Pakistan as a middle power in the new world order

Welcome back to another episode of thought behind things. This is one of the most special episodes that I'm gonna be recording as I've sort of returned. The reason being this gentleman I actually had the pleasure of speaking to in May 2023 around three years ago and he doesn't know it. But he was one of the maybe three, four people who have had an incredible, you know, effect on my decision making over the last three, four years because they've been able to open up my way of thinking and and help me understand the way the world works beyond the more sort of tertiary, standardized, you know, hypnotized understanding that we more often than not have by consuming media. If you'd like to know more, and I'd urge you to know more, there is an episode that we recorded in May 2023. You know, you can forward it's it's two hours long. You can forward a bunch of parts, but there are there are around twenty twenty five minutes minutes of those where he really gives a sense of how he sees the world and how he sees the future of the world and, and what's really happening on a geopolitical and geoeconomic lens. And even though at the time, you know, there were there were interesting it was an interesting analysis. If you listen to it today, it almost sounds prophetic. Some of the things that he said have played out almost to the t. And, again, this does not mean that he is a, you know, a sightseer. You know, he's able to make predictions. It's just that it it it makes you a believer in the power of analysis and the power of data, because he was able to gather a lot of that knowledge. He was able to really expand, what he understood about the world and question everything. And then based on that, through first principles, create an outline of where he sees the future. We had a follow-up conversation in 2024 around a year and a half after the first one, where he again gave me some further insights on because a lot had changed. Ukraine, Russia, I think, had gone to war. The world economy was very up and down, obviously, with the interest rates that had risen up after 2022. He, at the time, also appeared on Shaw Tank in Pakistan. So he had, gotten this new pound tons of fame. Was famous before that as well, but, you know, he was really famous after that. And so, obviously, we spoke about that as well. It has been a year and a half since then, and I feel like a lot has changed now. You know, Pakistan and India went to war last year. Iran and Israel are currently, I don't know if that's an active conflict or whether the ceasefire will be successful. But, you know, the world as we know it has changed. And, you know, this I've been saying this for the for for many many months now. I feel like whatever you understand of the world today, five years later or four years later by 2030, it is going to look completely different. Now that does not have necessarily have to be, you know, a very scary thing because the world has changed many many times before. But it is important for us to, you know, understand, identify and understand those changes and try to, at the very least, benefit from those. If not, I mean, even if we're not able to benefit from those, at least we're not able to get hit blindsided. With us today is Afezal Aftab. He is the CEO and founder of Zen, which is a Zen Capital, I believe, which is a venture capital firm and he's invested in a bunch of startups. But today in the conversation, I don't want to talk about startups. Want to talk about what's happening in the world, particularly the geopolitical and the geoeconomic side of things. Because again, whatever we understood, whatever we thought might happen seemingly is not happening. I've I'm speaking to a lot of people. Everybody keeps on saying, we live in a clown world. I don't know who's writing the script because everything is coming out of syllabus.

वैसल, thank you so much for taking the time out in coming to the show. Thank you, Muzambal. Always a pleasure to chat with you.

Just to sort of start off, Vasel, what's going on right now? I mean, what's with with the war in The Middle East, with Pakistan suddenly taking center stage, with decisions being taken that make no sense. Again, with particularly with this conflict, everybody kept on saying, you know, this war is does not make sense. It's going to destroy the global economy. And yet it happened. And then the war kept on going on, and then everybody thought this war is just not ending. We're on the at the brink of World War three. And then suddenly, there's a ceasefire, and, you know, everything is just upside down. What's your understanding of what's going on? Yeah. So, you

know, so it's somewhat what what we are the theater that we're seeing to quite an extent is obviously day to day what you're seeing, right? But there's really, you know, these are the downstream effects of something happening in the back end, right? If I were to just jump straight to the point, of course, there's, you know, Iran, you know, and The US and Israel the battle. But let's look at the grouping of the world. Right? So you really what's termed as the Western Alliance and the Global South. There's two parts of the world. So let's call them Nike and Reebok or you know, Coke and Pepsi, right? The yin and yang. So these are two separate parts of the world with two different philosophies. But at the end of the day, the Western Alliance pretty much rules over us and runs the system. When I say the system, it's always the monetary system from which then trade, regulation, all the other iterations of what we call or what we used to call the global order basically plays out, right? So to me, when I look at these streams, you can really trace back to 2015. And I think that was the true inflection point where I started seeing this element, that there's some fissures within The US setup. If you go down to the- I personally think politics is an illusion, but let's say Democrats and Republicans there, right? I think most people today, if you go back to then versus today, kind of realize it doesn't matter which party you vote for. The policies tend to be very similar when it comes to foreign policy, monetary policy and economics, which is what matters, right? Not the issues that they make us divided on. So when you look at that, when Trump was brought in, the first thing he did was basically say, I'm not gonna do any more wars. I'm talking about the 2016, and he stuck to his word back then, right? Which I find very strange because, you know, Trump owed a lot of money to Deutsche Bank, was almost about to file bankruptcy. And when he comes in, you know, obviously then there's some level of influence. You don't get elected without some level of backing, right? So, I started investigating that further. So, then when you look at, you know, and then obviously as soon as he left, we have hindsight on this. In 2020, you saw Biden and the Democrats come in and immediately war started, right? So, that entire and Trump in his time was pressured a few times with General Soleimani's assassination right before COVID. You know, those some of the things that he did do that were almost an instigation to start a war. But that led me to believe that something deeper is in there. And when you look at the so there's two lobbies in The US. There's the financial technology lobby, and then there's the old school military industrial complex lobby. Now, this one is easy to determine because since, let's say, 2001, we've pretty much seen the military industrial complex lobby active, right? And so, and a transnational and across party lines, it's known as the neocons and the neoliberals. So, whether it's Hillary Clinton or George Bush or Obama or Biden or whomever, right? You can go down the party lines. They all have been following the same agenda which was perpetual what they term as unending wars, right? So, that's a grouping of interest. This includes like Germany and probably our part of the world as well where there's a lot of ammunition, arms sales and then destruction and then rebuilding and lots of money involved in that. And then you've got the other side which basically it seems doesn't did not want to start the war, right? As in that when they got elected in 2016, when they brought Trump in. And when Trump came the second time again, his promise was I'm not going to start a war, right? And I'll I'll come to that as in what's happening as in why the war has started. And so there's that layer. Rather than just getting into the theology layer which I think everybody's talked to death about it, I'm trying to more come back in a more worldly layer of describing what's happening around us. So, इसमें अगर आप जाकर देखें linkages तो Gulf States ने alliances की हुई हैं, right? For example, they have, but I'll talk about the alliances that are people don't pay attention to. For example, taking stake taking stakes in BlackRock as in like alliances move them moving to

our part of the region in Abu Dhabi. The sovereign wealth fund. Exactly. Investing through different vehicles. Exactly.

And so, look, what was the original deal? The deal was you price your dollars in '71, right? You price your oil in dollars. I think '73, '74 when Nixon went over. And then basically, in exchange for that, you buy our bonds, right? And we give you security, which you also pay for. And then you invest in our markets. But primarily at that time, bonds were more important because we were in a high interest rate environment in the sense that yields back then used to be high at five to 6% and went all the way to 16 to 18%. So that's where everybody wanted to park their money, right? So, what's nexus here? It's now turned into basically the MAG7 and the strategic stocks, right? As in the financial and the technology stocks. And then obviously the data center building and alliances and infrastructure spending. So, this is really kind of a merger happening and this is not just here it's the sovereign wealth funds around the world that have been doing this if you look at their allocation and then central banks around the world if you see they've been de dollarizing and moving towards commodities right. That shows you a separate pattern that there's some sort of a fissure. I'll pause there because it's a lot to intake but I'll say this is where I'll start from that that's the actual backdrop that's been happening. And then every war and every event that we've been seeing on TV in my opinion, is just kind of a it's an event. But a lot of times when you event and obviously a lot of noise, but usually you see a lot of changes in laws at a global level. If you're paying attention to that, then they get synchronized down to the states.

I think so for a lot of people, that's the biggest, bigger question. What does this eventually lead to? It's it's less about, you know, on the on the more micro level day to day, what's happening, what's not happening, whether there's gonna be a ceasefire or no ceasefire. Obviously, there's gonna be a lot of collateral damage, economic or otherwise. But where does this eventually go over the next two years? Are we looking at another Iraq? Are we looking at another Syria? Are we looking at a devastation of the of the region? And for a lot of people, they'd be like, of course, this is another war just like many other wars just to make the military industrial complex rich and to to exert power, and it is going to be devastating for the region. But, yes, then then there are people with very interesting theories, on the contrary that basically say that we are on the cusp of a, of a switch. And and the reason for the context for that is earlier last year, there was a national security document that came out of the Trump administration that talked about The US going back to the Monroe's doctrine. Now Monroe's doctrine was something that was that predates world wars, and that basically said that the rest of the world is for the European colonizers. They can do whatever they want. But The US at the time is going to exclusively focus on his on their hemisphere, on in North America and South America, and that will be their sphere of influence. And right after that document, we started to see a lot of chatter. We hadn't seen it before, but we started to see suddenly hear a lot of chatter about Venezuela, Cuba, and suddenly the US administration was very And Greenland. The war on terror and Greenland. And Canada as well. So Canada was, like, the fifty sixth, fifty fifty first state. Greenland was I mean, people were just losing their minds. What the hell is going on? And towards the South, suddenly, the war on terror was being converted into the drug war. Right? And so then we saw the Venezuela thing happen. And so on one level and, by the way, Venezuela thing happened with absolutely zero protests from a lot of these other powers, including Russia and China. And so, you know, a lot of people would read that as The US sort of retreating from its overstretched empire all all over the world and focusing on its sphere of influence, which makes a lot of sense. I mean, South America itself is a huge population. If you have to create an indigenous region that has lots of energy, has great food resource, has great human resource, has consumers, has producers, it's a good like, if you look at it look at it, The US can retreat, take the next fifty years, develop itself, make sure it weans off of the globalization, get products from China, and actually start to stand on its feet again and then eventually exert that power. That's what a lot of people were looking at. And so with that doctrine, the Iran war seemingly came out of syllabus because suddenly The US was again overextending itself when a lot of people kept on saying they don't have the arsenal. They don't have the weapons. And the weapons supply chain is also completely controlled by China, so they're not gonna be able to even replenish that. And so here I'd love to add, and, again, for the viewers, if you're interested, there's a gentleman called Simon Dixon. He has a very interesting theory on this, but he basically says that this is theater to eventually allow for The US to have a retreat where The Middle East is about to change, where The US power projection is about to change. And, you know, eventually, this this entire region is going to look fundamentally I'm not gonna go into what he says will will happen to Iran. We'll we'll Saudi again. People can go and check that out. But what he says is it will look fundamentally different in the next decade. And that could be great. That could be not so great for for depending on what lens you look at look at it. But but I'm curious. With this backdrop, how do you see then The US role in this particular war and why it's happening in the first place? Yes. I think you touched upon many of these points. Right? And it was the Don Donrod doctrine doctrine

that he put in place. Right? So, basically, what they're saying, and this is what happens, you know when the world order collapses and or you're reaching the tail end of the system. Basically like look it's a resource grab, right? जो काग़ज़ था which we all believed in dollars, rupees, it has counterparty risk. अब वह counterparty sovereign risk आ गई है. तो it's like, you know, if I if I basically have to trust someone, if I'm the sovereign itself looks weak, right? Everywhere. So, you have to go after hard assets and resources. So, इसमें क्या क्या क्या उन्होंने किया है, right? So, basically, he's laying claim to all the resources, natural resources of the Northern Hemisphere, which is everything North Of The Equator in the Western Hemisphere, which would be North America and and Middle America. I'll have to go back and look at the Equator. I think Venezuela kind of comes in that. Brazil's below it. So that's the natural resources that they're after. Obviously, look, let's think about this way. If you and I are playing a game where let's say wealth competition game, right? And there's a lot of paper wealth in place, eventually when the system resets because people believe that paper has more value versus the actual asset, right? Trust in the system. जब वह खत्म होती है तो then you have to go back to gold, oil, commodities and hard assets like land, agricultural land. Food security as you mentioned and resource security which then builds all the other stuff, right? So I think The US, they're following the script which you mentioned specifically about Simon Dixon. Actually subscribed to that entire model as well. I mean, intuitively, was feeling the same that this is everything is out too much in the open. So when it comes out too much in the open, obviously, even these mediums we're communicating on are also the MAG-seven who are aligned with the underlying system right so you have to question these things so you know The US basically look number one they're one of the top not number one but one of the top energy producers in the world Net exporter now by 3% with the shale gas Venezuela को भी उन्होंने काबू कर लिया है तो which is the largest energy resources in the world. Tough to drill in the sense कि उनका oil की जो heaviness है but still it's it's they have it right? Canada they have the oil sands and multiple other natural resources. They're delaying claim to Canada right? In so many words, Greenland exact same thing and other दूसरी side पर क्या है? So let's break the world up into now The US with control of all these resources and the reserve currency today and technology and then break it up into Russia with one of the largest energy reserves and then China on the other side right which needs the energy. So China is not energy independent they're trying to get energy independent by micronuclear plants and pretty much every alternate energy means possible but you know fossil fuels are not going anywhere right in at least for the next I think like twenty years plus right regardless of what people say. So in that equation जब आप chessboard को देख लेते हैं then everything else is just a pawn in the game right when you look at all the smaller countries and the other energy resources. So Iran obviously is a very important component of this and you have to assume that all of the Europe is pretty much in subordinate control of The US, right? UK, Europe and Australia, New Zealand to quite an extent. So at that point that's why I don't mention them and even Japan to quite an extent. Japan's just a vassal state of the Western umpire in our region along with Philippines as well. So in that chessboard then you see that you know okay the funny thing is that where we live this is where the majority of the global population lives in this tiny area between Pakistan, India, China and then Southeast Asia. I mean, you've got I think about 4,000,000,000 plus people living in this this concentration, right? And on the left side, on the on the sorry, the Western side, you have all the energy which we consume so if you our energy is self sufficient ठीक है आपकी markets I mean that's all short term semantics right ultimately markets are built on a foundation and that foundation is insolvent so markets are nothing more than just basically it's kind of like the Venezuelan stock market in 2013 where it went parabolic and right before the hyperinflation showed up. I'm not saying it's coming tomorrow, but we will see heavy inflation in 2030s in the West as well if they can't pull off what they're trying to do. So in this game that I'm trying to play out on the map, you've now just kind of come in and basically created a stress for China. Obviously, they can get energy still from Russia but you need to diversify always. Russia, remember, is also talking to The US and saying that we may sell in dollars. What are you gonna give us for it? And so Iran का भी I think जब resolution होगी तो when eventually होगी resolution, they'll probably end up sending parts, selling parts in dollars as well. That that's part of lifting the sanctions, right? When you lift it, okay, fine. And nobody, you know, countries are not like everybody has to watch out for their own economic interest, right? We like to get emotional on these things. Similarly, Pakistan is negotiating on both sides - China and The US and The Gulf States, right? So, maybe this is a middle power emerging once The US security in this region dissipates a bit. So, then basically, Pakistan, Turkey and Saudi could create a potential block, which we're seeing signs of now when you saw the Islamod peace talks, what flags were there, right? So these are the moving chessports that are hidden behind the scene things. And this, by the way, happened in World War II. When one country attacked another country, then hidden alliances appeared. Right? So, to sum it up, in my opinion, what's happening and I'll go back to that entire thing that the transnational interests, which basically are financial and technology, and a lot of that's represented by crypto, fintech, VC, and traditional banking and finance and asset management, right, combined with big tech. Entire setup, which has tentacles all over, is basically negotiating with the military industrial complex, which was the old way of running the world because you really don't need to execute with the military as much. It's very costly and so you kind of want to bring a subordinate because the next you keep the military. I'm not saying it's in Pakistan I think the military industrial complex is and the fintech complex is getting stronger, right? It's the same all over the world. But when you look at it at a global scale, why need do to go and kill and enforce it when you could do it through AI and robotics in the future in terms of governance control and enforcement, right? And then social scoring. So, think of it a little bit from that perspective. Obviously, this is speculative in terms of what I'm saying, but the cost associated with maintaining the military industrial complex and the benefits of finance and trade are two separate equations. When you if you were to integrate, let's say, West Asia into Asia. Right? West Asia, when I say it's Middle East, is what is termed up, is really part of of Asia as a continent.

That makes sense. You mentioned transnational interest. And for, again, for those who don't understand that, what what that basically means is a lot of times we look at the world through a very nationalistic lens. We look at The US versus China, Pakistan versus India, so on and so forth. But if you look at a lot of these big sort of financial interests, whether that is individuals, billionaires or institutions that, you know, hold people's capital and invest that capital all over the world, they don't necessarily adhere to a nationalistic allegiance. Right? They can move from country to country. They will go to wherever, you know, they get the best terms, and, therefore, they wield a lot of power, and that is inherently transnational. And so I'm curious because if I look at the Western world as a whole, again, if you look at at it from a purely sort of American lens, it makes sense. A lot of that makes sense of what they're trying to do. But if I do look at it from a overall global lens, and if I purely look at it from an economic lens, what I do see in the West, particularly because I I moved to The US a year ago, and I've been coming here every every few years, I genuinely feel like this is an aging, dying empire. And the reason why I say this is because, you know, the the populations are a, they're they're aging. They're 100%. There is that youthful vibrance that is required to build things, to to solve problems, to, consume, to produce, just is not there in the social fabric. Barring a few cities, let's say Silicon Valley or here or there, much of the rest of The US is, you know, it's old, it's fragile, and it seems to be too comfortable, too too lazy, I would even say. Compare that to, let's say, the couple of years that I spent in Dubai, Middle East was just absolutely bustling with energy and creativity and problem solving. Same with Pakistan with all its problems. It was it is inherently youthful. It is inherently energetic. And so, you know, if I look at it purely purely from a national lens, I understand the wars and, you know, okay. Let's destabilize the Middle East. Let's make sure we have access to to energy because, you know, you had a booming superpower that wanted to consume on the backs of this sort of factory of the world, which was China. Today, if you have sovereign debt crisis on the horizon, if you have an aging population, if you have, you know, the the the last leg of the sort of end of the Roman Empire sort of a situation arising, how would then the transnational capital or transnational interest be looking at Asia? Again, if I purely look at growth and percentages, I would argue that Asia is where I would actually gather those returns, those multipliers. So how do you see that aspect of of this sort of power play that Sorry. So that's what I meant to,

the the transnational the transnational financial complex and technology, the growth is all in Asia coming forward. Right? So they're doing this to kind of create a new system in our part of the world. Wherever this population, and I would say the black economy as well, as you move to digital payments and cashless, hidden assets come out, right, into the system. So, what I meant was that yes, I agree with you 100% that obviously Europe and US and everyone is deflating because it's a demographic issue, age issue. Also, they're far along. But there's two things they're doing there, right? One is they want to perpetuate their technologies and financial hubs. A lot of it is going be augmented by artificial intelligence and agentic AI. So you need less people, a lot more people and universal basic income over there. Keep the population pacified, Netflix पर लगा दें, gaming करते रहें, आपको monthly check आ रहा है. Fake खाना आ रहा है GMO वाला delivery में. But that's the, that's part of poly market चल रहा और OnlyFans चल रहा है और वहां पर जाता Exactly exactly. You you you got the game. This is what's happening जहां पर you've got populations and growth is disappearing. We're we're gonna be the the growth engine of the world going forward. When I all of Asia, that's why I lumped in West Asia as in The Middle East into that part. But just like in any part of the world, you have economic interests, right? So, uneconomic interests को और lobbies जो है which are opposing this new system, which I alluded to in the initial neocons and neoliberal versus the Trump is actually destroying that entire military industrial complex, right? So, from that perspective, when you look at the whole game, things changed dramatically, right? And Pakistan and India and China and Southeast Asia and Middle East also which is very young, all these countries become significantly important. To do that, you need to basically establish control. That control comes through tools like the IMF, for example, to implement certain things. OECD common reporting standards is another one. So those are tools that are kind of aggregating regulation into place to be able to then offer the same system that was offered to the West, I would say, 1913 and 1945 onwards.

So I'll pause there and let you dive deeper. So I'm curious because you mentioned that the growth is in Asia. You mentioned that there is a lot of growth potential here. And how that's going to happen? Because for a lot of young people, when they're looking at, let's say, Pakistan, it's almost an impossibility for them to imagine a world where they're they're sort of now accustomed to the idea that they're in a terrible country or they're in a terrible region, and they are condemned to live a terrible life for the rest of their lives. And the idea that there can be better times ahead and we can have a have a fast growing economy and the stuff that we've heard about other regions somehow is laughed at, to be very honest. And I feel like I I empathize with people as well. They've had their fair share share of heartbreaks. And so it to sort of identify that potential optimism backed by data and the requirement for for the for transnational capital to to be able to invest here and and be able to get better returns, Do you see a situation where Pakistan, yes, we'll talk about the rest of the region as well, but but Pakistan can actually benefit from these changes over the let over, let's say, medium to long term, like, maybe a decade from now? I'm actually very bullish on Pakistan and I'll tell you why.

If I wanted to go after an asset, right, or accumulate an asset, I would psychologically make the users of that asset or investors of that asset believe that that asset is not worthy just like gold was kept like that for many years and basically accumulate it myself and then allow it to pump. Pakistan is exactly where India was in 2013 and 2016 when they demonetized the rupee and started digital adoption, right? And they moved all the way to the fifth largest economy and I think they'll eventually go to the third largest economy in the world. We have a huge hidden black economy and what the FIC or the financial industrial complex, which is actually a technology industrial complex merged with them, is going to bring in is digital payments and cashless systems. Crypto is just a backend element of that. It will probably be a digital rupee and iterations of that. But at the end of the day, once that black economy comes online, by default, all your macro numbers get fixed. If your debt to GDP ratio is 70% of, let's say, 400,000,000,000 and you have another $400,000,000,000 sitting hidden every year as digital payment adoption goes up and hidden GDP shows up from that factor. So you'll start seeing three to 4% capture a year. And then the regular documented economy by default in the frontier market grows around two to 3% a year. So, you start to see those 6% to eight percent numbers that both China and India incidental D. 2006 China demonetization or like adoption of cashless systems accelerated, right? And the same thing started playing out in India in 2016, right? So, I think that's where the mindset of everyone is going to change because you you got to survive borrowing. Look, these things have been we've been kept in a particular way, right? As a country, we'd like to blame internally but as it's evident, should be evident to most people, external there powers that play games with every country, right? Because based on economic interests, that's the same as a business person wanting to take market share in a particular segment right let's just call it what it is you know the states are nothing more than just a conglomerate of individuals that are protecting this territory to do business in this territory and govern the business in this territory and they negotiate with other states to see how we can trade with each other right So, from that perspective, I would say that the lenders that have been coming to us, they've always kept us in distress so that we're always rolling over our debt and we're not able to take independent decisions which are of national interest, the proverbial national interest, right? And I think there's been political intervention as well. Every time the trajectory starts to go up, I'll go back to the 2,000 era, right? When you had the massive growth. The second you started achieving growth and you got off the lender programs, IMF programs, you suddenly had political movements that started, right? And a lot of the media entities colluded with that. If you recall back in the day, it was very strange when Voice of America ads would show up on those entities and then they would push the same game. Now these things we can talk about openly as people understand these. And I'm not talking The US or, you know, the Chinese are doing it in their own way. They're not as gung ho and announce things like the Americans. They do it in a very subtle way. They're playing, you know, it's an old empire strategy the way they're playing it. But I think that in that context what I think is going to happen and I think you know you're you're originally from Istanbul as well. Can speak for Istanbul and Lahore and Karachi where I'm frequent. The younger population is buzzic, but they may be like burdened, stressed out, unlike our parents' generation because of the current global economic cycle, right? As in the transition of the currency. I'm sure if you weren't gonna ask people in 1939 of the youth in Europe, I'm sure they were pretty dismayed and not optimistic, right? But what happened in 'forty five? The whole world started rebuilding, there was growth. So I think from these ashes will emerge growth. And I think we're at the tail end. I mean, when I say tail end, I think over the next five to seven years, we'll have a settlement and a new digital monetary system that everybody agrees on. And next month, the chess move was to kind of put China, Venezuela. Russia in terms of like engagement of Russia. That was Chinese energy. Then you went after, you started getting more aggressive. You moved very quickly on Venezuela, China's energy source. And then you moved in on Iran. Another energy source do show up at the negotiation table if the China US Summit happens in May. And I think this is going to be a pivotal moment for how the world moves forward in terms of what they understand because as you mentioned aptly, it makes no sense. The US is going to war yet their supply lines in terms of the inputs of rare earths for their defense tech is coming from China and then you put up tariffs there and then you negotiate the tariffs, they open up defense tech, then you allow NVIDIA chips back on that side. So again it's not as binary as people think. There's a lot of negotiation and you know big players are just coming to a new settlement. So it's like if I had to sum it up, you know when a government is forming in Pakistan I always like to give this analogy, right? We have a parliamentary system. So multiple parties have to coalesce together to form the government and everybody is like I will get the defense ministry or both not defense, defense is kept with the strongest one but let's say you know let me get the ports and shipping right? Ports and shipping right? तो जितने and sometimes the king makers steal like MQM was a kingmaker back in the day ANP used to be. So they would get like a good ministry just because they're the kingmaker, right? So let's say Pakistan and a lot of these type of countries will be some of the kingmakers in the China, Russia and US negotiations of the new world order. Obviously every country is going to fight till the when I say country meaning the three countries what you're seeing play out is interest battles between these three countries and it's a very concerted game right when you look at it. We've talked about it in the previous podcast as well. Mean right at the end of the day when you look at Gaza and you look at the Suez Canal, the Red Seas and the Houthis, the Straits Of Hormuz and Iran and the Bosphorus in Ukraine right. Bosphorus is basically the international trade way. 20% of world LNG and food comes from there. Wheat upkee to here from Ukraine and Russia. So if you go back and zoom out and go back all the way to 2000 and you start to analyze what's been happening, you'll realize that every event and every war has been linked to these chess moves of the three big players in the world converging and basically sitting at a table. But before you do that, you try to weaken your opponent, right, and squeeze their supply lines and energies, resources, and vice versa. So there's a lot of interdependency here as well.

Okay. So you've created, an image for the wider, let's say, or rather the global conflict. You know, three major players trying to negotiate and figure out who is going to control maybe parts of the world for the next decade or or or the next century. I'm curious, And, again, we are whether it's Ray Dalio, whether it's a lot of these analysts that are saying that we are at a time when status quo are changing, and the way that the the power works is aggressively changing. And, you know, we're at the tail end of that cycle. So we're seeing, you know, when people say, oh, international law doesn't mean anything because the international law that was built maybe eighty years ago does not mean anything. As we go through this transition, a new set of rules might emerge that represent, you know, the new world that is emerging. Early on, you mentioned the military industrial complex. I would say if I were to sort of put this entire image together, it's understandable that the last cycle had two primary superpowers with the Soviet Union and and and The US. Post '91, there was inherently one major superpower, and there's nothing wrong with that. You mentioned earlier basal states. All states have to work within the realm of whatever the status quo is. Right? And so postcolonial world required that the elites of all of these different countries try to find their patronage from these superpowers. India went towards Russia, Pakistan went towards The US. And so they inherited a lot of systems that existed within these superpowers as a branch of expanding their power. Right? And so you particularly, two countries that I would I would mention here are Egypt and Pakistan, where you do very categorically see the the the structure of the military industrial complex very clearly out there. And that has worked for Pakistan in many ways because of the way the system worked. But in the the world that has emerged over the last couple of decades, it almost feels like I mean, if you look at The US, even the decline of The US, it almost feels feels like the reason for that decline has been that so much capital has been invested in these forever wars. The military industrial complex inherently is not that efficient. And you you are now sort of seemingly seeing this tug of war between the military industrial complex and the financial industrial complex or the financial techno complex. Right? I'm curious how that is going to as that transition sort of happens, how that is going to begin to reflect on a lot of these sort of potentially emerging middle powers, as you'd call it. Because if those doors are closed, you will have to evolve into a new status quo. And I think the the biggest example for that has been Saudi, where early two thousands, you had that sort of revolution happen, and you saw a very clearly different Saudi emerge after that. You know, there was a it was very clearly existential, and they saw that the requirements of our population has aggressively changed. And if we do not restructure ourselves, it's not going to last very long. So the elite remained, but the way that the elites function fundamentally changed. And so I'm curious in that context. The reason why I I I ask you this is because, you know, the the last answer that you gave me, I know for a fact a lot of people in the comment section are saying, you know, this is the same mangenturan that have we've been sold forever. You know, we have an extremely powerful security state. We're so powerful. We're so important. The the the the global chessboard is such that we will get some lots of money and we will all be, you know, powerful and and rich. The problem is the lived experience seems fundamentally different. The fact is you have an seemingly uneducated population. You're not investing in education. You don't exactly have productive capacity. Your energy is is is, you know, much higher than the region. So there is no I mean, beyond the whole macro, if I were to sit down and really think, what can Pakistan give to the world? There's not a lot today, unfortunately. While I say this though, I also see during this conflict, I see, oh, what if we get cheap Iran gas? What if we're able to, you know, connect the region and you have this $5,000,000,000,000 Middle East, you have a $5,000,000,000,000 South Asia, you have a $5,000,000,000,000 Southeast Asia or ASEAN. What if these blocks start to trade between each other? What if we are able to connect the regions as you mentioned earlier? Turkey, Iran, Pakistan, Saudi, Egypt? What happens then? Suddenly, we're able to solve the the the energy problem. Suddenly, we're able to solve the food security problem. So

so But you gotta be I'm we're on the exact same page. And what you're referring to is coming from how the British, the last empire, when they left. If you go look at the map, mean, was, you know, one of the things in The US is that they made sure that geography was the weakest subject in school and that's why they've been able to most people pointed to like Estonia when they said where is Afghanistan, right? And one of the most expensive wars that we had in The US from a taxpayer's perspective. But from when you come to, you know, let's say our region, right? I mean, does it look at Pakistan, right? We are the consumption is on this side. When I say like India, China, Pakistan and the energy is all on the on the Eastern side, right? So why is it that states are not you you can see it's a very carve out where states are just not able to work with each other so that they can't pipelines and things can't pass through or you sanction states and then you move everything to waters because it's easier to govern and police in waters and make sure that you price the trade in your currency and that very pricing of trade is and currency is what power is, right? Monetary power and to become an empire. That's why I keep going back to the reserve currency and the whole evolution of the new monetary system into the digital system, some of the logos behind me that you see. The reason is and you know I do think bitcoin is designed to suck the sentiment of gold. So it's not as if I think it's some amazing thing but the powers that be are going to use that and gold in the system and then come back with the new currencies, right? So Pakistan, how does it fare well? Our issue is constantly fiscal imbalance. In terms of we have to borrow to fund our own budget. We have to go and get energy from Qatar on a ship and bring it into a port when we have Iran right next door to us. A lot of their energy has been supporting us in terms of from the grey channels. These things aren't perpetual, So the problem is that our mind and the human mind is conditioned to take the way systems were for the last thirty years and basically project forward. I think both you and I know that AI is going have a profound effect on jobs and learning as well, right? So, if the K-twelve was designed for the industrial age where you needed to produce workers and not thinkers But workers may not have jobs because anything logic based is an AI can do, Which is mostly the white collar jobs. Blue collars, I think, less under threat until robotics gets there. So, yes, सारी जो चीज़ें simultaneously हो रही हैं. And this happened last time also, right? Nineteen thirteen-nineteen fourteen mechanisation was disrupting the gradient age. We have talked about this in the past and so now this time it's technology and robotics and AI that are disrupting the traditional industrial mechanised age. So, I think Pakistan is positioned in a very interesting way where it doesn't matter if your people weren't educated in the K-twelve because I know that IQ has nothing to do with the western education system or just English. Sure, it helps you get ahead in the current rules in the system but I think I've met a lot of people and you would agree with the same that come from the lower income demographic, have not really gone to school, but they have a high IQ.

Communication is more

of a communication problem than an NMT. If decide English, every empire does that, right? You enforce your currency, you enforce your culture, you enforce your language. So what happens when leveraging AI, you're able to communicate now and language barrier goes away? I think it's gonna unlock a lot of different types of talent, right? Now as a collector so when we also you know I did something recently and I'll do a post on that. I was doing an analysis for my own investments in Pakistan. We always look at Pakistan as one symmetric entity. Two fifty million people you know GDP per capita which I don't perceive like what is it I think 1,600 or something it looks very dismal right I hate standardization because first of all standardization takes away a lot of opportunities right when you look at these metrics and again is designed by the existing government system they prefer GDP per capita versus purchasing power parity because it makes them look smaller, right? Just like on the map in terms of the structure, their geography is actually a little bit stretched. Not because of subconscious programming but actually because of navigation. But, anyways, that's a different topic. But coming back to Pakistan, look, we have to look at how we have to play the game in the new environment. So if you go to the K through 12 and that equation, and you only look at education and project to you know my kids gonna get into banking and accounting and engineering, a lot of that stuff is not gonna be there, right? So let's let talent unlock. Now I'll come back to the state itself, right? So there's going to be different types of states. I think everywhere in the world things are going to become more autocratic. In fact, The US, the entire constitution is technically an abeyance man. It's being run by a bunch of appointees of the super empire. I won't go into details of that. And I was there in the by the of 2020 as well. Just go take a look at West Executive Advisors, the lobbying firm and see, you know, how many executives of that firm and where they were from as a dual nationals became the key positions in the in that administration right so these things that many people are seeing today have been around for a while it's just the hypnosis from media sometimes doesn't allow people to see that right so for Pakistan look we when you have a fragmented environment similar to The US you have to create a strong federation which unfortunately the NFC award in Pakistan weakened the federation I think it was by design because if you remember the charter of democracy that was underwritten by Condolee Sarice and David Milevand and Condolee Sarice, right, to be implemented in Pakistan which then weakened the federation and hence we are where we are. I'm gonna I'm talking about that openly because I had to allude to it in the past. I think some truth bombs are now over to the to people to kind of go back and at least think and analyze on their own. So federation has to get stronger in these countries because of the ethnic divide which we were talking about offline. The ethnic divide is beradris and caste based or tribe based, right? So really the national interest can't exist unless you have a strong federation and that federation in a country like ours where generally it's been very difficult unless you accumulate power. Even if you're a politician, even if your intent is to be democratic, you can't rule without accumulating power. So I don't blame Zardari and Navash Shreef because that's the only way to run this country in terms of actually to, you know, manage even a company. In all honesty, can't create too much of a Google dive environment here. So I think the federation is gonna get stronger through the military industrial complex, merging with the financial industrial complex and the you're kind of seeing a different system emerge, which may be actually good for the country because then the federation's interest kicks in and then things can be distributed evenly. That's why I think many times you see suggestions of 18 provinces. Think it used to be 22, now it's 18 which makes sense because it becomes easier to govern given that you know when you say Punjab, it's 110,000,000 people But when you go down within the caste and the different, you know, verticals of languages and then you put in like religious sectarianism on top of that with the and all your other elements, right? So you you you can't really govern this in a true decentralized way. You have to govern it from a federation. I'm I'm just I mean, this is just my observation. I'm not saying I agree or disagree And with

I also think I mean, personally, I mean, my my opinion is and these are opinions. They're they're tough to hear in Pakistan. But in my opinion, I feel like it is actually it it would serve all parties, including democratic and otherwise, to actually give people agency on the things that affect them the most, and then let wider issues be more handled at the federal level. Right? So I was reading on China and everybody keeps on saying, is an authoritarian government? A lot of their they they actually have a lot of agency on a very sort of district level where a lot of, you know, if if if you and I live in a random district in in in Punjab, by and large, my my water issue, my education issue, x y z should ideally be handled on a local level. Even if I would argue that if you would allow for a local government, a a very honest and a real representative of the people, local government election that deals with the administrative issues of people, 99% of the people will just stop talking and focus on making sure that their neighborhood and their taxil and their district is one You're talking about the devolution devolution power. They attempted that into 2,000 Devolution of power. Cycle.

During मुशहरा work? Partially. चिल्ल मुशहरा cycle. Definitely some areas got really good like Karachi, the the Nazim system worked for a bit.

So yeah, so you're But again, what the the the issue there was you had these sort of huge provinces. You're you're still gonna have that politics happen where 50% of the population is in Punjab and and and बलूचिस्तान is huge, but it's like there's no population there. If you break these down into provinces and then on that, that's the step one. And then further, you actually break it down into local bodies and you let people deal with the things that may not impact the federation as much on their own, you would actually, act as a as a pressure relief valve. Because right now, there is this incredible pressure between the state and the and and the subjects. And I feel like what's what's happening right now is there's a confusion as to how to manage that and there's no real solution that has been that that people have been able to come out with. The reason why I ask you this question is it's not necessarily because again Pakistan more often than not the conversation gets driven around military versus otherwise. The military is the people. Right? Ask you this is It's actually the largest representation of the entire state.

Right? Sure. Punjab they call it Punjab Absolutely. And and and so I mean population is the largest in the country. Right? It's a 110,000,000 people. Absolutely.

And I feel like right now because, you know, you can have your own political opinions and whatever. But right now, the state of the world and the state of the region, you cannot have you need to have a security first approach that is for the shorter term. So having said that, parking there for a moment, I feel like Pakistan is has an elitist problem where the elite have an old rent seeking understanding of how this country needs to be governed. They are not interested or ready to evolve and take any pain whatsoever to eventually go to the, to unlock to the next level. We can keep talking about how the world is changing, the externalities are changing, there is so much opportunity. But if you have these sort of parasitic elite that will keep on using one thing or the other, keep on switching patrons, whatever it takes to keep them. I'm not even gonna say in power. Whatever it takes to keep them, you know, sucking whatever they can, and and that may be far less than what they can potentially make if they actually allow for efficiency seeking. They're gonna go for that. And so the expectation, more often than not, I've I've done 500 plus conversations, the expectation that there can be sort of a ground up or a structural change that can happen from within the country. I am very pessimistic about that. What I am optimistic about, though, is an external environment shift that might eventually close all of those doors for that parasitic elite to eventually either leave or, you know, sort of evolve into a more efficient

system, if that makes sense. And so But you're talking about a 100%. I I mean, I I I agree with you. So so curiously,

in your thesis of the changes that are happening, how do you think those changes might come into play for the elite to be thrown out of power or or to be disruptive, so to so to speak? Look.

We're when we use the word elite, we have to parse that out. Right? Again, what I was saying when we standardize things in Pakistan, there's 30,000,000 at least 25 to 30,000,000 people that have a higher GDP pursing power than the rest of the population. Concentrate on the 22 cities in Karachi, Dora, Eslahabad. So, therefore, an entrepreneur, you can create businesses to serve those cities. But we tend to keep talking about all the people that can't afford them. But sure that's in The US, that's in most of the places on the planet, right? So when you standardize it, it kind of convoluted. Look within the business sector, let's talk about the elite, right? There's power interest, there's regional power interest for example enforcing certain type of seeds for planting right in terms of in your wheat and different elements. There could be that lobby, there could be a petrochemical lobby that basically ensures that EV policies are not don't happen for decades right. I'm just hypothetically throwing things out, I'm not targeting one or the other. So when we mention elite and we say it's Pakistan elite, it's transnational elite because usually you have alliances or linkages whether I am representing let's say Martin in Pakistan or whether I am representing the Chinese you know, defense contractor in Pakistan or representing a sovereign wealth fund in Pakistan and then this can keep going on, right? So those are interesting. There's nothing wrong with that. People have different agencies

and in The States. That's the world works. How The US works. What's happening in with World Liberty Financial in

The US. It's like Clinton Foundation 2.4, right? So basically look, have to parse that out. Within that there's certain elite with you in the business community that are very much documented paying all their taxes, compliance and gotten big by playing the game within. I think a lot of those are represented in the Pakistan business council which we basically ignore but these are people that are sure everybody lobbies man I mean even I go and try to lobby for VC and say hey give us better you know give us better tax environment right for returns but are the they have a right to do that and lobby within the system. But then you've got all sorts of hidden side of the system that I think is more powerful. These are people that you cannot see. And these are groupings that are whether it's the land mafia or the smuggling mafia or whatever whether it's the state intertwined with agencies or you know we won't get into that right. The point is I think one thing that will happen as much as this is a totalitarian system in terms of digitization everything getting documented right what will happen is these grey areas which is what I think what the financial technology industrial complex is trying to do is try to get rid of these grey areas that they can't see I'm not saying that they want it for their interest They can actually benefit from this and then securitize it and create derivatives out of it. But this is the hidden part, right? The black economy or the black businesses that are creating and I think it doesn't take a genius to figure out man if you just go around Pakistan. The amount of wealth, we are not a poor country. I mean sure you see people on the streets. I mean if you go to New York you see bums on the street too right? So we always tend to be harder on our side too. This is not a poor country man. I you know there is a lot of we are two fifty million people. And more often than not you would be

and more often than not I mean for me what has what's used to surprise me the most is you know we tend to imagine the rich in a certain way with it's a it's a suit wearing English speaking urban elite But if you really go out of the urban areas, that's where the land cruisers are. There are five land cruisers standing out in the The हाजी साहब. The visual imagery, the हाजी साहब. The visual imagery would be the most

humble, oh, look at this gentleman, you know, I don't know what he Office will look like it's normal if he's, he doesn't do anything.

He doesn't do anything and then but they're the ones with the maximum amount of money and they are the ones with the maximum amount of power because the average urban elite is actually still actually does it still believe in the system. So anything goes left and right, he goes to the police station, he expects the system to, I mean, look what what's happening with जयाची शीली. Yeah. Of course. And the way that he's being sort of punched around in Pakistan. Right? You have it's it's those people who who who work in the gray area is are are that's where the real power is, and that's what I experienced personally as well. And so what you're saying, coming back to what you what what you were mentioning earlier, what you're saying is you expect this sort of gray structure to eventually die out over the next five, seven years because of Look. So people will always penicillization. Because of digitization. Right? So digitization

is documentation, right? Data is the new oil and you're getting all sorts of data, right? So as and this is a baseline example, but it just is for the audience, it's easier, right? It doesn't matter if I settle in cash if I'm ordering groceries and food from food panda right the transaction is logged right and the FBR will have the ability to go in and trace it back for as long as you've been doing it right. So that is the food panda itself as a network is capturing the actual total addressable market in Pakistan versus the one that would be documented through POS systems right meaning you if let's say the nehari one nehari guy comes on here that would only take cash you can see it right or Pisces for example which I hate I shouldn't say that there's a seafood store in Islamabad everybody else has got a pause system they don't they've got really good fish seafood but I have to I'm annoyed because I have to always withdraw cash to go there, right? So my point is that okay so you know वहां पर भी fitting में भी है किसी के साथ कि उनको छोड़ देते हैं. So these grey areas eventually will close because it's the interest of the state and when I say state is the proverbial establishment, right? I can tell you their focus now is documentation because the amount of changes that is happening in terms of push for digitization at the FPR layer, I think we're moving in that direction much. Mean, sure, it's gradual,

but it's happening a lot more. You're saying the state that's that's in the interest of the state. But the the problem is that has always been contrary to the interest of the elite. So so that's why I'm confused. Either Maybe the elite are changing. There's such

the elite changing. Like I said, remember the 22 families. What was it called? Like, back in the youth's time. Right? So and I think these groups rightly deserve it because at least within the framework and net and their money is declared right so the difference here right now is if you got declared money and let's say you have large sums of declared money you're then allowed to participate in bidding of like PIA or like the RecoDig projects, right? Which I think is a positive development. Not I mean a lot of people criticize me for that but I'm just saying that look you're starting to differentiate between hey source of funds to quite an extent when it comes to these mega projects courses going into development, real estate. There's one of 50 ways to do it. But again, that's just a short sighted approach as in like everyone when I say this, people keep thinking two, three years out, right? I'm saying zoom out five years, seven years. I think you can agree with me that if you look at China and you look at even India, for example, as our benchmark, India has captured a lot of its informal economy and they only look good because they've managed to do that. And so their GDP expanded. We keep thinking productivity and export and this and that, but you're hidden GDP short term at least. It can give you enough fiscal space and then it's up to the leadership at that time to then use that fiscal space to invest in the right verticals, right? Which is, I think, where we've lagged every time we get fiscal space. We don't actually reinvest it properly.

Makes sense. If I were to ask you, and and and I feel like we had this conversation last time as well in 2024, But just to sort of rehash it again, we've had a Pakistan India War last year, and, certainly, Pakistan is there's a negative shift for Pakistan all over the world. In 2024, it was all about India. India was squad. India was the next superpower. India was emerging as this counterweight to China. And suddenly, has sort of completely flipped. And Pakistan is at the center stage for, at least for the moment. But having said that, a lot of times in Pakistan, we have this conversation about, look at India. Look at what they've done. This is where India was. This is where we are now. If India can do it, we can do it as well. Either you say that or you say, you know, look at the Chinese model. Look at this sort of authoritarian,

whatever is required and and get it done. And that's the same. That was a Gulf model.

That was the Gulf model as well. What what tends to happen is I feel like we miss the nuance of either or. With the Chinese model, they're they're a homogenous society, and therefore, that sort of authoritarianism works very, very easily because there are not a lot of conflicts. And so that when there aren't a lot of conflicts, it is fairly easy. They they did have their own fair share of conflicts, but they were so, like, minorities were so minute that they did not overpower the system. For for for countries like Pakistan, for example, the fort lines are just a dime in a dozen. Similarly, with the Gulf countries, again, there was a

one can argue there was a modern tribal states. One certain certain states. Dominates in that family, and everybody else just and there's intermarriages.

And everybody's But that other country But then there is also Sorry. The cost and the the other stuff as well. Okay. Yeah. That stuff. But but in terms of, obviously, the the economics, you know, a lot of these countries, at least the ones that we look at look up to, like, UAE and Saudi, you have this sort of they had an energy dynamic that got them a bunch of cash to invest and play around with and make a lot of mistakes and eventually come out, at least developed on some level. For countries like, let's say, Pakistan or Indonesia or India, you have huge populations. You have a lot of fault lines. You have a lot of diversity. And therefore, purely authoritarian models don't work if you do not have buy in of the population. You can have authoritarian systems as long as the population feels like they have agency in the system. And then the second is India where people tend to compare India. But for me, India and China seemingly started at the same starting point in terms of GDP per capita, terms of development. Arguably, China had it much worse because of communism and and opium and so on and so forth. But then China did something where they were able to alleviate hundreds of billions out of poverty, and they were able to create, again, the the the productivity. If you don't look at China in a GDP per capita lens and you purely look at it from a energy consumption and a productivity lens, it's a phenomenal story. It's a it's a mind numbing story of of of growth. You look at India and you look at crony capitalism plus plus. Right? You look at hundreds of millions in absolute abject poverty, and then you see $500,000,000 being spent on a wedding and the entire nation and the entire world being okay with that. And so I'm very fearful. Whenever whenever we we think, oh, you know, Pakistan was when India was an x y z time, and that's where we're going, I feel like that I I fear that. Now, again, something very controversial. The reason why I do believe or or at least I have some hope from authoritarianism is is is because I feel like authoritarianism or the system where some institution can act as a wildcard tends to allow for less involvement of the crony capitalists, and that does end up creating an inefficient system as Pakistan is right now, but at least creates a more creates a more equal society if that makes sense.

We're kind of we're visualizing the same. Again, it's it's an opinion. Right? We are visualizing the same thing I think a lot of nuances that you touched upon make a lot of sense right? Look in China the issue was there was a clan rivalries right? Political system if you go and analyze it's like basically you can your clan and the clans with alliances which would be the Hu Jintao versus let's say Xi Jinping today right the current head of state and he's now lifetime but like Mao but prior to that you had basically when they were developing that okay my clan comes in I can be extended for up to 10 max or an affiliate and then after that my rival clan is going to come in so basically it's kind of understood that if I mess up too much you know somebody's going to come and basically start to go against me and there's still there's a lot of corruption in China and they came up and these battles happened but then they eventually grew but one of the one of the main things that happened in China which I don't think is applicable to South Asia or especially Pakistan is that communism was that binding force that you were part of the communist party There was no religion, religion was outlawed under the communist party. I mean not in the sense that generally you had to you could it was a separation it was a basically separation of church and state, right? So then you use that as an engine and then you started rewarding people based on the national policy, right? Look, they've got a discipline that South Asians clearly don't have, right? I mean, we're generally generally lazy, calm. Like, we all like to relax, right? Yeah. To the quickest buck. But at the end of the day, as India's the in India is very applicable to Pakistan for two reasons right that in India their bureaucracy and their deep state are very strong. Now we see the political parties are strong as well right. In Pakistan because of the nature of how this country, let's take it back to the Mughal times, right? There's a lot of migration of people not just partitioned. This was a frontier land kind of of the British, the Mughal empire, right? Generally So when the British came in they created the agrarian society mostly in what we see in belt over here and a lot of people migrated from different fragmented parts to this part of the country or the region Then this country came about, right? So, when I noticed the first time when I came here is that I am used to The US, used to be a bit of a meritocracy that the best person goes up. Second, you start doing business or anything here, you start feeling this resistance and is along Beradri lines and groupings or like whatever somebody has a domain they try to dominate the other person right and that comes from some of that you know historical element right and so this is South Asia specific thing that doesn't mean we apply some other model. I think the model that works especially with the predominantly Muslim country, what works is you use a combination of the strong federation, digital governance which I think is probably going to change things a lot, right? Enforcement changes significantly because the less humans you have eventually, again not tomorrow but I think we'd agree let's say even fifteen years from now, right, that there'll be less humans involved in the governance because those rules of the constitution and the sub all the what do you call them the ordinances and laws would be programmed into the digital system to basically implement right so whether you have cashless payments or let's assume that sometimes they outlaw globally driving and they say it can only be autonomously driving vehicles. So then what happens to a traffic violation? It's not going to happen, right? It's enforced by AI. I'm just giving you, I wrote an article by the way, it's in the express tribute, says Pakistan in 2040. It's just a hypothetical but a lot of these things I talk about is an alternate version of a universe for Pakistan so I do think the federation is going to get stronger and the federation is in Pakistan represented primarily by the military because that's the binding force of all the ethnicities and tribal differences in the country, right? And then basically that model could be laid out in throughout the nation and a hybrid system where you have basically a strong military industrial base or financial complex linked with the civilian and political side. We'll see I mean this is all speculation I have no idea how this evolves. What I do know is that you know the communist movement did not originate was not there that when you talk about the Chinese communism is a recent phenomenon. If you look at the entire history, right? As China is a nation or as a civilization. Civilization essentially. So in the same way, you know, there's no perpetuity. This is Pakistan at a particular point of snapshot in time. Do we get amalgamated into the Middle Eastern culture? Because there, you know, we become their security alliance as in, like, let's say Turkey, Pakistan, Egypt become that triad,

and they fund us. That's why that's probably that I mean, was the next question for you. But probably I'm gonna wrap this up toward towards the end as well. But we've we've we've sort of gone into micro Pakistan and really within Pakistan, how the structures are working. Let's sort of zoom out a little bit, considering the changes in circumstances. शबरजैद, you've probably seen him. He was formerly the chairman of FPR. PwC.

Also PwC, right? The head of vice versa. Yeah. PwC, absolutely.

He's been on a a on a tangent last couple of days, and he's saying, you know, stuff like, we're gonna be getting a $150,000,000,000 a year through security bases. US is gonna leave. Iran's gonna open up. We're we're looking at, like, cheap gas, cheap oil. Not discounted, but because of the fact that LNG has infrastructure requirements, it just makes it costly. So, you know, you're gonna get cheaper gas and so on, and that gas is eventually gonna go to India as well, there's more connectivity there. If if The US retreats and the Middle East, particularly the Arab side of the Middle East or or West Asia, as it's now being called, they still require someone to come in and and and act as a as a security guarantor. And, you know, Shebhar Zhadi, for example, says that that would be Pakistan. And he's like, oh, you know, the things are just about to change. And what he's looking at is Pakistan more tilting towards so he's looking at more mean up versus South Asia. Which which is what we talked about in 2020. And beyond that. If you recall, mean up. Absolutely. And what I'd be curious, though, is that even in 2024, when we were when we were having that conversation the second time out, we we alluded to the idea that Pakistan is playing this sort of middleman, messenger who's trying to balance out because Soviet and US is very easy. China and US is existential for Pakistan. And so increasingly as that conflict becomes more heated, potentially towards Taiwan, so on and so forth, it becomes increasingly difficult for Pakistan to remain or or or keep that stance. I think, I mean, as of today, the fact that Pakistan is standing where it's standing in in terms of getting everybody, every stakeholder on on on board, I think that's absolutely remarkable, and I think that's a huge diplomatic victory. But I think that the the, you know, the timeline for that is just very, very short. And I personally believe, and I'm hearing a lot from academics and otherwise, people saying, you know, Pakistan will have to take a side. Eventually. We know that we're we're looking at eventually. Right? And and we we are looking at, obviously, these trade routes and the battle between these trade routes. When you look at Iran and how that energy impacts much of this region, particularly China, then you do understand गवadar and Sipek and why this might now be invoked considering But she has to straits straits of her mother's As soon as they sort of settle. Absolutely. And so that puts Pakistan into this precarious situation. The fear is the worst case scenario is, ok, if Pakistan is providing an alternative to China, let's create so much instability here. Let's create a Syria. The upside is we have a nuclear bomb, and we have 250,000,000 people who are going to devastate

as refugees all over. Plus, remember? So just like Iran. Iran's not been easy. Right? There's a massive 92,000,000 some odd people there. Right? You you when you destabilize Pakistan, it destabilizes the even India wouldn't want that because 250,000,000 people will have to move on land. Absolutely. They're they're gonna so Absolutely.

Yep. So it's not as as easy as Syria, but it's still a possibility. And then on the alternative side, you know, there is the the optimistic side says, okay, there's some block out there that would just finally provide Pakistan with that opportunity to be useful. And the reason why I say useful is, you know, useful is value and value is money. We I I that's how that's my framework of how how I look look at things. And so, curiously, if I were to ask you, with these changes, both in The Middle East as well as overall with the multipolar world, first of all, where do you what what what's your hunch? Where do you see Pakistan tilting towards? And then what's your recommendation in terms of what the ideal tilt for Pakistan should be to maximize, you know, whatever leverage that we have gotten out of this playing whatever we role we've played right now in in this conflict? So the assumption that I have to put in is that China is not binary because we're used to The US.

US is with us or against us. China even in this conflict was selling to both sides, right? So they do business, right? So they're not the pressure from China on Pakistan is not that break all ties with The US. That pressure is coming from the other side, right? So I think what's about to happen and again this is highly speculative, this is just based on pattern recognition, which you have to obviously change if as new data becomes available. But I feel that there's some sort of a middle power emerging. When I say middle power between the empires, middle powers have to emerge. Right? So in those that middle power position is our countries like Turkey, the Gulf States. Let's collectively call them the GCC. Previously, The UAE was the dominant force. I think it may shift towards Riyadh slightly in terms of how they're playing the cards. We don't know, right? But whatever the GCC is, it's going to have a policy. And then take Pakistan in that. Egypt less so because they are next to a pretty- I mean Egypt is important obviously but they're right next to a pretty you know powerful state, tiny little powerful state. So उनके वहां पर थोड़ा सा जुबरू कुछ और issues हैं, right? Plus उनकी territory पर भी थोड़ा सा claim है from the Nile to the Aphrates. तो so but let's go to you know from our perspective. If you just go zoom out on Google Maps and you'll see it from Turkey connected to Iran to Pakistan, it's just literally like it's connect it's you can do rail links, you can connect and then also from Southeast point of view, right? You can connect up there with Iraq and Kuwait and Iran. So I do think that this would be the likely middle power that would be hybrid. When I say hybrid, it will be the connectivity between the East and the West, possibly priced in both currencies from an external point of view. So you're trading in Yuan and the dollar today. It could be whatever the new currency is, right, settlement system. My guess would be that we're going towards a mean app with the and I think that security, you know, alliance with the defense back with Saudi is pretty that's a big deal. People don't understand. In fact, even in this conflict, the reason why we're playing such a peace mediator role is because Saudi will invoke that defense backed and we don't want to get involved. I think we're being very smart in the way we're playing it. Pakistan becomes really important in this new setup where the theater is now, you know this is the kind of the final settlement between the let's say China and The US and Russia, right? And I think Russia is going to try to play both sides increasingly even though they were China right now. They'll also agree to sell some in the you know whatever the western alliance monetary system currency that they're going come up with the reserve currency. So that puts us in a stronger position. India I think is big enough to be on its own. I believe that India as of today obviously there's a lot of resentment with Modi today because in terms of he's gone way too much towards the other side, right? The policy was always to be non aligned which was a smarter policy. So, I do think that India is eventually with the Western Alliance and that will be there kind of or in this region and maybe some other Gulf countries that will align with them. So that's how I see it playing out.

Makes sense. And that does make sense. I mean, with the main app alliance, I feel like there's a very logical there's there's energy there. There is food security here. There is capital there. There is consumption here. There is productivity there. There are human capital here. So so, I mean, there are there are ways, there are tons of beyond security. And I I think I do hope and wish that the policymakers are looking beyond security as well because we've always performed tenor of tenor security. Every time there is a security requirement, whether it's the sixties, eighties, early two thousands and now, Pakistan has come out at the top. It's just that we've been unable to convert that security success into economic success. And I think that's the part where I'm hoping the thesis around the financial industrial complex potentially now organizing might just play out in a way that Pakistan can finally leverage its positioning. I'm gonna wrap this up, but I'm curious. One last thought from you. Because you mentioned Pakistan 2040, and and I haven't done this question for a while now because everybody's so depressed. I Whenever I would ask this question, people would give me a very of dejected, disappointed answer. But we're at a time when aggressively Pakistanis have been leaving or at least any educated, productive, smart Pakistani has been leaving, including myself. Partly because, and and my opinion has been very clear, I did not leave with the idea that I hate this country and this is, you know, this is it's terrible. The idea very simply was at at a certain point, I realized that maybe I had outgrown this country and not in a way that I'm better than it than it. But I just felt like my... There was no further growth for me. I still... Personally, I mean, when Pakistan was all over x, you know, I genuinely felt like crying because I I still, I try to disconnect myself from the country. But, you know, there's connection there. And Yeah. There's always that pull. Right? But, unfortunately, for whatever the reason is, I feel like the pace of growth is just not fast enough for you cross a certain threshold in that country, and you're able to, you know, you you enlighten yourself a little bit. And the after that moment, it becomes increasingly difficult to just keep your head down and be happy with, you know, great food and this and that, and you'd start to think of bigger bigger and bigger issues. The problem, though, is that this was easy. My my brothers left early two thousands. You know, I had a lot of families left since nineties and early two thousands and so on and so forth. They left at a time when it was easy to leave, and it was easy to assimilate because the other places were so shiny that they were they would really bring you in. Today, me and a lot of my friends who've left can't help but think that the world is going to shit. And it is not that easy, and it is not that rosy, and it is not that shiny. And so on one level, while Pakistanis are dejected, understandably so, and are hoping to leave, immediately. On the other level, leaving isn't as as as as as easy, I I I would argue. And so one has to wargame. One can't just let, like, just let it go. One has to wargame what a future might look like because somewhere down the line, there is a part of me and there's a huge part of me I I I recently realized that felt like if though if the country could be a certain way, you know, I would rush back in a heartbeat. And so I'm curious with that context, how do you see Pakistan with all of that data that you've gathered over the last three years since we've spoken in 2050 with just, a medium I'm not saying extremely optimistic best case scenario, but a medium case scenario,

you know, here on forth. So I'll comment quickly on your thing as well. Look, if you're younger, there's nothing wrong with leaving. I think I'm I'm patient capital because comfortable, right? And I'm also older. So had the ability to accumulate some level of assets, right? But I don't think there's anything wrong with it. And people that leave the country are eventually an asset, right? You're sending some sort of remittance since remittances back or eventually the aspiration is to move back which contributes to the country and you bring back knowledge and discovery. Usually assets as well. So, I don't think there is anything wrong with it. There are so many people here that people go, there are more people that come and as a system more different types of people find niches, right? All of us that are western trained, we find it a little bit more complicated because we are used to some level of order but there are a lot of people that have grown up in chaos and it's easy for them. So if I look at Pakistan in 2040, I think our biggest issue and the reason why we keep having autocratic governments and democracy does not sustain too long is that because of the divides that I mentioned previously, right, in terms of ethnic as well as religious and multiple others, right, you need a strong stick to always govern and enforce law and governance improves because the enforcement improves. That's pretty much it and then it gets unraveled again. But what happens when the whole thing goes digital? So this is the first time digital enforcement which is coming is going to change things. So in that article that I mentioned earlier Pakistan in 2040, I do talk about these things like for example municipalities and being governed and managed, leveraging AI and technology which you are now starting to see take place. Police which is supposed to be kind of something that people feel comfortable with is distrusted But a lot of it is because the human element, right? But if there's direct governance monitoring, then even the individual being monitored as a police person through cameras and even if they have body cams on eventually, right? Because all the stuff is going become cheap. That changes the structure. So, you have to visualize a world where kind of like what The UAE has created to quite an extent or what China has created. And as technology becomes cheaper and we implement more, that federal government enforcement will start to improve. There will always be people that find loopholes that will exist in every system, right? But I think that things are going to be a lot better than they have been in the old system where we were trying to trace the economy through paper and voluntary documentation, right? And eventually even people out of the tax nut and the grey area people that I was talking about that actually are more powerful and a lot of money, a lot of the you know the unassuming people like the haji sab or the trader community. I think or even your आरतीs that are pretty damn rich, right? All that wealth they can't stay hidden, right? It's it's just when you go digital, it'll be two systems. Either you're part of the digital system or you're out of it which then takes away access to lots of things that you would for example, you can't buy a car, it's traceable. Can't buy assets. Where do you park it? Keep parking it in gold. And that's why a lot of people are bullish on gold also because it is an untraceable asset and bitcoin is the traceable version. But again, I think that things are going to be better in the future. It's not symmetric. If you're younger, you're talented, and you have an opportunity, there's nothing wrong with leaving because eventually you will end up contributing back and somewhere the other, even if you just invest in another founder or mentor someone. And I think there's so many people here that there's upward mobility that's possible. The second this K-twelve education system is kind of morphed and people are going to start learning directly from the smartphone because I don't need to spend twelve years in a classroom and another four years in college to literally do what I do today. Could have done that pretty much. Mean I agree with the K-six or even K-eight. But after that it's just been I mean I studied calculus. I could not even solve. I mean I couldn't use calculus today in my life. It could have probably focused more on business cash flow management skills early on. Just giving you examples and I think that AI and communication restrictions, the language barriers, that's going to open up intellect that we haven't seen before as long as the state harnesses this opportunity. So the main question which is I think we're all coming down to, we've had this opportunity, we lose it every time, we'll be capitalized at this time and this is a hundred year cycle, Right? This came last time in 1945. So I think, you know, there's an opportunity here.

Quick question to that, though. Do you think and and with AI, particularly, I feel like just like energy, we have always been sort of handcuffed with oil that we have to import, which is one third of our import bill. I think what we're doing is commoditizing intelligence very, very soon, where a lot of the problems that we can solve as a society will be driven by that intelligence. Right? And so I was I've I've been diving knee deep into AI myself. And just a few days ago, I set up a an OpenClaw.

I'm I'm obsessed with with Claude. And OpenAI has acquired them but it's it's insane. And

so I set up an instance for myself. I started automating a bunch of my workflows absolutely crazy. Literally, I fired two of my folks who work with incredible talents, I just could do it cheaply. So there was no requirement for them anymore. But then I'd I'd I'd run ran through a couple of sprints, and, you know, just, like, I think, four days into it, OpenAI locked me out and they said, okay. You're gonna be unlocked after five days because you've overused your, compute, essentially. Right? Now I realized two things very clearly from that. First, I realized the importance of AI server entity where I was locked out of productivity because a third party decided even though this was a cash flow problem, I could have just paid more. But then tomorrow they could just lock me out for, I don't know, throwing a Social scoring. Road. And so... Scoring. Right? And so I I realized, oh, wait. They have a power over me because I have automated my system so much that the productivity has been driven by a brain that they control. And so I realized, okay. The next thing I did was the next... Literally, next morning, I was sitting and looking at Mac minis and Mac studios and thinking about how I can deploy a local brain for myself using, let's say, Jema four or whatever. But then I extrapolated that on a on a state level, and I realized if we are to be building systems driven by AI that maximize our productivity and when we commoditize intelligence, do we allow for that intelligence to be a priced in dollars rather than PKR and be hosted in The Middle East or elsewhere where, okay, finally, oh, we have solar systems now. We don't need oil. We're finally no more oil dependent, but now one third of our export import is is is literally compute that we're buying off of of The Middle East. And so I'm curious, a, what do you do you agree with that thesis? And, b, do you think the policymakers understand? And I understand the fact that we don't have any money, we're stuck on We have the money.

That money is not allowed to touch the banking system under the FATF laws, right? I mean, buildings go up very quickly in Pakistan. There's enough money. I don't see any financing So from

the buildings go up, but do you think the policymakers realize the AI sovereignty issue and are because, I mean, we've seen the the the the digital authority and that this and that. A bunch of these authorities are there. But do we have an understanding of building our own indigenous AI compute capacity? I'm not saying don't, like, do it because you're gonna be a silicon hub that's gonna export to the world. At the very least, the requirement for Pakistan, if I want to build an AI startup and solve a Pakistan local problem using AI, I at least I should be able to buy compute NPKR with energy that is being produced in Pakistan, you know, to solve Pakistani problems. Is that something that's even in as a conversation

happening? One of the biggest projects right now, they're called Pakistan's best kept secret, is Sky-forty seven, which is the sovereign cloud. We're building one of the state of the art data centers in Pakistan, and it's going to be multiple co locations of it. I think the system understands it at a larger level. If you go around to individuals, maybe people don't understand it. I mean, to be if I have to say, think the current establishment is extremely intelligent. I mean, I'm saying this more from a military background. I am apolitical so I don't take political sides. I am talking on people get divided just like democrats and republicans I don't vote in The US either, right? Being a Pakistani American because I think that's just an illusion but when you look at domestically here these guys are more sewched on. My father who is 83, these guys are like 29 PMA and that old generation, right? They were more like, you know, very westernized, would read The New York Times, Washington Post, a formal opinion. I think these guys have actually seen the problems of Pakistan and they are less elitist in their mindset when it comes to solving the problems of Pakistan. And it seems like there is a switch on. This is just me observing living in Islamabad, interact with different people. And so within the bureaucracy

Sky Sky forty seven is the sovereign cloud. I mean, it's not it's Yeah. I just I this is the first time I'm hearing about it, and this is I've just gone through it. Can you tell me a bit about this and and whether this is I mean, something like this, would it be out open in the in the market for people to invest in as well as Basically, look. What what's happening. Right? Amazon,

AWS, Google, Microsoft, all your valuable data which is new oil is being parked there. Do you think they're keeping it and you know not using it for their own enhancement of their own agentic AI and their LLMs? So the question arises why can't we have state of the art data centers right and the person building my name very well the CEO he's built data centers in Qatar for ordu right so this is not this is it's a very serious play and I think this is the type of mindset that's going to change the country right to understand the importance of building these data centers, to understand the importance of sovereignty in tech as well right. And obviously we're dependent at a lot of superior technology level on US and China. But I think the understanding is there a lot more than the previous cycles, where there is a direction I see. That's why I'm kind of bullish. Look, you can see that indirectly in the push for digital payments. Again, when I say digital payments, I'm not just talking cryptocurrency, that's just an asset offering, right? That's different. I'm talking about integrations of basically stablecoins at the central bank layer in RAST. That's just a settlement, an upgradation of SWIFT. Then also coming down to KYC MLCFT, consolidating that process, transaction approvals, the flow of digital payments. I mean these days everywhere people are sending payments across. That's documentation.

Do you think stable coins and potentially

CBDC for Pakistan is coming anytime soon? Downstream, stable coins integration is going to become mandatory by The US into multiple countries because that's going to be their new flow. What would the timeline be? I think you're going start to see an acceleration after 2027. When the next crisis happens, the solution that we talked about is going to be basically a digital format, right, which is ultimate traceability. Look, your financial transactions tell you more data about an individual than anything else. It's health data and financial data right. These are the two most important data points you can have right and you cannot you can calculate the GDP down to a household in real time if everything is digital in its format. So I think these things are what we're underestimating. When I talk to the old economy, let's call them the feudals and the industrialists today or the princes states. The ones that are smart and switched on, they've either taken exposure if they don't understand it or have started to automate their manufacturing plants and these are the ones that are going to turn to the next cycle big guys. And the ones that don't adapt will just fade away. And similarly within the system people see these changes and can be patient enough to wait around. We'll you know kind of clip the coupon here right? But I don't think this is for everyone. I mean I think if you're a younger person it doesn't matter if you are getting a better your job is upward mobility. If Pakistan is not offering that today and you get a really good job in let's say Riyadh, go there, learn and when Pakistan gets to the state where your opportunity you see is there, come back and come come back at that time, you'll be more stable. So, feel like you know we we lump up the state of mind of the entire nation into one. There's a different frustration when you're graduated from college. There's a different frustration when you're five years into a job. If you're unemployed, ten years into a job. As you have ageing parents and kids that are growing up and they have to go to college there's different you know frustration or positive outlook on the planet. So these are things that we have to parse out. I don't think two fifty million people everybody is ready to go. Maybe if people are very emotionally attached to political parties they'll feel like it's the worst of times. So it's it's but again this has always happened in Pakistan right but I do see a trajectory and I think the chips are in our favor today because the old measure of the IMF and balance of trade and all that stuff. Just visualize what happens if Mina proposes a new currency and they say look we're going peg it to the dollar. What's the issue? Pakistan is consumption, Swadhi produces the energy. We have the productivity in food as you were mentioning. We send it that way and it's an economic zone like a country almost right like the five provinces or whatever we six yeah five provinces or the 18 provinces in Pakistan. What if these countries become a part of a economic zone which behaves like a singular has a singular currency, has singular regulation policies and all of it is governed via these rules and agreements are governed via AI. That's another side of the story if you look at it. Again, speculative, but there are signs of some of these things happening.

That makes sense. And I think, you know, there's a there's a shift in in terms of The UAE for Pakistan. I think that was a a also a center of a lot of grey forex inflow and outflow and I think that's six months ago, if someone would ask me, there's there's some sort of a digitization or or a structure to to inflow outflow of that. Having lived in The UAE, I feel like Pakistanis are very inventive people, and they would they had their loopholes one way or the other. But, suddenly, today's climate, I just feel like that is going to be increasingly difficult. And so I I I get the point of of those signs. I hope that they pan out in our favor. Fessel, thank you so much for taking the time out and sharing all that insight. That is absolutely phenomenal. I have to lodge you for having the confidence to be able to air scenarios because these are inherently the disclaimer needs to go out multiple times. These are data in, processing, and analysis could be completely wrong. But I feel like in a turbulent environment, people are quick to judge and it is difficult. And having spoken to over 500 people, it's a rarity because off camera, you get that a lot. On camera, it takes a bit of strength thank you fingers crossed man hopefully I'm getting in trouble for it just kidding and and and and for coming in thanks for thank you for thank you for the insights and for all of you guys let me know in the comment section below if you haven't again if you haven't heard the previous conversation, is absolutely phenomenal. Go through that, because it's gonna make you really approach this conversation very differently. But would love to know your thoughts on a bunch of wide range of things that we spoke about in this conversation. If there's something that that confuses you, you know, share that in the comment. I would love to read it. Maybe we can do a round two and and dive deeper into that further. But, nonetheless, there was Sayyam as Ambulance and Zedi. You're watching Thought Behind Things. Thank you so much for watching, I'll see you the next one.