Pakistan is in coercive economic diplomacy — and the elite has no foresight

A long-awaited guest, and a paper that went viral

The episode opens with Muzamil introducing a guest he has wanted on the show for a very long time: Dr. Adeel Malik, Associate Professor at the University of Oxford and holder of the Globe Fellowship in the Economies of Muslim Societies at the Oxford Centre for Islamic Studies. Muzamil notes that a recent paper of Malik’s went unusually viral — a paper in which Malik argued that the structures and institutions running Pakistan are about to be forced into change, and that the forces behind that change are now inevitable.

Malik walks through his own path briefly: a master’s in economics from Quaid-i-Azam University, two years working under Dr. Mahbub ul Haq at the Human Development Centre in Islamabad, then a Rhodes scholarship to Oxford, a doctorate covering Nigeria, Indonesia and Thailand, and finally a permanent position at Oxford. “More than half of my life now,” he says when Muzamil notes he has been there for the better part of a decade.

The opening question is the obvious one. What is actually happening in Pakistan? Malik’s answer sets the frame for everything that follows. The visible situation is bad, he agrees, but the right lens is not microscopic — it is telescopic. Wherever stability has eventually arrived in history, he argues, it has been preceded by very large instability. Britain’s rule of law cannot be read without the Glorious Revolution of 1688. Germany’s inflation regime cannot be read without the hyperinflation of the 1930s. China’s rise cannot be read without the opium wars. “When we think things are breaking, that is actually creative destruction,” he says. “Until the old breaks, the new is not created.”

Fire under the feet of the system

Malik names the thing he sees building in Pakistan. A middle class is expanding in Punjab and Khyber Pakhtunkhwa. A new kind of public awareness has arrived with social media. A generational shift is underway. External aid is shrinking. “Fire is forming under the feet of the ruling system,” he says, borrowing Daron Acemoglu’s phrase from Why Nations Fail — a revolutionary constraint on elite preferences. He compares the moment to the British rulers in the 18th century looking across the Channel at the French Revolution and being forced to concede ground to their own people to keep the same outcome from arriving at home.

Muzamil pushes back carefully. Pakistan has been near this brink before — the late 1950s, the late 1970s, the late 1990s — and every time a geopolitical opening produced a handout that kept the old system running. Is this time different?

Malik’s answer is the sharpest geopolitical reading in the conversation. The U.S.–China tension has opened a new war front, but in this one, Pakistan’s old role has gone to India. Washington has chosen India to contain China. “Pakistan will keep getting money,” Malik says, “but only enough to keep the show running.” Not enough to create strategic economic space, not enough to take independent decisions. He gives the moment a name: Pakistan is in coercive economic diplomacy — the international relations term for a country held between sanctioned states like Iran and unsanctioned ones, walked from one IMF programme to the next. CPEC triggered FATF. Imran Khan’s IMF programme was unusually tough. Mike Pompeo went out of his way to say that American tax dollars would not be used to repay Chinese debt. The current programme demands pre-profiling of Chinese debt before disbursement.

What is changing, Malik argues, is that the authority structures the West used to push money through are weakening. The army was once a cohesive institution with legitimacy; that legitimacy is eroding. The village chaudhry was once a natural conduit; voting patterns now move independently of him. The colonial template of indirect rule — the man on the spot, the political agent in the tribal areas governing through allies, keeping economic linkages deliberately thin — was extended across Pakistan after independence and has held until now. “That system has cracks in it now,” Malik says.

How the indirect-rule template was built — and never dismantled

Muzamil asks Malik to slow down and walk through how the system was actually constructed. Malik takes him into the archives. The British built indirect rule by finding natural village heads, turning them into zamindars, giving them defined property rights where none had existed before, patronising large families, building Aitchison College, and structuring military recruitment by region. If you were a wounded soldier in the Bengal regiment, Malik says, you got a stipend. If you were Punjabi, you got land — because canal colonisation was underway and there was land to give. The army’s officers were embedded in international imperial expeditions; even the first Pakistani army chiefs had served on imperial fronts.

Independence did not break this. It reinforced it. In India, large land reforms happened. In Indian-administered Kashmir, even larger ones did — Malik attributes the vibrant middle class, resistance and mobilisation visible in Kashmir today directly to those reforms, which empowered the ordinary person. In Pakistan, an agrarian reforms committee was set up under Jinnah, but the pre-colonial equilibrium reinforced itself. There is, to this day, almost no agricultural income tax.

Malik then introduces a frame he attributes to his own father, Professor Fateh Mohammad Malik. The assassination of Liaquat Ali Khan was the turning point, because power transferred from the Muslim League’s political leadership to a bureaucratic class. Three men carried it: Ghulam Mohammad (representative of the British civil service), Ayub Khan (representative of the British Indian Army) and Sikandar Mirza (a political agent). “Whoever killed Liaquat Ali Khan is beside the point,” Malik says his father used to argue. “What matters is what unfolded after.” Pakistan has, on this reading, been stuck in the same room ever since.

A transition zone, not a confused one

Muzamil presses on identity. Other countries have civilizational roots — Iran has Persia, India has India. Pakistan, he argues, is a buffer zone. Punjab had its moment of statehood, but Khyber Pakhtunkhwa connects to Afghanistan, Sindh to Rajasthan. Have we ever actually defined what this piece of land is for?

Malik does not let the framing stand unchallenged. The UK, he points out from where he is sitting, is also not homogenous — Wales, Scotland and England are deeply distinct. America declared itself into existence from disparate states. The Middle East and Africa were arbitrarily cut up. Diversity is not the problem; the failure to embrace it is.

Then he reframes the geography. Pakistan, he argues, is a genuine transition zone. North Pakistan is where Central Asia meets South Asia. South Pakistan is where the Middle East meets South Asia. The Indus Valley civilization, the spread of the Sufis, the Bukhari Syeds, Mir Syed Ali Hamdani arriving from Iran into Kashmir — these are real linkages, not imagined ones. Two cities he says should be central to how Pakistani history is taught: Herat and Kandahar. “Our Sufis are heavily inserted and embedded in the Mesopotamian tradition,” Malik says. The job is to own all of it.

The 1985 turning point and the death of political parties

The conversation moves to the question of political class. Muzamil notes that the same nineteen or so politicians have rotated for the last twenty or thirty years, that they are now at the end of their life cycle, and that no obvious mechanism is producing replacements. Where does the next political class come from?

Malik’s answer is precise about the date. Before the 1980s, there was a professional middle class entering politics. Bhutto’s politics had opened space for ordinary people. The non-party 1985 elections changed that. Without a party ideology to run on, a candidate ran on something else: whether they had paved a local drain, whether they were Syed, what biradari they came from, how much money they had, how well they could control sisters and family votes. Then MP development funds arrived. Patronage politics took over, and money became the dominant force in elections.

Dynastic politics — father, son, grandson — accelerates from the 1980s onward, Malik says, and he has worked on the data. A very large share of today’s assembly members either entered politics in the 1980s or built their machines then. The hallmark of that politics is control of the local bureaucracy: the thana, the kachehri, the agricultural scoring system, where the development branch will go.

This, Malik argues, is why political parties as national institutions matter so much, and why their decline is so dangerous. He picks PTI as his example, despite not being a PTI voter. A national party contains Pathans and Punjabis, Shias and Sunnis, rural and urban, young and old, Muhajirs and Sindhis. It is, in political-economy terms, a centripetal force. “It connects society,” he says. Building one is extremely difficult. He notes that the People’s Party has effectively become a regional outfit, when historically it contained every kind of person and every kind of faith. The job of institutions like these is to aggregate practices from Khyber to Karachi so that people can think above colour, race, ethnicity, and religious or political faith, and think about the state.

A new social contract, and the no-taxation-without-representation problem

Muzamil asks whether the current framework — constitution, institutions, social contract — can evolve, or whether Pakistan needs a constitutional reset.

Malik separates the two. The constitution is a framework of rules, and the 1973 constitution was a major unifying act — Bhutto walked into parliament and got it approved by every member at a moment when the country had just broken in half. It can be improved. Even most service rules in the civil service and judiciary, Malik says, are fine on paper. They are not followed; power is abused. “Re-inventing the wheel is not the answer.”

The social contract is a different question, and that one is genuinely broken. Whenever citizens question the state, the state’s reflex is violence. That is wrong. New bargaining structures are needed. Malik notes that Benazir Bhutto wrote about this in the early 1990s — that Pakistan needed a new imrani muahida, a new social contract — and that the question is now overdue.

He grounds it in tax. Traders pay almost no direct tax. They are also the Muslim League’s support base, so they will not be taxed. But if you ask the traders, Malik says, they will tell you they would pay tax if they got something for it — they send their children to private schools because the state schools fail, they pay protection money to extortionists because the state does not provide law and order. “No taxation without representation,” Malik says, naming the principle directly. A working system requires that the strength of the power centre be matched by an equally strong counter-constituency — constraints on executive power. Free media. Independent judiciary. Student unions. Associations. Political parties. The current Pakistani debate around IPPs and electricity bills, he notes, is exactly this dynamic playing out in real time: pressure on the government to explain which families own the IPPs and why ordinary people are paying the bill.

Indonesia, Turkey, and the elite that ties itself to trade

Muzamil shifts the lens outward. Indonesia, Nigeria and Pakistan are roughly comparable on population, development and economic size, but Indonesia’s per-capita GDP is now several times Pakistan’s. What did Indonesia do?

Malik is honest about the limits of comparison, then offers the structural answer. Indonesia in 1997 looked a lot like Pakistan does now: cronyism, businesses tied to the state, military embedded in the economy, corruption visible in the open. The 1997 East Asian financial crisis was the inflection. The Indonesian elite, slowly, tied itself to outward trade. Farms, companies, FDI — elite interest fused with industry and export. The Philippines, in the same neighbourhood, did not: dynastic politics, rentier relationships with America, military involvement. The Philippines looks more like Pakistan than Indonesia does.

Turkey is his second case. The Turkey of today is unreadable without Turgut Özal’s 1980s reforms, executed at a moment when reserves were down to months and the economy was on the floor. “It is really sad to waste a crisis,” Malik says, “because a crisis can really set the stage for reform.”

The deeper point is about Pakistan’s elite specifically. The Pakistani elite’s interests sit with traditional electorates, large landed aristocracy, and protectionist industry. They have no structural reason to want export-led growth, because they do not earn from it. And, Malik adds, Pakistan is unusually insular about what it does not study. “Name me one university in Pakistan with an expert on the Chinese Communist Party,” he says. Name one with an expert on the Saudi royal family in the post-MBS configuration. The two most important countries to Pakistan after America are China and Saudi Arabia, and Pakistani academia studies neither seriously. Decision-makers act on whim. They do not pull on think-tank or academic input.

Egypt is not the analogy people think it is

Muzamil draws the obvious comparison: Egypt. Both are military-shaped, both depend on foreign rents, both have centralised power. Does Egypt’s experience post-2011 tell Pakistan what its own transition will look like?

Malik concedes the surface similarity and then breaks it. Egypt has a pharaonic system. A very long tradition of centralised power. A society shaped by that centralisation in a way Pakistan’s is not. Pakistan’s history is more plural, more dispersed, more linked outward. The implication, which Muzamil names, is sharp: a Pakistani transitionary period will be defined precisely by whether the people who arrive in that window do their job, because a failed transition would dismantle resistance the way Egypt’s did. The window will not stay open.

The eastward shift the elite is too scared to make

Toward the end of the conversation, Muzamil pushes Malik on geopolitical positioning. The U.S.–China contest is intensifying. Iran is already in the other camp. BRICS is emerging. Should Pakistan exercise strategic options — pivot eastward, deepen trade with Iran, Iraq, India, Africa, the Global South?

Malik’s answer is direct. Pakistan does have options. The West takes seriously only the countries that take themselves seriously. India does. Vietnam does — engaging China and America simultaneously, even as the West knows much of America’s re-shoring through Vietnam is actually Chinese. Pakistan is not so important to the West that the West will keep funding it indefinitely, but not so unimportant that the West will hand it to the East. There is room.

But Pakistan’s elite will not use that room, he argues, because their lives are tied westward. Properties in Avenfield. Children in Western schools. Buyers. Links. Fear. “The West knows that fear.” Saeed Faridi, Malik notes, has made the same observation in a WhatsApp group recently: the Pakistani elite has no strategic foresight, only short-term interest. The long-term direction is eastward — owning the region Pakistan actually sits in, trading with India on Pakistan’s own terms rather than at gunpoint, building on the smuggling routes with Iran that already function, learning from how Iran trades with Iraq under sanctions. “Why not build the natural, organic linkages?” Malik asks. The general is thinking about his son. The intellectual is thinking about an invitation to NDU. Nobody is thinking past the next favour.

The intellectual failure is the bigger failure

The last passage of the conversation is the one Malik seems to feel most personally. Muzamil notes that the Pakistani diaspora is unusually quiet — that the academic class abroad does not work on Pakistan, and what passes for Pakistan analysis is mostly produced through an American lens. The intellectual class inside Pakistan has not given the country a counter-narrative.

Malik agrees completely. The biggest failure in Pakistan, he says, is intellectual. To rebuild any society you need a conscious rebellion, a new way of thinking. Pakistan’s region produced the Sufis, Iqbal, Faiz, Hamza Alavi. After his own paper went viral, Malik says he asked himself why. It was written in academic language. It was not rocket science. He had not, he believes, said anything people did not already know. “It wasn’t the article’s success,” he says. “It was that our intellectual discourse has become such a desert that anything written carefully now stands out.” The most radical thing, he quotes a scholar as saying, is to describe what you actually see. Pakistani academics, most of the time, look at what is dying in front of them and turn their gaze somewhere else — toward personalities, toward distractions.

By the end of the conversation, Muzamil thanks Malik for the time. Malik thanks him back. The closing line lands quietly: the country has the constitution, has the framework, has the diversity, has the region. What it does not yet have is a class of people willing to describe what they see.