Ramesh Damani: There is a movie out now called The Emergency, and I remember that as a young student in 1975, the then Prime Minister Mrs Indira Gandhi imposed the emergency. One of the tallest leaders of the opposition at that time was Jayaprakash Narayan. He was quoted in the press as saying when he was arrested and escorted to jail, vinash kale viprit buddhi, which loosely translated means that when bad days are here, you make bad decisions. I feel the same thing about what Donald Trump is doing. It is a vinash kale viprit buddhi. The order that has been built by America, NATO, Bretton Woods, WTO, GATT, is being undone by a man in a stunning space of 10 weeks.
So, I tend to agree with what the economists are saying, that the world as we knew it, and the world as we prospered in the last 35 years, is irretrievably broken and changed and it is done in a space of 10 weeks. It is actually unbelievable to me what is happening to the beloved country of all of us, which is America.
So, Mr. Damani, if the shape of the world is going to change and if we are looking at contraction and I hope not if a recession comes into the US, then financial markets should be in some kind of a panic mode. Stock markets are down, but they are not out. In Asia also, including markets like India and China where tariffs have been imposed, they are doing well, at least today. Are markets getting complacent? Are they closing their eyes to reality and what is coming?
Ramesh Damani: The markets are being wise. What will happen is that we will finally decouple from America in a way none of us imagined it to happen. The Americans, when they look back in history, will say November 5th, when Trump was elected, was the peak of American power. I think the world will move on to new alliances.
For example, the new SWIFT system for international payments is now being challenged by a Chinese system. New regional blocks are being formed across the world. With stunning speed, the world is moving on. If the US completes looking insular, it will slowly become less of an economic power. While there is no dispute today in my head that America is the preeminent economic superpower in the world, it is not the only superpower in the world. There are other economies that are strong and fighting and the US has to respect their opinions.
The fact that they can unilaterally move and do all these things, whether it is against Mexico, Greenland, Canada, or NATO, is just stunning to me. Would you want your children to now go and be educated in America? Another threat, if anyone says something that the administration does not like, they could be deported to Venezuela or El Salvador or wherever. It is a stunning fall from grace in America. In 75 years, they built soft power in America. To give you a more pertinent example, recently a neighbour, Myanmar, had a very strong earthquake, a 7.7 earthquake. Indian planes, Chinese planes, Russian aid were all available within the next 24 hours. I have not seen signs of US aid yet delivering because it has been dismantled by Trump.
So, what we are going through is an enormous change, but as water seeks its own level, the economies will move on. If you try to embarrass and humiliate world leaders, you have no friends left and they will form new alliances, which is what I think we are in the process of doing. It is very hard for me to say but the word of the US used to be the most paramount word and the word that everyone would listen to. But increasingly, thanks to Trump’s policy, it is becoming less important. I am not sure even today I understand what the US senators and the US congressmen and the US representatives have done, but clearly they have drunk some Kool-Aid.The slowdown in the US or the crackdown of the US economy, when it comes, given its sheer size as it is almost a $40 trillion economy, 70% of the total debt in the world is still directly and indirectly in the US. Could that hurt the world before it gets better?
Ramesh Damani: I mean, it could. But largely, it is starting to get discounted by financial markets very rapidly. My personal feeling is, the great historian Arnold Toynbee used to say that countries die not because of murder, but because of suicide. And here we are seeing a case of self-immolation. But what will happen? Let me give you an interesting example to explain this point to you. In 1970s, 60s, when America was in war against Vietnam and the body bags are coming home and the war was not going anywhere, Lyndon Johnson did not know what to do and a senator advised him, let us just declare victory and reverse course and get out.
I think that is the same advice that Trump is going to receive, that he will just declare victory in the next couple of weeks and then change all the policies that he has introduced, saying that, oh, my policies have been achieved, everyone has come to the negotiating table, everyone is scared of America, and he will declare victory because he will never admit loss. He will declare victory and we will move back to the regime we were.
But unfortunately, he will find out that the world would have moved on by that time. So, my sense is that in the back end of this year of 2025, all these measures that seem so draconian and so unrealistic are likely to be reversed. I cannot imagine America with higher inflation, higher housing prices, poor securities, no friends existing or going on for more than six months.
So, can I say that what looks like an iron fist right now from the US administration, in a matter of time, could be seen offering an olive branch. That ultimately things will mellow down and start coming back to normal?
Ramesh Damani: I think that will be one part of it when they realise that they have bitten more than they can chew. Yes, definitely that will happen. But more importantly, I truly believe that the world is moving on. The world has tried to be patient, tried to kiss the ring, tried to mollycoddle him, they visited him. You cannot, as a US president, ever say that Canada is going to be my 51st state or Greenland is mine. You just cannot say that. You can negotiate it, maybe have a treaty, maybe spend years trying to put it together, but you cannot use the threat of force in the world. The world has changed completely. It is not the world of the 1800s or 1850, to which Trump harkens back.
So, yes, they will reverse it and the world will move on. The world will continue to prosper. The US has only 300 million people. There are 8 billion people elsewhere in the world. They want a better standard of living. What is ironic and what is tragic is though America taught us all this, free markets, competing global, immigration, they themselves are turning back on what has been the greatest trend. So, the world will move on. That is my call basically.
