Dhananath Fernando  00:08
Hi Dana. Hi Shari, I changed my greeting this time to say Ibuan, Namaskar, Namaskar, Nihao, Nihao, to be geopolitically right in all fronts. Yes, yes, yes. We are being inclusive for everybody. So, Nihon, Nihon.

charindra chandrasena  00:31
Well, we have had quite a weekend. Oh yeah, man. Not the not the three of us necessarily, but the world. Yeah, absolutely. There has been a geopolitical earthquake that has triggered an international tsunami.

Speaker 1  00:46
Absolutely, just just imagine going to Betty in one country and waking up in another. Yes, I mean I mean literally. Yeah,

charindra chandrasena  00:53
it's it's fascinating. Yeah, yeah. No, it feels like the world has changed in a matter of 2448, hours. Yeah.

charindra chandrasena  01:03
Just initially, because before I move on to the foreign front, I want to sort of start from Sri Lanka. Okay. Okay. There were calls for the government to put out a statement or condemn the U.S. actions or say anything about it at all. There was a brief, vocal-I mean, verbal statement by the foreign minister Vijay Herat at a press conference, which was not related to this. That was about education. Yeah, and he was prompted, and he gave one sentence. The ruling party, the JVP, has been pretty open about its criticism. It has condemned it wholeheartedly. So Minister Vigita's point is that a party can have a view, but the government's view must be, you know, taking into account the citizenry, the entire like geopolitical interests, foreign policy, all of that. Just initial thoughts on that, and then also they have put out a statement now. Finally, I'll actually read that statement out as well, and then I can get your thoughts.

Speaker 1  02:23
Okay, the

charindra chandrasena  02:24
government is deeply concerned. I'm I'm paraphrasing, deeply concerned about the recent developments in Venezuela, and is closely monitoring the situation. Emphasises the need to respect principles of international law and the UN Charter, such as the prohibition of the use of force, non-intervention, peaceful settlement of international disputes, and the sovereignty and territorial integrity of states. Sri Lanka attaches great importance to the safety and well-being of the people of Venezuela and the stability of the region. Calls on all parties to prioritise peaceful resolution through de-escalation and dialogue. Important that the United Nations and the Security Council be seized on the of the matter and work towards a peaceful resolution, taking into consideration the safety, well-being, and the sovereign rights of the Venezuelan people. Initial thoughts: Is it a good statement? Is it strong enough? Is it weak?

Speaker 1  03:29
Okay, then I will take. No,

Dhananath Fernando  03:31
basically, first of all, we are. I'm not the geopolitical expert. I'm just bringing the economic angle. So we have to look at Sri Lanka's stance on how these two countries matters to us on an economic point of view. Definitely, one party who has engaged is one of our main export markets, and we had a. I mean, the entire world had a time in April last year on the tariff issue, and there has been some negotiations has been done, and there has been some agreements that has been reached out. So we cannot offset that front. I am looking at more objectively. I'm not saying whether it's right or wrong or yeah, you know. And at the other front, from if you look at if you from the statement, you can see there has been the target. I mean the the message has been focused on Venezuela and the UN, which I think is the objective point of it, which is the right thing to do, because that's because your your expression is we are concerned about the people of Venezuela, what has happened, and things has to be resolved according to the global global order, which is comes with the UN after the World War that there was some global you know agreement across the countries. Like when you you know engage with another country, there has been globally accepted set set of rules. So you have to fall back to that. Of course, whether it's the right set of rules or whether it can be improved or not is a different conversation. So in that front, I think, which is quite neutral, because you are we are not a. If you can play at all because it's one thing is it's completely away from our region, and we are not even consider. And even if you look at the how the other countries have made the statements, including the main allies of the U.S. they have also said they haven't said it's right. Neither they have said it's wrong. They have said they are also close closely monitoring what is going to happen, so I think that's that's right. I think the the other way was like also to bring the there has also been concerns about Venezuela, like how the elections being held, whether it's a democratic government, whether actually it represents the opinion of the people. So in our statement, nothing has been mentioned. We have basically said we are concerned. We have we

charindra chandrasena  05:43
have we have sided with Venezuela without criticising the U.S.

Dhananath Fernando  05:48
Yeah, we have brought rather than the sided, we have brought the concern out, but more on a neutral basis. It's like a sort of a courtesy statement without upsetting both sides because you haven't, we haven't mentioned even one party on the other side. We have just said we are concerned about one country because their president is no longer there, and the vice president is running the show now, and there are some courts action being taken in in New York. So I think in in that sense, on a Sri Lankan point of view, you cannot definitely upset US. That's the reality. And my my

charindra chandrasena  06:26
question is even more fundamental about what do we have to gain as a country by making a critical statement or a big statement, because at the end of the day, even the global media won't cover our statement. It doesn't matter. Yeah, we have to get out of this mentality that like we are a big deal.

Speaker 1  06:47
Yeah, yeah.

charindra chandrasena  06:48
And that's that sounds unpatriotic to some ears. I know, but it's the it's the truth. You know, until we get to a position where we matter on the global stage, we don't really, you know, and and so why why ruffle any feathers when you know there's no absolutely impact from it.

Speaker 1  07:06
So the thing is, Chari, like these these my point of just kind of bouncing off what Dana said. If you look at what's our proximity to Venezuela, Venezuela is technically from us. It's a far side of the world, right? So we have no geo, we we have no geopolitical significance. We don't have any economic significance because Sri Lanka doesn't purchase. As far as I know, we don't purchase Venezuelan oil. So we don't have any. As far as I know, I I don't think we have any trade between Israel. Venezuela is one of those countries. We have absolutely, I think, absolutely no trade. Minimal trade. Minimal. I don't know.

charindra chandrasena  07:42
I mean, maybe a

Speaker 1  07:43
couple of million dollars. Nothing much. I because I because the only thing the Venezuela exports is actually it's it's it's crude. It's the the

charindra chandrasena  07:50
connection is more ideological. It's ideological. It's ideological. Yeah, because the the ruling party. Yeah, it's it's not maintained good relations with ruling party in the JVP, yeah, because it's part of the communist bloc.

Speaker 1  08:05
Yeah, so it's a it's a Marxist setup. Yeah, because JVP is a Marxist party. Maduro's government is also on that same line. So because of that, it's a more as you said, it's a more ideological thing. But looking beyond that, I want to look at something a little bit beyond that. Is if we try to make more noise than what our actual size is, then it's going to be detrimental to us, right? Because end of the day, US is our single most single point because export market for us. I think we export 3.6 to 3.7 billion a year, so we shouldn't do anything to that will jeopardise that. Because end of the day, what is happening? There might be the rights and the wrongs about it, but the thing is, end of the day, every country has to work towards its own interest. So currently going and raffling or doing sabre rattling and all that makes absolutely no sense for us because no one takes us serious. We are too small for any of us to take us serious. Now, if something like this happen in the region, then we can think about it because there are regional repercussions.

Speaker 2  09:03
Yeah,

Speaker 1  09:03
this is not even in the same continent. It is, as I said, exactly the other side of the world. So I think what the government also I think has played it very smart.

charindra chandrasena  09:14
That's what I was getting too. I think it shows maturity on their part that they were able to resist that pressure that came from both within the government and outside to make a strong statement you know exactly.

Speaker 1  09:32
So the state what do you call the sentiments that Palavata has basically stayed at Palavata, right? So which I think is I think that's that's I think the easiest way to explain it. But looking at the world order, I just want to go beyond Sri Lanka. Looking at the world order, I think there is going to be. I mean, there was a flow, or how do you call it? There was a there was there

Speaker 3  09:57
was a

Speaker 1  09:57
way how the world was governed, right? And now there is a lot of disruption there because lot of countries are having problems with other countries and all that, right? So there's a lot of conflict going on. So with this, it kind of because if you look at the if you look at the world order, lot of things are black and white, right? And there was only a little bit of grey. Now there's a lot of grey, and there's the the lines of black and white are little bit little they're diminishing off. So coming back to why why the U S did this, because if you go back to the history in 1823, there was something called the Monroe Doctrine. The Monroe Doctrine was actually developed by the fourth U.S. president James Monroe. I think the exact date. I think it came out was I think december 2, 1983. Sorry, 1823. And in that, what they said was that if you look at the if you look at Americas, the American continent. There's a North American continent, North America and South America, and the American continent was before the American Revolution and all no, not the revolution before the American what you call after the Boston Tea Party, there were three countries that was interested in in the American continent, right? So that was one was the Brits, the French, and the Spanish. The Spanish were in the south below from Mexico downwards. It was the it was the Spanish. Then parts of America, Louisiana, all the French were there, and then north upwards it was it it was the Brits. So America's freedom fight against the Brits. What happened was after they got their freedom and all that, what they what they did what they did was so they thought okay we can't have any more undue influence or attacks from the from the Europeans so that's how the whole Monroe Doctrine was done

charindra chandrasena  11:48
so basically just to lay it out the Monroe Doctrine said that whatever colonies the Europeans have already in the two continents in the Americas

Speaker 1  11:58
correct

charindra chandrasena  11:59
will be untouched fine yes you just can't have any new colonies coming. Don't even think about it because this is our sphere of influence. Absolutely. In the same way, we will not come to your backyard. Yeah, and your neighbourhood and try anything. So mutual respect for each other's territories.

Speaker 1  12:17
Exactly. So so now the thing is, what I see is Trump is kind of President Trump is again kind of going back to the doctrine. Now now they

charindra chandrasena  12:26
call it the Donro doctrine. Yeah, and he he loves that term. Yeah, he's not saying it himself. Yeah, he thinks it's a good marketing. It's a good marketing thing.

Speaker 1  12:37
So I think one reason for that is probably on the Monroe Doctrine also. There's something on defence and economic. So one thing was China was heavily investing, and Iran was heavily investing into. I think Iran invested about 9 billion in the last nine years. The Chinese were investing a lot in this thing. So what happens is it's basically America's backyard. So I think that had a lot to do with it. And the other one is obviously the natural resources are there, right? So I think all that put together, because if you look at the natural resources, America has a huge problem with rare materials now, right? So because of that, because lot of the rare earth materials you find lot of that in China, and then lot of the processing is done in China. So now there is so after the trade war started between the two countries. Now the Chinese they also started stopping. A good example is in Australia. There was a tungsten mine which was closed three decades ago because the Chinese priced them out. They opened it again, and their sole purpose is supplying to the U.S. Because you need tungsten for, especially for the defence industry, for communications and all that, you need tungsten. So, so you are seeing a shift in global supply chains. Also, that's another thing that's going to change with this. Yeah, yeah.

charindra chandrasena  13:52
So, so it it all comes down to economics. At the end of the day, right? So it's it's it's power, but then that power is also determined largely by economics, you can't fight wars without money. Exactly right. You can have in modern warfare. You can have half a million people. Yeah, it still wouldn't matter because if you have the equipment. Yeah, you don't have to. It's not hand-to-hand combat anymore. Yeah. Right. So, Dana, in terms of let's let's take it down the economic path. Why is Venezuela forget about the the capture? Why was Venezuela struggling economically? Because the reasons that that are that are commonly put out is what it points to socialism, right? It points to corruption. It points to all those things, but break it down.

Dhananath Fernando  14:52
Yeah. So it is basically the state capture, because if you recall, many years ago. Venezuela in that region was the highest per capita GDP in that region, and they were quite a prosperous country. It was prosperous to an extent. Most of the U.S. expats were living in Venezuela, right? And then they had, of course, it was a oil-rich country, natural resource-wise rich country, gold and a lot of minerals are there, so it's a naturally gifted country. And then at the same time, these oil reserves were running with the companies from the U.S. like Chevron's and Exxon Mobil. There's another company I forget their name. So they were BP, BP, no? Yeah. So so they were basically running it, and then Venezuela was prosperous, and then basically they nationalised these oil companies and asked them to leave, and then they the state was planning to do that. At the same time, of course, the global oil prices were doing quite well, and then there was of course President Hugo Chavez was appointed, and then the oil prices were crashing. Of course, because of the money that they, I mean, basically earned from oil prices, they were able to at one point be very generous for the poorest of the poor. But then, when the oil prices started crashing, at the same time, they again invited back the U.S. oil companies, but with a massive royalty fee, where most of the revenue was going to the state-owned oil company of Venezuela, which then actually the oil companies sued the Venezuelan government, and they won the case, and they won the case, and they were the court basically ordered to pay compensation for these companies, and then in fact they paid. But then afterwards there were sanctions from the U.S. and because of that they could not pay. And I think the the claim was about 5 billion, and they were I think the they were they were asked to pay about I think 1 billion, so they lost about 80% of their investment, if I remember right. But even they could not continue. I think that's what President Trump claims that Venezuela stole. I mean, they stole their wealth sort of thing because they could not basically capture their investment back. So the point number one is, if you try to do state to run businesses with unproductivity, this is what's going to happen. You are basically bringing a massive productivity issue, and then you are, I mean, going into deep travel. And when they were in deep trouble, they thought the same thing that the Sri Lankans saw at one point. You can print your way out from this crisis. They printed money as like no tomorrow, and the inflation was. I mean, I mean, I think it's triple digits at one point. I think still it's very high. And I had a Venezuelan friend. He said, like he got the salary on like on a on a Friday, and and by Monday he could not deposit at the bank, and on Monday like there was no value for the salary, so it was that high. So and when you print money, this is what's going to happen to Venezuela. Not only it's a lesson for Venezuela, also a lesson for the U.S. because the U.S. system works based on the because they are a reserve currency and it's a petrodollar.

charindra chandrasena  18:31
Yeah,

Dhananath Fernando  18:31
and as you can see, U.S. is also in deep trouble with the mounting debt, and that's one of the main issues, and that's the reason behind their tariff, you know, higher tariffs in April, and they are looking at all sorts of options how they can keep this global superpower. And also, we are in an era where this global superpowers are competing for the same position, China and US. So this will be a quite a aggressive period in the global history, especially every time when there are two superpowers competing with each other, that's quite an uncertain period. So U.S. also they are in deep trouble. So when a country like Sri Lanka, when we print money, we will end up bankrupt. But when a country like U.S. print too much money, since they have the power, they will try aggression. Yeah, and that's what exactly happening? And also, they have given, I think, a signal to the other countries because, as I think Secretary Rubio has asked in that press conference, everyone comes to Venezuela because of oil, and now the oil was trading outside of the U.S. payment system because it was mainly for China, Iran, and Russia, and now with their capture, that is that's also an indication to the other geopolitical side. So economically, it's a very turbulent period. We have to be very cautious because this is not the end, as Riyad said. Now the other countries are also going to react, and if. Similar statements. There have been lot of opportunities for similar statements, but economically, don't print money. You are heading to massive crisis. It could be Venezuela, Sri Lanka, or US. And don't state try to do businesses because when the unproductivity seeks in, you are basically inviting risk to monetary devaluation.

charindra chandrasena  20:18
Yeah. So on that one, the third one I'll add that you didn't mention: don't cross the world's superpower. Don't antagonise the world's superpower, because you will understand the impact and the potency of sanctions. Then, right, and it won't. It might not hit you that same year, but as the sanctions are put years later down the line, they will start to bite, especially if that superpower remains a superpower.

Dhananath Fernando  20:52
Good one.

charindra chandrasena  20:53
So don't don't cross the superpower. Maybe China in 20 years, but whichever one, don't don't cross them. The second one is about this nationalisation, right? Now I I I I know Advocata has a view on this, so I want it clarified by you. It is at the end of the day, Dana. The natural resource of Venezuela.

Speaker 1  21:22
Yeah,

charindra chandrasena  21:22
why should the U.S. benefit from it over the national interests of that country? Because that was the argument about nationalisation.

Dhananath Fernando  21:35
Yeah.

charindra chandrasena  21:35
So where do you where do you sort of draw the line, and what is the balance?

Dhananath Fernando  21:40
Yeah, I I don't think it's like you know the you know the the companies come came and invest and there was dues to be paid like there were there were taxes to be paid and there were so so

charindra chandrasena  21:51
just to lay this out right, Trump's argument is we built that infrastructure yeah therefore we own it almost. They owe it to us because we invested so much money and effort and time. Yeah. So take it it from that. Yeah. How long a period of ownership does that grant a foreign country?

Dhananath Fernando  22:17
From from the little that I understand, I wasn't very sure about what President Trump means, as I said, they invested about if I remember it during that time about $5 billion, and then they nationalised and they really could not take the investment out. Only which was compensated was about 1 billion, like even what court was ordered. So they lost their 80% of the investment. If I remember it again, I mean, don't hold me to these numbers. If I remember, and out of that also 1 billion, they could not really take out. I mean, they could not take the payments, the entire payment out. So I think President Trump's claim is by nationalising the economic loss was much larger. It's not about that 5 billion because you invested with a long-term, you know, relationship. But I understand the interest of the U.S. as well. It's rather than their investment; it's the petrodollar, and they want to keep the control of the region. Let's not. I mean, that's that's the reality. So, but I do not. I mean, I do not see. It's like you know. I mean, if the now what is happening is concerned, if a country comes and really you know try to drill their oil and completely take it off from their ground without paying anything, then it's a problem. But in any investment, the country has a benefit. For an example, even in Sri Lanka, the land-I mean, the what we own is the surface, the the earth resources beyond the land is owned by the state, so there has to be a royalty to be paid for the government, regardless. That's where the gems and everything. If there's a gem mine under my, I mean under my house, though the land is owned by me, it doesn't mean I cannot say that I I own that gem mine. It's a property of the government. In most countries, the the the the earth minerals are owned by the government. So I don't see it's like USC is basically completely. I mean, taking it out. There was a investment, you know, transaction. There was a framework. Yeah, no.

charindra chandrasena  24:22
I'm just pointing out the logic behind the nationalisation. No. So is that the logic behind the nationalisation? Was that we? This is our land. This is our resources. Yeah. And therefore, we should get the benefit of it more than the US is. So, so thing is, this is

Speaker 1  24:39
not the first time it has happened, right? If you look at Aramco, which is one of the, I think that's the largest oil company in the world, the Saudi Saudi government own one. Aramco used to be American firm. Then what happened is he got King Saud, the current the current king's I think grandfather. He basically nationalised because what happens is now it has gone through court proceedings now. The court proceedings; they would most probably would have checked what time the infrastructure was put, how much of extraction that has been done, and then you discount it. So there is a methodology how it's done. So you can't just come and say that you know the whole thing belongs to us. And plus, there is a lease period. I mean, there is no infinite time you go and put up an infrastructure. There is a period after that you get your payback, so it has gone into courts. It has gone into arbitration, and then the court decision is right. Okay, they would have put it up. I'm not sure about the numbers or the number of years they would have put the infrastructure some time ago. I think it was put in the 80s, if I'm not mistaken, and then they would have been extracting for the for a particular period, and after that they would have discounted and said, okay, you all have recovered your money. This is the rest that actually belongs to you. That's why you go to courts, right? So I don't think President Trump's argument sticks in on that count. If that is the case, then they have to go and invade Saudi also, because Saudi also, I think 50 years ago or something, not 50, I think 30 or 40 years ago, they told him to move out. Saudi is an ally, you know. That's the difference. No, that's the thing. So the thing is, you know, that's I said, you know, the whole word, you know. But

Dhananath Fernando  26:04
we are coming back to Charin's question on like, okay, the the sentiment of okay, why why we can earn everything, why we should give it to that sentiment. No, exactly. You know, that doesn't really hold true, Chari, in most of the cases because you saw what has happened by trying to do that. In fact, Venezuela being the largest oil reserve in the world, they really could not bring that productivity in.

Speaker 1  26:27
Yeah, so I'll just just bounce on that. Before before the what do you call the foreign companies were basically kicked out, Venezuela production was about two to two and a half billion barrels a day. Now it has dropped a good day, 750. So you can see it has production has fallen to 1/3, right? So what they should have done was keep the companies, and if the agreements that were signed were lopsided, because normally these agreements, that's how this this thing. Because where even the even the Iranians had the same problem, where they were only getting a small amount. Let's say the total export amount is let's say 100. They are only getting a fraction of that. So that means it's a bad deal. Yeah. So a bad deal, you don't kick people out. You can renegotiate it and get it back on going again. I think that's where the problem was. Yeah.

charindra chandrasena  27:13
I I I don't think Chavez had the no no. He's a hero for no no. I'm just saying. I don't think Chavez, Maduro, those leaders necessarily had the diplomatic nose to

Speaker 1  27:27
no no no. That is one one thing is the one thing is the mindset. Like you get you have a political mindset. No, so and you so that was another issue. So what happened was when Chavez when they nationalised it at that time, oil was at a very high price, right? And what he did was he started giving all these freebies, and you know everyone knows it has happened in Sri Lanka. You start giving freebies, you can't stop doing it after that, because there is a set of segment of people who don't understand. They they want it. It's it's it's natural. Then I remember when Shaves was there, oil prices fell like it bottomed out, like it fell to like $15 or something like that. Don't hold me on the number, but it fell very low. And what happened was he couldn't give the freebies anymore. So that's where the printing started. Because when you start giving a freebie, right? This was around.

charindra chandrasena  28:13
This was around the crisis, financial crisis. I think so. 2007 or so.

Speaker 1  28:19
Yeah.

charindra chandrasena  28:19
Because so Madura came in 2030. Yeah. So it it was that last period because I also remember seeing that Venezuela's real decline when it started plummeting. Yeah. Was maybe around that time, but I don't remember exactly.

Dhananath Fernando  28:36
But on the other point, Shari, now this is a very interesting thing because your point, we have to understand there are certain resources that, especially when there's a geopolitical interest, you have to engage them.

Speaker 1  28:47
Yeah,

Dhananath Fernando  28:48
because otherwise you are getting into a deeper trouble. You think that you can do it on your own. Yeah, but it is much better because when they have a security concern over you, it's better to engage everyone. I think the classic cases in Sri Lankans context of East container terminal. Like we can think, we can say you know it's I mean container terminal is ours. Why can't we do it? But definitely we are there. We have a growing superpower next door. They have a security concern. Japan has a security concern. China has a security concern. So there is no way that you can build get their trust saying no. We will do without engaging anyone. Probably on that case, the best strategy is you ask them to come as a consortium. That's what we try to do on the East Container Terminal because already the Chinese CICTs already they have a deep terminal. So on there are certain areas that you have to balance and make sure that you give the trust and confidence, allowing everyone to invest, but not to you know step in into each other's foot. But when you try to do things on your own, basically you antagonise everyone, and

Speaker 4  29:52
then

Dhananath Fernando  29:52
it becomes a bigger problem. So that's the geopolitical lesson that you. Yeah. And another

charindra chandrasena  29:57
point to support what you just said. Is that Venezuelan oil is is pretty heavy? Absolutely, it's heavy crude. Needs it heavy crude, so it needs more refining than certain other countries. Exactly, crude oil. So that that makes an external partner all the more important. Yeah, the you know that that comes with the technology, with the expertise. Yeah, with and there,

Speaker 1  30:25
and there's another thing now. America is like economically they're competing more than economically they're heavily competing with the Chinese, and the primary buy-off when you sell an oil, 50 to 90% of the production was bought by the Chinese, right? Chinese were sending super tankers and purchasing, and since there was embargo going on. What happened was they were buying it at a heavy discount. So, which means Chinese consumer and Chinese businesses are becoming more comparative because they are getting cheap oil, right? So that's another thing I think on the economic front, where the U.S. is trying to kind of slow things down. Yeah.

charindra chandrasena  30:56
So since you brought that up, that was to be my next point. Actually, China has put out a strongly worded statement, but done nothing beyond that. Nothing.

Speaker 1  31:09
Yeah.

charindra chandrasena  31:10
Okay. That is because for all the talk about China is the second superpower and China and America competing still in the world the U.S. is the top player. Yeah, it is still the case.

Speaker 1  31:28
Yeah.

charindra chandrasena  31:29
Okay. Just because China, in terms of purchasing power, is not

Speaker 1  31:35
really Chari. So this is something that everyone cannot see. U.S. is the biggest consumer in the world, right? U.S. is not the biggest exporter in the world. The biggest exporter in the world is China. The manufacturing

charindra chandrasena  31:44
hub of the world is China. Exactly. So then it follows that because if you're so China doesn't doesn't have a materialistic culture like the US does. Yeah. Because China is still you know new to wealth on this scale.

Speaker 1  32:03
Yeah,

charindra chandrasena  32:04
America has a long established history.

Speaker 1  32:06
Yeah. So

charindra chandrasena  32:07
when they talk about the 1920s boom, which led to the the Great Depression.

Speaker 1  32:12
Yeah.

charindra chandrasena  32:12
That is the height of materialism.

Speaker 1  32:14
Yeah. Right.

charindra chandrasena  32:15
So America is required by more people, more countries, because they need that market to sell into, right? And it's a long-established market. So when I say that America is still the top player, I'm talking in terms of the size of the economy, but also the alliances, because whatever Trump has done, Europe is still with the U.S.

Speaker 1  32:38
Of course, Europe

charindra chandrasena  32:39
is still with it. No,

Speaker 1  32:40
so so one reason for that is Chari, it's not only the economics and all. It's a cultural, it's a cultural thing. You know, it's it's Anglo-Saxon. You know, this thing going on, but but the scenario is, I mean, if let's say if the U.S. stops exporting or doesn't give you anything, most of the countries won't even feel it, right? Because apart from apart from apart from software and tech, beyond that, and which which is something the Chinese are buying. But if

charindra chandrasena  33:03
my point is, if the U.S. stops buying,

Speaker 1  33:06
no. But

charindra chandrasena  33:06
then a lot of countries will fail. So a lot of countries have the U.S. as its main trading partner. No, correct, correct. But

Speaker 1  33:13
the thing is, this thing now in the U.S. I think for the last 10 years, China has been diversifying its exports a lot. So they are going into becoming, and don't forget, the world has been getting richer, right? If you look at, for example, the the the Far East, if you look at the Middle East, all these countries are booming, right? The per per capita incomes have come. Even Sri Lanka, right? Our per capita incomes have come even even before the crisis, right? We were 87 billion, right? Even after depleting 50 million from the crisis and coming back, we are now 100 plus, which means Sri Lanka's consumer, what you call consumer behaviour, has changed. That means we are purchasing more stuff. Market is market is this thing, right? So because of that, the world is also kind of purchasing more. So if the U.S. starts, that's the thing. That so this is this dangerous path. Path I think Donald Trump has actually gone down.

Speaker 5  34:00
No, but but

charindra chandrasena  34:01
my point was that US is still the number one. That's still I think that's number one. They're still number one, and that is that has not changed just because of China's growth. Yeah, because it's beyond economics. China still doesn't have the alliances that that make you a true superpower. No, it also doesn't have that age in terms of you know being a familiar.

Speaker 1  34:27
So the thing is like what has happened, and it might

charindra chandrasena  34:29
change in the next 20 years.

Speaker 1  34:31
No, I think it has already changed because the reason is now US. You are right about all those, but the thing is, which what have what has happened in the last few few years, not few years, maybe maybe the last 12 months, these tariffs have come, tariff wars have started. Then this whole Venezuelan issue. Then what do you call Mark Rubio said that you know he has kind of even President Trump warned, saying that Bolivia is you know watch out, Cuba, watch out a few countries in in South America. When that happens, what happens is they start going outwards towards other countries. It pushes them because they don't have a choice. Because America has become very underway. The

charindra chandrasena  35:07
only only thing there, Ria, that I will say is I think people are expecting that to happen a lot faster than it will happen. Because if it was going to happen, Europe Europe actually tried. Europe met China.

Speaker 1  35:20
Yeah,

charindra chandrasena  35:20
they couldn't reach an agreement. India is another example. India, when it was when the relationship was sort of fractured by Trump, India tried to get with China, and they are still struggling because it's it's it's not easy for them to put aside their traditional rivalries and suddenly become very chunky. No, but but the thing is,

Speaker 1  35:43
sorry. No, the thing is that because China is

charindra chandrasena  35:45
supporting Pakistan, right? China is also you know now getting control of Bangladesh. So for India, there are concerns like no no. No, I have

Dhananath Fernando  35:54
I have a view here. Now it's also interesting because I think while people criticise President Trump's moves. Actually, I I mean, one thing can be assured that these moves are very well thought, including the tariff. While I completely disagree with tariff, and I'm in my view that's take that's going to take U.S. I mean, on a completely a negative sort of consequences will be there for U.S. which we can already can be seen, but how they are trying to attack on to keeping the this all has come down to keeping your superpower. Now how they have they wanted to poke China through Venezuela on the oils on one front, right, and then also it gives a signal the very thing that you mentioned, China hasn't done anything, so that also questions the Chinese allies. Okay, they are taking your side, and this was, I mean, in Iran's case, they did not interfere. Even in this case, they did not interfere. Even in the Sri Lankan thing, a lot of people actually thought, like when we were going through the crisis, one of our hopes were that China will step forward and they will give like 5 billion some amount and we will not bankrupt. It did not happen and it's fair by China on the other side because USC is one of their main markets on one side and if you look at like how they responded to the entire tariff thing, they went by the rules. They said this is against the WTO rules. So China is playing it in a way smartly.

charindra chandrasena  37:21
China is playing the long game. Long game, so they

Dhananath Fernando  37:24
know.

charindra chandrasena  37:24
But one one thing about what you said, Dana, is the only thing I would disagree with on is that when you say Trump's moves are well thought out, they are well thought out in the short

Dhananath Fernando  37:37
term. Okay,

charindra chandrasena  37:37
in the sense that, okay, it's like somebody going and buying an expensive whatever, right? Because it gives them pleasure at that point to own it without thinking long term. How does this affect my my my wealth? Trump's moves, and that's why I'm saying the next 20 years, China could very well be the proper superpower because what he's doing is eroding these alliances that actually made America great. When he talks about making America great again, it is so nonsensical for me because the only reason he can flex his muscle on the global stage is because America was. When you say great, I mean it's powerful. The power that was built by all the previous presidents, he is using. He didn't really build any of this power. So it's it is. I'm flabbergasted when when people believe that he's making America great again. You can't make the superpower of the world great again. Yeah. So

Dhananath Fernando  38:36
let me recorrect myself in that front. So yeah, what I meant was it was well thought, well thought, short

charindra chandrasena  38:42
term for sure. No, well

Dhananath Fernando  38:43
thought, well thought in terms of poking China. You know, well thought of like rather than directly getting into China, of course, these these will completely destabilise the entire world, and you can see what has happened. And sometimes it may also, you know, counter counterattack because that the the actions will also rethink whether the global superpower is using the power responsibly, which will lean the other countries for different regionalizations and you know like you know aligning with other countries. That's what Singapore was mainly, you know, putting forward. They said like no longer the U.S. is the reliable partner in the way that they treated. So we'll think of a different geopolitical order or a strategy to move forward. Not a

charindra chandrasena  39:32
caring leader. Exactly. You're no longer the

Dhananath Fernando  39:34
caring leader. You're not no longer responsible with power side of a narrative. Exactly. So that's that's another lesson. Also another lesson for Sri Lanka is cherry now. We, I mean, as you can see, India is the third superpower, and we have to be prepared for similar consequences. Not probably in our lifetime, but even that could be could be in our lifetime. And also, we have to understand the narrative because before President Trump attacked Venezuela. The narrative has been set. First, it says drugs. Then it says it undemocratic. So the narrative was coming on their way. They should have understand that you know these things are not coming. Colours are not good. They have to come to some level of you know. I think President Maduro from the news reports. I think he tried to. I mean, he indicated that they are willing to work with the U.S. But I think it's not. So I think

Speaker 1  40:25
so. So there are two things, Chari. One thing is America has not committed boots on the ground without having without having boots on the ground. You can't. You don't have 100% control, right? You can't

charindra chandrasena  40:34
run the country. You can't run the country. Same thing. They cannot

Dhananath Fernando  40:36
afford also to have boots on the ground

Speaker 1  40:38
because the last few was no American debt is which Dana spoke a little bit early on. Is 38 trillion. Another war will push it up even more. And more important, more importantly,

charindra chandrasena  40:47
Trump came on a platform, pledging that he is not going to go. He is

Dhananath Fernando  40:53
president of peace. President

charindra chandrasena  40:54
of peace, non-interventionism, no regime change. I am not going to forever wars. No boots on the ground. All of that. Yeah.

Speaker 1  41:01
So there, so there's a, so there's a different kind of you know plan going there. Another one I just want to touch upon is now, I think the world is going to basically go into different zones now. Now the thing is, the Chinese they have issues with Taiwan. The Russians are currently fighting Russia and Ukraine are at war. So currently, what President Trump has done, it legislates other people to do their own thing, right? And if you if you look at China not getting oil, China will go and buy more oil from Russia because currently Russia is under embargo. Russia will know. I mean, this is what my personal opinion. Russia might openly go beyond embargoes and sell, and they will say, "Listen, if this guy can go into a country and take it on, we will do whatever we want. And the other part of it, then what happens is when you're going embargo busting, you use the navy to blockage ships. What if the Russians and the Chinese send their own ships to escort their oil carriers, oil tankers. What's going to happen? Is an American ship going to fire up on a Russian ship or a Chinese ship? Then you are going into open war. It's a completely different game. Yeah,

charindra chandrasena  42:09
and and since you brought up spheres of influence, and because Dana also was talking about India, so India is going to be in the next five years or so. The it's going to overtake Germany and become, if I'm if I remember very third largest city. India, India has already overtaken

Speaker 1  42:25
Japan. Yeah, Germany.

charindra chandrasena  42:27
Yeah, right. So Germany is above them.

Speaker 1  42:29
Yeah,

charindra chandrasena  42:29
and they're going to overtake Germany and become the third largest in the world. Right. So then we will have U.S. China, and in India.

Speaker 1  42:38
Correct.

charindra chandrasena  42:39
And the spheres of influence, this Monroe Doctrine or Donro doctrine, whatever you want to call it, is going to allow India to exert more control over the region. Now, India has not done a great job with it, right? Because it has, it had an ally for the longest time in Bangladesh.

Speaker 1  43:00
Nothing gone.

charindra chandrasena  43:01
Pakistan was anyway gone, and it had problems with Maldives as well, which we don't know how it's going to turn up. Nepal, you don't know what's going to happen in the future. Sri Lanka is really the only ally that it has really that that matters. So it has not done a good job, but in future it might actually start focusing on this, and we are going to be the the Taiwan of not that they will invade. They they won't have to. India doesn't have a culture like that, but we already can't think of foreign policy beyond India. No, that's going to maybe become an official stance. I don't know how that will go. What What are your thoughts? And also economically, you know, what how we can leverage. I think I would like to

Dhananath Fernando  43:48
look at on two fronts. One is while India becoming a global superpower, when they are slowly stepping up to number three position, our interest becomes, you know, higher and higher. What is basically President Trump says on Greenland now? He says there's so many warships of Russia and China is around that we want Greenland from Denmark, right? Same thing can happen because when you know when because when you are a superpower, the other countries also look at what are the neighbouring countries and we are there. We can make it the opportunity, or we can become a disaster at the same time. Second thing is even in the current crisis, the impact is going to come for Sri Lanka because, as we already know, there is also a bit of a tug of war between President Prime Minister Modi and President Trump on this Russian oil matter. So how they are going to? I mean, on the Russian oil, what is what they are coming? I mean, how the USC is going to react? How India is going to react is also important to watch. So that implication will ultimately come down to Sri Lanka. So we have to be quite cautious on a geopolitical front. Even I would recommend that we strengthen our diplomatic standard. And thinking about it, and maybe if we need to get consultants. So far, the statement was good, but on our front, to think on those lines, it's quite critical. But I

charindra chandrasena  45:08
don't know whether foreign services like you know working at at top gear really. Yeah, I don't. I don't see that we are building alliances as such. Yeah, and

Speaker 1  45:19
the thing is, if you look, I mean, I think even if American companies take over, I think they'll they will openly sell to the Chinese. Only thing the Chinese won't get that discount, which means they will go back to Russian oil, right? Because this whole petrodollar thing is there. So if the Chinese and the Russians are purchasing, it'll be done. It'll be done on the RMBO on the RMBO on the on the ruble. So there are a lot of ifs that we are looking at. We don't know because the thing is, if America goes and tells China, you know, you can't buy Russian oil, China will say, listen, we were buying from somewhere else and you blocked it. We will buy. If you want to get into a trade war, we'll go into a trade war.

charindra chandrasena  45:55
They are already. I mean, buying. So no child. US is not going to go and say you can't buy any more,

Speaker 1  46:01
right? So they will. They so the thing is, let's say they tried

charindra chandrasena  46:04
it and they China said no go away.

Speaker 1  46:06
China is, if you like it or not, at the rate they are growing, they are going to they are going to surpass. I mean, America being the cradle of capitalism in the world, right? They have banned Chinese electric cars from being entering their market, so that shows how shallow sometimes how the American setup is to competition, where they have been pro. You know, you had to compete. Yeah, competed globally.

charindra chandrasena  46:33
I don't know. You saw last week the report came out that BYD has overtaken Tesla.

Dhananath Fernando  46:39
No, it's the

charindra chandrasena  46:40
world's largest electric, and it's so young. Yeah, like BYD in terms of global significance. Yeah, absolutely. China is doing this amazing thing. Exactly that that US can't even dream of right now.

Speaker 1  46:54
Yeah,

charindra chandrasena  46:54
but right now US is still the global leader. So that's even

Dhananath Fernando  46:59
I remember even when Kishu Mahobani came to Sri Lanka, he's pretty much because he was more. I mean, speaking about the growing Chinese influence and how China slowly stepping to become like a superpower and how it's like, you know, the the ASEAN countries, this Asian region is becoming like the global taking global dominance. But at the same time, one thing he said was, but China taking the lead? Do not underestimate also the power of U.S. Yes, because they still will have significant power on on the other side. Even if China at one point takes over, purely economically, if China takes over, America still has some influence in other areas. Yeah.

Speaker 1  47:42
No. The thing is, the thing with the U.S. is their real problem is the whole economic setup. The whole economy is basically pegged on the dollar, right? Because it's a global reserve currency. I mean, the more they start using losing their reserve currency status, then they are on a really steeply slope. That's where the problem is. I think a lot of these things they are doing is basically to protect the dollar. That's why then you have to deal with even in Venezuela. If I mean, irrespective who sells it, it's better if the U.S. company sells it. Then then they are going to profit from it. But the thing is, it will be sold in dollars then. It won't be done on a local currency. So that is something they are trying to do. But the problem is, you know, so there was this talk show where people were talking about how the two countries are governed. So they were saying, okay, China doesn't have these things and all that. No elections and all that. It's a single party system. Okay, fine. U.S. and all that. But he said, look at the people who are governed in the country, right? In U.S. is governed by lawyers, China is governed by engineers. Yes, right. Even Z is a chemical, which a lot of people know. He's a chemical engineer, right? So obviously, when a setup, lawyers running in a setup, engineers running the setup, right? No offence to the lawyers, no, no, yeah, right. But when you take like so, so the

charindra chandrasena  48:57
argument there is that the loyalist society is all about blocking things. Yeah, blocking things and swinging. Yes, the engineering society is about building things. Exactly. So that so

Speaker 1  49:10
that's why. So the the the other problem where U.S. is not going to compete with China. I mean, it's a at the moment it's a kind of you know false statement. Is the simple reason is they have not. I mean their infrastructure is just too old, which nobody is talking about. That is something even Trump has said that the infrastructure is too old because a lot of he has

charindra chandrasena  49:28
done much about. He hasn't done nothing until he has

Speaker 1  49:31
just spoken about. Because

charindra chandrasena  49:32
Biden had a build back better scheme. Exactly. Trump doesn't have anything. Exactly. So

Speaker 1  49:36
there are only two industries. I just want to finish it. There are only two industries. Maybe two. Maybe there's three, but the two industries that have really done well in the U.S. like on the engineering front has been defence, which is a destructive industry. Other one has been IT and AI and all that. That's a. But the thing is, the Chinese are really catching up on that too.

charindra chandrasena  49:53
Yeah, that's their future. That's their future. Their future is energy, clean energy,

Speaker 1  49:58
exactly,

charindra chandrasena  49:58
and IT. AI exactly. Oh my God, the things they are doing.

Speaker 1  50:02
Yeah,

charindra chandrasena  50:03
we don't have enough time to get into that. Which hopefully, so this was our geopolitical episode. We will do another tech episode later. Yeah, but yeah. So I think that's about it for today. Do you have anything? Yes, yes,

Dhananath Fernando  50:20
Abhi, I have my standard message. So become an Advocata insider. It's just 12,000 rupees a year, 1000 rupees a month, and you will get exclusive content about the currency, about the land market, and we are launching a new series about the stock market starting from the second week of January, as we promised, but all the content will be in single on the inside the platform. But if you would like to get the macroeconomic outlooks and also there are different tiers of subscription for corporates, for small and medium enterprises, please join us. Importantly, that you are helping to improve the economic literacy of Sri Lanka and simplifying the economics because it's it's a subject that we all should learn, like science and maths. We all should know economics. That's the way that we can take Sri Lanka to the next stage, and that can be only driven also by policy reforms. And we are an independent think tank, no political strings attached, and you can support us to keep our independence. And in a war, when you are independent, you get shot by both sides. So you have to stand with us on getting the message across and improving economic literacy. And we are operating in all three languages. In Singala, we run as Advocata Plus. In English, you can find us on Advocata Institute. And in Tamil, our presence is as Advocata kural. So please join us on all three languages and share the message and become an Advocata insider. So then we can continue the similar kind of chats, which you will get benefit. So as all Sri Lankans get benefit get benefit from the content that we create. Thank you.

charindra chandrasena  52:00
All right,

Dhananath Fernando  52:01
but before before we wrap up, the key messages that I want to deliver today is this state businesses and this socialism and this is not going to work. You cannot really print your way out. Don't print money. Sound money is something that you have to cautiously think about. Otherwise, this aggression can can slowly come in and taking lesson from Charins as well. Do not step into. Do not underestimate the superpowers, and you understand the scale that you operate. And do not upset anyone, especially when you are 20 million small island economy. You really cannot afford to.

charindra chandrasena  52:37
Pick your battles. Pick your battles. You have

Dhananath Fernando  52:39
bigger battles, different battles that you have to do, and economic reforms are important. If you are economically, if you are not strong enough, you are opening your country to a geopolitical battlefield. So you have to do your reforms, and I mean bring the prosperity of people. Otherwise, you are inviting others to come in into your territory. No point saying it's a conspiracy theory and all that. If you are not doing a good job, you are allowing basically you are inviting others to come and play in your backyard. So make sure that you do the reforms and make sure the country is stable, economically stable, not vulnerable, have the strength to absorb external shocks. Otherwise, it's an invitation for others to come and play in your backyard.

charindra chandrasena  53:25
Right. So I also want to wish it's a bit late in the year, but wish all our viewers prosperous, successful 2026, and most importantly, a good year for Sri Lanka, hopefully, because that will benefit us all. So thank you for joining, and thanks Dana, thanks Riyadh. We will see you next week.


Transcribed by https://otter.ai