04/05/2013 12:09 EDT | Updated 06/05/2013 05:12 EDT

Why Canada Should Cozy Up to the Middle East

Canada as long been a diplomatic player -- albeit a small one -- in the Middle East. In helping maintain a stable geopolitical order, Canada can become a stronger economic player in this region.

The geopolitical role that Canada must play in order to ensure its vital interests in the 21st century is one that will be fundamentally different from the international posture to which it has become accustomed. The challenges that Ottawa will face in a multi-polar world order -- the result of an increasingly economically and geopolitically powerful global South -- will be numerous and will force Canada to think strategically about international affairs.

The economic rise of the likes of China, India and Brazil has increased the global demand for energy, thus driving up the price of oil. This, in turn, has made it economically viable for companies to find new, innovative ways to produce oil. Yet whereas in the past the result of this search has produced simply new conventional oil reserves, things this time will be quite different.

Shale oil -- an unconventional form of the substance derived form rocks -- exists in such large volumes on the planet that it threatens to upset the world's economic (and thus geopolitical) balance. It is estimated that, thanks to oil shale deposits, that there is more oil in Israel than in Saudi Arabia, the latter of which currently possesses the second largest proven conventional oil reserves in the world. Israel's reserves, in turn, pale significantly in comparison to those of the United States.

It has not yet become technologically and economically possible to produce and export shale oil. Yet some estimates hold that countries such as Israel will be able to do so within a decade. The recent revolts in the Arab world having demonstrated how vulnerable an Arab dictatorship can be, many oil importers may choose to seek oil from stable, reliable liberal democratic countries such as the United States or Israel instead of the likes of Saudi Arabia.

Riyadh and its OPEC friends are in for trouble in any event. For even if their patrons do not switch allegiances, the increased global supply of oil alone could cause the price of a barrel to disinflate. Oil accounts for 90 per cent of Saudi exports and 75 per cent of its government revenues. The result in both scenarios could be catastrophic for oil-reliant OPEC states, leading to their economic collapse, likely followed by the dissolution of these states' respective regimes.

In countries such as Tunisia and Libya, the result of regime change is currently unclear. Riyadh's collapse, however, is certainly not something that anyone would like to see. The result would be the empowerment of Iran's regional revolutionary bloc, the strengthening of Al-Qaeda in the Arabian Peninsula and the loss for the United States of its principal Gulf ally that has done much to ensure global geopolitical stability.

Some sort of international fund designed to bail out the economies of these Middle Eastern dictatorships may be in order, although it would involve both long-term planning and political toxicity for the liberal democratic regimes of the global North. What may be more effective is a strategy to help these Arab states diversify their respective economies.

Canada alone cannot accomplish this due to its small size, yet two facts may help Ottawa build a global critical mass with the help of Europe. First, Canada and the European Union are set to complete a free trade agreement, thus providing for a base upon which this diversification project could rely. Second, Canada has earned increased diplomatic clout vis-à-vis NATO states thanks to the leadership roles its military played both in Afghanistan and Libya.

This would represent a strong message that Canada wants a new relationship with the Arab world -- a relationship that has been strained at times in recent years. And if Canada harnesses its internal diversity and implements a national language strategy designed to strengthen its polygot ability, then it could be Canada's economy that reaps the most from the expanded economic dealings that the global North stands to share with Gulf states.

Canada as long been a diplomatic player -- albeit a small one -- in the Middle East. In helping maintain a stable geopolitical order, Canada can become a stronger economic player in this region.