#BTSpeakingOut – We are not insulated

Disclaimer: The views and opinions expressed by the author(s) do not represent the official position of Barbados TODAY.

by Michael Callender

The two primary factors that impact the price of oil are market sentiments and demand and supply. At this present time, sentiments are driving the market i.e. the war in Ukraine.

The mere belief that oil demand will increase dramatically as a result of the war will trigger an increase in oil prices as speculators and hedgers alike will snap up oil futures contracts on the CME (Chicago Mercantile Exchange) where commodities are traded.

While these commercial entities use futures for hedging, speculators often take the other side of the trade hoping to profit from changes in the price of the underlying commodity which in this instance is oil.

With uncertainties always present in the world, it may be expected that countries will have the tools at their disposal to mitigate risks that will adversely affect the business activities of the country.

This may prove difficult for some Small Island Developing States like Barbados because Barbados is a single industry economy. That is, the economic survival of the country depends on a single economic activity, tourism, and because of its sensitivity to a change by both internal or external factors which can cause the industry to easily collapse.

No one country is truly self-sufficient, each of us must rely on the other for some degree of comfort and support in order to thrive in this global economy.

So, it is disingenuous for anyone to attempt to lead the masses into believing that the PM with a single budget speech can control the increase in prices of commodities, and solve all the economic ills of the country with one feel swoop.

It can be difficult, but at times decisions have to be made at the discomfort of an individual for the collective benefit of the country. Experience has thought us that it is impossible to please everyone.