The conflict in the Middle East where Israel and Palestine are once again engaged in fighting will impact the Pacific and the rest of the world unlike what the Fa'atuatua i le Atua Samoa ua Tasi (F.A.S.T.) Chairman and Agriculture and Fisheries Minister, La'auli Leuatea Schmidt told the EFKS TV program on Friday night.

He boldly said that the war in the Middle East is unlikely to impact Samoa's financial position.

The end of the month is approaching and this is when the new fuel prices would be announced. Economists all over the world have already predicted that fuel prices would be up again. The world is already battling the inflation brought about by the Russia-Ukraine crisis and this would certainly add salt to injury.

When fuel prices go up, everything associated with the use of fuel also takes a hike. The cost of production, transport, freight and food items will also go up. At the end of the day it is the consumer who will absorb the cost.

Just last week, the Cabinet announced that the rebate of 20 per cent that was being given to businesses and non-resident customers for electricity will no longer be applicable from next month. This is because the Electric Power Corporation is making losses and high fuel prices means more operational costs.

If the fuel prices keep on increasing, it is only a matter of weeks when the discount for the residential customers will also be revoked. Similarly, Samoa’s imports will come with higher prices as freight companies will pass on the added costs to the customers who in turn will pass it on to the consumer through higher food prices.

For an average Samoa family, this means that food and other goods will cost more leading to a decrease in the food basket. Higher fuel prices will also impact travel because it will cost more to travel and this will impact tourism.

Like Middle East wars of the past, the conflict between Israel and Hamas has the potential to disrupt the world economy — and even tip it into recession if more countries are drawn in.

That risk is real, as Israel’s army prepares to invade Gaza in response to an attack by the militant group. The death toll from the Hamas assault and the ongoing Israeli air strikes on Gaza is already in the thousands. There’s concern that militias in Lebanon and Syria that support Hamas will join the fighting.

A sharper escalation could bring Israel into direct conflict with Iran, a supplier of arms and money to Hamas, which the US and the European Union have designated a terrorist group. In that scenario, some economics estimate oil prices could soar to US$150 a barrel and global growth drop to 1.7 per cent — a recession that takes about US$1 trillion off world output.

Of course, secondary effects like these aren’t top of mind after the past week’s human tragedy. A large majority of the dead on both sides are civilians. Dozens of Israeli hostages have been taken to Gaza. Missiles and a looming ground attack threaten the lives of Palestinians trapped in the enclave with no escape route. The devastation is raising emotional temperatures, and makes military escalation more likely.

Conflict in the Middle East can send tremors through the world because the region is a crucial supplier of energy and a key shipping passageway. The Arab-Israeli war of 1973, which led to an oil embargo and years of stagflation in industrial economies, is the clearest example. Other conflicts had a more limited impact, even when the human toll was high.

Today’s world economy looks vulnerable. It’s still recovering from a bout of inflation exacerbated by Russia’s invasion of Ukraine last year. Another war in an energy-producing region could rekindle inflation. Broader consequences could extend from renewed unrest in the Arab world, to next year’s presidential election in the US, where gasoline prices are key to voter sentiment.

All of these potential effects depend on how the war develops over the coming weeks or months. Bloomberg Economics has examined the likely impact on global growth and inflation under three scenarios.

However, La’auli is right in saying one thing.

"Going back to the lands and our sea can ensure that we will have enough food supply for income and for consumption. The only people complaining are the ones who do not work. We have the answer to the problems in our hands,” he said.

"So instead of complaining, we should support the initiatives initiated by the government so we can rely on our own hands and our own backyards to provide for us. Other people will not come and feed you. You are responsible for taking care of your family and children."