charindra chandrasena 00:05 Hello, Daranath. Dhananath Fernando 00:06 Hi, Chari. I cannot go today for that like high pitch. High pitch. You have a bad voice, no bad throat. Very bad throat today. charindra chandrasena 00:14 But you're okay. Apart from that, Dhananath Fernando 00:15 yes, I think my throat is quite a bit painful, so I'll speak a little slower. Also for audio guys. charindra chandrasena 00:24 And the audience can wish you a speedy recovery, also. Speaker 1 00:27 Thank you, thank you, indeed. charindra chandrasena 00:29 And hi, yeah, Speaker 2 00:32 hi, Charinder. charindra chandrasena 00:32 How are you? Speaker 2 00:34 I'm okay. Very. Yeah, charindra chandrasena 00:36 we. I mean, we thought the weekend where Nicolas Maduro was captured was a big weekend, but boy, this weekend makes that look very small. Oh Speaker 2 00:50 yeah, man! David and Goliath. charindra chandrasena 00:52 Yeah, David and Goliath. So Iran is under attack, and Iran is lashing out as well, all over the place. Basically, any target that they can hit that is connected to the U.S. or the generally the Western world, and only a couple of countries in the Western world have have not sided with the U.S. like Spain and and a few countries like that. handful of countries. Speaker 2 01:20 No, I mean, Western world means the the the countries that have some basically the countries that have a military or otherwise some interest with the U.S. So their bases are now being targeted. That's charindra chandrasena 01:31 it. Speaker 3 01:31 Yeah. charindra chandrasena 01:32 Yeah, but like Spain has said that their bases cannot be used. So that's one of the very few countries that have said Speaker 2 01:38 anything like that. No, but sorry, even initially, even the British said that their bases can be used. charindra chandrasena 01:42 Then they then they said they can be used. Yeah, they they went back because I think for a defensive Speaker 2 01:47 role. charindra chandrasena 01:47 Yes. Yeah. Well, I mean, if you fire the first shot, then how defensive is the role? Exactly. Is another question. But that geopolitical side aside, I I want to focus on the the impact this could have on Sri Lanka. So we saw over the weekend. Did you did you pump full over the weekend? Dhananath Fernando 02:12 I did not. I Speaker 2 02:13 did. You did. Yeah, because while I was coming, there was a at least at least what you call a there was a petrol polymer. charindra chandrasena 02:19 Okay. Speaker 2 02:19 Fortunately, my car is a diesel. charindra chandrasena 02:21 Okay. Speaker 2 02:21 So the diesel line was basically there was nobody. There were a couple of bike guys who were just trying to jump in. Oh yeah. So you know, like pouring pie, you know, kind of thing. So the diesel line was clear, and I just went and tanked up. Yeah. So I was lucky. So charindra chandrasena 02:33 you were lucky. Okay. But but was it because of the the war that you wanted to go? Speaker 2 02:37 Not really. My my right was on. Okay. So you were actually in need of any choice, right? charindra chandrasena 02:44 So a lot of people who were in those queues were actually not in need as such. Yeah, they were holding Speaker 2 02:50 basically. charindra chandrasena 02:50 They were holding. They were they were panicking and they were holding full, and obviously that has a lot to do. That has everything to do with the Iran crisis, and then obviously the the closure or the virtually full closure of the state of Hormuz. Generally, one of the one of the sentiments in among people who were in those queues was that the government should have been more prepared to ensure that these kind of full queues don't form, and we don't want to go back to that queue era that we saw in 2022. And if the government can't manage a crisis like this, then they should, you know, hand it over to somebody. So, just initial thoughts on that: Was the government underprepared, and if the government was underprepared, what could they have done better? Dhananath Fernando 03:55 In in in this case, Cherry, I feel like am I am like the former Venezuelan president, because since I was not feeling well, like I was sleeping. Now you know what happened to the Venezuelan president was he he went to sleep in in Venezuela and woke up in New York. For me, like I went to Speaker 1 04:13 sleep on the 28th and I was sick, like you know, sleeping sleeping, and then I woke up like the entire world has Dhananath Fernando 04:21 kind of changed, but I don't think that is a reasonable statement because because Speaker 1 04:29 because even the Congress didn't know U.S. Congress even there. Dhananath Fernando 04:37 U.S. Congress didn't know, and many other countries didn't know. Of course, there were tensions. I mean, they were moving the ships and all that. I think for some level of intelligence, sort of a message to to really get the strikes. But I don't think anyone was really prepared. And you can see how the global markets go haywire after the shocks. So I don't think we can do. We can do much on on this. It is just that what we can do is actually, as we always say, the to minimise the vulnerability factor of the economy is what you can because these shocks are kind of inevitable. The climate shocks, the now the geopolitical shocks. So the only way that we can do is to basically have the foundation and the fundamentals right, that's the only thing that we can do, and not probably even don't try to go there and try to convince President Trump on like not having attacks like these Sri Lankans. I think a lot of people are kind of sometimes try to do those things as well, avoid that space, even not tweeting, texting exactly, not like. he would charindra chandrasena 05:43 listen to anybody also right now, unless you're Benjamin Netanyahu. Speaker 2 05:48 Yeah, unless you're Bibi. But so one thing is, it's like this. There are okay. So the thing is, I mean, obviously, what like Dana said, Sri Lanka. I mean, in Congress also didn't know. I mean, there's no way the Sri Lankan government or anyone in any office in the government will know what the hell is going on. But charindra chandrasena 06:05 a point could be made Speaker 2 06:07 on preparedness charindra chandrasena 06:08 on on Speaker 2 06:10 emergency response. No, charindra chandrasena 06:11 yes, no on on the level of stocks that are maintained. Speaker 2 06:14 So the best example I can give is okay. We have stocks now. The petroleum ministry came and said that we have stocks for a free, just over a month. charindra chandrasena 06:22 Yeah, Speaker 2 06:22 like roughly touching 530 to charindra chandrasena 06:24 40 days. Yeah, right. Approximately. Speaker 2 06:26 So basically, let's take it as a month, like just to keep it easy. Okay, right. But the thing is, Sri Lanka's biggest asset. I mean, the biggest stockpile of fuel capacity in South Asia in 1945 it was Sri Lanka because of Frincomali. Have we got? Have we used that? No, absolutely not. LIUC has taken a few tanks. Other tanks are just rotting inside. So the thing is, every time when they try to privatise, give it out to someone and all that, you always set the political turmoil that comes with it. For example, the CEPC trade unions have been completely against it, right? Now is the time, at least now, try to understand that these are assets that we have, which we even give it to a private sector or not. Still, somebody is using it. Like so, the Sri Lankan what do you call the trade union mentality is okay. You have a car, it's our car. We are saying okay, it's not doing anything. Yeah, no, don't even lease it out. Don't give it to anyone. Just keep it walked inside the house. It just gets old, and after a while, it goes beyond the usable age, and it starts to corrode because these are all made out of steel and all that. You know, they start to corrode, and it goes beyond its economic value. Then you know the repair cost will go up and all that. So thing is, you know, give it out. Don't oppose these things. Give it out to someone. Someone will use it, and if someone is using it. Let's say stockpiles of millions. Let's say millions of litres of fuel is there. When there's emergency, if Sri Lanka needs it, you know already the fuel is in our country. So for me, the only learning thing what I can take is that you know we have certain assets in the country which are completely not utilised. It's not underutilised. It's not utilised, right? And this is not going to call. Give it out to any companies. The Chinese ask for it, give it to them. If the Indians ask it, give it to them. If anyone else asks for it, give it to them. At least the country will get a revenue. Plus, for emergencies, we have fuel stocks. Right, then we don't have to, you know, run around like you know, like a headless sticker and all that trying to figure out. That is number one. Second is we need to think about what you call energy security. So energy security currently Sri Lanka is very much dependent on the Middle East, and the area is in Sri Lanka is dependent on the Middle East because even though if the the petroleum minister or I don't know who it was, I think it was the petroleum minister who who went and said that basically we don't have to worry that we bring a fuel from we buy our fuel from India, Singapore and India. But you don't understand India is not a producer of oil. charindra chandrasena 08:49 Yeah, it's a refined. This is refined oil. Yeah, refined oil. Singapore also. Crude oil. He's Speaker 2 08:53 he's not talking about crude oil. So India also has to get the crude oil. Indian crude oil also has to come from the state of home Speaker 4 09:00 rules. Speaker 2 09:00 Of course, Indian crude oil comes a lot from Russia, and they were under a lot of. I think they under a lot of pressure. I think Prime Minister Modi was under under pressure, a lot of pressure from from President Trump. From President Trump, basically telling not to buy Russian oil because this whole Ukraine thing, and he's saying that you are giving them money and all that. charindra chandrasena 09:17 In fact, President Trump announced that India had agreed to stop those imports, and India didn't respond positively on anything. So now India didn't confirm it or anything. Speaker 2 09:27 No, if the state of conflict with the current situation, India is not going to respond at all because end of the day, if India doesn't get this thing and there's a choke point, there's going to be a supply shortage, and how much of the supply shortage can be met, right? Obviously, the supply shortage part of it will be met on price at a higher price, right? But then again, still there might be a shortage because state of home produces between 25 to 30 percent of global supply, right? And even though you have bigger things like Venezuelan oil and all that, Venezuelan oil is a very thick crude. It's thicker than the Saudi. It's not a light. I mean, it's very. Crude, which needs very a lot of you know Speaker 1 10:03 processing, processing in yeah Speaker 2 10:05 yeah refine and then refining also you need to from what I understand is you need to mix that with light crude and then only you can refine. So it's a huge process and those refineries are only available in the U.S. So I think currently the Sri Lankan government or the people who are in charge of of of securing energy, they have to look at diversifying Sri Lanka's portfolio of this thing. So we can't be normally the system is we tender it, we give to the lowest bidder. That's a normal tendering system, right? But the thing is, sometimes you might have to go to other places, even at a higher rate, where you might have to bring a energy mix where you can't be dependent on Singapore. You can't be dependent because don't forget, Singapore and that part of East Asia is the largest populated stretch in the world, right? All the countries are highly populated: Indonesia, China, Philippines. It's all countries with big populations and all that. Then even up to South Asia, the corner of Southeast Asia, that is Bangladesh. They are all highly populated. So the thing is, when there is a shortage, it's a shortage not only for us; it's a shortage for the world, right? So then, you know, what's going to happen is, you know, they are going to then there is going to be a game of priority, and Sri Lanka is very low on the pecking order, right? So then we have to figure out a way where we can secure energies and all that, which means we have to go and secure, let's say fuel from, let's say from the U.S. maybe from Africa, and we need to start dialogue and start purchasing even at small levels because you you know the petroleum industry it runs a lot on relationships, right? Yeah. So you need to reach out and say at least you need to buy a small order because suddenly if there's a shortage and you can't get fuel from anywhere, at least you can tell them. You know, even at a higher price, it's the thing is sorry. It's better to have something at a higher price than not having at it at all, right? Because then you're grinding to a halt. So those things, I think, we need to kind of look into. So that energy mix and things like that. Now, currently, for the last, I don't know, far as I can think LPG was sourced from Middle East, particularly from Oman, where there was a lot of discussion. But now currently LPG is imported from the US, which means even though there's a state of Ambrose, this thing is there. Still, Sri Lanka's LPG will come into the country. Just imagine if we were procuring it from the previous supply, or let's say from the Middle East, they see currently there won't be any LPG shipments coming here because all shipping companies are sent. Insurance insurances are being cancelled, especially on trade-off rules, and there is a blockade. So no energy company, no ship is going to go there for refuelling. They are so going to say they are not going to go. It's too dangerous. Then what's going to happen to us? We only have energy stockless, gas stocks at at Litro. The Litro gas Litro can only hold gas at its terminal. The storage only for 8000 tonnes. 8000 tonnes with current Sri Lankan consumption, it's done in four days, right? So which means we need to have a ship that comes every two two and a half days, and pumps and goes into the terminal, into the storage, right? So currently we have issues like that. So one one other reason is we for energy security for gas we need to expand the storage. That is number one. Second is currently they have diversified, so they are going into other places. For example, they are bringing it from the U.S. right? But if it was the Middle East, we are in a we'll be in a deep Sudan, yeah, right. That's the thing. charindra chandrasena 13:21 Our dependence on the Middle East, and I think Russia could be a big winner here. Yeah, because Speaker 2 13:27 Russia is a definite winner. Yeah, charindra chandrasena 13:28 because a lot of people will have to look look upwards to Russia. Speaker 2 13:35 Yeah. charindra chandrasena 13:36 So that is for as far as energy is concerned. There are there are couple of other areas that might be affected by this. Let's focus on because we speak a lot about tourism, which is one. We'll focus on the remittances first. Okay. Now, I don't think remittances are something that we really should focus on, as far as an economy is concerned, you know, rely so much on. It's it's not a for me. It's not something to be proud about that that foreign income, but the reality is we are dependent on it, and a lot of especially female workers go there and send money. Firstly, Dana, what is the impact initially that you see in terms of one is their safety, and secondly about those remittances coming in in terms of it could be loss of those jobs or it could be less people going there. Dhananath Fernando 14:41 So, Charlie, if when you look at the numbers, what we can see is the the most of the migration that took place to earlier from I mean, it has been for Middle Eastern Gulf countries, and the composition change. Like a lot of Sri Lankan male skilled ones are the one who migrated to Gulf countries. Happened was also with the transformation in that Gulf region because they became like the business centres or economic hubs in the world, like Dubai, Abu Dhabi. Those countries were mainly becoming airline like airline hubs. Like if you look at MV rates to Qatar Airways because of the because of the economic activity that is taking place, so even before the war, from what we see on news, most of these countries basically tried President Trump to convince not to go to this war because most of their U.S. military bases are in those Gulf countries, so definitely they have to take U.S. side. But at the same time, when Iranian strikes coming into these Gulf countries that also tarnish their image as a safe and secure place for business, and as we can always, I mean, see if some anyone who has travelled towards US or UK probably they may have touched either the Dubai airport or the the Kata airport. So, so now it has a little. I mean, of course, there what you call air defence system activated, but it's still there has been some damage, and that's a small. I mean, that kind of a damage is kind of enough for investors to rethink about their strategies or slow slow down the process because these are cities. So, as a result, a lot of Sri Lankans were also there. Even if you go to the Dubai Airport or Qatar Airport, you can see Sri Lankans. So the first first hand impact would be if there's a slowdown in the economy, not even like a closing down. If there's a slowdown in the economy, that is definitely going to impact the remittances. If there's a job losses at the initial stages, if people are giving everything and coming back, there will be quite surge in remittances. But overall, it is not. I mean, remittances overall will drop down. And anyway, since these are the business centres, regardless of the remittances, the global economy will kind of slow down. That is also not a good sign. And at the same time, because of because of this state of home roofs. I I struggle to pronounce that word hombros. And with that, of course, the shipping, the the the premium charges and the insurance premiums are going to go up. So as for our freight, so as a result, the pricing will go up. So as a again, as a result, the entire economy will slow down globally, and that will have a ripple impact on our exports and all that. Now, after saying saying all this, now don't say every time when we say this, lot of people saying that okay, you are Danaat, you supposed to speak about the positive things, and why are you always selling negative things? Generally, we get the invitation to comment on when there's an exception or shock. What can I say? I mean, can can I say like the war is good, and like you know, it will boom the economy. That that is unfortunately not the case. charindra chandrasena 17:44 War is only good for the defence company. Defence company. Yeah, so the defence stocks have been going up. Absolutely, absolutely. Dhananath Fernando 17:49 So so that is the first round of impact at the same time, because most of these European tourists are also coming through Middle East, and the tourism season is kind of you know it's at the the season we are in the season, and as a result, when the even if you recall, like lot of even the when there's uncertainty in the Middle East, even some of the diplomats who are connected to Western countries, there's generally specific directions to take a alternative route, not to go through. Sometimes they specify not to go through Middle East because they know the tensions and they don't want to take a risk. So as a result, in these cases, not many people will consider to travel or like they postpone. So that can have an impact on our long. I mean, of course, in terms of our tourism composition, it's mainly from India, but the high spending people who stay for some you know for longer is coming from the European Western European country, so that can also have an impact. All that is kind of negative, but at the same time, sometimes when those markets close down, maybe sometimes the other markets get reactivated, and it may have some unexpected win also for Sri Lanka in certain cases, but overall those are kind of the negative impacts that can happen on the immediate aftermath. Of course, with the foal prices goes up, of course that will have an impact on fuel prices. So as sometimes the electricity prices, not sometimes electricity prices and inflation. Inflation in the sense, some food items will go up, but I don't think it will collapse the economy or anything like that. Because as as long as the central, as long as we increase, we adjust the fuel prices according to the market prices. Because that's of course it's not again going to be very popular because your fuel prices are going to go drastically up. It will have, I mean, as inflation and all that will go up, but it is better rather than giving a subsidy and selling fold at a lower price than the market price because you have to adjust the system and economy will kind of slow down, and that will have the other impacts of like debt sustainability to everything that will come into play. But I won't. I don't think it will collapse the economy. It will slow down. It may we will not be able to reach our targets as we expect. It will it will slow down. But it's a given charity. Now we have all we all have to be be prepared for this geopolitical. Remember last April we had the tariff thing, and now it's February there is another thing, and we had the Venezuelan thing. So it seems that these things are quite common and quite frequent. Yeah, yeah, yeah. charindra chandrasena 20:24 More than any other era that I can remember, this January 20 is when President Trump was inaugurated, and now we are about 14 months-not 14, yeah, 1213, and a half months. So 13 and a half months down the line, I don't think I remember a 13 and a half month period in my lifetime, which was more chaotic. The only only thing that comes close is when 911 happened, and then the war in Afghanistan was launched. But that's the only comparison, really, I can think of, and obviously the pandemic initial part. But generally, it has been pretty chaotic. Now, you because you mentioned the full prices, the full price adjustment that happened for February. Sorry, for March at the end of February, they had increased fuel prices. Petrol 92 goes up by one rupee, super diesel by six rupees, and auto diesel by four rupees. Now, this is generally done based on the formula, fuel price formula. So, and it's it's not immediate in the sense that it is not for today's global prices that the prices are set. Speaker 2 21:49 Correct. charindra chandrasena 21:49 It's for about a month or two back. Speaker 5 21:51 Yeah. charindra chandrasena 21:52 So we are going to get the effects of this, irrespective of how long it goes on for. We are going to feel the impact of it maybe next month or the month after. Absolutely, yeah. And in terms of inflation, now we have a a target. I I heard somewhere that they might revise that target. Dara, have you heard about? Yeah, there was Dhananath Fernando 22:16 a conversation. Yeah, because now it's in the Central Bank Independence Act. I think it's at 5% so we have been missing the target 5% which is a good, which is good. But since it's an act, central bank also can't like always provide excuses, so they will try to reach the 5% target. But what what we would like to recommend is maybe bring it down. Yeah, exactly. You know, maybe maybe. And that's what I heard as charindra chandrasena 22:40 well. The discussions are about revising it downward, so that one is it's a realistic target that they can hit, and also they can hit without affecting the cost of living too much as well. So, but how do you see this affecting? Because I think we can all know for certain that the prices are going to go up. It has already gone up in terms of oil prices. How is that going to trickle into the wider economy? Dhananath Fernando 23:09 So here, Shari, I stand. I mean, there are two sides. There was this famous saying by Milton Friedman: "Inflation is always and everywhere a monetary phenomena. Now, what we calculate as inflation is a statistical model. Basically, you take a basket of goods and you measure the price escalation Speaker 2 23:30 from a from a particular base year. From Dhananath Fernando 23:32 a base year, right? So, of course, when the fuel prices goes up, inflation. I mean, the prices will go up. But we also need to understand when you when one price goes up, if you have I mean if your income hasn't changed, you have to also rationalise. If for an example, if I am using a petrol vehicle, when the fuel prices goes up, when I pump, I mean if earlier if I was spending 10,000 rupees for fuel, now if I have to spend 15,000 rupees for fuel. That 5000 I have to cut down from somewhere. When I'm cutting it down, the demand and supply needs to adjust, right? So while the while the prices will go up, I agree, and that will reflect on inflation. But as long as you don't give a subsidiary, as long as you don't add like liquidity into the market, things will stabilise because there's there'll be choices. Of course, for something like fuel, you don't have a choice. But what they spend extra on fuel, for them to cut it down, there will be choices. Some may cut it from food, some make food, some may cut it down from I don't know education or whatever, going to cinema, whatever. So all that will adjust. Of course, based on that, all those markers will entertainment. All that will completely change. But what we do as inflation is, it's like the thermometer. The real disease is the viral law, the bacterial law, the infection. What you check from the thermometer is. The symptom, it's not the root cause, right? So what you check on a bas the prices escalation on basket of goods is just like okay, fuel prices went up, so that will impact. But your body temperature can go up for so many reasons, right? So that is where I am coming from. I mean, there's a demand side and a supply side when it comes to inflation, which all which is true, but as long as we don't we keep the monetary system stable, it won't have a big issue. Of course, the prices will go up and inflation will go up and it will come down. Like at Ditwa, I mean Ditwa of supply chains interrupted. Of course, the carrot prices went up, bean prices went up. Of course, after two days it crashed, charindra chandrasena 25:41 but this might be a longer term impact. No, this Dhananath Fernando 25:43 time this might be based on the fuel, but already the OPEC countries have said that they are going to increase the supply. So likewise, the market they they adjust as per the system, but it doesn't mean that the of course there will be an impact on inflation because we are ultimately calculating it based on the pricing escalations or the selected, but inflation may also depend each and individual differently. For an example, people who are using fuel and very, I mean, less fuel economical vehicles will have a bigger impact because they have to pay more and more fuel. So likely they have to cut it down. I mean, if they were using the same vehicle for short runs or trips or something, probably they have to look at for alternative options. Correct. So it affects everyone in a different way. That is what we need to. Speaker 2 26:30 And and and plus the other thing is there's a huge inflow of electrical vehicles. So I think the electrical vehicles also certainly think if you take overall the number of vehicles in Sri Lanka, the electrical vehicles don't even count. Yeah, exactly. Yeah. If you take, I think we are a few charindra chandrasena 26:41 years behind exactly. Yeah, so Speaker 2 26:44 but the thing is, whoever the lucky ones who actually have electrical vehicles, or let's say vehicles that are you know plug-in hybrids, they have a better they have a better option or better chance of actually riding the storm. And as what Dana said does now. Even though the state of home rule, so state of home rules, what happens is home home rules, home rules. So depends on yeah. So, but okay. So the thing is, we say the strain. Yeah, the strait, yeah. The strait. So so let's say in that region you get you get Iran, obviously. Then you get Saudi Arabia, and then you get Qatar. So these are huge oil producers. But then again, you get countries which are outside. Now, for example, if you take Africa, North Africa, Libya is a producer. Then you get Nigeria, it's a producer. Malaysia is a producer. US is a producer. Then Canada produces shale oil and all that they can do. So other and Russia is a big producer. I mean, Russia is a giant, right? So I think things will kind of level out from there at the right price, where Russia will increase their production and all that. Now, for example, in an instance like this, President Trump can't go and pressurise President Modi saying, "No, don't buy Russia no. Yeah, he'll say, "Listen, I don't have listening, mate. I don't have any other option. I don't have this thing, my country is going to stop. Yeah. So, so there will be some adjustments that will happen, charindra chandrasena 28:04 and and the fact that the Supreme Court shut down his tariffs exactly. Yeah. So now it's a uniform tariff. He can't decide. Okay, I I don't like this country, and therefore the guys are higher. Exactly uniform if he's exhibiting it. Speaker 2 28:17 So the thing is, so so so definitely prices will go up. No question about it, right? But the thing is, supply also will because normally when prices-that's basic economics-when prices go up, normally supply goes behind it. So because for them to profit, then then what happens is then you get into equilibrium, and then it comes to a it comes to a you know market will come into equilibrium to a to a new price, which will be most probably higher than what we are paying now, but and the other thing is how long will this war? I mean, how long can you sustain this war? Because one thing is when you're sustaining war, you need two things, okay? And one primary thing, what you need is you need munitions, right? So in in America's case, you need you need munitions for to attack and defend, like because you need the Patriot batteries, you need the Thar battery, and all that, right? So you need the missiles for that. Another thing is how much can you sustain it? Because one, what they say is one Patriot missile is like three to $4 million, right? Where an Iranian missile is about $200,000. So you need to work out, and an Iranian drone is about $20,000, and the Iranian $20,000 drone took out a 1.1 million long range ballistic missile radar in Bahrain or something like that. So all that comes into play, right? charindra chandrasena 29:33 Yeah, I think in the case of the U.S. I think it's less about money and more about whether the country's population has an appetite for this kind of war because they have been burned by the. No, Chari. Speaker 2 29:44 The thing is, appetite is one. One thing you need to look at the economics of war. No, Speaker 5 29:48 the Speaker 2 29:48 problem is a lot of American hardware, Western hardware has been going to for the Ukraine war, right? So they had depleted stocks. Now they have gone and started on another frontier, right? So. In this in this instance, if something goes wrong, let's say problem starts between Taiwan and China, basically U.S. can't do anything to defend Taiwan. So there is a huge global this thing here to look at now. President Trump has taken a massive risk, one thing politically and one thing militarily, because whatever he is doing now, how can he sustain the war? Because some defence guys, what they're saying is he can't sustain it beyond beyond three weeks. So he is already saying four to five weeks. Yeah. So so I don't know. So the thing is, how long can he sustain? The other thing you have to understand is Iran and Iran and Iraq are two different animals. Iraq is a nice flat desert. Yeah, it's like driving on a beach. Iran is completely surrounded by a mountain range. That terrain is very tough. And 92 million people. 92 million people. Another thing is, which a lot of people don't know, because our maps, the sizing of our maps are not very accurate. Iran is actually three or four times bigger than three to four times bigger than Iraq, right? Which doesn't show on a normal map that we use. There were the maps that we used while we were in school, right? So it's all these things come into play. So even if you go on a bombing campaign, the larger the country, where do you bomb? That's the same thing with Russia. Russia is the biggest country in the world. It's second biggest country in the world is Canada. It's twice the size of Canada, right? So the thing is same thing is Russia. Like if with the Ukraine thing and all that, I mean Russia is a massive bloody country. So how do you manage this? So that's what I'm saying. Sustainability of this war is a big thing. So I think most probably after a couple of weeks, this is what I see. They'll come into some kind of they'll come into some kind of accord where Trump will also do something to save face, or he's going to get hammered on the midterms. I think any of us going to get hammered on the midterms. So it doesn't look good. I mean, I think Trump took a massive gamble against military advice, and up to now, I think it hasn't paid off. charindra chandrasena 31:47 It hasn't paid off, yeah. And it's obvious because he keeps keeps coming out and giving a different timeline. Timeline every time. It's first it was a quick one, and then a week, and now four weeks, and then it became five weeks, and then actually Speaker 2 32:00 the primary this thing of he came to defend us. This was done for the need of Bibi Netanyahu, right? Who who is also having his own political problems. So the problem is now even though they came and bombed. Yeah, and Israel charindra chandrasena 32:12 is having an election this year. Speaker 2 32:13 Israel is having an election, and don't forget, he's charindra chandrasena 32:15 under under investigation for corruption. Absolutely. So this is how that's why they say like the men who decide who launch wars don't actually fight the wars. So he's just so Trump Speaker 2 32:26 is having abstaining. Yeah, exactly. So this is a fantastic distraction. Exactly. And now Bibi is talking about sending, I mean, putting boots on the ground in Lebanon to take out Hezbollah. Again, he's just sending. You know. I mean, I don't know a lot of things he is saying, but I think he may not be able to do because the reason is the missile barrage his country is taking, and Iranians are saying I don't know if it's true or not. They're saying this is just the beginning, because normally on a normal normal military on a normal military thing, what they normally do is you send your weaker missiles and you send your slower missile with dummy missiles to basically for them to, to for basically basically to exhaust your enemy's missile capability. That is defensive missile. That is basically, you know, what the Israelis have. You know, they have something called David Sling. They have something called Iron Dome and all that. Because after a while, even the defensive missiles, what they have, like Yakawa, you run out of that. charindra chandrasena 33:22 Yeah. Speaker 2 33:23 So then you know what happens is then you get a then the Iran because Iranians have a massive stockpile of missiles. charindra chandrasena 33:29 Yeah. Speaker 2 33:30 Right. And plus they are saying that they got some stuff from the Chinese and the Russians. We don't know. So I don't know even if they are saving their best for the you know best for the end. Yeah. So you know it's all everything is time will time will time will tell, charindra chandrasena 33:42 and and we are out of time now. But Dana, do you want to have any closing? Yeah, and also by the way, the president is addressing parliament right now as as this is being recorded. So what he says, we are not covering because we don't know it. But people know by the time for Dhananath Fernando 34:00 geopolitically it is for for Sri Lanka is also in a kind of a tight spot, Shari, in my view, because if you, I mean, as we most of us know, in fact, we highlighted this in our initial podcast. Now, Iran actually our refinery was donated by Iran, and even if you look at this, Uma Oya and Iran has been a kind supporter, and even the Iranian president paid a visit to Sri Lanka. Yeah, Speaker 2 34:24 and and and there are there's another thing. Our refinery is actually made to run on light on light crude. Line crude. I mean, we can't run Saudi heavies and all. So that's on Dhananath Fernando 34:31 that's one side, and they have been kind of voting for us on lot of human rights challenges at the international stage. And on the other side, US is our main export market. We are already having another battle on the tariff front, so it's kind of a geopolitically quite sensitive that we have to. There was a movie charindra chandrasena 34:47 last year called One Battle After Another. Is it very appropriate title? Leonardo got to a movie, so this this feels like that for this government also because they get over one thing and then another thing comes. One Dhananath Fernando 34:58 battle after another, but yeah, go on. And then also now China has said. I mean, I don't know what they will do, but they have also kind of supported. They have said like they are supporting the territorial integrity and sovereignty of Iran. So I don't know what what the military support or anything. Yeah. But it also seems like also like when these big guys are fighting with each other, for us to manage geopolitics is also not easy, so we have to be prepared. I mean, if someone asks rather than preparing for the war, I would recommend better is to preparing for the geopolitical and the foreign affairs front because that's where the preparation can happen. Speaker 1 35:31 Exactly. Dhananath Fernando 35:32 If you if you are really serious about it. Exactly. So so so that's that's one thing, and also I think we have to keep in mind about the global monetary system at the same time because U.S. is also having a because one thing is these two I mean leaders they are also in a kind of a political ramble they also want to keep their popularity on one side at the same time the the the strength of the dollar with the high budget deficit and their inflation and their their economy is also having their own challenges so we have to make sure that nothing goes wrong on our front. While economy can slow down, all that can happen, and it may not be the most favourable situation for Sri Lanka. But the economy won't collapse as long as we keep the stability of the monetary system. Things will. I mean, maybe there'll be challenges for sure, and that's why we always say, as as a policy think tank, trade is very important. Anything that challenges trade is a challenges on human existence. As it was famously said, when goods and services don't cross borders, soldiers will. And this is a classic case of what's going to happen. And everyone who are not part of it is also going to get affected, and that's why yes, I think we are out of time. I get the indication, Chari. Just one, just one small Speaker 2 36:48 thing to be saying. One thing from the government's perspective and point of view. One thing you have to understand is there are things as a government you can do and you can't do. I mean, we can't influence to stop a war. Yeah, but the thing is, what like Dana said, you know, keep it the diplomatic channels absolutely and all that. Those are things the government can do. Those are under your control. So I think the government has to be more proactive in that particular area and see how how they can actually minimise Sri Lanka's exposure. charindra chandrasena 37:15 Absolutely. Dana, is there Speaker 5 37:17 a yes? Final final Dhananath Fernando 37:19 thought. So become an Advocata insider. It's 12,000 rupees a year, 12,000 rupees a month. What we are trying to do is to build the policy community who support economic reforms, and you get special analysis in Singhala about exchange rate, stock market, and many other markets, and a weekly update on economic stories. So, become an Advoca Insider. We have more programmes on supporting our research work. What we need is to keep the independence and basically, you know, navigate Sri Lanka through the economic reform process. So, if you haven't been, please become consider an Advocata inside. That's charindra chandrasena 37:56 it. Right, great. So, geopolitical conversation, quite interesting. By by next week, we'll probably have more to talk about because because the picture will hopefully be clearer. But thanks, Dana, as always. Thanks, Riyadh, and thank you for watching as well. We will see you again next week. Transcribed by https://otter.ai