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With Philip Shaw

Calamitous Accidents Mask Impending Tension with Iraq

Tuesday, February 4, 2003

It's been a tough week. When the space shuttle Columbia broke apart over Texas and Louisiana this past Saturday, it was like deja vu. 17 years earlier, I sat in Massey Hall drinking a coffee at the University of Guelph when a friend yelled, "Hey Phil, did you hear the space shuttle blew up!" At the time I had no idea. I remember very clearly how surprised I was. Even in 1986, space travel had grown routine. Now, 17 years later I was reliving the moment.
A world away, in the high glacier country near Roger's Pass, British Columbia, death came to 7 Canadian high school students when an avalanche buried them. This came only 10 days after another avalanche in the same area killed several skiers. Having been to Roger's Pass two out of the last three years, I have a real appreciation for what happened. When I've been there in the middle of summer the snow capped peaks are everywhere. I can only imagine what it was like in the middle of January when the skiers heard the rumble. There would be no way out.
Both of these tragic events have filled the airwaves with wall to wall coverage. The high country ski accident surely was not as spectacular as the Columbia disaster, but it did have the same loss of life. As an agricultural economist writer, I'm often asked to explain things in very black and white and even gray terms. The events of the last week are an example of how this world is still bigger than all the technology man can muster. But we soldier on.
One thing the events of last week did was knock Iraq off the proverbial radar screen. This Wednesday, Secretary of State Colin Powell goes before the United Nations to further the American position for action against Iraq. With the shuttle disaster still fresh in the American lexicon, he has lost momentum. No smoking gun doesn't help. He'll have to muster all the satellite photos he can find to get other nations on board.
The scary part for the folks here in Chatham-Kent might manifest itself at the gas pumps.. An oil problem caused by a war at the same time as Venezuela supplies are blocked could send gas prices soaring. This would be an unwanted blow for Chatham-Kent which is faced with plant closings, increased unemployment and a declining tax base. $1 litre gas only makes that harder.
At the same time, Canada's interest rates are heading higher. Inflation, according to Bank of Canada governor David Dodge, is showing its ugly head again. Inflation is currently running around 4%. This is in the stratosphere compared to the rates of the last few years. Dodge has hinted he will raise rates in the near future to counter these inflationary fears. A war in Iraq would complicate things further.
A short seven day war would reduce economic tensions quickly. But if a war lasts longer, the world economic outlook would get more jittery hurting business and consumer confidence. It would also boost energy prices which would push Canada's inflation rate higher as well as restrain global economic growth. That won't be good for our financial and commodity markets. Markets don't like uncertainty and that is exactly what we are looking at.
Of course, what could make it even a bit more messy is direct Canadian involvement in an American led coalition into Iraq. The Chretien government has been reticent to support the American position without the UN being involved. That has seemed reasonable so far, but you can bet when push comes to shove, the Chretien government will find George Bush's religion. He'll need the IOU when softwood lumber and wheat come up in the conversation the next time he gets to the White House.
Keep in mind, I don't think Saddam Hussein is about to win the Nobel Peace prize. In a world full of low rent dictators, he's right in there. This time around, it's obvious the Americans aren't going to let him continue on. War seems inevitable. In the next few weeks the world will just have to get used to it. It's too bad things like this have to happen. Hard to believe as it is, it seems just around the corner.



Philip Shaw, farms 830 acres near Dresden, Ontario. He holds a Masters of Agricultural Economics and Business Degree from the University of Guelph and is a well-known commentator on agricultural issues in print, on radio and over satellite in Canada and the United States. In the Chatham-Kent Times, Phil will use his frank and forthright writing style to address political and economic issues from the local to the international stage. He is a keen observer of political life at all levels, reads widely and has travelled the world to gather fodder for his column. See what's At Issue this week.