For Danish Firms, Boycott in Mideast a 'Nightmare'

A Palestinian child holds the Koran at a Gaza City protest against the Muhammad cartoons. A West Bank merchant said the boycott has also involved the young:
A Palestinian child holds the Koran at a Gaza City protest against the Muhammad cartoons. A West Bank merchant said the boycott has also involved the young: "Little children come to the store and ask if this is a Danish product." (By Ahmed Jadallah -- Reuters)

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By Kevin Sullivan
Washington Post Foreign Service
Saturday, February 11, 2006

COPENHAGEN, Feb. 10 -- The Arla Foods plant in Riyadh, Saudi Arabia, which produces cheese and flavored yogurt drinks, sits idle and the company's 800 employees in the country have been sent home because of a Middle East boycott of Danish goods, following a Danish newspaper's publication of cartoons of the prophet Muhammad.

"It took us 40 years to build up our business in the Middle East, and five days to bring it to a total stop," said Astrid Nielsen, spokeswoman for the Danish company here. She said suspending operations at the Riyadh plant, the company's regional base, and a near-total boycott of the company's products have cost Arla about $1.7 million a day since Jan. 28.

The boycott of Danish goods, propelled by Muslim leaders and imams preaching in mosques, has brought exports of Danish products to the Middle East and North Africa to a virtual standstill. It has scuttled a flow of goods to the region that was worth about $1 billion in the first 10 months of 2005, according to government statistics.

The boycott has been less visible than the angry mobs around the world burning Danish flags, torching embassies and carrying placards calling for "Danish blood." But it has been just as unnerving for Danish business leaders, who have spent decades expanding their sales of food, pharmaceuticals, industrial equipment and other products into the Middle Eastern market.

"As Danes, we are still sort of in a situation where we are thinking this is just a nightmare," Nielsen said, "and we are going to wake up in a little while and find that this didn't happen. We can never hope to regain what we had, but we hope we can reestablish some of it. We have a huge task ahead of us."

Prime Minister Anders Fogh Rasmussen, in an interview Thursday, said the boycott was not a major threat to Denmark's economy.

"According to the latest figures, 3 percent of Danish exports go to the Muslim world," Rasmussen said. "So seen from an overall perspective, it is of minor importance on the Danish trade balance."

Rasmussen, a former economic affairs minister, said it was "too early to make a final assessment" about the long-term impact of the boycott and whether Middle Eastern consumers would eventually start buying Danish products again.

"From experience we know that trade may be resumed in a longer-term perspective," he said. "Danish industries are famous for their ability to adapt to new situations. And our competitiveness is very strong. Danish companies are in very good shape for the time being."

Still, Rasmussen noted that companies such as Arla that do extensive business in the Middle East and North Africa "may be affected very significantly."

"And I strongly regret that, of course, because Arla is not responsible for what is published in a Danish newspaper," said Rasmussen, who has repeatedly expressed regrets that Muslims have been offended by the cartoons of Muhammad, while saying he cannot apologize for what was printed in a private newspaper.

"You can't hold a whole nation responsible for what is published in a free and independent newspaper," Rasmussen said. "I do know that it is very difficult to understand for many people in the Arab streets, because they can hardly understand how free and independent media work. But that's our system. It is unfair to take Danish companies and employees hostage in this case, in an economic sense."

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