Swedish companies are not stopped from operating in Iraq, according to Farhad Alaadin, foreign adviser to Iraq's prime minister. But relations between the countries have suffered a blow after the latest Koran burning. Entrepreneur Nebe Almayahi fears that it will have a negative effect on Swedish operations in the region.
"I think it's years of work that have been ruined over a single incident. Of course, it's very sad and very tragic," she says.
Almayahi has previously worked as an export promoter at Business Sweden and helped Swedish companies to establish themselves in Iraq. The good relationship between the countries has been an advantage.
"Given that Sweden and Iraq have historically had very, very good ties both politically and socially, it has been relatively easy," she says.
Got a worse reputation
But that may be about to change. The Koran burnings have meant that Sweden's reputation has deteriorated.
"It's not connected to the common man's image of Sweden and I think it might make the reactions even stronger," says Nebe Almayahi.
Last year, Sweden's exports to Iraq were worth SEK 767 million, less than a tenth of a percent of total Swedish goods exports. But the risk of spillover effects to other countries in the region is great, says Iran expert Rouzbeh Parsi, head of the Middle East and North Africa program at the Swedish Institute of International Affairs.
"Everyone has to show that they distance themselves from Sweden and then there is a risk that it will escalate," he says.
Compare with Denmark
He compares the situation to the consumer boycott of Danish products in Saudi Arabia after the publication of the Mohammed cartoons in Jyllands-Posten.
"I don't think we've gotten to where there could be a consumer boycott," he says, but continues:
"It's not impossible that something like this could happen.
Listen to Nebe Almayahi talk in the video above about the situation for Swedish companies in Iraq.