Globalization, Trade Policy & AI Risks: Growth Mindset Strategies w/ Babak Hafezi

0:00 So I think if you're interested in global policy, I, if you're interested in your stance and how the world is working around you and how that impacts you, I think this is a very, very important podcast, right? Ultimately, you don't live in your own economy better self. You're living in a competitive environment and whatever happens somewhere else in the world, it impacts you in one way or the other, maybe with massive delays, but it impacts you. So being educated about global policy, being educated by international economics is critically important to see where you stand in the world and what affects you and how you can actually monetize that.

0:37 So that that's what I would argue is, is how critical to this. Number two, it's any podcasts and and podcasts are a great way of becoming more in tuned when the industries and segments that you're in and learning from other people's experiences, right, is to build a larger library of experience knowledge. And you don't have to experience everything yourself, but you can actually read about it and learn from other people's experiences. So that's why podcasts become so critically important. Before we dive back into today's conversation, I want to share something important.

1:07 This episode includes a pay partnership with Better Help, a platform designed to make starting therapy easier. I know for my own journey as a leader and entrepreneur that life can sometimes feel overwhelming. There are seasons, severe stressed, uncertainty and pressure pewed up, and you need to save space to process it all that severe therapy comes in. Therapy isn't only for people facing clinical challenges. It't the space to reflect, grow, and find better ways to see my stress, relationships, and personal goals. It takes courage to see how, but it's also one of the smartest investments you can make in your mental and emotional welding. That's why I'm proud to highlight Better Help. With Better Help, you simply

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1:46 And with over 7000 reviews and 4.5 trust validation, Better Help is a platform you can rely on. So if you feel like you feel like you feel the therapist, this Data help.com/kinggames That's Data help.com/games to get 10% off to your festival 30. Once again, this is OK partnership with their help and I encourage you to take that first step. If you've been thinking about it. Sometimes the best investment you can make easy yourself. Welcome to the King Dems Podcast, where we share the stories of extraordinary people and dissect hot, relevant topics that shape our world.

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2:41 Your life, ladies and gentlemen, who once again welcome to the Kingdom's podcast and Diary of a CFO. Today our club will be a very, very important guest fighting out of New York by way of Washington, DC, United States of America. Beck, Walker, Bobberg or Fuzzy. How are you, Bobby? Oh good, thank you.

3:06 Wow, now I feel like I'm boxing and the lights are missing. Whoa, that is the Bruce Bluffer introduction. That's big special arts. You know, life is a fight anyway, so welcome to the economic fight. Wow. So I've actually prepared your your fantastic introduction based off your fantastic profile. So sit back and let me give you your flowers today on the King James Podcast and Diary of a CFO. We are joined by a global business strategist, news advisors, shaped Fortune 500 CEOs, governments, investors and entrepreneurs across continents.

3:46 From guiding Morgan Stanley during the IPO to advising international government and scaling companies worldwide, Baba Khashezi needs a true authority in strategy, risk growth and international market expansion. As the founder and CEO of Hafezi Capital International Consulting and agent, Professor of the International Business Arts, American University, Babak, a wealth of experience that blames academic figure with the real world impact.

4:21 Bob Buck, it's a privilege to have you on here. Welcome to the show once again. Thank you very much. Thank you. And that was a mouthful, that. Was a mouthful because your career is a handful. No, no, no. It's one that hard for maybe maybe a globe for because it's amount of the whole globe. Well, it's good to have an impact, right?

4:50 Ultimately, I think that we all live to make impact. Absolutely. That that's, that's the main goal. You know, I always tell people that I'd rather impact obedient lives than make a billion dollars because that is what legacy is about. But you know, talking about the globe, right, it's interesting for us to know about globalisation and that's something that is very, very what I say important to you as well, given how your body of work has been able to keep global impact. Our love for each educators about globalisation and how it speaks to what we have been put together. Many thanks to quoted right.

5:29 We talk about the China U.S. trade and industrialization policies. So let's start from globalisation. Yeah, I think one of the key elements of globalisation and I think one of the key reasons that we became so globalised is because we lived in a world, you know, pre World War Two, in a world that was very combative, where, you know, friends and foes were always at war.

5:54 And that it did not allow for economic development on a large scale and limited people and it created a lot of instabilities, economically speaking. So we designed a system after World War 2 with the Bretton Woods agreement to to really integrate the world and and create institutions. And this is a keyword institutions to really be able to systemize and and allow us to engage in trade.

6:18 And that system became very America centric early on in the 50s and 60s and all the way to about the early set. America was a big recipient and a winner of that because the factors around Japan and the European markets had, you know, this is created after World War 2 and America was the only fact that was open for business. But then when competition started, when Japan came back to the market, when Europe came back to the market, it relocated positive competition.

6:46 And then in the late 70's, the beginning of the late 70s and early 80s, we have the financial behemoth, which is China, which back then was really nothing economically speaking. And they started becoming competitive in a global market sale. And in the 80s and 90s and 2000s, they became the manufacturing hub of the world.

7:07 And we have seen massive dislodgements globally in terms of manufacturing jobs, in in terms of economic growth in certain sectors. And so this has become a social challenge. It started in economics, entered politics and then now it's social. So it's impacting us on, on, on multi layers. Social Economy wow, so you know, I remember doing my first degree in economics and being taught the theory of comparative advantage, right. So there are sectors in which China, for example, has comparative advantage and America has comparative advantage.

7:50 The basics in economics is a country should focus on the area where they have the comparative advantage, right And I from other countries, you know products guarantee not or they lack the comparative advantage, right. So bringing it to like a personal and individual level. But for me growing up, I was talented at music as talented as speaking, but I always met people who were more talented musically, but I really did not meet people who were that talented as me speaking wise and I decided to focus on speaking right. So taking it back to America versus China, right, there's something I love to see.

8:34 Why hate when you can collaborate, right? So globalisation has broken down the pivotal physical walls or physical barriers that we used to have prior to technology to advancement. So what is your opinion on what really needs to be done right in order for US, China, the rest of the world to collaborate instead of Haiti and, you know, we have global economic prosperity. So absolutely the notion of comparative advantage at this is a critical notion economics that that is that part in central. But you have to understand economics is not always foreign policy, right?

9:21 And this is where economics and foreign policy kind of go in two different critical ways. And in a sense that if you're a hegemonic power like the United States is, and you want to maintain hegemonic power, economic coercion and economic power is critically important because that is what you need to force other countries into to be able to, to still remain powerful, right? I would argue that globalisation can actually be divided into kind 6 narratives.

9:45 And those six narratives are kind of the establishment narrative, right? The the establishment narrative. Is that what you're talking about? That comparative advantage is important. We we win in certain industries, we lose in certain industries, but everybody wins in the process. You also have this what's called the left wing narrative, which is a win lose situation. We have actually four win, lose situations, right, depending on where on the political spectrum that you're in. And that is that the elites are the ones who are winning, right? That in this case of globalisation, the elites are the winners and everybody else loses in the process. The third way is the corporate of power narrative, which is the corporations win, especially

10:25 multinational corporations win at the expense of people. The the right wing populist argument is that the people on the other side of the world in developing countries are winning against us, that we'll lose it in the process, right. And then again still win, lose. Then you have a Geo economic narrative. This one is the one in economics, you know, for us to maintain our competitive powers economically that we need to diminish other people's economic powers and we're becoming too reliant at others.

10:55 And the last one is the global threat narrative, which is a lose, lose narrative, is that everybody loses in this right. We're losing our jobs, we're losing our autonomy, we're losing all these different elements. And everybody else is, you know, and then you don't have you don't have critical critical manufacturing domestically, you lose talents. So all of those are kind of the narrative. So those are the six narratives of globalisation and where you fall economically, where do you fall socio politically? It impacts the way you see the world. And I wouldn't argue.

11:28 And so the way you perceive it, the way where you where you see the world impacts the policies you implement. Absolutely. So think about it from a Brexit perspective, right? The, the Brexit perspective was to certain degree of Geo economic narrative that that we don't want to give power up to the EU, that we wouldn't have our own autonomy, that we wouldn't grow internally, right?

11:51 That was an argument and we only dominate by somebody else. So that that Geo economic is also a geopolitical argument. And that got intensified more after COVID, like if you think about what the impact of COVID and the inability for us to access materials easily globally because of supply chain disruptions. And that really impacted our mental models per SE of how we see the world.

12:18 And that has kind of changed the narratives of how we see the world and hence economics. This is actually very true and a lot to unpack. Right? The Geo economics is looking at the way perspectives are aligned based off the geography. And you really can't blame people for wanting to protect their territory because man is a social animal. Human beings are territorial in nature. You identify with the territory in which you inhabit, right? To protect it.

12:57 But a lot of times we cannot see the bigger picture and that's why I I see this. I've said this on the podcast before that the capacity of a man is dependent on 4E's, right? That is their education, their exposure, their experience and their enlightenment. And that is why we have platforms like this, you know, to bring that enlightenment to help people understand the bigger future, right?

13:23 The, the, the, the first law of the jungle is self preservation. But a lot of times you don't realise that being greedy and not looking out for others is counter intuitive in pursuing self preservation. So I'd like for you to touch on that from an economic perspective and also within the industrial policies, right Titus?

13:49 Industrial policies. How does you know industrial policies and instances of overproduction? EG you know steel, solar, impacts of global markets and US based industries. Right. So I think there's another element that there's an R missing in your word, which is risk that humans are in generally not willing to take excess amount of risk, right.

14:13 And when your livelihood is being threatened, that is because that becomes the, the nasty, the protectionism. It's how can I protect my, you know, my industry? How can I protect my livelihood? It's the best. And then sometimes in that process, I mean, you thinking you're doing a good thing, you're actually creating more barriers for your sustainability and you're making yourself less competitive in the global market space.

14:35 And that's where human. Exactly, exactly, exactly. So that is where where we are, you know, we were being challenged. So when we talk about, I think it's really important that we look at when we use the word China, we shouldn't look at it from a Chinese perspective in terms of a country, because many times the in the West, when we use the word China, we think of the central government making this decisions, which if we look at from a, from a company perspective, it's not, it's actually much more distributed.

15:06 You know, there is no central authority in in China that's setting policy in terms of economic, in terms of business policy, right? What I mean by that is that there's no person in the Chinese government says this is how much steel we're going to produce every single year. And it's what's happening very similar to what the USSR used to do. It doesn't exist per SE is corporations. These are capitalistic corporations that have access to raw materials that they have created infrastructures with the help of government.

15:33 Obviously in sourcing Robert products. Most of us are coming from emerging markets and frontier markets. So we're talking about Africa as a continent, We're talking about South America as a continent. That's where the Roth models are coming from. So that's because they have that much capacity, they're producing to decrease the cost as much as the possible can to remain globally competitive. And that's why you have overproduction in China now. In the early 2000s, you did have dumping where they brought things like tyres into the US market, right? And they dumped it into the US market. Don't.

16:08 Forget. Africa. Don't. Forget Africa 100% of course, but the problem with Africa and institutions are weak, right? And because institutions are weak, they they cannot contact. Individuals. Weak institutions. Correct, correct, correct. So because Africa, the African continent in general does not have strong institutions to protect businesses, what ends up happening is the African economy suffers from it, but the US was able to actually win and they won. In the case of tyres in the United States, the problem again is the institutions are too weak. They were designed for the 1960s and 70s and 80s or all the way to the 90s, but they're not designed for the 2000s where speed is critical.

16:48 So when you take a case to the World Trade Organisation, it may take 3456 years for it to be fully determined. Right by that time any industry is dead. So we need to refine institutions, including the WTO to, to, to short to showcase faster processes of enlightenment, of, of legal enlightenment and, and, and education. So it's really, really critically important. But unfortunately what's happening is that our institutions are not keeping up with the rate of business, where businesses speed has dramatically increased and the instant institutions that are behind it are not keeping up. And it's creating massive gaps that are created that's creating these uncertainties in the market. Industrial policy is being

17:33 damaged in one way or the other, and delays are happening and job losses are. You know, Speaking of the speed, the speed keeps increasing over time, and we now have something that is very, very dear to my heart and links to my government name, AI Artificially Intelligent. I often joke about it that it's like my parents saw something that other people did not see coming.

17:55 My name is Adam. And why am I sharing the same initials as artificial intelligence? And artificial intelligence is something I have personally used, you know, to build my video career. My company and I see the speed of this large language models. I train AI models and I see that speed at which they respond and adapt, innovate. It's really, really what I see alarming that the institutions that are meant to be protecting our interests, right, are not adapted to the times.

18:36 So like, what do we need to be saying to the policy makers? How do we need to drum these into the ears that if you don't speed up in terms of your adapting to what is happening, especially with AI in business, I think we we are probably going to have another World War. I don't know. I think that's probably I. Mean don't don't forget the both things can be true right? Large learning models are extracting data from from outside sources.

19:07 So large language laws to certain degree are actually infringing in IP laws. Think about all the data that are extracting to create the LM models, right? Many of them are based on extraction of IP laws. So we there's no protection in IP in that sense. 1 #2 What happens if a an adversary wants to degrade our LM and create content that is absorbed by the AI?

19:32 So we don't have any systems around that either yet. So I think that we're in a completely blue ocean over here and that there is no regulation. We don't know where we're going and there could be massive social implications and challenges ahead of time. We have had remember that we had a different word for artificial intelligence up to about 3 or 4 years ago and that was called machine learning, right?

19:56 Machine learning was very systemized, was very, very, you know, there, there were systems in place. But artificial intelligence has taken at a different route and, and for example, things like things like landing an aeroplane and, and flying an aeroplane, they have been part of the machine learning process for decades.

20:12 We have ample amount of data, but because we have such refined data, because we have had so many issues that we were able to solve. Because we know what the outliers are, where the anomalies are, when we're going to solve for that. We haven't had that right now with AI because it's on a massive scale, right?

20:29 And I think that we're going to see massive amounts of legal issues and social issues that are going to come up in a negative way. So both positive, but also in the negative way that we have no legal protection from, which is going to be quite worrisome. It's, it's really crazy, you know, how can you regulate something that you don't understand? Well, the same, you know, we don't understand. I mean, I mean, think about it.

20:53 I mean, for example, right now we let's talk about artificial intelligence in in, in an autonomous driving cars, right? As of right now, main insurance companies in the United States, if you get an interaction with an autonomous car, the automatic fault is on you, the human, and not on the on the machine.

21:12 So what they're saying is the machine could not actually create an error. It is you that created the error, right? So even our mental models around AI still not refined correctly and we're saying that the machine makes better choices than humans do, which in many cases they may, but it doesn't. That's not totally true for all circumstances because the variables are difficult.

21:35 So this idea that that's the way that we're, we should go ahead and, and be is, is, is, is weird. So I think that the fact is, I think people do not understand and comprehend the fatality of it. And rather than saying, listen, we're going to put this in a in a box and and figure out how this played in a box and then extract the T humanity in general, we have just unleashed in the humanity and say, let's figure it out and go along as we can and see what happens. And that is freewilling optimism. And freewilling optimism can actually lead to so many undesired or unwanted consequences and outcome, Right, right, right.

22:12 We can only hope for the best. So let's talk about, you know, the trade negotiations. Like in your own view, how effective are current US, China trade negotiations that's addressing long term economic imbalances? And the the first thing I'm going to say is I don't think tariffs by the nature are bad. Let me explain what I mean is tariffs if they're implemented cohesively and concurrently with a very well designed foreign policy can actually be very effective as a form of really feeding change in the market, positive change in the market. And we have seen that throughout. You know, we have for example, sanction, sanctions are also form of tariffs, right?

22:50 It's the restrictive trade policy as well. So you can see how sanctions can be effective in economic limitation and, and, and create increases in cost for certain countries. We've seen them in Iran, we're seeing that in Russia. So we've seen in, in, in Myanmar. So we've seen those throughout history. And they and yes, they're not a panacea for regime change or for anything else, but economically speaking, they're pretty powerful and increasing domestic costs. But the current unfortunate, the current process of tariffs and the way they have been implemented by US are quite half hazard, I would argue.

23:25 Meaning that they actually did not achieve any real goal other than creating, you know, a, a system of making America an antagonist against even it's friends, even it's allies, right to to, to have high tariffs against Canada, against Mexico, which are your key trading partners against the United European Union in general. It is honestly a repressive form of economic warfare that does not help in any meaningful way the US economy. As a matter of fact, it decreases foreign direct investment into United States.

24:03 It creates massive uncertainty in terms of where the US stands and what the policy is. And #3 it decreases innovation as well because ultimately we need for us to invest our country to increase innovation because there's a lot of things that we do not know. And hence foreign people bring new knowledge, new know house into the US market.

24:23 And that's the, the, the beauty of, of, of global trade is that you, you bring different minds together and you create something completely new that you wouldn't do individually. So I think that the, the form and the method methodology that's been imposed is actually creating a system which is making the US less competitive globally and as making the US less investable. And I don't believe that manufacturing is going to come back and mass the United States.

24:51 And if it does, it's predominantly going to be automated manufacturing. It's going to be things that are that you know that that automation can handle much easier. So I agree with. You. Yeah. So automation is going to be the key element of of job reduction in the US at a larger scale. And I'll give you, for example, one nuanced case. McDonald's right now is working on a process to limit the number of employees to about 3 to 4 employees per McDonald's. Everything is going to be all automated. So that's a lot of low income jobs that are going to be gone. And if McDonald's is good at doing it, correct. If McDonald's is doing it, then all the other competitors have to do it as well to remain

25:30 competitive and to remain to regain pricing power. So ultimately the machines are the one that that have been the biggest evil in human history. You know, it is not different coloured people from different parts of the world. It is machines who are the biggest job destroyers in our livelihood. And honestly artificial intelligence is going to make it even worse.

25:51 So it's the, it's the extension of that machinery from Steam into, you know, LLM that's going to completely change the way that we actually do. I hope, I hope I'm not going to get new enemies because of my because of my initials. AIA lot of people already showing me hate. They're like your AI. I heard you're coming for our jobs, but I'm not coming for jobs.

26:18 I'm here to help you. I mean like for example, the steel industry, right, 8090 years ago had 300,000 employees. Now you're running with 2030 thousand employees. You just don't need the issues. And even even in cheap, cheap countries like labour, in terms of labour compared to the developed world, right, like China, Chinese are also using automation and it's creating less jobs in China, right?

26:44 So this. Is not. This is not a purely, you know, Western concept. It's a global concept. So this is no, and you're not getting it. You're not getting. It sadly, sadly. You know what? When people ask me like why are we losing jobs? Why are jobs being caught, I tell them just two words. 2 words are the answer number one word is automation #2 word is recession. There you go.

27:13 I don't know, do you? Do you have an opposing view? No, no, I would, I would add another is lack of innovation. I think lack of innovation is another one, right, Because how do you produce new jobs, good jobs? It's innovation, it's new fields that it cannot be replicated in cheaper country because of knowledge isn't there.

27:29 The best example I'll give you is back in 2008, 2009, when the US and economy was haemorrhaging about jobs, specifically in the car industry, there was a small little electronic car company called Tesla that was producing jobs and increasing jobs and creating a new market that didn't exist, right.

27:47 Whatever you think about, you think about politically from Elon Musk, let's put that aside. But from what he's done in, in creating a market in the US that it was, it was one of the hardest markets probably to to enter. He did a fabulous job in entering the market and changing it and creating jobs, manufacturing jobs when the the audit industry in the US was haemorrhaging jobs and and went bankrupt because of it, right. And that's a great example of where we need innovation and innovation is a critical component to our growth, which means for innovation to happen, we in good education systems, not just the college level, but from primary all the way to 12th grade and then also into the

28:27 college system and, and, and post post, you know, bad for system. So we need good education. That's critically important. Those are the kind of things and elements that we really need is innovation. That's what's going to create new industries. That's what's going to create new jobs and good quality jobs.

28:43 I one of the things that I, that frustrates me so much is that we don't necessarily want our kids to go and work in a factory floor working 10-15 hours, you know, in a job that may not have a great quality of life. I mean, that was the point of, of growth and, and development is that we don't want to be in a really, really dirty jobs, right?

29:05 We want to be in clean educational jobs that we add value to society. I'm not diminishing the value of dirty jobs. They're they're in critically important, but everybody, every parent wants their two kids to have a better quality of life. So why are we regressing now? Why are we thinking that a regression is the model that's going to impact humanity in a positive way?

29:23 And that's the answer big challenge it's. Actually very true. You know, dignity in labour is very, very important, right? And nobody deserves to use that dignity. I respect every, every job, you know, I say I respect hustle, people's hustles hard percent. It's as legitimate, right? Right. Dirty hands make clean money. 100% this is not, this is not an issue of degrading jobs, right? It's an issue of that as a society, we, we, we don't want everybody to be a farmer.

29:58 That's why we, we moved from farming 400 years ago into now having different jobs. Otherwise we could still be in farming. I mean. Well, somebody has to do it. You're 100%. I'm not, I'm not diminishing farming, right, But I'm just saying that we have moved from farming because there are other jobs that are also the pay better that have a higher quality of life, right. And even farming, think about how much technology plays in farming and that created massive amounts of efficiencies. And we're not doing everything by hand anymore or with animals anymore.

30:24 We're doing with machines and ideal curve has gone up dramatically in that. So it's an notion of innovation and innovation is critically important to a better quality of life for all of us, number one. And #2 to also create new industries and new segments that will pay high quality jobs. I, I love, I love that word innovation.

30:45 It's a word that is very, very dear to my heart. As a matter of fact, if you go onto my company's website, it reads where finance expertise meets tech and media innovation. So if it wasn't documented, it wasn't done innovation because like you rightly said, with innovation, we were able to execute view ocean strategies and then to uncontested market spaces and create, you know, new opportunities for yourself and for people and create new livelihoods for people.

31:18 I think I very much appreciate that perspective. But let's talk about the noble supply chains. With the shifts in supply chain strategies like, how should businesses and policymakers think about diversification and resilience outside of China? So I think that that has already happened. If we look at for example, Walmart and one of the largest companies in terms of sales in the world, retail companies around the world.

31:44 Walmart back in the since before the first trip administration, their total exposure in in procurement from products from China was somewhere in the 80 to 90th percentile depending on the quarter. So about 80 to 90% of everything came from when it came when it came to Walmart. Today that number is about 60%, right.

32:03 So it's a pretty large shift if you think about it from the largest retailer in the world. We are seeing this notion of shifts depending on what country you're from. If you're in the US as an example, the shifts went from China to Vietnam, Cambodia, Indonesia and Malaysia. And so that's where the shifting happened also to Mexico, obviously, you know, for, for the, the lower production price qualities, they shifted there. So we, we're seeing that the shifts are happening to other countries around the world.

32:37 Another element of, of this is that the, the, the issue simultaneously is that because the US system, the way that it's being run right now is in silos, meaning that immigration is not aligned with trade policy. When you have a company like Hyundai who is investing in the, you know, 4 is creating a factory, investing $4 billion in the US and they are about 6 months before opening and they send their engineers to train everybody. And then ICE picks all the engineers up, puts them in, in, in, you know, in handcuffs and gaols them without water. And then that creates a massive economic imbalance, risks that were not there before.

33:18 So if you're looking for foreign direct investment into the US and manufacturing into the US, your immigration policy and every single other vertical has to align to be able to allow for that. You cannot say you need to invest $4 billion into the US, but you cannot have any of your employees come over here and train people.

33:37 That just can't happen, right? So you cannot have one without the other. You need everything to be aligned. So when it comes to policies, we are not running cohesive structured policies. Now, one of the key elements that kind of COVID implemented is that it taught us that we need to rethink cost versus security, meaning that, you know, this comparative advantage notion was that we have to go to the cheapest country around the world. I think that COVID showed us that no no longer should go to the cheapest country in the world. We need to go to the securest country in the world, or we can make sure that we have good relations with them. We can extract and do things whenever we need to. So we we, we, we are in this

34:18 process of going through what we call a re establishment of production autonomy, right? That's kind of in the process that we're going through and I think it's a very healthy thing. I think that that's going to obviously increase costs. So we're probably going to be in an environment where inflation is going to be continuous. And the reasoning is because we went from the lowest production country in the world to now going to the securest country in the world.

34:45 And that obviously is going to have inflationary elements built into it until we can create mass scale, until we can create structures that enable price decreases. But in the short term we're going to be there. And then also I think we're trying to re establish who are, who do we want to deal with? Are their values concurrent with ours believe there that's where we are figuring or assess.

35:10 We're figuring where we are. We're assessing where our trade policy is. And I think that's where we find ourselves both in the EU, in the UK, in in North America. That's where we are right now. Obviously, if we look at the bricks, they are looking at very differently from the Burke's perspective is how can we make sure that the powerful countries that we have been dealing with, who in many times were our colonisers, how do we create independence from them and allow the ourselves to actually run our economic policy without dependency on them in terms of economic policy, in terms of trade policy, in terms of banking.

35:46 So where can we create systems where we can, in a sense of the front, run them or circumvent them if they decide not to work with us? And I think that's where BRICS is becoming the powerful player there. I had that block of countries with, would I say, strong economic power on a global scale. So just for the lead man, I think the BRICS countries we're looking at Brazil, Russia, India.

36:17 India. Who? Else China and it's. China. South Africa. Korea. Africa has been added. Yeah, Korea. South Korea. There's not Korea. Korea. Sorry that. There's no key, right? China, South Africa, right? Yeah. Yeah. So we're looking. At how many countries here BRICS right? Yes, but we have others that have joined as well. For example, Iran has joined them, North Korea has joined them.

36:41 So we have, you know, so, yeah. So this bricks is the acronym for the for the, you know, it's 1980s acronyms of the biggest countries of his growth, but they have been expanded down to include other countries as well. So like from a global economy perspective, right, for the audience to be able to understand the implication of decisions made by bricks, you know, on the global economy. So if you're looking at from a percentile or percentage perspective, what percentage of the global economy the bricks are blocked?

37:22 They're somewhere between a 30 to 40 and 40% of the global economy, right? They're pretty substantial, large amount of economy. They're also growing rapidly. They some of them are very raw commodity focused. So think about Brazil as an example. Heavily raw commodity South. Africa. Heavily raw commodity, right. Russia have a raw commodity, you know, and then China is manufacturing has less raw commodities, right. India has some raw commodities in natural, in some natural resources, but also again very similar to China, the next manufacturing hub there, right.

38:00 And it's the secondary implications, what we call second derivatives are all the contracts and negotiations that can go into developing blocks that allow trade to, to decrease the the frictions of trade to decrease between countries. And I think that that's exactly what BRICS is doing is how can we create systems within our existing network of countries to decrease the friction of trade between US and to also limit the choke points that countries in the in the West could have, for example, choke points on banking, right?

38:34 Think about that, this idea that everything has to be determined into dollars first before it clears into the system. If we circumvent that in the US loses a certain type of a hegemony and the dollar uses a certain type of value. And that's what they're working on right now is how they can go ahead and limit the, the, the the issues around that is how can we go ahead and trade directly within our currencies without converting it into either EUR or dollars?

39:01 So. From. An automation perspective. Now, how has industrialization and technology right we shaped that industrial landscape globally? And what is the role of the Greeks in this power play? Well, they are. I mean, that's where the raw commodity comes from. I mean, every single cell phone manufactured starts somewhere in the African continent, right? That's where the raw commodities are. When you talk about raw commodities, that's where they come from.

39:39 And they need to be taking away, you know, away from think about this, a small piece of metal of some sort keep gold, silver, whatever it is, is extracted from somewhere in Africa, moved, you know, by by truck to a port, maybe transferring from anywhere from, you know, Nigeria all the way to Djibouti.

40:01 To be able to, to from Djibouti to be placed on a, on a boat to travel to China and then to be redeveloped into a part of the chip, right. So this entire supply chain is, is dependent on rock commodities. So how can you speed up industrialization? How can you speed up manufacturing of chips? How can the speed of the manufacturing of natural products that go into what we call intermediary products that go into larger products, How can you all do that systematically?

40:31 And if we look at China, for example, one of the numbers I saw was they control about 90% of rare earth middle development and about 60% of the raw aspects of it. So they have a monopoly of raw earth minerals and that's what goes entirely into modern technology. Everything from missiles that we use to bomb those parts go into there all the way to your newest iPhone.

40:56 So that is necessary. You know, that is not that this is a necessary tool. And China has been very, very good at creating monopolistic powers, both on the raw side as well as on the naturalisation side, which again, if we moved out towards security, you see how that becomes kind of critically important for for demonic powers to create resilience against that. Yeah.

41:23 And of course, you know from a broader global impact perspective, what are the brother implications of the US China tree relations for international trade, policy, geopolitics, and of course, the global economy at large. Well, the way it's looking right now and if if we move forward and I think that this is where it's going everybody segment A multiplarity where we're we're going to go back from A1 unified system of global trade to a multi polar system of global trade. We're varying hegemonic powers, regional hegemonic powers are going to go into different segments and and trading blocks. And so that we're see we're going to see a multipolarity. I don't believe in the multipolarity argument. I think that one of the things

42:09 in trade is the larger the systems are, the better it is. So I believe that we're probably most likely going to go into bipolar model and we may go into multipolar beginning and then eventually go into bipolar model. And the bipolar model is going to be an American LED system of global trade, a meaning that the American system will be American banking institutions, American economic, economic and political institutions and dollar based trade.

42:33 And we're going to go most likely in a Chinese based model of international trade, which is based on not necessarily on the RMB, because I don't think China wants to actually make the RMB a global market because there's a lot of issues domestically that creates and allows for, you know, for for for flight of capital outside of China. So they mean use a BRICS currency, a secondary currency to be able to achieve that and protect their domestic currency. And so we, we most likely will see a BRICS style or a secondary currency that will challenge it.

43:08 So we may have more integration between the EU, the UK and and the US and Canada and Mexico. And then we're going to have a bipolarization of the world with China and many of the developing markets joining them. And so the, the, the question from a global perspective is what do you do if you Saudi Arabia as an example? So Saudi Arabia's largest trading partner is China. 18% of Saudi oil is sold to China.

43:33 It's it's its largest partner in terms of oil. Whereas in militarist, militaristically you are based into the US, but economically you're dependent on China. Which one will you choose, right. So those are the kinds that are in particular dilemma. No, those are the questions that you're going to have.

43:51 Or for example, a country like Mongolia, right? A country like Mongolia, which is trapped between Russia and China, but it's looking, it prefers to look to Washington for economic, you know, liberty. So what do you do when you're those countries, when you are when you do so this is the challenge of the next multipolarity system.

44:10 These are the elements which will, you know, countries will have to decide based on their own self-interest and motivations by the different blocks to entice them to come into under system. And so we're going to see is it reshaping of the global system in a probably once it's one of those once in a lifetime shifts. The same way that I talked about the Bretton Woods system, how critical that was in reshaping global economic policy. I think this next move is going to be one of those. It's going to impact our next global economic policy for at least 50 to 100 years.

44:45 Interesting stuff. So let's let's look into the future, right? If you were advising the US government or multinational CEOs today, C-Suite executives, what strategies would you recommend to navigate news uncertainties around the US, China trade relations? So one of the, in the short term, it's really hard, right?

45:10 In the short term, it's very, very hard because you don't know what's happening if you wake up 1 morning and then you have another tariff. Like for example, over the weekend we woke up to in the US having new tariffs on pharmaceutical products, as an example, or kitchen cabinets. So right now it's exceptionally hard to kind of do anything because you have to assume that eventually they'll get to your industry and sector in terms of tariffs.

45:34 So the question becomes what do you do outside of the US? Right now the powers of most of these organisations is outside of the US because it's much more stable, right? So I think that what you do is you have to create outside entities and you have to create those identities with, you need to use those outside entities as a means of trading and and also creating relationships with the, with the regional governments there. Saying that just because of this is more corporate perspective, just because of the government is doing AB and C, We as company A do not believe necessarily in the same policies and we would like to still be heavily invested here and then maybe not trade with the US, but to trade

46:13 with other markets that we're in. It's important to understand that 60 percent, 60 percent of the S&P 500 brings its money from outside of the US, So they're selling out to the US. So global sales for US corporations are critically important, critically important. So we cannot, we, we cannot walk away from that.

46:33 That has become, so it becomes to look outside of the US versus in the US. Once we have much more clarity and we know what the policy is and it's not going to change every weekend, that's when we can start looking domestically as to what to do then and how do we reshape those relationships that we have created externally. We're the ones that we have domestically, right. We also have to look at resiliency in terms of what other supply chains and where other where, where else we can do our supply chains fairly quickly. So creating options A through Z in terms of countries and identifying production facilities outside will become critically important just so we know where we can go to just in case of tariffs are implemented.

47:14 And the number 3 is how can we use arbitrage as it comes out to A minimising the tax liabilities. So we know that we have tax liabilities from 125% all the way to 10%. How can we use arbitrage to minimise the cost and move it to countries that are much more efficient in terms of tariff policy? So those are the elements that we're we have to go through and that's what most corporations right now are going through.

47:40 Unfortunately, by the time they go through it, it may be null, void, because it's a very strong chance, very, very strong chance that most of these tariff policies are going to be deemed unconstitutional by the Supreme Court. We already have two courts in the United States that I've said that they're, they're, they're unconstitutional.

47:57 We're waiting for it to go to Supreme Court next. And, and, and there's a very strong chance, somewhere between a 60 to 80% chance the, the Supreme Court will say the same thing. So if that happens, then we're back to .0, right? Exactly. But the, the issue is that one thing about this administration is that they're consistently looking for other small points to go after. So just because this one is teaming unconstitutional, it does not mean they have three or four other things that they can go in and implement.

48:27 And then it will have to go through the judiciary system. And we'll take another a year and a half to two years to figure it out. And, and so we, we, we may be in a different dilemma, same dilemma, different circumstances in the next 18 months. So that's why holding tight and not investing domestically is going to be probably the the smartest policies right now. Also domestic manufacturing, you cannot base your domestic manufacturing on a one to five year timeline. You're generally looking at a 10 to 30 year timeline for this. So you, you, you again, you cannot repatriate everything and create things domestically if you do not have clarity on that. So those are all the issues that you have. And obviously every corporation

49:13 has its own sub issues because how they manage the organisation, how to manage the supply chain, always implement all those, actually implement differences and striations and implementation. So that those are all the elements that we got to take a look at. I'll say follow the money, chill. Even Peter Piper dictates the tune.

49:33 So I hope, I hope that pirable sounds thus far right. Wow. So thank you very much again for being on the show. I have to close this with the five question quick fire round. Are you ready to rumble? Let's see what happens. OK. So number one question, what's one book that has profoundly shaped your thinking on East as and leadership?

50:01 So it wasn't a book, it was a class that I took in System Dynamics and it is a system dynamics book, right? And it is it was a great book. It was a great class that I took and it was all about how to think outside of the general notions of black and white and to look at the grey area. I think that we live more in grey matter that then we look in the black and white. And I think that that's that was a the system dynamics class, and the book was the most critical part of how it changed my perspective of life.

50:36 Interesting. I love that it's quite documented. I always talk about kicking outside of the box, but who wrote that book so we can have that book in the description? It was Professor Sherman. Professor Sherman, I think, wrote the book. OK. I will find that it will keep. You It's a very, very thick college book, but the amount of the plethora of stories that it has on, on mental models, on how we see the world and how we structured the world and how that impacts our cognitive and how cognitive biases impact our perspective of life really, really is absolutely amazing.

51:14 I love that you mentioned the cognitive biases because I have identified that in a number of people and you know that you realise that you're actually making decisions based on a cognitive bias, but people cannot see it. A very good example is a recency bias. You're making a decision based on recency bias.

51:35 You should know that because that's the last item that was that had an impression on your mind and that's why you think that is the best, but that is not necessarily the best. So I think it is any time we need to learn to be when I say unbiased, neutral, you know, you know that you'll be able to make, you know a better informed decisions.

51:55 Thank you very much for that one. OK, so the next one is if you could give one piece of advice to your 25 year old self, what would it be? So I always tell my students, if you're not growing, you're dying. And what I mean by that is that if you're not learning every single day something new, you're falling behind and you're becoming you're, you're left behind, right? Think about going back 345000 years when we're trying to fight for food every single day, right? The difference between living and dying is people who, you know, they tried new things.

52:34 And if you know, if they found different foods to eat, the one nutritious, they found two different ways of actually engaging in warfare to be able to hunt and to eat right. That was all about learning. So if you're not learning, you're dying. I love that survival of the foetus that there is there is a proof of we are come from a Nigeria in Yoruba land PC that the day we die is the day we rest that learning is a lifelong exercise right We keep learning every day and. Every single day.

53:09 Learning is the day you die. It just didn't stuff. So coffee, tea or something stronger. What fills your work days? So I'm very biassed towards coffee. Very good guys, what's coffee? The point that one of my students actually opened up a coffee shop and I joined them in the process. So I am very biassed towards coffee and yes, there's nothing more refreshing. Listen, I come from a Middle Eastern tea drinking establishment.

53:39 A good tea always hits the spot, but a good latte is also amazing. OK, OK, OK. Cheers. Just do that. OK, So which country or culture has influenced your world view the most and why? So I'm a so I grew up. I'm an Iranian who fled Iran because of the revolution. We went to Austria. I grew up in Austria, I grew up.

54:06 And then from there, we ended up moving to Spain from Spain, we ended up moving to Australia, from Australia to the United States. And then I went to boarding school in Madrid. I believe that every single country, every single country in the world has an amazing way of reshaping and shaping us. So every touch point with every country for me is an awakening as as as a person, as an awakening in in terms of learning.

54:33 And it's also seeing the world from a different perspective. It also sheds discrimination because as you see the world, as you see how other people live, as you humanise everybody else in the process, it allows you to really see that we are 99.9% the same, right as humans are differentiating factors and our DNA is minimal. So I don't want to say there's one country because it's not true.

55:00 It's every country, right? Every country, every touch point, every background, every form of learning makes me more complete as a human and it makes me see the world from a different perspective, which I think is the beauty of life. That there's no one true sense. It's the multiple sense, the multi layered sense. And that how every single person lives their life is a is a natural beautiful thing.

55:21 And for us to be in their shoes to live it is what makes us human. But empathy? Well, I, I love that and how that, you know, it's interesting how you mention it, a couple of countries, Austria, Spain, we are on the Apple top 100 charts in Spain, in Austria. Beautiful. I think in India, in Poland, I think we're #17 in Poland today #5 in Zimbabwe, top 100 in the a number of countries. That's quite interesting.

55:49 And you think about it, even in Saudi Arabia as well-being top 100, It speaks to what you say. Yeah, I mean. Information. 100% I think that one of the things that, you know, one of the things I always thought is, oh, I'm educated. I will not fall for propaganda. And sometimes you realise, wow, you really fell for the propaganda, you really fell for that, right? Your biases are really, really bad. And when you go to foreign countries and you see what's on the ground versus everything you have been fed, you start realising, wow, there's a huge difference. And that's why I love travelling. That's why I love seeing people for who they are, not to be informed by others in the process. Exactly, exactly.

56:32 I I left that, you know, quite interesting have some countries that I'm from Africa, you know, the way people, especially the western world paid. So African countries, they're like. 100%. Have you been there? You see what is on ground like it's a deeper reality. So say less. I go there and find out by yourself. Wow.

56:52 I mean, they'd love to put Africa like the 1984 Ethiopian famine crisis. And that's the mental model that Africa lives in, sadly, right? They have not seen the level of wealth of Lagos, of Casablanca, of Rabat, Alexandria. So you haven't seen the level of development that has happened. And then what happens is that's the issue, right?

57:15 When you when you have good leadership and you when you have good institutions that are redeveloping the country and then where the West is not investing in that. And then you you start travelling there, you see the airports are better than our airports. There's an issue. It's a massive issue. I, you know, was it 2 years ago? I was in Morocco and I had a good time. I'm like, OK, why interested.

57:37 Yes, exactly. Wow. So it's kind of interesting. I think people should travel more and you know. 100%. Find out more by travelling more. Last year I was in Lithuania and so it was asking like, what did you go to do in Lithuania? OK. I'm like, OK, I got this. I got this from Lithuania, you know.

57:56 Nice, I think. Very. Were you in Vilnus? Were you in Vilnus? Yeah, I was in juniors. I was in the corners as well. I am beautiful, beautiful country. I am. Beautiful place, beautiful place. And of course you've got Estonia. You've also got Latvia as well. Correct. Amazing place, amazing people, but you know, people only want to travel to the popular places.

58:19 I'm not both about popular places, you know. So I, I think that that's changing, right, especially with like for example, we talked about before we came on the, the, the, the depreciation of price of cost of travel. Think about that how how much that has changed right from the 70s until the 80's, the price of travel has substantially decreased. The quality has also decreased to certain decree. But the, but the, the, the accessibility of travelling right for, for, for a person, for a person to pay 1617 lbs and to travel from, you know, one of the airports in, in London to, to anywhere in Europe.

58:56 It's pretty, pretty amazing. So, but the point is, don't go to Ibiza. Choose other markets. Now, now you're attempting me. You're attempting me to call out to airlines. You're attempting me anyways. I'm going to call them out. I'm going to call them out. Don't call them out. They could become. Partners EasyJet a riot air please you guys can do better, right? You guys can do better and of course PG can become partners, you know?

59:31 Exactly, exactly, exactly. We'll do our next podcast from the aircraft. How about that? That would be great. That would be fantastic. I I I need to play, I need a seat in was a pool in business class. But the crazy thing is I think a lot of EasyJet and right air fly study will have a business class. So how can you do that?

59:50 No, they don't. They don't. They don't. OK. So let me call my preferred partner, British Airways. Yeah, you are. What's up, British Airways? I think British Airways was the first one, the very first business class. Flight I I ever had I I did have a good time with them. So guys, I spent my money on you guys. So it's time for you guys to spend your money on me following you guys Co sponsor the podcast at first. Let us have our next episode.

1:00:18 Myself and Barbara Percy on the British Airways. I'm pulling it now and of course, you guys, I'll get to tag you. So the last question right here is what's 1 quote for mantra you need by that our listeners can take away today? So one of the things I feature glad on learning from failure, right? And and and anything related to failure.

1:00:43 I think it's wonderful. I think that ultimately failure is what allows humans to good failure. Intelligent failures allows us to to really become better at what we are. So to me, again, it goes back to this notion. If you're not trying new things and learning new things every single day that you are falling behind and you're dying and you're failing.

1:01:04 So that to me is the mantra of life is try new things. Don't be, you know, learn research as much as you can, learn with others where others have failed and why. And then try, if it's a really, really big risk, try and small, small portions. And then as you become successful and learn scale. So that's kind of a the mantra of my life is so you are ever evolving, you're ever learning, the mark is changing on you. And the only way you can become competitive is really to understand where the market is and where you are and how you can finance yourself and become the best version of yourself. I love that absolutely this is a man that allies with my philosophies.

1:01:49 I really appreciate and of course, you know, I always love to say not even gratitude is good attitude. And when a person shares the time with you, they share their life with you because the SI unit of veteran life this time. So once again, thank you very much. I love and respect to you, to the audience, to the audience, conceive beliefs, try to thrive and achieve.

1:02:10 For me, it's goodbye. Brethren. Barber, do you want to leave a shout out to anybody? And who do you want us to go back to? I just wanted to say that the world's inclusive. An inclusive world is better than an exclusive world. So let's strive to to bring everybody in and make everybody live a better life. Wow, thank you very much guys.

1:02:33 It's goodbye for me.