Is America a diminishing power?

सामने साहबदिना स्थात welcome back to another episode of thought behind. Thanks आज हमारे साथ मौजूद है. एक बहुत ही खास मेहमान who I have been meaning to have a conversation for a very very long time primarily because इनका नाम हमेशा pop up करता था जब भी Pakistan में कोई भी major startup investment announce हो रही थी. They are the largest fund in Pakistan right now. दो हज़ार अठारह से invest कर रहे हैं, सत्ताईस investments कर चुके हैं. You talk about नया pay, post tax, bookme.pk, अभी finance, अदल भाई, बाज़ार tech, k trades, nav retail. I mean any major name these guys are in. So so कैसे इनको पता लग रहा है कि यह चल रहा है या यह define कर रहे हैं कि कहां पर जाना चाहिए. It's fascinating. So let's get some real insight on that as well. With us today we have फ़ैसल अफ़्ताब who is the founder and general partner of Zane, Zane Capital is in the rough pronunciation.

फ़ैसल भाई thank you so much for being part of the show. Thank you. It's a pleasure to be here and I'm actually looking forward to this because I've been watching your show. Thank you, thank you. I like like what what I'm hearing. फ़ैसल भाई, मुझे थोड़ा सा बताइएगा in the start. Where were you born and early life आपने कहां भी गुज़ारी? So I come from a military family. My father is a technocrat, was a technocrat in the military. He's retired now. He was of the 29 PMA, he's in his eighties now. Technocrat in PM, military. What does that mean? So you're he was from the core of engineers Right. And a civil engineer. And most of my inspiration in life I get from him because he was a very, very forward looking person. And a lot of the, a lot of big projects in Pakistan that have come to fruition today, he had been behind them. Subsequently, when I was very young, he decided, while he was in the military, to take a sabbatical and go do his PhD in Bay Area, which is where Silicon Valley is, and he went to UC Berkeley. Oh, wow. And so I actually grew up in Berkeley, California.

Very good. Most of my life. And where were you born? I was born in रावलपिंडी, Pakistan. Interesting. Military hospital. उससे पहले most most probably you were moving around couple every couple of years?

Yeah, I mean it was I was here till the age of about six seven. Right. So we were I think in Karachi and multiple other places like कोटी सत्या और वैसालपुर. Right. My memory is Of course. Relatively limited of that time. Of course. So six, seven you moved to Bay Area? Yes. And you start school there? That's correct.

और उसके बाद फिर आप वहीं रहे हैं for throughout high school? So we moved back

towards the tail end of my high school. My sister, eldest sister, she had actually, graduated, from high school when we moved back. And I was in my, we're two years apart. So I was in my final two years. So we got back at this is around nineteen ninety one, ninety two. And then I finished my high school in Pakistan. What school? So I went to a military school called Foji Foundation which was run by the Mister दिलशाल who is the HS,

क्या नाम है आपका? हसन अब्दालs. हसन अब्दाल. Principal. So I mean, was that? I mean, Bay Area American high school से सीधा plan करते हैं फौजी foundation में. That must have been quite a shift. Honestly,

today the reason why I can invest in Pakistan and I have, semblance of understanding of the layers within Pakistan. Pakistan's a very, layered based, country. It's because, actually, the military is the actual melting pot in Pakistan. Mhmm. So going to that school,

you I actually got exposure to the grit of what Pakistan is versus being a burger. Of course. And that's why I invest in founders that I understand from different layers and backgrounds. Yeah, I think वह military school की ख़ूबसूरती यह होती है कि वहां पर एक general का बेटा भी पढ़ रहा है, वहां पर एक हवाददार का बेटा भी पढ़ है और you know, that's it's very unique in that way. There is no other schooling system structure जहां पर आपको इतनी sort of variance मिलती है. बिल्कुल. You graduate from four g foundation and then what's next? Do you go? So then I go straight to,

undergrad in The US. Went to a big 10 school called Michigan State, the Spartments, where then I ended up doing a five years, honors program. And what what was the major? This is actually interesting because I didn't know why I did this. My father actually wanted to be a civil engineer, so I went into the engineering school. And he actually knew a professor there, so he suggested that I'll be chaperoned while I'm there in the engineering school. I was always a naughty bit of a naughty child. Right? So he he want he wanted to make sure that I'm under some level of supervision. But, when I got there, I realized after a couple years in The US, by the way, you're you pick your major two years into your undergrad. Right. So I took all the tough courses, you know, the the advanced physics and calculus and chemistry, you name it, for civil engineering. But I realized that most of my friends were in the business school. Mhmm. So when it came time to pick, I picked the business school, as my major. And then my fa I felt guilty, that I didn't tell my father. So then I called him and I told him, and he said, okay. You're in charge of your own future, so we'll see how it plays out. Was that the reason why it took you five years of moving, some core courses? Yeah, आपने कहीं What was that? So, actually, there's another interesting story about why it took five years. So I actually did, honors program, which was a combined masters and bachelor's. Right. So I have an, I have a master's, of science in MIS and, in professional accounting. So I Interesting. When I went into business school, I chose accounting Mhmm. And economics. As this is on the undergrad side. And then when I went for my internship, to, a summer internship, which was with one of the big four accounting firms, I realized I really didn't like financial audit financial audits. So when I came back the subsequent fall, I decided to also take management information systems. And I'll we'll talk about this a little bit later, but it's very interesting that accounting, economics, and technology effectively

are merging in where we sit in the world today. So I never knew why that happened but it actually has helped me a lot. And and that do you think that was a time जब वह उस इस convergence की beginning हुई थी and and and you were able to be right there at the debt center of it. क्या economics भी पढ़ें, accounting भी पढ़ें, but with MIS, you were able to really get on that, bandwagon?

Yes. So, I mean, if I fast forward to today, like, let's say, or I would say closer to 2008, that post 2008, that conversion started. But, you know, at that time, you don't you don't many times things are happen in your life that you don't know why they're happening. It was the most was or I can say the random combination

of, you know, courses you could select. Right? Makes sense. To focus on. And so you graduated in '96?

I graduated in 2000 because of five year. So I went I was in '91 without Pakistan.

Absolutely. So you graduate in 2000. And then immediately after, क्या हुआ?

So I the the same company that I'd done an internship with first in the financial, audit side, I actually ended up getting an offer from their consulting side. Was called Deloitte Consulting. And so took that, job offer and moved to New York.

उस time पर did you know कि आप क्या कर रहे हैं? क्या यह job offer है? Deloitte चलो I'm sure बड़ी है, यह big four है. यह तो एक दिन लाख को university से idea हो गया होगा. But if I were to ask you very simply, did you have an understanding of where your life is going and whether it will go in the direction that it went eventually?

Yes. So at that time I just wanted to move to New York. So so, yeah, I did there was another big firm back then called, Anderson, Arthur Anderson. I think they're still, no. Actually, Arthur Anderson would belly up. Right. They were the number one firm back then. They gave me an offer, but they gave it in, the financial accounting side. I also applied to, BCG Boston Consulting Group and Deloitte Consulting. I ended up getting a pretty stellar offer from, Deloitte in New York where I wanted to be, and Arthur Andersen had given in in Boston where, actually, my, sister and brother-in-law lived there, and my sister wanted me to come. In fact, you had my brother-in-law on the podcast, Bilal Musharraf. He was here a few months back, I think. He he's turned by afterwards.

Fascinating.

Wow. So I, you know, she was very upset. I I actually took the offer in New York wherein subsequently ended up meeting my wife who's also Pakistani but was living there at the time. Interesting. And why do you wanna go to New York? Like, what was the thought behind that? Are you just New York as a New the greatest city in the world, man. Yeah. It still is. I'm starting to like Dubai,

but New York is still the greatest city in the world. Do you think Dubai will ever cross, New York? I think they're

they've attained parity, with New York as a brand. I mean, obviously, New York is a lot more historical than London. But I think if you think about world, big capitals today where people concentration is happening, A lot of the finance is moving as well gradually. I think, Dubai is getting ahead well on its way. It's gonna be the Singapore for the investments in this region. Interesting.

So so you moved to New York, and, Deloitte में आप हैं. कितने बजे तक? How long were you there for? So I was there for about, let's say, about five or six years. In 2006,

I moved over to another company called National Financial Partners. Right. Where I was doing more of corporate M and A and operational restructuring, of companies they were acquiring. And that was actually my first, inkling. I mean, Deloitte, most of my clients, by the way, were all the I wanted the, largest school asset managers. So most of my clients were, like, you know, basically Blackstone Group, JPMorgan, Morgan Stanley, Bear Stearns, which doesn't exist, Lehman, and then even the New York Stock Exchange back end systems, which is Siak. So it was base very technology oriented consulting that we were doing, but it was analysis of a lot of the risk parameters that didn't exist back then that we were trying to identify. And then post house 2008, those actually came to light. So, was a very important, in in terms of the largest scheme of things from a knowledge base for me. Interesting.

यह बड़ा interesting time था. मैं जब देखता हूं ना the the way that I see it I I feel like कि एक बड़ी interesting marriage रही है innovation और Wall Street की. कि eighties में you know personal computers आ रहे थे, वह सारा कुछ आ रहा था. Nobody took them seriously but वह ice था ice था they were making their way. Nineties में उसकी productivity आना शुरू हुई. Wall Street got into it and बहुत ज़्यादा पैसा pump होना शुरू हुआ. To the extent कि फिर वह internet आया हुआ and they were like यार this is the next thing and everything was.com and money was flowing everywhere. Absolutely. And then o one में वह crash करता है तो during 2000 to 2010 फिर से हमने वही देखा कि अच्छा internet companies ना ही इस था innovation की, Facebooks and Google's and all these appeared. Twenty ten तक यह clear हो गया कि अरे यह value create कर रहे हैं फिर twenty ten से लेकर 2020 तक पर आप जाह रहे उस time पर बैठे हुए थे आपने technology का तस्करा भी किया कि, you know, you you had a lot of these investments in technology backed areas. How do you see what happened? How what was your experience like in terms of the finance side of things, as these Google's and the Facebook's were emerging?

So, basically, when when I was in New York, I was more fixated on the, financial world just because that was what was basically the king profession back then. Right? So Right. The way, this keeps happening. If you look at history, in the nineties, it was lawyers and doctors. Then it was, like, basically asset managers and investment bankers. Right? Right. Now it's the technologist. Right. I mean, really, the when when and and it keeps changing. And but I do think technology is here to stay for a very long time, and it it's gonna be very interesting when we talk about it later. I actually woke up in in that 02/1989, cycle because there's an age when you you know, we we always assume that what we know at every age, it's in perpetuity. But life experiences teach us, and you kinda wake up. And if you're an if you have an investigative mind, you start to realize that, wait a minute. History rhymes, it repeats, but it it rhymes. Right? No. Sorry. It rhymes. It, it doesn't repeat. So everything has happened in cycles. And all of this that is happening now has happened in a in a dissimilar fashion before because the economy or a country is nothing more than the collective sentiment of individuals. That heartbeat that you see in charts, which literally is like an EKG chart, that's actually showing you human behavior patterns. And throughout history, it's been the same. So 2008 was, what you were saying that, you know, you saw these cycles repeat, or in what you were actually identifying was, interest rate cycles. So the reserve currency of the world since 1945 has been the US dollar. And the Federal Reserve, which is the most important central bank in the world, was created in 1913, and the reserve currency status was given from the Bank of England to the Federal Reserve in 1945. Since then, we've been in a US dollar denominated standard, which which was readjust or I would say I would use the word reset in '71, and now we're in that reset dollar cycle, which is maturing. And these are linked to in 1971, prior to up to '40 in '45 when The US became the reserve currency of the world, they had actually gone to a gold peg. There was something called Brenton Woods, and in that, it was decided to give $35 with equal an ounce of gold. And therefore, The US had to use its gold reserves, which was about 20,000 metric tons. And by the way, incidentally, they got the gold reserves because during World War two, they said to the Allies that there's a going concern. So why don't you send us your gold reserves? And, obviously, they had a significant amount themselves, but they ended up with most of the gold reserves. Now this thing played out. The US, you know, went along. And this is, way, by very important because I discovered all this post 2008. It's very conveniently skipped in the academic system. It starts from the ten year US treasury as a bedrock. And, obviously, as an investor, we have to understand all these things because, you see, Google is going up in value. Facebook is going up, and they're contracting, then they're again gonna pump. So this game played out till about the late sixties. The US had gotten into a bunch of different war cycles, Vietnam, Korea, where some of their allies, realize that they're definitely not adhering to the peg of the gold standard. They're printing way more money. And so then, France, incidentally decided in I believe it was, 1969, right, a year after the creation of the IMF, SDR, that basically that they would like to send all their dollars back to collect the gold. And then in '71, Nixon, basically suspended the redemption temporarily of gold, and we started a new monetary system. Most people don't know that we're in a new dollar system, and that cycle started then. Now the US Federal Reserve has a 2%, debasement, which means, target inflation rate, which is actually 2% debasement. We're literally at the precipice of that cycle. If you add 50 to 1971, we're at in 2021. And if you do the math on that 2% debasement, times 50 takes out a lot of value. That doesn't mean the dollar is over, by the way. I'm not bearish on the dollar. Actually very, very bullish on the dollar because these things take years to play out. But now that creates something called anomalies in the system where you have to manage currency. So by raising interest rates, pull currency out of the system, and you you strengthen your currency. Plus you when so by raising interest rates, you're basically, creating a money money supply constraint. So you're pulling back, currency, from the system, and you're strengthening your currency. When you're cutting rates, you're actually printing money. And so वह जो up cycles देख रहे हैं, that is actually the dollar flushing in the world. When they lower rates, that's what they did in 2010 and then everything started pumping. Right. And basically जब वह पैसे को खेजते हैं वापस, जो शुरू हुआ था which we just experienced right now in starting in March 2022

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is that policy, if I were to ask you? It's it's not it's it is randomized in the sense that, you know, nobody wants to raise rates. I can assure you if you're a central bank governor, it's not a fun thing when you're raising rates because criticism आएगा. Right? People lose jobs. It's it's there's human elements to this. Right? But humanity has a tendency to overspeculate. So जब आप मुफ़्त के पैसे देंगे and there's too much money in the system, this happens in Pakistan. The plot prices start going up on a weekly basis. Right? Same thing was happening in 2021. Same thing happened in the .com bubble. Same thing happened in prior to 2008, the the GFC where people went into speculation. It was different asset classes, but they boom in a different way. So but it's predictable in the sense that these cycles tend to last seven to ten years, on average. But as you're maturing, again, these are, like, आप कह लेंगे 50, मैंने आपको इससे breakup किया था, 4571 onwards because there's hundred year credit cycles. And since, by the way, since '71, since we're not backed by gold in in our current monetary system, since everybody is effectively pegged to the dollar indirectly or indirectly, you're sitting you're now sitting on a debt based monetary system. So जब तक debt expand नहीं करेगा credit, you're gonna have an implosion and deflation of the system. बिस्किस का मतलब people lose jobs,

housing prices come down, stock market comes down, valuations come down. But in a way, don't you think that's a bubble? Because आप infinitely debt को तो नहीं increase कर सकते ना. वह तो आप you just, I mean, that's quack economics fundamentally.

Absolutely. So देखिए history में, you know, again, if you look back when we're we when we're whichever points in space and time we live, we tend to believe as human beings. We're very self centered, right? Right. Or centric in our mindset. So होता यह है कि we don't analyze that these things have all happened before. All unpegged systems or they determine as fiat eventually come to an end. Right. But, know, but I will say this that The US, while in our brains we think that the biggest, baddest empire that ever existed was the Romans, I think it's the American empire. I mean, look at what they've accomplished in terms of technology, in terms of multiple things. And there's now rising empires that are challenging them, such as, China and their innovation in tech and, various other elements, in genome. But, effectively, you know, when you look at all of these things combined, there is a natural conclusion. You always have oscillations where, basically, one empire as the pound was the reserve currency. Even when they lost the status in '45, I think most of us still, you know, wanted the pound. Maybe after 2016, you can now finally see that The UK is no longer that strong of an, of a country, especially when India has dislodged them in terms of Right. Size. Sixty years, more than sixty years before the But the dollar's not going anywhere, by the way. Right. As a very simple,

I'm So, इसमें

red अली होगा एक बड़ा interesting thesis है. He's one of one of the people that I, especially after 2008,

I went back and read so much of his stuff. He's a great inspiration. And and he talks about how even though, you know, it's not gonna be very very rapid, but it is gonna happen. And the picture that he paints you know उनकी जो नई book भी आई है जो new world order वाली वह तो अगले दस साल की बड़ी खौफ़नाक picture paint करते हैं because वह एक जो जिस cycle की वह बात कर रहे हैं वह बड़ा cycle है. यह भी सौ साल का cycle है right और हमने यह बस इन इन cycles के बारे पढ़ा है. हमने world war two के बारे में पढ़ा है. हमने वह देखा कि यार एक एक एक global power जो है वह diminish कर रही है, एक rising power है, वह challenge कर रही है. It's exciting for a lot of people because they're seeing now a lot of change happening and it's it's also fascinating for people who are adventurous enough to to want something different happen and वह उसके बारे में भी हम बात करेंगे कैसे Asia में क्या changes आ रही हैं? But do you think पहला तो सवाल मेरा यह होगा कि अगर मैं आपने आपने बात की कि federal reserve की जो cycle है उसके बाद पूरी दुनिया reflect करती है और वह फिर eventually यह चीज़ होती नज़र आती है. As these growing powers are rising, till what point will they take that? क्योंकि उनको why do they have to follow the American cycle when you know अगर उनको maybe they want to have growth over the next decade but इस वक्त वह पूरा दस साल अपने जाया करेंगे because Americans decided कि यार you know हमारी inflation बहुत ज़्यादा हो गया whatever. So so what happens when right now जो हम sun रहे हैं आजकल कि यार वह petrol dollar से हट रहे हैं और वह जो है ना बड़ा Central Bank of India and Turkey and a lot of these countries are buying gold over the last year. Are these symptoms of these countries trying to get away from this sort of, have they understood कि यार अच्छा ठीक है America is a diminishing power? And do you think कि अगले दस साल के अंदर हम बहुत ज़्यादा turbulence देखेंगे to the extent कि potentially civil wars and maybe not here but in different areas of the world हम वह chaos होता देखेंगे?

Yeah. So, I mean, multiple aspects but, I I I let me break it down, I guess, and and I agree with 100% with what you said. So देखिए पहले तो the first thing I'll do is, you know, we tend to be human beings are very, because of cold war thinking, we're very binary in our thinking, right, that it's either this or that. The reality is it's, like, gradual. Right? Just a pound come an example. Still a pretty important currency, until, I would say, 2016 was the end of that cycle, but now they'll gradually diminish. As a country, when they started printing in 2008, that's really the change over The US cycle changed, after global financial crisis. The the choice, which wasn't much of a choice, they had to go in this direction to bail out the system. They decided to print. It took them quite a while to get an approval for $700,000,000,000. This is I'm talking about 2008, में जब उन्होंने किया था. And then after that they kept rates low effectively still about twenty twenty two March. Right? What happens is when you start printing money like crazy, that's when the loss of confidence in the system starts to happen. Similar to, what has happened to us in Pakistan, where we've lost more confidence in the last, I would say, five years than we had, let's say, in the previous fifteen. Right? Because जब आप tailor end पर आ रहे होते हैं cycle, you get more desperate as a government, and that's the case for the American system as well. They're trying to prop up the system. Now what happens with that is that typically that leads to stress, and that usually happens because now you have a challenger in the system. When the Soviet Union collapsed, The US became the sole superpower and consequently everyone was like, you know, जो Pakistan में वैसी करते हैं जिसका card ऊपर चार्ट है, उसको back करो, right? So the whole world effectively said कि US bonds are the safest. Let's go and buy buy them, right? By the way, 1971 when they deepak from gold, The US had to really convince people to buy their money because a lot of countries started trying to hedge. And Paul Walker, who was the central bank governor, had to raise rates. It's very similar to Pakistan right now, by the way, to 20% to make that thing to to convince Make it attractive enough to attractive, but that decimated the economy. Right? Right. And then by 1991, through innovation, through hard work, which is always an important let's not forget that, hard work element. Right? And and in unity in a in as a nation. So they got to a point where they effectively Soviet Union imploded, and they became the source of a power. And now that was, I would say, the start of the peak of The US. And from that point, they kept on accelerating. And then 2008, all those excesses from 1991 to 2008 caught up, and then they had to prop up the system. But keep in mind that unlike previous cycles, this time we're living in a very global financial system. So what happens to The US and to the four reserve currencies has in which is which are on the SWIFT pound, euro, yen and dollar. System banking option. They they order a lot of power. Right? That has an impact on us as well. Right? Because we have to convert our money as a country, as individuals to buy goods from overseas. So China is rising. They've actually attained, technology symmetry with The US, which because we're in the technology disruption in that final stage that I think is exponential adoption of technology, that's a very important attribute to have. India is lagging in that. Russia is lagging in that. Europe is lagging. The US and China are at symmetry. And simultaneously, they've also, in size, pretty much become as big as The US. Right? So these things make then the system vibrate. And so I do think that over the next ten years, you're going to see it's it's actually a financial war. It's a currency war, which you'll see play out in the form of interest rates and trade tariffs. And it's gonna be limited kinetic warfare, which we were starting to see now, for example, in Ukraine. Right, could play out in our region. This is a flash point. Can play out in the Suez Canal region. That's, again, a trade route. That's Egypt. And the and so you'll see these countries start to kind of the currency start to shake. And same thing with Turkey, right? Because that's the phosphorus. वहां से सारा energy price होकर आनी है. तो we're actually living in a pretty good interesting part. Interesting. So so wait. So,

हम trade देखते हैं. China की trade जाती है, समंदर से Taiwan के पास तो वहां problem चल रहा है. Potentially rail से, समुद्र से Pakistan के through तो यहां problem चल रहा है. Yes. Egypt में जाती है तो वहां problem चल रहा है, Turkey में जाती है तो वहां problem. Fascinating. Four countries जहां पर आप sun रहे हैं, अच्छा. And Iran. And Iran.

Because because the the current superpower is and all superpowers, in the history, Portuguese, British always are stronger in waters. So if you try to price trade in another currency and move it over waters, there'll be trade blockades. The Land Asia is called a big island. Actually, it's all of Europe and Asia is connected. Right. So if you're built, which is what one built in one road is an attempt to create, land connections.

It's an attempt to bypass a potential naval blockade on the Spot on. Right. Okay so basically वो यह कह रहे वो कह रहे है कि हमने final war करनी है currency पर जैसे war करेंगे वो जब blockade मारेंगे जब वो blockade मारेंगे उससे पहले हमारा trade route होना राज में ही chest खेलने बोलो. Chest खेलने है. दो आधी chest खेलने है और हम beach में पैसे How do you see what's happening with the changes that are happening in Asia right now?

So so look, it's countries we tend to think of them as different countries as friendships, right? Like, gods higher than the Himalayas or deeper than the ocean. The reality is these are nothing more than business. Right? So, like, there's very little emotion in it. When interests, economic interests converge, then everything is possible. Right? As you say, all is fair in love and war. Right? So the largest consumer of energy was The United States until about 2020 with for the last decade, effectively, they've been, having shale gas production, but $60 price extraction cost. So when oil gets above a certain level, then there's no need for them to import energy. Right? So now the the Saudis, which were primarily who were primarily selling to The US US, and therefore, they're actually buying US treasuries. That's what the dollar is actually the US treasury or US bonds. So it's where people are worried about Pakistan defaulting. Bond demand, rupee demand outside the borders. So now they have to find other buyers. Right? And Iranis also wanna sell oil. So those buyers, the largest two consumers going forward and where the growth is shifting is going to be China and India. And, therefore, it makes more sense for them to work together. Now that that doesn't mean that Saudis aren't gonna sell to The US or this is not a a, you know, binary equation. You don't go all in in this direction or in that direction. But you begin to look towards this direction now or next. To try to preserve your own interests. Right. And in that, you know, you start to realize, okay, maybe, you know, me doing regional wars or, having conflict regionally is not necessarily in my own interest in the long term. Right? So and it obviously, leaderships change, different schools of thoughts come in. So all this has is playing playing in in all this. If you, by the way, look at The Gulf States, there's been a change in leadership if you look at, in most of the key ones, like The UAE and, in Saudi in the last five to ten years. Right? And so there's a new school of thought that's emerging. And what's that school of thought? What what

how does that school? So I saw this very interesting talk by मोहम्मद बिन सलमान, where he talks about, you know, Middle East being the new Europe and उसके पीछे एक बड़ी सोच है. वह कि random बात नहीं है. वह हम तो Pakistan में देखकर कहते ना कि Europe जैसे Europe ख़ूबसूरत है, Europe developed है. But वह एक मैं उसको इस तरह से देखता हूं कि Europe at one point was completely ravaged by war. Yeah. And we saw over the next sixty years they've completely turned it around. मतलब मुझे नहीं लगता कि recent history में कोई ऐसी मिसाल मिलती है जिसमें completely दबा हुई. मतलब कुछ बचा ही नहीं था उस पूरे land में. Absolutely. Right? और वह ऐसा land था जिधर people हम अपनी Pakistan India के problems निकालते हैं. हम मतलब Pakistan India के तो मुझे problems कुछ नज़र ही नहीं आते Europe के सामने. Right? Like these people have done all sorts of atrocities against each other. They fought wars. They've killed hundreds of thousands and suddenly they're in a system where everybody can go everywhere and they have a single currency and it's very collaborative and cooperative and it just changes the the fate of these nations contrary to what it could have been. Granted कि यह सारे के सारे उस time पर एक empire की शक्ल में थी वह नहीं रहा. But it could have gone much worse. Yes. उस context के अंदर Asia को अब largely किस्तान Middle East को but overall Asia को किस्तान देख रहे हैं अब इस twenty first century में?

So, complex it's answer but because there's multiple things happening. Right? One is that technology is disrupting the industrial age effectively, the brick and mortar, which is very similar to the way the industrial age disrupted the agrarian age, the princes states, the feudals, the monarchies. Right? That's playing out. And then the nation state was created. It's a relatively new creation. If you look at the world as a post World War two, post World War one and two creation. Right? So we're moving, in my opinion, this is speculative, but a lot of things when you look at how, you know, positioning is being done, we're moving to economic zones. So Abi, for example, you know, and, again, I'll go back to Europe. They created the Eurozone. Right? I think the current battle in Pakistan is really that are we gonna be part of the Central Asian Economic Zone under the tutelage of China and Russia, or are we going to be part of the Middle East, North Africa, and Pakistan Economic Zone. Right? The world world's because of the geopolitics between India and Pakistan, the world tends to, if you look at any major corporation, bucket us with the Middle East. At least in tech, I can tell you that it's a very Middle East, alignment because, for example, Karim, which had majority of पाकिस्तानीs in it, they're very comfortable landing in रिहाद, in Cairo, and, you know, in Pakistan, and so they can, you know, how to scale in these companies. मारी companies is a C direction majority है. That this is actually what's driving this change in the region. Partially, one, because I told you what's happening in The US in terms of them buying energy, they're self sufficient. Number two, also because money itself is changing. We are living in a analog system world where money is there digits digits in your bank account but settlement times are like you know आपने पैसे भेजने हैं तो पांच दिन लग जाते हैं दूसरी जगह पहुंचने में या आपने credit card पर तीस दिन बाद settlement हो रही है. But वह तो it's more of a borrowing, but still. So we're we're moving to where when cash disappears eventually, which it will globally. I mean, would be like saying कि, you know, when WhatsApp or Skype came about, we still have people paying for long distance. This is a foregone conclusion. It's just a matter of time. It has to behave like, I'm paying you money, and you give me the goods immediately. Right? Check लिखूंगा आपको तो you probably not trust it. So digital payments have to behave, and you're not gonna sit there and wait for one hour अगर मैंने I've sent you money और वह settle नहीं हो रहा. Right? The the reason I'm talking about all this for what's happening in our region is you have to understand that that creates to to create a regional currency, if that ever happens, or alliances, you need critical mass, which is land and population. Right? So in my own assessment, as the world is changing, China is rising, India is rising, Big big the Big Island, Asia is rise rising, right, which is gonna have a spillover effect on us. Regardless what the current state is, this is just a historical cycle that's repeating itself. We're as we move towards Meanup, you're you're seeing, obviously, China and India become more important as buyers. And from a from specifically a Gulf state in Saudi Arabia, if you look at historically, they've always kept you know, they've had a security alliance with The US where the in exchange for pricing, energy, and and dollars, The US has always come to protect the Saudis. But as the Saudis have become more independent in their foreign policy, Prior to that, when that was the case, they were a 100% aligned in foreign policy. Right? Now they're trying to become more independent because, obviously, the buyers have changed. So in that scenario, they need newer security alliances. So, one, they have to reduce their biggest conflict in the region, which is Iran. Number two, and this is what's what this is why I'm bullish on Pakistan. They want to have security alignment with Egypt and Pakistan, two of the strongest, states and militaries in the region. And so that kind of is that change that you're seeing happening. And then Pakistan comes with the added flare of nuclear weapons that offsets Iran's nuclear weapons since they're pretty much at about 83% enrichment in uranium which means they'll have a bomb. So, you know, you kinda have a stalemate and then that creates harmony. Remember I said there's no friendships. It's all business interests. Makes sense. तो अगर मैं सारे को now अभी

tangent पर हम निकाल गए, मैं original हूं. मैं निकलता हूं because सारी चीज़ें घूमकर एक ही में मर जाती हैं. एक ही में मर जाती हैं. Before I move on to the the most pressing question जो कि start से मेरे दिमाग में था. मुझे अगर quickly आप बता दें, so 2010 you were still doing consulting. What happened from 2010 till 2023?

So 2010 में, I basically then moved over to, in twenty two thousand twelve I actually went entrepreneurial. So, basically, I I think I skipped this part. I'm I'm I'm, like, I have an overactive brain. So in 2006, while I was working, I actually started moonlighting, which is doing a business on the side. Saw an opportunity. And that's, by the way, where I learned, the protocols and how the disruption that's happening because I went through a disruption myself. So I realized that there's television channels in Pakistan. People wanna consume them Right. In the West Right. Outside the free to air satellite footprint area. And so they were, their platforms like DISH Network in The US. They were, Rogers cable in Canada, similar B SkyB in, Asia. So I realized that people were willing to pay money for this. Like, were you one of those? क्या magic TV था? क्या नाम था उसका? जादू TV. जादू TV. That came, that came subsequently. Yes. So you guys were जादू TV? So somebody else had founded it and then I came in later and I I became one of the executives to scale the company. Oh wow,

fascinating. अच्छा, sorry. You were saying? So now let's go,

so basically and disruption is important because, I mean, eventually, we're gonna end up talking about tech. So I'm trying to link everything back, whether it's geopolitics, everything you're tech, because we're in that disruption. And I want people to really understand and pay attention to this because you can't apply the rules for the last thirty years. They all have changed post 2020. Economic, financial, even Geopolitical and Geopolitical, everything. Right? Even as an investor, if you apply those rules, you're probably gonna lose a lot of money. So now, I had gotten channels, put them on these satellite, platforms in, in in developed markets. It was pretty good business. Was 29 years old. I basically suddenly started getting subscriptions. It was be decent chunk of money. Right? And but it taught me a lot. Now suddenly, that business is going strong from 2006 all the way to 02/1011. And then suddenly, we start to see subscriptions drop. Right? And I'm raising this with Dish Network, some of the incumbents, Rogers Cable. And these guys don't seem really frustrated about it. They're like, it's a new technology emerging, which is online distribution of television and content, which would be YouTube. Netflix was in its early stages. CDs say, from there, sorry, CDs the discs, they were changing to Streaming. Streaming. Right? Bandwidth improved So, incidentally, I had gotten wind of this because when I was looking for where all Pakistanis and South Asian wanted to consume content, I looked at even Japan and Korea. And वहां पर I found an IPTV platform that was catering to people, even though it's 60,000 subscribers. But, you know, if people are paying, like, 50¢ a month, that's 30,000. Right? I realized that Japan and Korea were a lot more advanced than even The US because infrastructure, उनका the it's cheaper to set up infrastructure in smaller sized countries. So their bandwidth back then in 2003 sorry, 02/1967 was, almost, like, a 100 megs or so, 50 to a 100 megs average. So The US में थी five megs. Mhmm. Right? This I'm talking about, again, 2006, era, 2000, 06/07 era. So Jump TV, a bunch of these platforms started coming. So I kept on signing. I was the first person in the in my at least in the South Asian industry, maybe not in India, but in Pakistan, to catch wind of this, just because I was in the front line, so it's easier. But, with the incumbents, none of them saw this disruption coming because they they were so comfortable as big entities that they said this is completely, you know, a fad. It's gonna go away. Similar to the Internet was a fad. Right? And, effectively, then I started noticing a new platform that's spreading like wildfire in The US, and, you know, everybody was talking about it, and this was Jadoo TV. And, basically so I start the relationship started where I sent a notice saying, kid, take my channels down. But when I met the individual, he was actually a pretty smart guy. Was a Pakistani entrepreneur in his mid fifties. He actually had created he went to Urbana Champagne, in Illinois, and he created a company called Dazzle that was the first VHS tape to conversion into digital when the computers were there and was one of the initial pioneers of the MPEG standard. The mediums that we're on now. So this was right up his alley, right Yeah. In terms of understanding this stuff. So when I spoke to him, realized that, okay, there's something called DMCA, digital, millennium copyright act that, you know, he didn't understand this. He said, look. These are unencrypted channels sitting on these satellites. So all all I'm doing is really just, you know, encoding them and offering them to people. And under the DMCA, a channel is supposed to notify you if you have locked up rights in another country. Right? So I did that. Incidentally, I was one of the few people where my channels had nonexclusive rights because these, the larger distributors would always lock up exclusive rights. And I had specifically carved out IPTV, which they didn't really see as anything important. So I got the channels placed on him. After talking to him, I realized that he has no understanding of content in the content world. So I said, okay. How about we partner? I'll create a content company where I go and acquire content rights. And, basically, that then, effectively, that was a boom of Jadu, where we went and secured content rights and did all sorts of, you know, India, Afghanistan, Pakistan, Persian content, and, Bangladeshi content and started then creating getting to the larger South Asian community. Very cool. And how long were you doing that for? So I did that from 2012 to roughly around 2000 I mean, really, '14 to '15. And then at that point, I basically started moving on into more tech investments myself and, continued with them till about almost 02/1617. And then, you know, kind of actually, he started getting disrupted. So this was actually the big departure where he was slightly a different age demographic. So my belief was that the future is all online streaming, which app based. So you need Samsung apps. You need Apple TV apps. And because he was a hardware guy, he felt that the box is pervasive. And so he stuck to the box. And I that was a difference of strategy, opinion. I didn't see that playing out. And, eventually, he did get disrupted because then YouTube and content was ubiquitously available. And so disruptions always disrupt as well. Right? By that time, I had basically diversified, I'd started investing and, you know, gotten into a whole rabbit hole of economics merged with technology and Bitcoin and Ethereum and all this stuff. So we'll we'll talk about that. Interesting. So 2016, you move on from that.

And 2018, may you you you started Zane Capital?

No. So the Zane Capital actually started in 2021. अच्छा. So, पहले you started investments in 2018? I did. So I actually created one of Pakistan's first institutional VCs, called Laxon Venture Capital backed by the Laxon Group. Right. And, that was the first venture capital fund. So two questions. 2016,

say twenty eighteen तक. You know, twenty eighteen में you're essentially landing in Pakistan and saying कि listen, I think we need to be investing in Pakistan. Yes. Yes? So what happened between those two years? Because you've been in The US for forever. You're not necessarily really looking at the पाकिस्तानी market. You're looking at South Asian, sure. But essentially तो वह American economy पर ही चल रहा है ना? Yep. So

what changes in those two years that that made you a believer? So so I'll backtrack a bit because this all starts from two thousand eight global financial financial crisis, right? I went back and started studying cycles. So when I studied the cycle, what I realized was because the debt based monetary system, every time you have a crisis, it's actually credit slowing down. Borrowers have run out, and so now credit needs to readjust. So when I looked at the pattern, in 1998, you had a crisis. Subsequently, you saw, basically, a bunch of countries come online with credit, which was called the Eurozone. And, basically, Greece, Italy, Spain, Portugal, these I'm missing one in here. Greece, Italy, Spain. They're called the they're now called the pigs, P I I G s. Right? Right. Because, effectively, they borrowed so much that they in 2008, they had an implosion. But, effectively, what happened was that Europe came together in the Eurozone, and then Germany and France's balance sheets were used as leaders in the Eurozone to make the rest of these countries creditworthy, and then credit was expanded. Home mortgages, you know, auto loans, all sorts, credit card loans. And so I started detecting a pattern. And then when I looked at it, I was like, okay. Then the BRICs came about in 2008. Right? Where you now you're hearing about the BRICs a lot. But, again, credit was expanded in these countries. India got a lot of corporate credit back then. India's a little bit larger, so China is the same thing. Same thing with Brazil and, Russia and South Africa. Now so at that point, I was like, okay. Where in the world is the next when the whenever the next crisis comes, I told you this predictable seven to ten years. Where is it gonna happen? And in that scenario, what I realized was that, wait a minute. This is, you know, looks like it's the next eleven, which Goldman Sachs had coined this term. When you look at the next eleven, it's like Egypt, Pakistan, Nigeria, all these countries. Right? And I was like, okay. Where do I have home turf advantage? Basically, all you have to do is position yourself

before credit arrives. And it's essentially riding the wave. And so if you look at it now, we're in that crisis. This is the this because it's the epic bubble. So is this the crisis that is followed by credit arriving, or is it's this is a crisis that is a prelude to the credit arriving

because you have high interest rates. In countries like Pakistan, unlike the developed markets, which are much more documented. Right? So you need in order to lend, you need historical data on individuals and, in over there, it's in the form of paper, like your salary slips and all that. In countries like Pakistan are the next 11. Also, by the way, b c BCG and, Google termed it as the next billion users. We all fall all these countries fall on that, domain. You're gonna need data on people. So this is not gonna be your traditional bank lending. It's going to be digital lending. And so यह जो सारी behavior patterns आपके capture हो रहे हैं through your phone, all this stuff, they'll be used to So यह जो बाज़ार है और जो यह सारा का सारा यह century वह एक network वन रहा है. Consumer book me में your travel habits, your

bag gallery और फिर सारे में आता है अदिल फ़ाई. अदिल फ़ाई से credit score ही है. I

think you figured out my portfolio.

Better than some of the, some of my investors. They're like, आप यह क्या करें? मैं समझ नहीं आ रही है. और वह उधर नहीं आ रहे हैं. Fascinating. चलिए I won't go into much detail there but ok but चलिए next question यह आता है कि पहले तो मैं दो minute लूंगा. मैं बड़ी अच्छी game खेली है sir. इसका reclaim करूंगा. नहीं नहीं sir, चलो जो मेरा मेरा सवाल है ना वह actually वह आपने वहां पर answer कर दिया है क्योंकि वह इतना मैं विद्ध करने वाला मैं it sounds like मैं घूम के आ रहा हूं. हां. But मैं you know. इधर हो गया है. मुझे यह बताएं कि देखें fundamentals make sense. ठीक है? आपने एक cycle किया आपने कहा कि I am going to bank on that cycle अब मैं थोड़ा सा zoom in कर लेता हूं. Right? Pakistan में मुर्ता सैयद आप कहते हैं कि यार पचहत्तर अरब dollar आपने अगले तीन साल में निकालना है. आप नहीं निकाल सकते. पहले आपको कोई ना कोई जंग मिल जाती थी जो कि आपकी effectively bad druggy habits को fuel कर देती थी. That's not gonna happen. So what we're seeing is कि very very short term के ऊपर आपको एक बहुत massive किस्म का pain अभी deal होना है. अभी भी you're not at the जैसे कहते ना bottom out नहीं किया आपने. उस pain के बाद how do you reconcile with first of all that pain? Second of all the fact that we don't have any मतलब हम हमारा वह DNA ही नहीं है जिसमें हम global market जो छोड़े हैं हम regional markets के साथ connect हों और connect होकर हम participate करें उस trade के अंदर चाहे वह services की हो, चाहे products की हो, so on and so forth. वह credit अगर आ जाता है और वह आकर park होता है और वह real estate को pump करके बाहर निकल जाता है तो उसको तो कोई फ़ायदा नहीं है ना as such. You add political instability to it, you add continuously you have this demographic 50 plus जो कि एक certain तरीके से Pakistan को चलाना समझते हैं. ज़हर है 50 plus power में भी है. Granted कि आपके पास. I am only four years away. But granted के आपके पास बहुत बड़ी एक youth bulge है जो कि आप power gain करिए. Every year on year they will gain more power and more power and they come with a different understanding altogether. But constantly आपके पास एक sort of status को जिसको हम generally कहते हैं. जिसको जितना भी समझा दो उसको समझ ही नहीं आती कि there is a different way of doing things and understandably समझ नहीं आती because they are so used to controlling power both in terms of soft power as well as the capital and all of those things in the old system, in the old economy. Right? What I am seeing right now is कि पूरी की पूरी economy completely आपकी unravel होकर वापस put together होगी और एक नए system है जिसमें painful होगा. It has to be painful for the old guard. It can't be कि they I mean some of them will convert and we are beginning to see a lot of these sort of family. I mean a of growth that happened in the previous cycle also, right? The smart ones converted to the rising industrial age,

sold their lands and bought,

built factories. And the other ones will be devastated.

So, मैंने आपको disruption की analogy दी थी कि जो जो when you're very powerful and earning money from a business, it is very difficult for you to see कि this tiny little new emerging thing is gonna make me money. Right? So the incumbents always can never disrupt. That in fact, laxen may, that was one of my major discussions with them that, guys, it's, you know, in order to disrupt, we have to think differently. Right? So we can't back these. And they're very they're forward looking group, by the way. So they understand all this. So in fact, some of the investors in that, that's how I'd explain it to them, that you're actually defending your own businesses, and a lot of them put money in to learn about this change. So effectively, what you're what the way you have to look at it now is that a bulk of the people will be disrupted. Right? Especially, I won't even get into the rabbit hole of AI. You know, if you're not a creative person, you really are gonna struggle. Anything logic based, accountants, lawyers, all that stuff, right, is gonna get disrupted very rapidly in the next five to ten years. And don't underestimate the adoption rate. If you just look at the leapfrog from landline telephones in Pakistan where people are on waitlist to then when cell phones launched and the food stand guy had a cell phone as well, that's the same speed with which this adoption is gonna take this. So you don't have twenty, thirty years. You have about maybe ten, fifteen max. If I were to speculatively give a timeline. Right? So let's look at this from a new angle. We were in the financialized world. The US schedule dollar का standard था, and let's say they're all the JPMorgan's, Goldman Sachs, all the banks and the amalgamations. The key to documentation was touching the banking system of financialization, which was paper based documentation. Right? In tech, it's tech based documentation. Case in point, and I'm doing the analogy because this is where I feel like many in Pakistan हम जब रोना शुरू है, think, सत्तर साल से हम यह हो रहे हैं. Let's forget that. Let's look at the opportunity in front of us. अगर आप food panda पर खाना order करते हैं and you're from the black economy, right? And आपकी declared income है zero, but your food panda bill is 2 lakhs a month. I can assure you that data point even if you're settling in cash जब वह rider आ रहा है, वह transaction log हो गया है. Right? So all this is documentation that's your habits and data points that are getting documented on that. So Pakistan is going to get documented from technology.

So rather than की वो top down हो रहे वो bottom up हो रहे वो bottom up हो रहे है. वो पूरा का पूरा वजह का और आपने एक point बार connect करना जिस दिन connect होगा तो उस दिन is gonna be a nightmare for all the people जो की अपने हिसाब से रह रहे थे. We begin really need to begin to understand के the the tax collection is coming very soon and the documentation is coming very soon. आपके पास एक choice है. या तो top down

you understand the change and then you take the rectifying actions in order to basically ensure that you are leading this disruption. Otherwise, the very concept of decentralization is not कि दुनिया decentralize होगी. It is incumbent powers that know that जो black economies हैं वह capture होंगी तो वह नीचे से आपके आपको आकर capture करके अपने systems में लेकर जा रहे हैं. Food pandas European that's gonna be the European digital currency at the back. Front पर आपको digital rupee नज़र आएगा. पीछे वह Europe के साथ instantaneously convert होगी, Europe के साथ. Facebook is American. Front पर digital rupee होगा. जो रास्त के through है ventures, when we do our central bank currency, वहां से digital dollar होगा. ठक करके एक second में settlements होंगे. जो भी state bank के through हो रही है ना, वह रास्त वन जाएगा. State bank will evolve into रास्त. So not to recognize this change, and doing an analysis from the history. It basically is in my opinion, I think The Gulf States have recognized this. That's why you're seeing them rises. I think Singapore's recognized this. I think China's recognized it. India's definitely recognized it. That's why मोदी demonetized the rupee in 2016 for wallet adoption, is documentation. So I've been saying this to people in Pakistan since about 02/1516. A lot of my friends that come from the very affluent segment of Pakistan when I've gone to some of the best schools Harvard, Yale, Princeton, Oxford, Cambridge tend to the more involved you are in the existing system, the less likely you are to spot change because it's, it's fear that's forcing them to question this change because उनकी अपनी livelihoods impact होती है. एक fear है जो कि question करता है, एक fear है जो उसको stop करता है, right? जो जो disruption

के champions हैं और जो supporters हैं, उनका यह fear है कि the people who are in charge because they are all part of the old system, they are not gonna allow for that change. How do you ensure for example और rather how do you reconcile with this idea कि यार I don't care who's in charge? It's now in at what point does it become inevitable? And are you seeing the inevitability of it play out? The inevitability,

I mean, I I mean, nothing is a 100%. Only, god knows what Of course. Gonna play out. Right? But I can say with me myself, putting my own, you know, bet on it and saying that with my own reputation on the line, this is a 100% certainty. The choice is ours. Do we want to let other people disintegrate Pakistan's economic fragments into their economies? Or similar to what happened in the seventies where we lost half the country, that was in a more industrial age, separation. Right? Or do you want to actually control it from the top down? When I say control it from the top down, that doesn't mean you're to Pakistan and ban कर दो हर चीज़. That doesn't work. Never worked for, YouTube, did not work for WhatsApp, has not worked for anything. Right? In reality, you create, you actually facilitate the process. Right? And so you create the right environment, for this process to go, which, by the way, our government has done it. No no you know, people are very critical regardless of political side. All governments in Pakistan, whether it's been the the PMLN government, PPP government, or PTI government, and associate coalitions, when it comes to technology, they've all been actually very soft on it and actually try to encourage it because they do understand it. मस्तही कि just political experience, makes you short sighted. You're trying to constantly we're we're actually a company in distress. We're just trying to solve things, and we don't realize that we have a gold mine sitting in the form of our undocumented economy. In my opinion, our documented economy, which today, actually, the state of Pakistan, that how bad things are, yet nobody's burning tires and killing people on street. That's that's I mean, it's a black economy that's, sustaining. It's

there are no imports. You have a current account surplus. Apparently, nothing is being imported. The shops are full. The coffee is there. The Paul Mitchell shampoo is available. KPS.

So so I'll give you an example, right? What I said was कि if your declared income is zero, yet your food pan double is 2 lakhs, right? Similarly, if you look at the taxpayer base, I mean, it's barely what? 250,000,000 people, like, तीन, चार million registered taxpayers हैं. जिसमें से 1,000,000 जो है वह zero है. हां हां और ऊपर से जो filers में भी हैं उसमें से बहुत से nil वाले हैं, right? I think I am one of only idiots as paying taxes as well. But the point is कि look, you are not going to document in the way until you enforce digital payments, which is what Modi did. Now we can sit here and do these compares. India's going here. We're going here. I'm like, did you analyze the steps they took? So we're at this inflection point. Right? It's really like India in '91 where they took the population growth. Like they suddenly the population had grown and they turned to a consumption economy and then they took tough steps and basically effectively became a producing and export oriented and domestic consumption as well. Rather than importing, you produce it locally, right? अब वह एक something called real real effective exchange rate होता है. Mhmm. In Pakistan, by the way, it's at a beautiful place right now where it's at in below nineties. That means you don't import, produce domestically. और जब वह sauce ऊपर होता है, which it has been for the last fifteen years, you don't need to produce anything. So there's a bunch of factors. They all come down to currency and interest rates, right? So now we're at that same combined slot where एक एक तो हो गया मनमोहन सिंह's India in 1991. मैंने से मनमोहन सिंह, I'm talking about the economist मनमोहन सिंह. Right. And I'm I'm talking about मोदी's 2016 where he demonetized the rupee and अंबानी was throwing free data for wallet adoption. Right. Those are not random events. They were planned events. Consequently, India is the fifth largest economy because black economy is gone. 70% plus जो है banked हो गया स्वात वाला से. अच्छा, so that

जो वालों ने free internet Reliance

वालों ने आ के जो AJIO free Wallet adoption की हां, हां. उसने he's a smart guy so he realized he's like, kid, look who cares about the data if I get them I'm the bank, right? This disruption is also having a merger of banks and tech company. Eventually Facebook, all these companies are gonna have a banking side. Right. In order to exchange a value disruption. So, we are because we tend to not take decisions in a timely manner, we still have the greatest opportunity. Take the steps, nothing dies over and over. It's not binary. So, आपकी industrial economy gradually disrupt होगी tech से. तो आपने उसको भी protect करना है, लेकिन साथ में tech को भी adopt करने देना है और उसमें आप rupee को demonetize करें. And once you demonetize a rupee, the money layers are all there. Easy पैसा, jazz cash, नया pay, सदा pay, Multiple other money layers are there. Most of the people don't mind being, at least most of the urban lower income bracket is sending money on EasyPesa back and forth, right? Right. So they they, it's not like they don't want to be documented. Most of them don't even fall in the bracket of qualifying for taxes. Mhmm. So I think we have to have a will. We have to have a thought process at the top. One of the issues that I see in Pakistan is also because of the सिफ़ारिश concept, the right people never get on any committees. Like, there's task force बनती हैं. I'm not saying, like, I'm not I actually hate, being involved in any of these type of thing, but I'm saying कि जब भी मैं देखता हूं, you know, किसी का cousin आ गया, किसी का relative. So then these people are just coming and doing the same thing over and over again, suggesting backward looking suggestions, looking to other countries rather than looking at local solutions with inspiration from other countries. And then Insanity is doing the same thing over and over again and expecting different results. Right? So I think we are in a very great position. So, and it's up to our, you know, the general the individuals in charge in our country today to recognize this change, which is either we basically get disrupted from below where we become, know, fragment goes to China, fragment goes to India, fragment digital goes to MNAP and The US or Europe, or we harness it ourselves similar to what China has done, what India is doing as we speak, and then force them to come and invest in Pakistan and then grow the economy from there. 70% of this population is below the age of 30. I can assure you they understand tech. Even even the the your proverbial man on the street understands tech. They're using tech every day. Right? It's it's a पूरी दुनिया में recession it's on the verge of recession. I think we're actually already in a recession. But has have people stopped communicating on WhatsApp? Have people stopped using ordering food on Food Panda? Maybe less in numbers just because of the birdsing power. But adoption is still extremely strong.

अगर मैं आपसे पूछूं, ठीक है, you know, I get the local context. Short term pain, long term growth beyond our wild streams, hopefully. एक piece of the puzzle जिसके बारे में मैं आजकल बहुत ज़्यादा सोच रहा इसका कोई जवाब दे नहीं पाता. और वह यह है कि at the end of the day if you want to ठीक है आप local you can't be an isolate, you can't be North Korea. Right? So you can't say कि यार मेरे पास कोई पैसा आ नहीं रहा. मेरे पास कोई पैसा आ नहीं रहा और मैं जो है वह दुनिया की तमाम services को पैसा दे जा रहा हूं. So क्योंकि tech is very tech does not have borders and so जैसे जैसे आपने कहा chunks लेकर जाएंगी कि यह company वह company और वह बड़े differently chunks लेकर जाती है. They don't even care कि वह पूरे साल का. Book me go of Chinese company

buys it right? हां. Wish they will eventually or an American company.

तो एक percentage is always going to be going to them. चाहे आप उसको जिस तरह से भी play out करें. The fact is कि you are not effectively in a position where on some level you can also go be a पाकिस्तानी company and go to other countries and take some of their chunk back. So for example trade है ना? मैं कहता हूं यार मैं आटा बाहर से मंगवा रहा हूं और मैं footballs बेचता हूं. ठीक है? तो मैं उसको equal कर लेता हूं. मैं tech में जाता हूं तो tech में at every given time मेरा पैसा बाहर जी ही जाएगा, जा रहा है by and large. मैं अभी जाकर यह नहीं कर पा रहा कि let's say मेरी company पाक्स्तानी है जिसकी technology सुधान में इस्तेमाल हो रही है या Nigeria में इस्तेमाल हो रही है और उस consumption economy के अंदर एक percentage मेरे पास at every point Pakistan में आ ही रहा है. As a matter of fact if anything यह तमाम different economies के chunks जो जा रहे हैं वह Dubai में park हो रहे हैं Singapore में park हो रहे हैं. Of course. So on some level when you when you're looking at it someone has to identify कि ठीक है industrial age ख़त्म हो रही है. शायद हम products की उस तरह से consumption अब वह you know with the climate change world and all of that हम उसको थोड़ा सा शायद कम भी करने की कोशिश करें. But कुछ ना कुछ तो हमें दुनिया को देना है या तो ठीक है expats are sending remittances of Exactly. और वह Europe की aging population है, Japan की aging population has throw in as many people as you can. You're gonna throw them. India's gonna throw them. बंगला is gonna throw them. That's not, in my opinion is not going to be enough to service the cost of import, service import or product import जो कि आपकी remaining population को चाहिए. So क्या है या तो services का कोई business है या वो क्या है? Why have we been unable to fuel that part of Pakistan's growth? हम constantly Pakistan के ठीक है ये भी बहुत बड़ा problem and now that you've sort of connected it all that's one component जो कि बड़ा necessary है Pakistan को कराने के लिए. Think that's the foundation. यह fix कर दें तो बाकी बहुत सारी चीज़ें हो सकती हैं. Ease of doing business fix हो जाएगा, दस चीज़ें वहां fix हो जाएगी. But इसमें optimization आएगी, इसमें growth नहीं आएगी. Growth के लिए आपको dollar in चाहिए. And I don't hear a lot of smart people talking about that.

What what are your thoughts on it? So, again, India is our closest comparable. Right? So let's start with, the old system. Right? Just what you're saying is about, you know and so everybody's trying to increase exports. And we're really good in a lot of things. I mean, honestly, we we're really bad marketers. Like, for example, our FIFA ball is a good ball. They connected the dots connected. It's been the ball that's been used since they realized this is the best ball. Istanagi, our crafts, and there's so many industries that are phenomenal. Right? But when you look at the bulk of our manufacturing sector, they're just they're not really innovators. All they're doing is basically getting concessions from the government from taxpayer dollar to enhance their margins and really adding very little value and exporting. Right? So they're actually doing more damage because raw materials import तो वह offset अब the question is कि are you gonna keep doing the same thing, attempt over and over? Let's be honest about realities in Pakistan. Right? We are not competitive in many things because our academic system was weak. Right? Let's look at India. They put in the IITs in place very early on during Nehru. Nehru was effectively the brainchild of that. Right? So all that was in place. If you have 25,000 engineers that get produced in from a tech point of view, barely 500 are the ones that that can actually get a decent job anywhere in the world even domestically to produce something. Right? In your manufacturing sector, there's a lot of good companies. I'm not denigrating a lot of good businesses out there. But, you know, you you've kind of missed the boat, and you just can't keep giving subsidies with this auto sector. We have 1997 again. There's no domestic, like, effectively supply chain. You were supposed to build that. Right? As long as you have black money floating in the system, you it's just not gonna happen because you can just bribe anyone. I mean, literally, if you have enough money, you can bribe anyone to get anything done. We all know that in Pakistan that when you as you live here, right? And nobody's incentivized to do it unless there's a change. So now let's come back to this entire dollar thing, right? So what is your best? I'm not saying reforms but that's a slow change. That's a structural change that's gonna take ten years. Right? There's multiple things we can do simultaneously. Now our freelance market, we're actually the fourth in the world. Right? Let's cultivate that. You know, you don't need, for example, a four year degree. The best programmers I've hired in my life were not did not even have a formal education. They were self taught. You don't need, a four year degree in order to basically learn how to program. Right? And so why not set up technical training centers and try to produce better quality? I'm not asking the government. I'm actually this is a call to the private sector and go out there and become the funnel because Pakistan's labor arbitrage is so cheap right now that around you as all these smart contracts are written and all the rest of the region around you is digitized. Philippines and India are no longer as competitive. Pakistan's cheap. So that's your net dollar coming in. अब वह state bank की अलग policy है that, you know, that basically allowing that money to come to Pakistan. As long as you have capital controls, nobody's gonna wanna bring money back, right? So the net inflow is is, reduction in that is also due to partially the आपकी capital control. I can tell you this आपकी जो IT export and freelance industry है, यह probably होगी छह billion dollar पर या सात billion dollar पर. देखिए उसमें सिर्फ़ एक दो billion Pakistan आ रहा है मुश्किल से. Because people are like वह आपको Everybody is parking. IID तो आप बड़ा optimize कर रहे मैं आपको YouTubers का बता देता हूं. सारा park पड़ा हुआ है. Exactly. So so my point is you have human resource as your number one asset. Why are we shy about that, right? We we Pakistanis are some of the smartest people on the planet. When you collectively, we're a disaster, but individually, we're geniuses. You go look at any field around the world. You look at Silicon Valley, big tech. Right? You see Pakistanis in pretty senior positions. The chief battery officer of, Apple was a Pakistani. When you look at PACE Finance, Blackstone Group, you look at Goldman Sachs, look at any of the big asset managers on the on the planet. Right? You'll see Pakistanis there. That's not the case with many other countries. Whether you look at African countries, even, Middle Eastern countries, that's a rarity. Right? So, Egyptians, Pakistanis, Iranis tend to be more intellectually, you know, highly educated because we didn't have wealth in a as a nation. Right? So you'll see doctors, engineers from our part of the world that do very well. So my point is kids, okay. Those are your assets. The people here are your assets. Not everyone's gonna move, but you can actually now sit here and do work anywhere on the planet. So why not use that but incentivize if you want to bring money back to Pakistan? So that's one mechanism offsetting it. Obviously the other is having less reliance on it. There's no reason to bring, you know, stuff that is not needed in Pakistan. For example, I realized that we import dal from abroad. I mean, that was a weakening for me. I mean, I thought dal was a local, he is one of our local staples, right? उसको भी हम नहीं कर रहे हैं enough. अभी आटा for example they are complaining. We had a banner crop this year. I can assure you क्या होगा? It's gonna run out because वह hoard करके बाहर smuggle करके ले जाएंगे, right? तो these are things I can't fix. I can only see what's happening. From my perspective again I'll become more selfish in this scenario. From my perspective it's a very simple thing. I'm betting on companies either the state can take advantage of this disruption that's happening whether they want to or not. Even अगर आप बंद कर देंगे regulatory क्राम लगानी वह होती रहेगी नीचे, right? तो या वह दूसरी economies के अंदर चली जाएगी. सायदा someone's gonna buy it out or it's gonna become a year soon. वह आपकी पूरी economic activities है. करीम के जो 3,100,000,000 के जब Uber ने valuation की थी, right? Which was an overvaluation at that time. But I mean it was still a formidable company. I think उसमें से कम से कम 800,000,000 जो value थी वह Pakistan से आई थी. वह हमारी क्या सिर्फ ride hailing जो यह cab वाली service थी जो हमारी economy को भी document ही नहीं हुई थी by the way. किसी ने I mean जब taxi वाले को दे रहे होते थे आप cash तो think of think of the logic, right? But where did that get logged? Kareem was listed overseas. That got logged in the Holdco GDP. Right? That's okay. It can get logged there, but, you know, you can facilitate the process like India has where you allow the Holdco's or you fix your local systems like belief in the judiciary, for example. Right? If I'm an investor, if I know my capital is not protected, I'm gonna go into court and my opponent is gonna get a stay. Even if it's an iron class two plus two is equal to four case, I'm gonna say, I wanna put money in the holdco in Singapore where I want to enforce. By the way, our fund also invests in Holdco's only because our investors will not allow us to invest, in Pakistan, Incorporated, OpCo's. So so these are these are fundamental issues that we have. I think some of the smartest people in this country left in the sixties, seventies, nineties, February, even today. And so what's happened is that everybody that's left is effectively part of some, you know, one grouping or another where they're just making money from the state. And that to me is, think, they're gonna be disrupted whether they like it or not. But again, I'll I'll say why they'll be disrupted. Right? You can't get a bribe when money is digital. For example, if you're in the banking system, आपके तीन लाख रुपए आकर जमा हो जाते हैं month में. तो वही source पर question हो सकती है ना? तो जब cash ही नहीं होगा eventually दस पांच साल, दस साल, पंद्रह साल, बीस साल, I'll take a bet on this. Money is gonna be digital. There will be no such thing as paper money. So corruption is gonna get eradicated on its own, whether we like it or not. We just need something someone, a grouping of people. I don't care I'm, by the way, apolitical. So I don't care which side is there, to have the recognition that, okay, even if you're a head of state, you're still from Pakistan. So if Pakistan looks like a really bad place in the world, you're not gonna get respect even outside. Even if you move abroad and, you know, and say I'm the former prime minister of the country, people are like oh okay yeah nice good good to meet you right. So the point is कि we can actually come up with some sort of policy to recognize this change and if they don't then they will be disrupted. That's that's the beauty of disruption. You can't stop it. या तो फिर आप internet को बंद कर दें Pakistan में.

झुक again आपका risk You मिला यही can't make, you can't make Pakistan and North Korea. The economy and the the circumstances are now gonna push you towards it. I think we're at a cycle within Pakistan जहां पर हम वह देख रहे हैं कि resistance एक हो रही है towards that change और फिर उसका आपको public का एक वह भी होता हुआ नज़र आ रहा है. एक अगर मैं आपसे सवाल पूछूं आपने अभी बोला कि training बड़ी important है. Upskilling, training, education by and large. You know, where there is a problem, there is a requirement for a solution. आपके पूरे portfolio में मुझे EdTech नहीं नज़र आया. क्या Pakistan में enough काम नहीं कर रही? काम कर रही हैं तो did you not like any?

What was the thought there? So I've I actually invested in EdTech for my first fund called Knowledge Platform. It was actually one of the bigger EdTech's. Joe, one of the main issues that I have is, you know, look, investments, everything is about timing. Right? So that was not it was a good call in the sense the company is still around. Didn't really scale to expectations. Right? Mhmm. The reason is is because this was something that I missed, I feel like, is was accessing access to meaningful enough screens. So if you're a child or even if you're a student, you're not gonna take your father's phone to learn for five minutes or ten minutes because most of the time that phone is usually if your father's a business person or, you know, just in general that's where people are conducting business. तो आपको एक dedicated screen चाहिए. एक छोटा सा भी नहीं even if you can get a tablet, right? So जब तक वह नहीं आएगा तो you don't have the total addressable market that's online. ठीक है, बच्चे हैं, you can say कि there's 43,000,000 school going kids and this and that. But the reality is is that that access is limited. So from a scaling a true ed tech, you first need fintech which will then create the installments for families to be able to afford a tablet for a child. Right? And then, you know, obviously, the government can facilitate. But my world, I actually try to find problems without the government. I still think you can solve problems. So I EdTech will have its day. None of the EdTechs in Pakistan have been really able to monetize. There's about seven or 10 of them. Egypt may be a year over है by the way. So I don't think EdTech is ripe in Pakistan. Somebody's gonna end up making a good call. I've chosen to concentrate more on the B2B, B2C and Fintech side because I think वहां पर I'm doing my part of the the contribution, which is to try to document that economy. So Makes sense. You know, really, from a private sector, what I will say, you know, people are looking for what to do in this economy. Right? I think that outsourcing is gonna only amplify. I mean, if you if people understood the importance of the exchange of value disruption, any piece of paper contract that's been written in paper has to go into a smart contract. The concept of, you know, that is is mind boggling. There's a whole podcast we can do on that. That's actually my underlying thesis of what these changes are. But, in reality, all that those contracts has to be written, right, in the on Solidity, the Ethereum language. There's depending on if that platform wins. So people can set up centers themselves, private centers, and then become a funnel to train resources and then have them placed. Like I was if Saudi is gonna become the Vision thirty and Dubai is gonna continue to become the blockchain and the tech center, I mean, who if you look at any cofounder or founders in The UAE, they're usually from India or Pakistan along with the locals. So we are part of the talent. Right? We shouldn't be shy about it. Let's train our resources. Again, I gave the analogy in the seventies. They sent all the labor, like, for construction and, you know, your oil, boom. This time, you're gonna send skilled labor that's actually trained, but you don't even actually need to physically send them to them. I mean, you the cream of the crop will end up there, but a fair chunk of people will be working here, and the salaries are gonna purchasing power is gonna increase. That's lot of sense. Inward inward flow. Makes a lot of sense.

I'm gonna wrap this up. We're we're at the one hour twenty two minute mark. फ़ैसल भाई, I'm gonna ask you one last question I asked all of my guests. How do you see Pakistan twenty seven years from now, knowing all of what you know now, seeing all of what you've seen?

So we're at an inflection point. So this is a fifty-fifty bet. Either we're gonna be basically, not such a great place where, like I mentioned, everybody will take pieces of Pakistan from a digital point of view, and they'll benefit. Right? And as a nation, we'll we can probably get amalgamated into one economic zone or the other. But I'm more optimistic, I'm actually bullish. And not because I'm investing in Pakistan. Frankly, I wouldn't be I mean, I can what I do, I can move to any part of the world, and I'm pretty much hedge. I was in The US for such a long time. Right? So this is not a self, kind of preserving, statement. I mean, it is really a great opportunity. This is a onetime if you look at OECD common reporting standards, regulation is pointing here, which basically is saying, hey, nation state, we will send your taxpayer data. If somebody spends six months or more in your country, we will send their global data back to you. And so there's no such thing anymore with mutual legal assistance of being able to hide money. Right? Number two, and this will take time to implement, but that agreements are in place. We became, signatory in 2016, if I remember correctly. Number two, FATF, which is actually actually pushing in the garb of money laundering and, your, editor financing and narcotics. It's actually focusing on traceability that down to which is actually enforcing digital payments at the end of the day. That's the only way the banking sector, KYC, MLCFD. So यही तो मसले हैं Pakistan में सारे. आपने जो शुद्ध देनी है वह मंदे cash की वैसे दे रहे ना? तो पांच, दस, पंद्रह, बीस साल में. If you take a bribe, it's gonna show up where you're gonna get a digital wallet. ठीक है? Maybe people might be giving you and gifting you gold bars. Some level तो रहेगा हमेशा, right? बल्कि the bulk of the people will be in the digital framework and that then shows the true potential of Pakistan. Our debt to GDP ratio today that looks bad in the financialized term, let's say it's a $365,000,000,000 economy, right? So 80% lost track. Increases I think 80% debt to GDP ratio. Sure. That's of a, effectively a one third documented economy. In reality, you're a trillion dollar economy, so your debt to GDP ratio is not that bad. Let's take the benchmark of this world today in The US. Fully documented economy, debt to GDP ratio is 250%. If you count domestic liabilities, external is a 150%. Right? So I'm pretty hopeful if we can do this capture, which unlike the FBR trying to document it, this is gonna happen on its own. And we have a gold mine in something called PRAL already where I don't you know, they have all the property data linked to the NICs. Not sure why they don't take action on that. Right? So my point is that eventually, the system will autocorrect. Therefore, I'm very bullish, and I do think that the money is gonna keep pouring in into tech. Foreign investors will come in, but, you know, then they'll buy up your state owned enterprises. They'll buy up your private businesses. And that's what I call as the underlying. नीचे सिर्फ़,

you know They clean it up. Then suddenly जब boom cycle आएगा तो आप कहोगे यार यह तो बड़ा fit से ही intact, except कि they're the ones who's benefiting because you you were. Look, people will benefit regardless, right? The at top के साथ. Will the average person benefit? Yes. Because look, state may become weak but the person will, they will become globalized citizen essentially and they will benefit at the end. We are moving into a global, everyone is effectively a global citizen today. Right? So we have differences today, but as time passes, we're gonna become more and more integrated. Like, for example, when I left Pakistan in the nineties

for college, right, the awareness of, let's say, what was, you know, what music was playing in in, let's say, New York or The US, right, and what shows were people watching. There's a lag effect. Today, people are on the same page. The dress sense in Pakistan, I'm talking about, like, in in even at the lower income demographic, in, is much better because people are switched on. They're connected. So we're we're all already global. My kids, I mean, for example, they're, you know, they're playing Roblox. I don't actually discourage it because that's gonna be their world. When they go to meet my friends' children in London or in New York, they actually start discussing that, hey. Yeah. You're on this in this game. There there's kinda no lag. So, you know, we're headed in the right direction. It's gonna happen whether the people around us wanted to or not. When I see people around us, I'm talking with the status quo. And so the better thing is to embrace that change and to allow them to accelerate it. वह change होना है speech. This is not a political statement, I'm not of course one political party. I'm not of the actual structural change with the inflection Yeah. क्योंकि वह ज़हरे जो beneficiaries हैं, वह तो सारे पुराने हैं ना, वह हर जगह भी बैठे हुए हैं. तो it's not one or the other to be very In all honesty, don't have any hope in one political side or the other. Yeah. Because there's no plan. It's just hey, we need to come back in power, right? But the reality is that if these are the things that people need to focus on, right? And so whether that comes from an extended setup, whether that comes from the country with the existing setup, or that comes from, let's say, the setup

that's aspiring to get into power right now, they all have to think along these lines, in my opinion. Makes sense. वैसे भाई, thank you so much for coming in and first of all sharing all that insight. Second of all, for finally giving us some semblance of hope. I think hope मिल जाती है long term पर तो लोग थोड़ा short term का जो pain है वह भी बर्दाश्त करना सीख जाते हैं. But this was very very insightful and I am excited to see this vision of Pakistan that you have built. I hope that we can see it soon or at least begin to see कि यह जो dip है उससे अब हम finally Next year, Q3. Q3 twenty twenty four? चलिए, I'm I'm I'm excited to see that. Thank you so much for coming in. Thank you for having me. Pleasure. And for all of you guys, thank you so much for watching. अगर आपको यह episode पसंद है या अपने दोस्तों यहां पर ज़रूर share करिएगा. नीचे comment section में मुझे आकर बताएं. What do you think about black से white की तरफ़ लेकर आए हैं उसको you know digitize करें. What are your thoughts? Do you think कि यह digitize हो जाएगी? Governments जो हैं वह eventually will they you know pave way for for this change that will happen? Let me know in the comment section below. YouTube वाले like over the buying agent में मुझे लगी तालोगों की हमें conversation पहुंचेगी. Audio platform वाले subscribe over the buying आने में episodes का आपको notification मिलेगी. यहां यहां पर कहीं पर easy पैसा जाए, sky सादा पर आ रहा होगा. If you'd like to support the channel, we accept anything from 1 rupee to as much as you'd like. It's the thought that counts. But, anyways, this was Sayed Muzambel Sanzhedi. You're watching Thought Behind Things. Thank you so much for watching, and I'll see you in the next one.