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When the United States launched its military operation in Iran on 28 February, it probably did not anticipate that it would drag on for as long as it has. Yet it is clear that spring is already well underway and the situation persists.
We offer an overview of what this situation entails and what it portends for the coming months, both for our book market and for the Canadian economy.
The start of price rises
Price rises began nearly two months ago with petrol and gas. Until now, we were still hoping that the conflict would be resolved through diplomacy and a bit of common sense. That was to forget all too quickly that the decline of empires is never resolved through peace between nations.
Over the past ten weeks, the bulk of hydrocarbon stocks has been used as a buffer against the crisis. If the blockade of the Strait of Hormuz continues, which is likely, stocks will run out and the situation could become quite complicated, with unforeseeable knock-on effects. We can add the following to the list of strategic products that our economy risks running short of: fertilisers, aluminium and all petrochemical derivatives.
If there is any silver lining to this worrying situation, it is that the Covid crisis has at least taught us that by planning ahead, we can prevent shortages.
We have already mentioned this here, but we cannot praise highly enough the visionary Quebecers who, from the 1960s onwards, built a system for the production and distribution of abundant and affordable electricity. This mitigates the impact of rising energy prices. We would like our future leaders to be capable of implementing such ambitious projects for our children’s future, rather than just making speeches.
The measures taken by Rapido
At Rapido, we took steps right from the start of this conflict to build up stocks of paper, glue and laminating film. Under the current circumstances, we believe we will be able to cope with longer delivery times without running into shortages. We will, of course, continue to monitor the situation closely so that we can adjust our forecasts and purchasing policy accordingly.
Nevertheless, we are once again forced to increase our prices. As was the case in 2021 and 2022, we will simply pass on the rise in our costs. However, thanks to the efforts made with some of our suppliers, we are currently managing to limit the increases to the price of paper. If only Canada were to become a major player in paper production again!
It is impossible to predict what will happen in the coming months, but we can safely assume that we will not return to a satisfactory balance for another year or two, with energy costs significantly higher than in the past. By then, events will no doubt have taken a different turn and we will have to adapt.
The impact of the conflict on our economy
What consequences will the conflict between Iran and the United States have for our economies? Whether or not one sees any benefits in it, the relative stability provided by American dominance has, since the start of the 21st century, allowed globalisation to flourish in a climate of relative security. For our country, this has guaranteed abundant supplies and low prices.
If the world order is to be rethought, it is certain that the transition will be long, arduous, uncertain and undoubtedly painful. Until now, Western countries – of which we are one – have tended to dominate the debate, but this balance of power will not last. In our economies, which import a large proportion of what they consume from overseas, this poses a considerable risk, with unimaginable political consequences. We are not prepared for this.
Another consequence is that the dollar will lose value. For Canada, which sends 71.7% (source: Government of Canada) of its exports to the United States, this is very bad news. For over a decade, our country has benefited from a very favourable exchange rate, which has enabled many economic players to experience significant growth. If this balance is disrupted, these exporting companies will pay a heavy price, especially as the US economy could face the most severe economic crisis in its history. This will have a significant impact on Canada’s economy.
One could add to the list of impending upheavals the likely demise of the petrodollar, the worsening of the sovereign debt crisis, the challenge to Western hegemony by countries of the Global South, China’s global dominance, the challenge to the free movement of merchant ships on the seas, the weakening of service-based economies in favour of countries that have built their economies on the production of goods, etc. For us, this means opening our eyes, reconsidering our many preconceptions and embarking on profound strategic changes. We are about to enter an interesting period, but it will also be a time of great uncertainty.
Conclusion: a future characterised by moderation and responsibility
With humility and perseverance, Rapido has been pioneering and developing a model of frugality since 2013 by reducing book stocks. In the long term, this is the solution that will prevail in reducing waste. Increasing print runs by sourcing prices from the other side of the world may be a way to save time and money in the short term, but it still leaves us dependent on others.
In a world where problems are piling up, the era of sophists and censors is probably over. The era of technocrats obsessed with standards is on the wane. The time has come for men and women who innovate, invest and take the initiative.
We are undoubtedly living through a historic moment, comparable to the fall of the Soviet Union in 1989. Failing to grasp the full significance of this, failing to engage in strategic thinking about future challenges, is to condemn ourselves to suffering for decades to come. If, instead of remaining mere spectators of our own destiny, we were to seize every opportunity arising from our neighbour’s decline, we could build a more secure and prosperous future. With a little courage, it is possible.
Simon Dulac
Founder & CEO of Rapido Books
