Features
The Non Aligned Summit
by Leelananda de Silva
Sometime in 1973, Mrs. Bandaranaike, the Prime Minister. directed that I should be in charge of the economic side of the Non Aligned Summit (NAS), to be held in 1976 in Colombo. She was anxious to attach a high profile to economic issues in non aligned discussions. This was for two reasons. The first was that she wanted to make the NAS clearly more non-aligned, getting rid of the extreme anti western rhetoric of previous conferences, which was partly due to the focus on political issues.
Talking economics, specially at a time when the North-South dialogue was a dominant feature in international relations made great sense. The second reason was that she felt that greater attention to international economic issues would better relate the Summit proceedings to Sri Lanka’s own economic interests. As I advised her, it was necessary to focus on relevant economic issues for Sri Lanka, instead of merely following earlier Non Aligned economic agendas where issues like transnational corporations and the New International Economic Order were focused upon.
These issues were pushed by countries like Cuba and Algeria, as they were aimed at attacking the United States and Other Western countries. Thereafter, engagement with non aligned issues became my central task during my Planning Ministry years. Between 1973 and 1977, I was working as much with the Foreign Ministry as with the Planning Ministry.
The Fifth Non Aligned Summit held in 1976 was the culmination of a long process starting with Fourth Summit in Algiers in 1973. The Prime Minister led the delegation to Algiers and other members were Felix Dias Bandaranaike, Mrs. Lakshmi Dias Bandaranaike, Shirley Amarasinghe (Permanent Representative to the UN in New York), W.T. Jayasinghe (Permanent Secretary Defence and External i.e. Foreign Affairs), Susantha De Alwis (Permanent Representative to the UN in Geneva) and myself.

This delegation constituted many of the key persons who were responsible for the substantive preparations of the Colombo Summit. The other two persons who were not there were Arthur Basnayake and Izeth Hussain. The Algiers Conference was a grand affair and was held in a newly constructed palatial conference hall.
One of the things that struck me most was that the Conference was not organized well. During the week we were there, the conference sessions were held at night, and during the day we had our rest. This made most of the delegates very tired. Mrs. Bandaranaike suggested to the delegation that we should observe the way in which the Conference was organized in Algiers. There was nothing much to learn from them.
I was looking after the Economic Committee and it was being chaired by Ambassador Hernan Santa Cruz of Chile, a leading personality of the time in international affairs. I remember working closely with the Ambassador from India, K.B. Lall, who was later to lose out to Gamani Corea, in the UNCTAD Secretary General stakes.
The work of the Economic Committee was dominated by Algerian pressures to obtain support for the OPEC oil price hike which had just occurred, raising the price of oil from US $4 to $13 a barrel. This was a great shock to poorer developing countries. The Algerians and other oil suppliers manipulated the Summit to obtain a clear endorsement of the OPEC position, although it was the poorer developing countries which paid a heavy price for the oil price hike.
OPEC promised that they would support schemes to obtain better prices for other commodities, but this never happened, apart from unrealistic resolutions to change the world economic order. The OPEC countries started to push for a New International Economic Order which was later adopted by the United Nations in 1974. Layachi Yaker, the Algerian Minister of Trade was the key figure organizing this OPEC campaign in the non aligned context (he was later to be the head of the UN Economic Commission for Africa).
The great event of the Conference, in effect, took place outside Algiers. Salvador Allende, the President of Chile was overthrown and killed in a coup led by General Pinochet during the week of the Conference. Chile under Allende had emerged as an icon standing up to US hegemony in Latin America and generally in the third world. Many of the non aligned delegations were shocked by what happened in Chile. Hernan Santa Cruz, who was chairing the Economic Committee, was the living embodiment of the Chilean crisis and he was not to go back to his country for a long time.
One unforgettable memory that I have of this Summit was our departure from Algiers airport. Waiting for our respective planes, along with Mrs. Bandaranaike, were Emperor Haile Selassie of Ethiopia and President Houari Boumedienne of Algeria was there to wish us goodbye.
The most important objective for Sri Lanka at Algiers was to get the Summit to endorse Colombo as its next venue. Whether this would be done was not at all certain. To the great delight of Mrs. Bandaranaike, the Algiers Summit confirmed Colombo as the venue for the Fifth Summit. This was the start of the preparatory process. Mrs. Bandaranaike was anxious that economic issues, particularly in a North- South context, should be equally placed with political issues on the NAS agenda. This was my task in the next four years, and those preparations were pursued largely in UN multilateral forums, which were then brought into convergence at the NAS.
After the Algiers Summit and prior to the Summit in Colombo, I attended three non aligned meetings held in Dakar (Senegal), Lima (Peru) and Algiers. The Dakar and Lima meetings were at Foreign Ministers level. Apart from myself, others on the delegations were Felix Dias Bandaranaike, Shirley Amarasinghe, and Arthur Basnayake.

The Dakar meeting was held outside the main city in a newly built conference hall, in the middle of nowhere. One night, Shirley Amarasinghe, Arthur Basnayake and I had to go in a car assigned to us by the government for a late night meeting. The relations with our driver was pretty bad as he was using the official vehicle assigned to us for his own purposes.
This night, on our way to the conference hall, he stopped the car in the middle of a jungle saying there was no petrol and that he was going to leave us and go to collect some petrol. This was a frightening experience. We had to forget our status and had to plead with the driver offering him some goodies to take us to the conference hall somehow. About half an hour later, he said that he had some petrol in the car and that he would use it. Anyway, we got to the conference hall and we did not see the driver again.
I was to work closely with Shirley Amarasinghe on Non Aligned issues, although he was in New York and I was in Colombo. We traveled together for many meetings and met often in New York and in Colombo. I enjoyed working with Shirley Amarasinghe. Shirley had held the highest offices of government, being appointed as Secretary to the Treasury at the age of 47.
One day in Dakar he told me that when Felix Dias Bandaranaike had to leave the Finance Ministry in 1962, he also had to leave his post of Treasury Secretary. He had thought of retiring from the public service and his brother, Clarence, who ran the leading motor firm Car Mart had asked him to come and take over the running of the company. He was seriously considering moving to the private sector.
At this point, Mrs. Bandaranaike and N.Q. Dias who was the Secretary of the Ministry of Defence and External Affairs had asked him whether he would like to move into the diplomatic service and proceed to New Delhi as High Commissioner. His whole life changed with that decision to go to New Delhi at the age of 50. For the next 17 years until his death, he was a leading figure in UN circles and latterly as Chairman of the Law of the Sea Conference.
I remember another amusing incident. Over the weekend in Dakar, Arthur Basnayake, whose academic background was geography, wished to go to the interior of Senegal by train. He wanted to go alone, and there was a train going to that place. So I accompanied Arthur to the railway station. The Dakar main railway station was totally deserted and there was no train in sight. We walked down the long platform and there was a man seated at the end of it, smoking a cigar.
We asked him whether we could see the station master. He said he was the station master. We asked him about the train, which was scheduled to leave that morning. He told us that was a good question, as yesterday’s train had not yet left. He suggested to us that we take the bus outside the station to our destination, as that will get us there sooner. The bus was run by the station master’s son, and to get business for the bus, it was in the interest of father and son to see that the trains were delayed.
The meeting at Lima, Peru had the usual agendas and the usual speeches. What was more interesting was the coup that took place while we were in Lima. On the Monday morning of the conference, it was ceremonially opened by General Morales, the Military Dictator of Peru. On the Wednesday morning, as we were leaving for the conference, we were informed that we should stay in the hotel as a coup had taken place and there was a curfew.
The conference met again the day after and it was wound up on the weekend. When it was wound up, the new military ruler came to declare the conference closed. The host Government Peru insisted that the former dictator Morales’s name should not be mentioned in the communique and he should not be thanked for opening the conference. This was non aligned politics at its best.
The mechanism for pursuing non aligned agendas was the Coordinating Bureau of the Non Aligned Countries Meeting at Foreign Minister’s level. I attended a meeting in Algiers of the Bureau in early 1976. The task of the Sri Lankan delegation was to keep the Bureau informed of our preparations in Colombo. I remember this meeting for one poignant reason.
Although Chile had a military government now, the Non Aligned Bureau, still recognized the Allende government of Chile. Its Foreign Minister Orlando Letelier, suave, elegant and the perfect diplomat, was there in Algiers. I had a cup of tea with him and discussed the forthcoming Conference in Colombo, which he expected to attend. About a month later, he was gunned down in the streets of Washington D.C. in broad daylight, a murder which had ramifications the world over.
Let me now briefly set out my observations of the NAS in Colombo. I was appointed by the Prime Minister to be Secretary of the Economic Committee of the Conference. By virtue of my position, I chaired an inter-ministerial committee on economic issues for the NAS in Colombo. We met a few times but it was not productive in shaping an economic agenda from Sri Lanka’s point of view. This had to be done by the Planning Ministry.
One of the first things I had to do was to provide an input into the Prime Minister’s speech for the Conference. After discussing with the Prime Minister and with Felix Dias Bandaranaike, I submitted two proposals- one fora Countervailing Third World Currency and the other for the establishment of a Third World Commercial and Merchant Bank. The first proposal for a third world currency was a political one, to please radicals like Cuba. The second proposal was one I had developed and discussed with the Prime Minister.
She liked the proposal which was pragmatic, and this was included in her speech. The Summit adopted the proposal and was later to be followed up by UNCTAD. I was asked by UNCTAD to come over to Geneva to prepare a paper on this proposal which I did in May 1977.
I am proud of this proposal, with which Mrs. Bandaranaike agreed. She wanted a high profile for economic issues, as they related to her own domestic concerns. People could relate to food and agriculture and pharmaceuticals in a way that they do not relate to Arab- Israel or East West political confrontations. The proposal for a Bank, which had merchant banking functions, was modeled on the experience of the Crown Agents in London.
Most developing countries at the time did not have the expertise and the skills to get the best terms from exporting and importing transactions. It was found at that time that Sri Lanka was purchasing commodities like oil, rice and wheat, when prices were high in a volatile world market; and full of stocks locally when the prices were low in world markets (at a time when we should be buying).
A central facility for developing countries would enable them to obtain large gains through combined purchasing and other means. The bank could also handle many financial transactions of borrowing and obtaining export credits. An institution of this kind is still relevant in today’s world for many of the smaller developing countries.
Prof. Senaka Bibile had made his mark through his proposals for rationalization of pharmaceutical supplies and the purchase of non- branded, generic products for national health services. Such arrangements reduced the costs of medical supplies. Senaka Bibile was known to Mrs. Bandaranaike. She suggested to me that I should have him on the delegation to work with me in the Economic Committee to develop his ideas through a resolution which would then be applicable to the developing countries in general.
Senaka Bibile worked with me at the Conference to get the resolution drafted, and we had to do some lobbying among the delegations. I found that most countries welcomed the proposals on pharmaceuticals and there was no problem in getting a strong resolution adopted. This is a resolution which had clear implications for health policies in countries like Sri Lanka. It was a delight to have worked with Senaka Bibile.
The NAS was a historic event and it should be remiss of me if I did not mention the others who were associated closely with the NAS, as I had personal knowledge of the event. In organizing an NAS on this scale, Sri Lanka was punching above its weight in international relations. Mrs. Sirimavo Bandaranaike, the Prime Minister, was primarily responsible for the success of the Summit. She personally supervised many of its key aspects.
Felix Dias Bandaranaike and Shirley Amarasinghe were actively engaged in most of the preparatory work between 1973 and 1976. They were persons of international standing and were highly respected, and with Mrs. Bandaranaike, were responsible for a highly acclaimed Summit. W.T Jayasinghe, the Foreign Secretary, Arthur Basanayake, Director General of the Foreign Ministry and Izeth Hussein, Director of the Non Aligned desk at the Foreign Ministry were key figures in the preparations on the political side. Susanta de Alwis who was our ambassador in Geneva, was the secretary of the political committee, and he and I being secretaries of the two committees had to interact closely to avoid possible conflicts in conference proceedings and resolution drafting. Neville Kanakarathne can be added to this list. Izeth Hussein made a distinctive contribution in drafting what was considered an outstanding Political Declaration which captured the essence of Non-Alignment. Dr. Mackie Ratwatte, was the man in charge of the organizational side of the Conference. He was assisted by several Foreign Office officials, specially Ben Fonseka. Manel Abeysekara managed a flawless protocol operation with finesse and flair. This aspect of the Summit was crucial, as delegations with Heads of Governments and State are sensitive to their treatment by the host country.
Vernon Mendis, who was then the High Commissioner in London, was brought to Colombo to act as Secretary General of the Conference, as W.T Jayasinghe and Arthur Basnayake declined to undertake that role. Vernon’s role was to assist the Prime Minister during the Conference proceedings. Dharmasiri Peiris, Secretary to the Prime Minister, worked behind the scenes over this entire four year period and was guide and adviser to the Prime Minister on many NAM issues, and ran her office at the Conference, where many questions had to be addressed on an urgent basis.
He was associated with Nihal Jayawickrama, Secretary to the Ministry of Justice and Sam Sanmuganathan, Secretary to the Ministry of Constitutional Affairs On the economic side I received much assistance from Wilfred Nanayakkara, Deputy Director of the Economic Affairs Division in the Ministry of Planning. Lakdasa Hulugalle, an outstanding economist working with UNCTAD and an authority on North South issues was in regular contact, and was a great source of advice during the Summit. Havelock Brewster, a well known Caribbean economist from UNCTAD worked with the Economic Committee, at my request. He was actively involved in the drafting of the large number of economic resolutions which came up at the Conference.
Let me divert here to record my recollections of two episodes connected with the Summit as they are instructive and should not be forgotten. First was Mrs. Bandaranaike’s decision to vacate ” Temple Trees” so that Mrs. Gandhi, the Prime Minister of India could occupy it during her visit to Colombo. At this time, Indo- Sri Lanka relations were at a low ebb, due to Sri Lanka’s assistance to Pakistan during the Bangladesh crisis. Mrs. Bandaranaike wanted to signal her closeness to India and also her personal regard for Mrs. Gandhi by this gesture.
That was a master stroke in bilateral relations. The second was with regard to Kurt Waldheim, the Secretary General of the UN. He was in Colombo accompanied by Dr. Gamani Corea, who was Secretary General of UNCTAD. He expected to address the Non Aligned Summit, of Heads of Government. There were many who were opposed to Waldheim addressing the Summit and preferred him to address the Foreign Minister’s Conference the previous week. It is my recollection that Waldheim in the end addressed the Summit. In 1976, the Secretary General of the UN was not regarded as an equal to Heads of Government.
The Colombo Summit was attended by over 60 Heads of Government and I remember seeing most of them either in the Conference hall or outside. There were Anwar Sadat of Egypt, Gadaffi of Libya, and Marshal Tito of Yugoslavia. Yugoslavia was one of the key countries in Non Aligned and Third World organizations, and it is astonishing that 20 years later Yugoslavia is no more. I remember standing next to Tito as the national anthem was being sung to bring the Summit to an end. He had gone out of the hall and had just come in and I happened to be standing next to him.
Apart from the Heads of Government, there were many other Foreign Ministers and high officials I came in contact with in the course of my work on the Economic Committee. It is a long time and I forget their names.
After the Summit, in early 1977, Felix Dias Bandaranaike, Shirley Amarasinghe, Arthur Basnayake, Izeth Hussein and I were the delegation to the Non Aligned Foreign Ministers meeting in New Delhi. Mrs. Gandhi had lost the election and there was a new BJP government. Mrs. Bandaranaike had asked the Sri Lanka delegation to meet with Mrs. Gandhi, informally at her residence. This was not at all appreciated by the new Indian Government. That was the last time I was to see Mrs. Gandhi, having seen her on many occasions in the previous six years. This was also my last non aligned meeting, as Mrs. Bandaranaike lost the election later in the year and a new government came in.
(Excerpted from the writer’s autobiography, The Long Littleness of Life)
Features
Dilemmas of ‘hurting economies’ – the case of Sri Lanka
Maldives President Dr. Mohamed Muizzu was in Sri Lanka recently on what was apparently a goodwill visit and this event, no doubt, bodes very well for Maldives-Sri Lanka relations. Besides, the visit would go some distance in strengthening Sri Lanka’s claims to Non-Alignment.
However, the commentator on regional politics could be accused of simplistic thinking if he/she glosses over or ignores the regional politics nuances or undertones of the Maldivian President’s visit. In Sri Lanka we currently have a government which is eager to solidify its bridges, so to speak, with China and which, given the chance, would be courting increasingly close relations with Russia. In other words, the NPP government is likely to see itself as a ‘natural ally’ of the East and would prefer to distance itself to the extent possible from the West, if that is a realistic proposition.
Given the foregoing backdrop, it would be in some of the NPP regime’s best interests to be on cordial terms with the Maldives which is a close ally of China in the South Asian region. However, the NPP government, given the utter financial helplessness of Sri Lanka, cannot afford to distance itself politically and diplomatically from India and the West. Sheer economic necessity compels Sri Lanka to adopt this foreign policy stance. In other words, the latter has no choice but to be ‘Non-Aligned.’
This columnist was led to the above observations on listening to a lucid and comprehensive presentation titled, ‘A Global Economy in the Shadow of the Iran War and implications for Sri Lanka’s debt recovery’, by Dr. Ganeshan Wignaraja, Visiting Senior Fellow, ODI Global London, at the Regional Centre for Strategic Studies (RCSS), Colombo on May 4th. The forum, RCSS Strategic Dialogue – 4, was moderated and presided over by RCSS Executive Director Ambassador (retd) Ravinatha Aryasinha.
The forum brought together a wide cross section of society, including diplomatic personnel, academicians, public and private sector personalities and the media. After the presentation a very lively and informative Q&A followed.
Ambassador Aryasinha at the outset set an appropriate backdrop to the presentation and discussion by stressing ‘the increasing interconnectedness of geopolitical and economic developments, noting how disruptions in the Middle East could have significant ramifications for global markets, trade flows, energy prices and broader economic stability, including Sri Lanka.’
Indeed, there are occurring currently very disruptive economic and material consequences for the world from ‘the Iran War’, and with US-Iran hostilities spiraling in West Asia it may not be wrong to surmise that the worst could be yet to come, unless a peace process materializes in earnest.
Meanwhile, ‘hurting countries’ such as Sri Lanka would need to summon their best economic management capabilities to remain materially and economically afloat. ‘Economic transformation’ is what is urgently needed and not mere management and some of the insights thrown up by Dr. Ganeshan Wignaraja should have the local polity thinking.
There was the following observation, for instance: ‘Sri Lanka has achieved remarkable cyclical stabilization but faces critical challenges in transitioning to transformative growth, with 2027-2028 debt repayments looming and only $5.4 billion usable reserves.’
Needless to say, the path ahead to ‘transformative growth’ for Sri Lanka is strewn with multiple challenges and meeting them effectively is of the first importance. Sri Lanka must soldier on towards even a semblance of development in the short and medium terms and such initiatives cannot be separated from its foreign policy choices since the country’s economic partners and their growth prowess have a close bearing on the country’s material fortunes.
As mentioned, Sri Lanka will be compelled to be ‘a friend of all countries and an enemy of none’ going forward but it cannot afford to be seen as cultivating China as a close growth partner at the expense of India and other major economies of the region.
This is primarily because while India is remaining a major economic power, the current West Asian crisis notwithstanding, China’s economy is being seen as ‘slowing’. Dr. Wignaraja singled out the following in the main as the factors causing this slow-down: a bursting property bubble, increasing state regulation, and weakening investor confidence. Besides, the speaker sees production cycles moving away from China and India replacing China and Hong Kong as ‘manufacturing hubs’.
Accordingly, the NPP regime in Sri Lanka would need to craft its regional policy in particular with the utmost far-sightedness. It will need to have close economic links with all the growth centres that matter.
On the question of authentic economic transformation, the following observations of Dr. Wignaraja on Sri Lanka’s economy are of the first importance as well: ‘Foreign reserves are now at $ 5.4 billion, the cost of living is high, an estimated 20 per cent of the population lives below the poverty line of $ 3.65 per day, the recent cyber security breach at the Treasury would affect some 10 payments.’ These factors were termed ‘critical vulnerabilities’.
It is difficult to conceive of an economic transformation worthy of the phrase minus a steady economic empowerment of the populace. The above data point to the considerable magnitude of the local poverty problem. Right now, the disruptive effects of the West Asian crisis render swift poverty alleviation a most difficult proposition.
One possible way out of the present economic debacle is the forging of a national consensus by the present government on all outstanding problems that have been bedeviling the country’s advancement. That is, there needs to be a meeting of minds across current political divides. Considering the present inflammatory political polarities in Sri Lanka this would prove an insurmountable challenge.
Unfortunately, conscience-filled and civic minded sections in Sri Lanka have chosen to be laid back rather than seize the initiative, come centre stage and impress on politicians the need for enlightened governance and progressive change. There needs to be a historic coming together of the right thinking to ensure that the best interests of the people and of the people only are served by governments. In the absence of such a process, might would be projected as right and brute force would come to increasingly rule politics and society.
Features
Australia funds project to restore climate-resilient vegetable livelihoods in cyclone-affected highlands
The Ministry of Agriculture, Livestock, Lands and Irrigation, the Government of Australia, and the Food and Agriculture Organization of the United Nations (FAO) have launched of a AUD 2 million (USD 1.4 million) recovery initiative to restore and transform vegetable production systems in the cyclone-affected districts of Nuwara Eliya and Badulla.
The FAO said yesterday (5) that the agreement was formalized through the signing of the grant agreement by Matthew Duckworth, Australian High Commissioner to Sri Lanka, and Vimlendra Sharan, FAO Representative for Sri Lanka and the Maldives, alongside the signing of the project document by D. P. Wickramasinghe, Secretary of Agriculture.
Cyclone Ditwah, which struck Sri Lanka in November 2025, caused widespread devastation across the country, severely disrupting agricultural production systems and livelihoods. The highland districts of Nuwara Eliya and Badulla, key suppliers of vegetables such as beans, carrots, leeks, cabbage, tomato and potato, were among the hardest hit, with thousands of smallholder farmers losing crops, seed stocks, and productive assets.
This 12-month initiative aims torestore and strengthen climate-resilient vegetable production systems, with a strong focus on empowering women farmers and supporting persons with disabilities. The project will directly benefit more than 2,400 smallholder farmers, through improved seed and seedling production systems, small machinery, training, and market linkages while indirectly supporting thousands more.
“This initiative is an important step not only in restoring what was lost, but in building a more resilient and self-reliant agricultural sector,” said Minister Lal Kantha. “By strengthening local seed systems and supporting smallholder farmers, particularly women and vulnerable groups, we are investing in the long-term sustainability of Sri Lanka’s food systems.”
“Australia stands alongside Sri Lanka in its ongoing recovery from Cyclone Ditwah,” said High Commissioner Duckworth. “Australia is a steadfast partner in the agriculture sector with its importance for food security, rural development and climate resilience. By focusing on climate smart practices, farmer-led solutions and inclusive economic opportunities, this project will deliver meaningful and lasting benefits to affected communities.
The project will prioritize the restoration of farmer-led seed systems for beans and potatoes, support the re-establishment of both open-field and protected cultivation systems and women led seedling supply nurseries while empowering all farmers with Climate-Smart Good Agricultural Practices (CSGAP) with small scale machinery and input support.
A key feature of the initiative is the establishment of six accessible and inclusive nurseries in Nuwara Eliya and Badulla. These nurseries will serve as sustainable agri-based enterprises, producing high-quality vegetable seedlings while creating new income opportunities and strengthening local input supply chains.
By combining recovery support with long-term resilience measures, the project will help stabilize vegetable production, improve household food security and nutrition, and reduce reliance on imported seeds.
Features
War on Iran may hasten unraveling of New World Order
It took several decades for the US to realise it was losing the war in Vietnam. It took a bit shorter time in Afghanistan. And what is happening in the countries the US and Israel intervened and broke up? The US has been asked to leave Iraq. Syria is talking to Russia about establishing military bases, President al-Sharaa met with Vladimir Putin in Moscow to discuss the project, which is vital for Russian power projection in the Middle East. Libya has been divided into two competing administrative units with the Eastern section actively engaged with Russia in defence matters. The Sudanese government has finalised a 25-year deal to allow a Russian naval facility in the Red Sea in exchange for weapons, including anti-aircraft systems. On the Eastern side of the Red Sea, Yemen remains divided, with the main power center, the Houthis maintaining a staunchly anti-US, anti-Israel stance, while the internationally recognised government remains in exile.
When the Iranian Foreign Minister recently undertook a tour of Pakistan, Oman and Russia, the US wanted to meet him and got ready to send its negotiators Vice President J. D. Vance and his team to Pakistan, but Iranian FM snubbed them and left Pakistan, saying Iran did not want to talk to the US while a blockade of their ports were in place. The Iranian FM met President Putin, who congratulated Iran for courageously defending their country and then phoned US President Trump and told him further attacks on Iran would not be acceptable. During this conversation on April 27, 2026, Putin reportedly warned Trump that further U.S. or Israeli attacks on Iran would have dangerous consequences, according to Al Jazeera). Such a sequence of events would not have been possible in the unipolar world we had in the past.
Furthermore, the damage that Iran has inflicted on the US and Israel in this war would have been unimaginable in the late 20th Century and early 21st Century. Sixteen US military bases spread across Saudi Arabia, Qatar, UAE, Bahrain, Kuwait, Iraq, Jordan and Oman have been either destroyed or severely damaged. Advanced surveillance aircraft and radar systems worth more than $ 2.8 bn were destroyed. This had a far-reaching effect on the war as the US could not use these bases in the war against Iran and also in the defence of its allies in the Gulf.
The attacks on Israel have been equally damaging. In Central Israel and Tel Aviv area multiple attacks targeted military and intelligence assets, resulting in massive damage. Iranian missiles hit the Haifa oil refinery, causing a shutdown, and hit residential buildings, leading to injuries and structural damage. Residential and commercial areas were damaged in Bat Yam and Petah Tikva with significant casualties and destruction. Attacks in Dimona and Arad targeted the Negev Nuclear Research Center, with casualties reported in both towns. The Soroka Medical Center in Beersheba was hit in a strike. The strategic port and naval base in Eilat were targeted. In Rishon LeZion suburban residential areas suffered extensive damage.
Usually, Israel makes short work of its many enemies in the region, for example it took just six days to defeat the combined military of Egypt, Jordan and Syria in 1967 and grab their land as well. Hamas, Fatah and Palestinians would suffer ignominious defeats if they dare challenge Israel. However, the recent war against Hamas, following a daring wide scale invasion into Israel by Hamas in October 2023, went on for more than two years with no conclusive victory for Israel.
These significant massive military setbacks suffered by the combined forces of the US and Israel have been made possible by the unprecedented advancement in military technology achieved mainly by China and to a degree by Russia as well. Iran has been able to develop ballistic missile systems that could penetrate the “iron dome” that Israel boasted, with technological assistance from China and North Korea. Iran’s drones are very cheap yet very effective, requiring interceptors worth millions of dollars to counter them, thus making it much more costly for the US to fight this war than it is for Iran.
Further, Hezbollah in Lebanon, Houthies in Yemen and Hamas in Palestine are well equipped with advanced missiles and drones. Hezbollah has been able to destroy about hundred Israel tanks and stop their advance. According to Larry Johnson, former CIA intelligence analyst, Israel soldiers are much war weary and mentally affected and are being withdrawn. Netanyahu’s 40 year dream of a “Greater Israel” is telling on the poor soldiers.
If a person like Barack Obama had been the US President instead of the hyper egoistic, blustering, intellectually barren Trump, things may have been different. An attempt would have been made to reconcile with the fact that the world is changing, instead of trying to stop it and make “America Great Again”. Perhaps, it could be said that Trump is facilitating the emergence of the new world order by enabling the US citizens to see the reality, the futility of war and the fact that Israel is a liability because the US is fighting its war. Further, the war has enabled Iran to assert its place in the region and negotiate from a position of strength.
Perhaps, Israeli people may realise that the Palestine problem cannot be solved by militarily occupying their land, and that in a changing world a “Greater Israel” is a “pie in the sky”. They may have to agree to a two-state solution. US support may not always be forthcoming, certainly not at the level that Trump could extend, as this war is very unpopular and expensive. The other very significant fact is that Israeli settlers in the occupied lands feel insecure and one in three wants to leave and the numbers may grow when Palestinians and their sympathisers grow in strength in the new world order.
Moreover, the war on Iran has afforded China the opportunity to demonstrate with authority the fact that it stands for universal peace and does not tolerate illegal wars. Its message to the US conveyed its world view and its desire for peace in no uncertain terms. Trump cannot afford to disregard the Chinese position on the war on the eve of his visit to that country which may decide on future trade between the two countries as the US depends on China for several essential materials like rare earth minerals. Furthermore, China has shown that peace could be achieved by developing the economies of the underdeveloped countries irrespective of their alliances. It helps Iran as well as Saudi Arabia and try to build bridges between these foes. It welcomes Trump in the coming weeks and hopes to strengthen ties between the two countries despite the weaknesses of the latter.
Another important factor is the gradual decline of the critical value of the petro-dollar. Following the end of the gold standard in 1971, the US struck deals with Saudi Arabia and other OPEC nations (around 1974) to price oil exclusively in USD in exchange for military protection and arms sales. Dollars earned by selling oil came to be known as petro-dollar. Oil producers, holding large dollar surpluses, reinvest these funds in the US Treasury securities, real estate, and financial assets ensuring the recycling of petro-dollars. The system ensures a consistent global demand for US dollars, which helps fund the US budget deficit and maintains the currency’s dominance.
However, the petro-dollar system is on the decline and there are two main reasons for this, firstly the gradual rise of the new world order with organisations like BRICS, making a concerted effort to extricate from the dollar dominance by developing alternate currencies and methods to bypass the dollar. Secondly, the need felt by most countries to develop alternative energy sources to replace enormously harmful fossil fuel would eventually result in a decline in the demand for it and consequently the effectiveness of the petro-dollar. China is leading the world in both these endeavours; depolarisation process and renewable energy production. The war on Iran seems to have hastened the process of depolarisation as Iran insists that it will sell its oil for yuan only.
These revolutionary changes in the aftermath of the Iran war have their undeniable implications for the Global South, where more than 60% of the poor live.
by N. A. de S. Amaratunga
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