Why Muzamil thinks Pakistan is heading for an Indonesia 1998 moment

Checking the February predictions

About three months before this episode, just ahead of the February 2024 election, Muzamil made a set of predictions in a video series. He said the PTI would get the most votes but would not form the government, that a coalition similar to the PDM would take power, that the PTI would fight a long legal battle, and that economic pressure would bring unrest and keep foreign investment away.

He says the past three months have gone more or less as he expected. That matters to him because the same analysis stretches over the next two to three years. He is clear about what he is not offering. “I have no insider news,” he says. This is a reading of data. He adds that he is pessimistic in the short term but optimistic about Pakistan over the medium to long term.

What the 1940s teach about change

To explain today, Muzamil goes back to the 1940s. The British who ruled the subcontinent were few. They designed the laws and the structure, and local nawabs, jagirdars and sardars carried them out. After two world wars, Britain was deep in debt, and India cost more to run than it returned.

He gives his figures for how extractive that system was. In Aurangzeb’s time, he says, the subcontinent produced about a quarter of the world’s GDP, roughly America’s share today. By 1947 that share had fallen below 3%. Bengal, once an industrial region, suffered a famine in the 1940s. Resentment grew and the cost of ruling rose. Muzamil does not deny the role of Jinnah, Gandhi or Nehru. His argument is that the conditions made change inevitable. “Whether these people existed or not,” he says, independence and the end of the status quo were going to come.

At independence, in his reading, one ruling class handed power to another. The local elite kept the British-era laws and structures, and Pakistan soon became a client state of the US. Aid arrived each time the economy neared collapse, under Ayub, Zia and Musharraf.

Two forces the old system cannot absorb

Muzamil sees two reasons why change is now unavoidable.

The first is awareness. Around 33% of Pakistan’s children are out of school, he acknowledges, and the country lags the world. But compared with its own past, the change is huge. At partition, he says, one child in six was literate, and 84% of the population could not read. Today four in six are literate. Private TV in the early 2000s and mobile internet after 2013 widened that awareness further. His point is that awareness, once spread, stays. “You cannot force them to unlearn,” he says.

The second is the economy. For decades, he argues, Pakistan ran two economies: a consuming elite of under 3% and a largely rural 97% who needed bread, clothes and a house, most of it produced locally. Small amounts of aid kept the elite comfortable and cheap flour kept everyone else quiet. Now a large new middle class wants motorbikes, fridges, air conditioners and phones, and treats them as rights. Demand has become dollarized. Where three billion dollars once kept the elite satisfied, he estimates that keeping today’s population satisfied could take 60 to 80 billion. Old tricks, like holding the dollar down, now break the economy within months.

Where the money will not come from

Muzamil says Pakistan’s debt and interest payments in the coming year are about 40 billion dollars. The usual rescuers look different now. America has its own financial strain, and in his reading its interest bill now exceeds its military budget. If Donald Trump returns, which he expects, foreign spending will be cut further. IMF and World Bank programmes bring conditions. They will not deliver the sudden feeling of prosperity people want.

The Gulf has changed too. He recalls the Saudi foreign minister saying at the World Economic Forum in January 2023 that the era of free money was over. Egypt, he notes, recently escaped a crash only by raising 35 billion dollars from the UAE through a land deal. Pakistan, he argues, has few assets that could be sold that way. So the outside help that saved the old system three times before is not coming. “Economics will follow its own natural progression,” he says.

Turkey, India and Indonesia

To show what that progression looks like, he asks viewers to search the GDP charts of India, Turkey and Indonesia. Each grew slowly, dipped sharply, then took off: India in 1991, Turkey around 2001, Indonesia in 1998. At the time, each economy was between 200 and 300 billion dollars. Pakistan’s is now about 350 billion, which he calls too big to control the old way.

Turkey and Indonesia matter most, he says, because the military played a large role in both, much as in Pakistan. He takes the argument for military-led governance seriously: the army is disciplined and works as an institution. But in his reading of the data, hard power leads in poorer economies and then has to make way for softer power and a knowledge economy beyond a certain size. In Indonesia after 1998, all stakeholders had to renegotiate the social contract. He expects Pakistan to go through something similar in the next 24 to 36 months, and says there is nothing bad in that.

A leadership vacuum and the symptoms on the street

Muzamil adds a point about leadership. By his count, about 70% of the members of the 2018 National Assembly were over 60. Many of that generation rose through student unions, which were shut down in the mid-1980s. Since then, no new pipeline has formed. The old leaders are reaching the end of their time, and their children were not groomed the same way. He expects the next leaders to come from the new middle class.

Until a reset comes, he expects things to get harder. He reads recent events as symptoms: protests in Kashmir, the Haq Do Gwadar and Karachi movements, unrest in Balochistan, rising terror attacks, farmers’ protests, and two killings over motorbike thefts in the morning’s news. “We are trying to fix cancer with Panadol,” he says. Cancer, he explains, is the body’s own cells demanding too much. He does not call those cells evil. He says they cannot last.

A negotiated deal with amnesty

His central political prediction is a deal between Imran Khan and Pakistan’s establishment within 12 to 24 months. He expects it to be about political economy more than politics: governance, the social contract and possibly, though he is unsure, an amended constitution. He thinks core PTI supporters who want revenge will be disappointed. In his view, the settlement will come with amnesty, and every side will be allowed to save face.

Beyond that, he expects the PTI’s legacy to last whatever name it carries, the PML-N to fade, and the PPP to hold its space in Sindh. He sees Pakistan moving from a two-family democracy to one where 30 to 40 families negotiate, which he calls a step forward. He also expects Jamaat-e-Islami to grow over the next decade.

He is direct about Khan’s role. “PTI was a transitionary party, Imran Khan was a transitionary leader,” he says. In his reading, Khan’s job was to speed up the end of the old system. He compares it to Martin Luther King’s role in the civil rights movement, where others later built the new structures. “Beyond that I do not believe that he has any solution for Pakistan,” he says, and he adds that most other leaders do not have one either.

What the smart person is doing now

Muzamil ends with advice for the despondent educated middle class at home and abroad. Stop following who said what on TV. “Criticizing is very easy,” he says. “Making solutions is very hard.” Someone should be writing white papers on what a new economic policy, legal system and governance model could look like.

He frames it as self-interest. If he is right, a large share of parliament will need replacing within a few years, and those with ready solutions will rise. The people who befriended the British in the 1940s were lost to obscurity, he notes. The ones who read the pattern reaped the rewards. He repeats that he backs no side. “I have no skin in the game,” he says, and asks viewers who disagree to share their own data.