Is America a diminishing power?

From Rawalpindi to Berkeley: a military family and a melting-pot education

The episode opens with Muzamil introducing Faisal Aftab as the man whose name surfaced every time a major Pakistani startup announced a funding round — the general partner behind investments in Nayapay, Bookme, Bazaar Technologies, K-Trade, and Nav Retail, among others. Before any of that, though, Faisal’s story begins in a military hospital in Rawalpindi.

His father was a civil engineer in the Corps of Engineers who took a sabbatical from the Pakistani military to complete a PhD at UC Berkeley — which is how Faisal ended up growing up in the Bay Area from the age of six or seven. When the family returned to Pakistan toward the end of his high school years, Faisal enrolled in Fauji Foundation, a military school. He describes that transition — from an American high school to a Pakistani military institution — as formative in a way he only understood much later.

“The military is the actual melting pot in Pakistan,” he tells Muzamil. “Going to that school, I actually got exposure to the grit of what Pakistan is versus being a burger. And that’s why I invest in founders that I understand from different layers and backgrounds.”

From Fauji Foundation he went to Michigan State University, where he enrolled in the engineering school at his father’s suggestion, then quietly switched to the business school two years in. He eventually completed a five-year honors program with a master’s in management information systems and professional accounting — a combination of economics, accounting, and technology that he describes as accidentally prophetic.

The Wall Street years and the 2008 awakening

After graduating in 2000, Faisal joined Deloitte Consulting in New York, where his clients included Blackstone, JPMorgan, Morgan Stanley, Bear Stearns, and Lehman Brothers. He was doing technology-oriented consulting — analyzing risk parameters that, as he puts it, “didn’t exist back then.” By 2006 he had moved to National Financial Partners, working on corporate M&A and operational restructuring.

The 2008 global financial crisis was the intellectual turning point. Faisal went back and read deeply about monetary history and economic cycles, and what he found reshaped everything that followed.

“History rhymes,” he says. “It doesn’t repeat. Everything has happened in cycles. And all of this that is happening now has happened in a dissimilar fashion before — because the economy or a country is nothing more than the collective sentiment of individuals.”

The dollar cycle: Bretton Woods, Nixon, and the 50-year reset

The most sustained intellectual thread in the conversation is Faisal’s account of the US dollar’s reserve currency arc. He walks Muzamil through the sequence: the dollar replaced the pound sterling as the world’s reserve currency in 1945 under the Bretton Woods agreement, which pegged the dollar to gold at $35 per ounce. By the late 1960s, US military spending in Vietnam and Korea had made it obvious that America was printing far more money than its gold reserves could support. France, under de Gaulle, demanded its dollars back in gold. In 1971, Nixon suspended gold redemption — temporarily, he said — and a new fiat dollar system began.

Faisal’s argument is that this system carries a built-in 2% annual debasement target (the Federal Reserve’s inflation target), and that 50 years of 2% compounding takes out an enormous amount of value. “If you add 50 to 1971, we’re at 2021,” he notes. “And if you do the math on that 2% debasement times 50, it takes out a lot of value.”

He is careful to say he is not bearish on the dollar — “these things take years to play out” — but he argues that the system is now at a mature inflection point. When the Fed raises rates, it pulls money out of the system and strengthens the dollar, causing everything else on the planet to get shaky. When it cuts rates, it effectively prints money and everything pumps. The 2010–2022 era of near-zero rates was, in his framing, a giant dollar flush into global asset markets. The rate hikes that began in March 2022 were the reversal.

China, trade routes, and the currency war already underway

Later in the discussion, Muzamil asks whether the countries now buying gold and moving away from the petrodollar — Turkey, India, Saudi Arabia — have simply understood that America is a diminishing power. Faisal’s answer is nuanced.

“We tend to be very binary in our thinking,” he says, “that it’s either this or that. The reality is it’s gradual.” He uses the pound sterling as an example: still a significant currency until 2016, now gradually diminishing. The dollar’s trajectory is similar — directionally declining in relative dominance, but not collapsing.

What is happening, he argues, is a currency war that expresses itself through interest rates, trade tariffs, and limited kinetic conflict. The flashpoints are not random. They cluster around the world’s critical trade routes: Taiwan’s straits, the Suez Canal, the Bosphorus, and — crucially — Pakistan. Every historical superpower has been dominant at sea, he observes, which is why One Belt One Road is best understood as a chess move: a land-based trade network designed to survive a potential American naval blockade.

“It’s chess,” Faisal says. “Two sides playing chess, and we’re in the middle of the board.”

China has achieved what he calls “technology symmetry” with the United States — the only country to have done so. India, Russia, and Europe are all lagging. That symmetry, combined with China’s economic scale, is what makes the system vibrate.

Why Pakistan matters to the Gulf states now

Faisal’s geopolitical thesis converges on a specific argument about Pakistan’s strategic value. The Gulf states, he explains, built their security architecture around a simple bargain: price energy in dollars, and the United States will protect you. That bargain is fraying because the US is now largely energy self-sufficient through shale production, which means the Saudis need new buyers — and the largest future buyers of energy are China and India.

As Saudi Arabia diversifies its foreign policy, it needs a new security architecture. That architecture, in Faisal’s reading, centers on Egypt and Pakistan — two of the strongest militaries in the region. Pakistan’s nuclear capability also creates a deterrent balance against Iran, which he estimates is at roughly 83% uranium enrichment. “You kinda have a stalemate, and then that creates harmony,” he says. “Remember I said there’s no friendships. It’s all business interests.”

Pakistan’s black economy as a gold mine, not a liability

The conversation’s most provocative turn comes when Faisal reframes Pakistan’s undocumented economy. Rather than treating it as a governance failure, he argues it is an asset waiting to be captured — and that the capture will happen from the bottom up, through technology, not from the top down through tax enforcement.

“If your declared income is zero, yet your Food Panda bill is two lakhs a month, I can assure you that data point — even if you’re settling in cash when the rider arrives — that transaction has been logged,” he tells Muzamil. Every food delivery, every ride-hailing trip, every mobile wallet transfer is building a behavioral data profile that will eventually constitute a credit score and a tax record.

He draws a direct parallel to India’s demonetization in 2016 and Reliance’s free data campaign, which he describes as planned events rather than random ones. “Consequently, India is the fifth largest economy because the black economy is gone. Seventy percent plus is now banked.” Pakistan, he argues, is at the same inflection point India was at in 1991 — a moment when the real effective exchange rate, the demographic structure, and the technology infrastructure all align to make a transition possible.

His portfolio, Muzamil observes, already reflects this thesis: consumer apps building behavioral data (Bookme, Nayapay), logistics networks logging transactions, and fintech infrastructure (Adil Finance) that can convert that data into credit scores. Faisal laughs: “I think you figured out my portfolio better than some of my investors.”

The freelance economy, capital controls, and the talent argument

By the end of the conversation, Muzamil presses Faisal on the dollar-inflow problem: Pakistan cannot be self-sufficient, and its tech sector, while growing, is not yet generating the export revenues that would offset import dependence. Faisal’s response is direct.

Pakistan is already the fourth-largest freelance market in the world, he says, and its IT export and freelance economy is probably already at six to seven billion dollars annually. The problem is that only one to two billion of that actually returns to Pakistan, because capital controls make it rational for earners to park money in Dubai or Singapore instead. “As long as you have capital controls, nobody’s gonna wanna bring money back.”

His prescription is not government-led reform but private-sector action: set up technical training centers, produce better-quality programmers, and take advantage of Pakistan’s labor cost arbitrage at a moment when India and the Philippines are becoming less competitive. “Pakistanis are some of the smartest people on the planet,” he says. “When you collectively, we’re a disaster, but individually, we’re geniuses.”

He also makes a structural argument about corruption: it will be eradicated not by political will but by the mathematics of digital money. “You can’t get a bribe when money is digital. If you’re in the banking system and three lakh rupees show up in your account every month, the source can be questioned. When there’s no cash — in five, ten, fifteen, twenty years — I’ll take a bet on this: money is going to be digital. Corruption is going to get eradicated on its own, whether we like it or not.”

Twenty-seven years from now: a fifty-fifty bet, but Faisal is bullish

Muzamil closes every episode with the same question: how do you see Pakistan twenty-seven years from now? Faisal calls it a fifty-fifty bet. In the pessimistic scenario, Pakistan gets digitally fragmented — pieces of its economy absorbed into Chinese, Indian, American, and European platforms, with the benefits accruing to foreign holdcos rather than Pakistani citizens. In the optimistic scenario, Pakistan does what China and India have done: recognizes the disruption, facilitates it from the top, and captures its own undocumented economy before someone else does.

He is, on balance, bullish — and he says so not as a self-interested investor but as someone who is, by his own account, sufficiently hedged that he could operate anywhere. The OECD’s Common Reporting Standards, FATF pressure on digital traceability, and the structural logic of digital payments all point in the same direction regardless of which political party is in power.

“The change is going to happen,” he tells Muzamil. “The better thing is to embrace it and allow it to accelerate. Whether the people around us — the status quo — want it to or not.”