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Essay: CANADIAN ECONOMIC SETBACK IN THE AFTERMATH OF 1973 OIL CRISES

Sample Essay

THE Motive of Canadian Leaders:

In the early 1970s, Canadian economy was strongly dependant on Alberta, the fourth largest province in Canada. Albertan economy – enriched in oil, natural gas and minerals – played a crucial role in developing the production and exploration of natural oil and gas in order to meet Canada’s future energy requirements. The great motive of Canadian leaders was to design such mechanism that can stimulate country’s exports, bringing in greater prospects for the balance of payments.  Canada then came into business with the United States to export crude oil and gas to the US after the enactment of National Oil Policy (NOP). This accord seemed to perform not in the influence of any political motive but to bring a cordial relationship between the two countries. [1]

The arrival of 1973 oil crisis made it difficult for Canadian leaders to keep the same momentum of foreign direct investments (FDI) in the country; however, it was not the only reaction of the great Arab oil Embargo. The global oil crisis emerged with increased petroleum prices and threats to Canada’s domestic oil production and exploration targets. The crisis was led by the Organization of Arab Petroleum Exporting Countries (OPEC) which is a permanent anti governmental organization. It comprises of Arab nations: Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Qatar, Indonesia, UAE, Algeria, Nigeria, Angola, Equator and Libya.[2] The Arab Oil Embargo was raised against the countries that supported Israel in the war with Syria & Egypt. OPEC stopped shipping oil to its key strategic allies which later brought record price hikes in oil and other petroleum products in the US, Canada, Western Europe and Japan.

[1] “The oil crisis and the Canadian response,”  n.d  [Database on-line]; retrieved from http://www.tulips.tsukuba.ac.jp/limedio/dlam/B15/B1548190/10.pdf, p 211-212

[2] Cindy Hwang, Jennifer Kim, Lisa Kim, and Yunji Kim, “The overall explanation of the 1973 oil crisis,” 1973 Oil crisis, n.d  [Database on-line]; retrieved from http://internationaldebtcrisis.wikispaces.com/1973+Oil+Crisis

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