The question I have is this: how much longer will the actual recession last for Canadians? Take, for example, unemployment levels: Canada is around 8.5%, while the US is around 10%. Historically, Canada has a higher unemployment rate than the US.

While Canada fared better in terms of unemployment than the US did during the recession, the US recovery is likely to be much more dramatic than the Canadian one, particularly given that the Canadian government’s stimulus package is being scaled back, and ultimately will be ending faster than any other package, a classic mistake, according to Keynes. Therefore, Canada’s economy, while having fared better during the actual recession, will limp along while the US economy quickly recovers in 2010.

Now, I’m sure many people think that North Korea is an ‘irrational’ actor, but I beg to differ. North Korea is playing the only game it knows how, and is doing it well. Not only has the DPRK gotten away with testing two nuclear devices, but it continues to flout international law and security council resolutions, and there’s also the question of proliferation. (Although I’d hate to be the recipient of North Korean nuclear or missile technology – not exactly worth the cost. Better to get it from someone a bit more reliable!)

So what more will North Korea get? I’m willing to bet that they’re not done provoking the US – I’d wager there’ll be a few more longer-range missile tests, and possibly another nuclear test. (My best guess as to when? G8 leaders’ summit coming up next week.)

The question really becomes what does North Korea want. The answer is simple: to be recognized as a nuclear state. Will North Korea get what it is gambling everything for, or will it all blow up in its face?

- much of the index this year focused on how fragile states will be effected by the global economic crisis (my favourites include Pakistan, Sudan and Iran)
- This year they added an interactive map that helps you see, in a nutshell, how bad the situation is in any part of the world.
- What did they miss? Mexico. Mexico is the state that is quietly failing, but doesn’t get talked about very much. I’m working on an article for a journal on the subject, so I might share a few of my findings here, because I think they need to be said.

- Iran, while having democratic elections for president, is controlled by a small cadre of people who firmly control the security architecture
- Any changes that might take place in Iran are likely to be slow in coming
- Any interference from the US will be played up by Ahmadinejad and his supporters and will be counterproductive

However, the thing that worries me is that Iran is more volatile now than ever before. The Iranians looking to acquire nuclear weapons could see these demonstrations as a threat and step up their game for two reasons: it’s a popular move that will support the regime, or in case (as they might see it), western powers think now is a good time for some ‘interference’.

Either way, it throws a wrench into the ‘nuclear Iran’ scenarios.

Take Tuesday’s attack: the LTTE will likely continue to use terrorism as a tactic, and may in fact evolve into an entirely terrorist organization, instead of the ethno-nationalist separatist group that some describe them as.

The one thing that the LTTE has not done (for the most part) is execute terrorist attacks on foreign soil. However, as the situation gets more dire for them, they may in fact be motivated to start executing international terrorist attacks in order to gain support for their cause. Likely targets? India, Sri Lanka, and major supporting nations – among which Canada could be ranked.

Canada is expected to draw down its mission in Afghanistan by 2011, which means that the actual end of operations will likely be much sooner, given the amount of equipment that will need to be out of the country to meet the Government’s stated close of business deadline.

However, the U.S. is getting ready to launch a surge of soldiers into Afghanistan – and Canada is getting ready to leave. Personally, I don’t think that’s actually going to happen. I think we can expect a new commitment from Canada to stay in Afghanistan past 2011, and it will likely come after the next election, which by my clock is due sometime between June and September.

As a former member of the Canadian Forces, it was my experience that mental health issues were not tackled adequately. Where physical injuries received exceptional support (within the confines of the Canadian medical system), mental health issues were marginalized, downplayed, or outright ignored. Significant work needs to be done to give soldiers access to mental health resources, and to de-stigmatize mental health issues within the Canadian Forces.

However, without significant research into this area, there will be little traditional mental health care workers will be able to do. Mental health is a much neglected and marginalized field of study, and combine it with military operations, and it becomes a serious subspecialty. As more Canadian soldiers return from active combat, I sincerely hope that we don’t see an increase in domestic violence and other manifestations of operational stress injury, but I suspect that will, in fact, be the case. Is Canada prepared to deal with it?

27 June 2009 Update: It looks like the Globe and Mail has picked up on this, and that the CF will at least pretend to do something about it.

Here’s the link to the column in Spanish.

So the question is: if the embargo were lifted tomorrow, what kind of trade model would Cuba embrace?

For the US, it will mean an increase in US steel and iron purchased, but it won’t be in a competitive market. As a result, US iron & steel companies will have a significant market advantage. For many economists, this means that those companies will become structurally uncompetitive, as they won’t have to undergo the same rigorous competition as others. When the US eventually opens its market again (as it most likely will), those companies will be seriously disadvantaged, even if they’ve survived in the short-to-medium term, something many other companies will not have. (US infrastructure projects may also become more expensive, since the projects won’t be paying competitive, market-rates for their raw goods.)

In terms of international prices for steel and iron, we can expect them to decrease, making other countries’ infrastructure projects more affordable. While many companies will suffer because of the lack access to the US market, many will survive. These companies will be efficient, having weathered a very tough time, and very competitive.

In the long run, preferential treatment to US companies will create inefficiencies in the system, and delay the US’ transition to the new economy.

Issue: Iranian nuclear ambitions. Constraints: regional geopolitics. Obama’s position: open to dialogue. Likely outcome: some discussion, but much of the same. Reason: Iran is unlikely to abandon its nuclear ambitions, and Israel is unlikely to become okay with a nuclear Iran. Watch for Israeli strikes on Iranian nuclear facilities with US complicity.

Issue: Iraq. Constraints: domestic issues. Obama’s position: timed withdrawal. Likely outcome: A slower withdrawal than people expect. Reason: As US troops withdraw from Iraq, the sectarian violence that has been plaguing the country will continue, and Iraqi security forces are not ready to take over. Expect the US to withdraw some troops, but keep a good number.

Issue: Afghanistan. Constraints: Taliban insurgency and Pakistan border issues. Obama’s position: prosecuting a successful, and brief, war in Afghanistan. Likely outcome: A surge, and a long war. Reason: The conflict in Afghanistan is intractible, and with allies like Canada set to withdraw their troops, there will be more work for the US. The Pakistan issue is massive, and isn’t currently being addressed. Watch for a long war, and increased pressure, and possible troop deployments in Pakistan.

Issue: Pakistan. Constraints: Domestic instability, a rogue security service, and a rough neighbourhood. Obama’s position: unknown. Likely outcome: State failure and increased insurgent activity in Afghanistan and India. Reason: The ISI and other groups are running wild through Pakistan, which lacks the institutions to make a successful comeback. The US will put pressure on Pakistan, and it will be unable to constrain the many disparate groups pressing for its disintegration. Watch for a very unstable neighbourhood, with increasing intervention on the borders of Pakistan, and perhaps into Pakistan proper.

Essentially, we’re not going to see huge change in Obama’s foreign policy. It’s too bad, but there are too many constraints, both domestic and international, on his policies and programs. Interesting areas to watch will be Cuba, Russia and Iran. Let’s hope for the best!