If you think falling oil prices have affected the local economy, just be glad you’re not trying to run a certain vast country east of Europe. “Russia needs $142-a-barrel oil to balance its budget,” analyst Michael Weidokal told more than 70 people who attended the Going Global event for businesses on Friday at Kent State University at Tuscarawas. The featured speaker told those gathered for the ninth annual such event that no one predicted oil prices would fall to $30 a barrel. The cause was increased production unmatched by comparable demand. “We have so much supply, we don’t know what to do with it,” he said. Further driving down prices is an apparent effort by major producers to capture market share, regardless of price, said Weidokal, founder and executive director of International Strategic Analysis in Cleveland.
He gave a rapid-fire analysis of international opportunities, government affairs, demographics and markets during the two-hour presentation. He detailed five leading long-term global threats:
• Wars in Africa, the Middle East and Central Asia;
• A depletion of key resources, including water;
• Environmental degradation and climate change;
• Long-term economic growth continues to slow; and
• Mass migration leads to instability.
Weidokal noted that 1.1 million people crossed into Europe last year. Estimates are that 1.5 million to 4 million people will flee conflict zones this year. He said that although Canada is welcoming immigrants from war zones, they want families, women and children, but not single young men “because there’s nothing more dangerous in the world than an unemployed, bored young man.” Weidokal apologized briefly for giving so much negative information. On the positive side, he cited the Republican National Convention coming to Cleveland. “The entire world is going to be watching Northeast Ohio in July,” he said.He touched on China at several points. “There’s a lot of uncertainty in China; the markets have slowed down,” Weidokal said. “Growth is not going to collapse in China, absolutely not.” He said the country is losing some of its export competitiveness to Vietnam and other countries with lower costs. Growth will be experienced as Chinese themselves increasingly join the consumer economy. On the military front, he noted that China has developed an aircraft carrier as part of its attempt to control shipping lanes. “The South China Sea bears watching,” Weidokal said, calling it a place where U.S. and Chinese interests intersect.
Long-term opportunities in the global marketplace outlined by Weidokal included:
• Rising income levels in emerging markets;
• Productivity gains made via new technologies;
• Renewable energy;
• Infrastructure development in the emerging world; and
• The growing market of elderly people.
Among the record number of audience members on Friday was Richard Dee, chief financial officer of ChemSpec Ltd., which has sales offices here.He said the strength of the U.S. dollar means his company has to be aware of the possibility that its customers might switch production from this country to others where costs are lower.“In my mind, what’s really engaging is the number of people in this area who are really interested in the global economy,” said Harry Eadon, president and executive director of the Economic Development and Finance Alliance of Tuscarawas County.“Many people might look at Eastern Ohio or Tuscarawas County as provincial,” he said. “It’s not provincial.”He noted that even Amish businesses are involved in international trade, sending rough-finished lumber to China for additional milling before crafting finished products in the U.S.
Video recordings of Friday’s event are to be posted within a month on the website of the Economic Development and Finance Alliance of Tuscarawas County at www.tuscedfa.org.
Information about other upcoming international trade seminars is available from the Ohio District Export Council, at www.ohiodec.org. Seminars are planned regarding traveling abroad safely and doing business in Canada.