Pakistan's elite never had to deliver — that's about to change

The good, the bad, and the ugly before the guest arrives

The episode opens with Muzamil walking through the news block he uses to frame every show — and on this day the news block is doing most of the framing for him. The good: the IMF has reached a staff-level agreement with Pakistan for a 1.2 billion dollar disbursement, and China has reaffirmed its commitment to the second phase of CPEC, the industrialization phase, alongside a renewed push to put more solar into Pakistan. With the Strait of Hormuz choked and Dubai’s ports operating below capacity, Karachi is suddenly processing ten to fifteen times its average container load. “We have an opportunity to provide a solution for the problem that is right now happening in The Middle East,” Muzamil says, “and seemingly, we’re making good use of it.”

The bad is harder to soften. Twenty percent of global oil and LNG supply is offline. JP Morgan has mapped out when the cushions in storage and in transit will run dry — mid-April for North America, the first of April for Asia. Thirty-three percent of global fertilizer is offline, fifty percent of urea, fifty percent of plastic capacity. The Gulf is already importing seventy percent less food. The UN World Food Programme is warning of forty-five million people in acute hunger if the war continues to June.

The ugly is a single tweet from Dr. Moeed Yusuf, the former national security adviser, warning that if no off-ramp is found within a week, history will write the conflict off as World War III. Muzamil notes that he knows Moeed personally, knows him to be conservative, and would not have written that publicly without seeing something serious underneath. It is this backdrop — not a stable one — into which Javed Hassan is introduced as the man who can deconstruct the multipolar reality that is now forcing itself into the room.

Three months at Fudan, and what China is actually becoming

Javed Hassan spent September through December at Fudan University in Shanghai. The first thing he wants to say about China is not the well-worn line about poverty reduction or GDP — those are stories most people have already heard. The shift he is reporting is the next one. China, he says, is “transformation from just an industrial power center to an innovation and technological power center. And that is going to be what is going to be defining for the next fifty years, not only for China, but possibly for the globe.”

Muzamil responds with the line that is doing the work in his head — “we really need to be thinking, go east, my son” — but he is careful not to romanticize. He puts the harder question on the table immediately. Pakistani policymakers, he says, keep talking about a “China model,” and what they mean by that, almost always, is permission to be more authoritarian. Javed cuts that off cleanly. He had the question put to academics and policymakers at Fudan repeatedly, and the answer kept coming back the same way. “Please, please, do not try and copy the China model. This is unique to us, and we do not expect anyone else to copy the China model.” Four thousand years of history. Two revolutions. Deng Xiaoping’s image of feeling for pebbles in a stream. The Communist Party is not, in his telling, a dictatorial monolith — it has roughly a hundred million members, runs heavy internal screening, and is meritocratic in a way Western coverage tends to flatten. “Democracy with Chinese characteristics,” he calls it.

The lesson he wants Pakistan to take is the inverse of the one its policymakers want to take. Don’t copy. Observe. Build on your own particular capabilities, your own normative values, the things Hidalgo and others mean when they talk about economic complexity grounded in what a country actually has.

The civilizational excuse, and why Egypt undoes it

Muzamil offers a familiar framing: Pakistan is a seventy-five-year-old construct, not a civilizational state like Iran or China or India, and that thinness of identity is part of why it is so easily knocked around. Javed pushes back, and the pushback is one of the sharper moments of the episode. “I’ll first address this, I call it shibboleth of civilizational nation,” he says. The United States, where Muzamil is now based, is “no more than two hundred years. It’s a completely artificial construct. And with ideas, fantastic ideas of life, liberty and pursuit of happiness.” Egypt has three thousand years of history; it has not done well either. Civilizational age is not the variable.

The variable is what the elite is willing to demand of itself. In every country there is an elite. The countries that progress are the ones where the elite has understood, often grudgingly, that it cannot win unless the wider population is enabled — educated, capable, participating. The countries that stagnate are the ones where the elite, as Javed puts it, is captured by a narrow worldview and “doesn’t really think big.” He returns to a conversation with the dean of Fudan’s business school, who had been pressing him on what was wrong with Pakistan. Javed answered with one fact: the same ten conglomerates have dominated Pakistan’s economy for forty years. The dean stopped him there. “Well, you don’t need to tell me anything more.”

No creative destruction. No new competition. No new companies. No pressure on anyone to grow, to create jobs, or to educate a workforce. That is the diagnosis.

The 1950s decision that bought the elite out of the social contract

Muzamil moves the argument toward agency. Why did Pakistan’s elite become rent-seeking when other elites became efficiency-seeking? His own answer is that Pakistan’s elite was a vassal class — never required to develop agency because pressure was always relieved from above by global patrons. Javed accepts the framing and adds the historical specifics he has been gathering for the book he says he is trying to write.

In the early 1950s there was a window. Land reform was possible, the kind that Taiwan, South Korea, and Japan went through and that lifted agricultural productivity in Taiwan by three to four hundred percent over a comparable period. Pakistan’s agricultural productivity rose by roughly fifteen percent in ten years. Defense spending in Pakistan’s first decade averaged forty-nine percent of the budget — sixty-two percent in the first year, dropping only gradually. American aid filled the gap that taxation would otherwise have had to fill. And once that gap was filled from outside, the elite had no reason to go to its own population, ask for money, or negotiate a settlement with it. “It was a society that needed did not need social contract,” Javed says.

This is the formulation he wants on the record. Forget the language of elite capture, he tells Muzamil. Ask instead whether there is a societal contract between those who govern and those who are governed. In China the Communist Party operates under one — implicit, surveyed, constantly anxious about GDP and poverty alleviation because legitimacy is at stake. In Taiwan and South Korea, even during their non-democratic decades, that contract existed. In Pakistan it never had to.

What happens when the patron stops paying

Muzamil paints the hypothetical carefully. A protracted Iran war. The Gulf weakened by lost revenue and possible escalation. American missile stocks drained, American economy strained, recession or depression on the table. The patrons of Pakistan’s elite — Dubai, London, Washington — degraded in the same window. He asks whether that finally produces the pressure that domestic politics has refused to.

Javed says he is, against his usual instincts, hopeful. The rents of the 1950s, 1970s, and 1980s are no longer arriving. Even China, he points out — and he is candid here in a way the official line is not — has invested very little in Pakistan in the last four years. “You’re not prepared to absorb it. Your conditions are not such,” is how he summarizes the Chinese position. If oil prices stay near or above one hundred dollars for the next four to five weeks of war, remittances from a weakened Gulf may compress at the same time the import bill spikes. The pressure wall the elite has lived behind starts to crack.

He does not romanticize the crisis. “Nobody wants a collapse, nobody wants an implosion.” But the historical record, he argues, is uncomfortable. Sri Lanka, post-default, is in some ways better positioned than it was before. The cataclysmic events the elite fears are the same events that occasionally make transformation possible. The elite frames those events as dangerous because they threaten the existing order, and that framing has shaped the public’s view of risk too.

A strategic American defeat and a genuine retreat

The second half of the answer is geopolitical. Javed thinks the United States is unlikely to get the overwhelming victory it was looking for in Iran, and that the absence of that victory constitutes a strategic defeat. He frames the consequence carefully. It might mean, finally, that America turns inward — “America first quite genuinely, as opposed to just in terms of talking.” For the people of America, he says, that would be a good thing. For the rest of the world it means a multipolar order in which China’s rise continues, India and Russia matter more, and Saudi Arabia, Qatar, and Egypt are forced to confront the fact that their growing populations cannot be managed through patronage alone.

Pakistan, he says, “really has run out of steam.” The last four years have produced almost no growth and almost no job creation. The capacity of the elite to gaslight the public — his word — will give out. The pretense that being a regional mediator constitutes a development strategy will give out. And then the serious questions arrive. The first one he names is alignment. Pakistan’s official rhetoric calls China higher than the mountains, deeper than the sea, sweeter than honey. Its actual posture remains Washington-first. “I think that really will need to dilute. It doesn’t need to break down, it just needs to dilute. And we need to firmly hitch our wagon with the country, which might be the country of the next fifty to one hundred years, which is China.”

The AI and robotics gap, and the new gatling gun

Javed grounds the China argument in numbers. In 2024 roughly 550,000 industrial robots were installed globally; about 260,000 of those went to China and 35,000 to 40,000 to the United States. Japan, Taiwan, and the rest of the field together accounted for the remainder. The United States may be four to five months ahead of China at the AI frontier by his reckoning, but in the diffusion of AI into industry — and in the coupling of AI with industrial robotics — China is well ahead. He cites the BYD factories in Shenzhen and Shanghai, where one vehicle reportedly rolls off the line every twelve minutes.

He reaches for a historical analogy. In the early nineteenth century, the Mughals, Japanese, and Chinese were not far behind the West on civilizational values, but the steam engine and the Gatling gun changed the math on the battlefield and in the factory. Today, he says, “we are facing a China which is really the one with the Gatling gun and we are probably like Bolsonaro” — by which he means the country still bringing bows and arrows to a fight that has moved on.

Muzamil pushes back from the other side. Earlier development models assumed someone, somewhere, would still want to buy what a poor country could produce. The United States is exiting the consumer-of-last-resort role. China is automating away the labour-intensive ladder that India and Vietnam climbed. Where does that leave a country with forty percent illiteracy and no fiscal room? Javed concedes the bleakness, then refuses it. Every technological revolution has eliminated jobs and created different ones. Even Chinese AI companies, he says, are starved for English-language talent. The opening exists. The question is whether the state can stop trying to direct everything and let people find it.

Stop chasing the anchor deal

The last substantive thread of the conversation is about how investment actually arrives. Muzamil notes that Pakistan keeps positioning itself for the headline-grabbing twenty-five-billion-dollar Saudi commitment, or the next big Chinese announcement, and these announcements rarely convert. Javed says the framing is the problem. In Shenzhen, when he was working out of Hong Kong, the deals he saw were five million, ten million, twenty million. “Acorns into big oak trees.” The Special Investment Facilitation Council and other top-down vehicles are optimized for the wrong end of the distribution — for optics, not for ecosystems.

He notes that in the same year China deployed roughly a trillion dollars globally under the Belt and Road framework — significant amounts into Nigeria, Congo, Malaysia, Thailand, even Vietnam, a rival — and “virtually nothing” into Pakistan. The reason, in his read, is not only security. It is that China does not feel Pakistan is committed. The two-boats posture — one foot in Washington, one foot in Beijing — does not look like fence-sitting to anyone watching closely. It looks like indecision.

Muzamil layers a related point on top. The state, he argues, should be doing only three things: storytelling, narrative, and policy. The rest should run on its own. But the current government cannot even hold a coherent narrative. It says export-first, then defends a Pakistani rupee that has been flat against the dollar for an unnatural stretch while the Indian rupee has depreciated in spite of a strong current account. Javed agrees — and goes further. “I have not seen any currency which is so stable like the Pakistan rupee. It’s been around 2.8 so constant. I mean, this is not a market.” Let the currency find its level. Stop performing control. Replace the official line that everything is hunky-dory with a humble pitch to the world: come here, we need help, the playing field will be fair.

From bust to bust, with stability in between

Muzamil closes by asking whether the country is heading into another twelve-to-twenty-four-month tumult, given oil, remittance pressure, and the absence of growth under stability. Javed corrects the question. “Let’s let’s get away from that. There’s no boom bust because there’s no boom. That has it happened. It’s from bust to bust. It’s bust, flat line, what is called stability, and then bust again.” Another bust is coming. The luxury of gaslighting and of hundred-billion-dollar Saudi mirages is running out. “The truth liberates you,” he says. “We have to start getting real with ourselves.”

Muzamil ends the episode with a story from 2022, the last bust, when his proximity to the show had put him in rooms with the so-called elite and he watched them push their wealth out to Dubai and London while the controlled dollar bled the country. He sees the same signals now in the calls to loosen real estate taxes and stimulate the property market — exit liquidity, in his reading, dressed as policy. Javed agrees and adds the only line that matters. This time, he says, there is no space left in the system to make it work. “They’ll have to face the music.”