Peter Middlebrook on Dubai as the New New York and the Return of the Golden Age

Speaker A: I like the idea of democracy, but as I always say, you get a genius and an idiot and you cancel each other out. The private sector says if you're a genius, well, you just go for it. Right? And it's hard to find these people coming into government because the, uh, cost benefit is on the other side of it.

Speaker B: Peace in the Middle East. Is this the beginning of a new golden age for the region? What are the business opportunities that you can seize this new normal? I have some strong opinions on the matter. As someone who was born in the middle of a war in Lebanon, but decided to stay and build in this region and invest in it anyway, I exchange views with someone whose job is to make sense of global economic shifts and translate them into actionable plans that governments can implement. Dr. Peter Middlebrook is the CEO of Geopolicity and advisor to governments and international institutions across the Middle East, Africa and Asia. He has worked with the World bank, the British government, the European Union and the United Nations. We focused on the Middle East's geographic and also demographic advantage, the gap that exists between the various countries in the region and the real threat from AI. And it's not what you think.

Speaker A: You're growing like 2, 300%.

Speaker B: In the early years, I never wanted to be an entrepreneur, so I'm definitely an emerging market junkie. I like to go to the frontier. Okay, give us the meat. Abdullah, you need to be able to make the sacrifices that are required for this journey. Take pride in your job. This too shall pass.

Speaker A: Yes,

Speaker B: It seems, uh, peace deal has been, uh, reached. What are your thoughts on, uh, this latest development?

Speaker A: Well, sure. I mean, first of all, thanks for having me. Middle east is a convergence zone. It's a convergence of cultures and technology and, and, uh, innovation and, uh, a geostrategic space which can't be copied. It's a major comparative advantage that it has. So I think this deal is useful. I think it signals to a lot of people that the third quarter going forward, there's likely to be a return to normal, whatever normal would be. I think it reflects, um, the extent to which great powers have had some pushback in their aspirations. And that is something which likely is going to exist for the next 10, 15, 20 years. These are issues which are long, um, term structural changes. You can't push away a two and a half thousand year civilization very, very quickly. They're very resilient. And that's one of the lessons that we always get from this. But I think it's good news for business. Uh, having said that, Having lived in the UAE for a long time, it's always summer. Uh, everyone leaves anyway, so some of the quiet that you get here, some of it relates just to that and the normal cycle of people leaving with their kids and things. But it's good news, and I expect towards the end of this year, it'll probably go back a little bit. We have the midterm elections in the United States, and we see what happens after that.

Speaker B: When you say it's a strategic place, is it just purely geographical, or do you think there's something about its culture and makeup as well that makes it a, uh, unique place?

Speaker A: The Middle east, as it's conventionally termed, um, if you go back to kind of the Islamic golden age of 750 CE, and you look at Ibn Sina and, uh, Battuta and, uh, Kildran and, uh, Rumi and, uh, Gibran, all these other great philosophical thinkers, all of these people, and many of them laid the foundation for, um, the kind of the European renaissance, if you like. So this is exactly how it works. Now. We are probably moving back into a golden age for the Middle East. And the way I see it, I mean, if you're outside and you're looking into the Middle east, you're going to follow the news. And so what are you going to see? You'll see a conflict, you'll see an oil. You see some political strife, um, and that's. And sadly, blood. So that's part of the story. The other part of the story is that this is a declining Western century. Don't let anybody else tell you anything else than that. The average age in Europe is already 45. By 2050, it'll be 50 is an average age. And you get what is called a demographic dividend of young people who are coming in, innovating, driving growth. So that's being taken out. And then you have the debt crisis in the west as well. So part of this is what we call the pivot to Asia. Um, and I believe, and this is probably an oversimplification, Dubai, as I would say a replacement for New York, definitely a simplification. I always say uptown Dubai, downtown Dubai, uptown New York, downtown Dubai. This is now the gold and diamond trading hub of the world, one of the commodity centers. And just up the road is going to be called Dubai World Central. These are not by accident. So the Middle east, uh, is central to the pivot to Asia, between Israel and India and China and everything else between. And this is a return to where we were 2,000 years ago. 2,000 years ago, the economic center of gravity of the world was in Central asia. And since 9, 11, it's been pulling back. So in the long run, I've always seen Dubai as a city of light.

Speaker B: Interesting.

Speaker A: And I think it will probably remain that way.

Speaker B: Interesting that you would say that you believe it would be the return to the golden age.

Speaker A: I think that's, uh, I think it's happening already. Exactly. Yes.

Speaker B: Okay. So again, it's mostly because of its location, as I understood from you, and it being sort of like when it comes to infrastructure projects that you alluded to. Right. Like to be, to be basically in

Speaker A: between Europe and so infrastructure for trade, logistics for a frictionless trading system is going to be critical. But I think there's ideological issues here as well. And we, you know, take the Abraham Accords, for example. Abraham was the patriarch of the three major religions. Right, okay. And that's what you see here, an incredibly tolerant, uh, society. You know, they took Friday, which was the public holiday, the Islamic holiday, they, they shifted it to Sunday. You can now trade on a Friday. All of the accommodations to allow multiple cultures to coexist. And certainly for the uae, which is incredible, the Emiratis are a very small percentage of their own country. You couldn't play this out in any other country of the world. You couldn't flood another country with 95% of. Not you and expect to have stability. So this accommodation is there. The infrastructure is being built out. This is a capital trading hub. It's a clearinghouse. And more importantly, I think, is that, um, the Middle east is beginning to find its own political voice around an emerging ideology which is largely economic and financial. And that's different. It's not the world defining what the Middle east is going to be. It's the Middle east defining substantially how it's going to be seen by the rest of the world. Space agencies, AI, AGI, robotics, all of the amazing innovations which they're very quick to move towards as well. I mean, I work a lot in Europe. I'm, uh, European. I'm British originally. Um, but if I look in the western Balkans, where I've just been very actively involved, it just feels like you're going back to the 1970s and 1980s when you're there. And the U.S. has what, 38 trillion in debt, a $2 trillion a year budget deficit. What is 2 trillion? Two trillion is the wealth of 140 countries just as a deficit. So what happens if there's a Crisis and the US goes down? What happens with the 750 plus US military bases. Who funds them? Maybe they don't. Maybe there's a global security vacuum. So everybody's hedging against these issues. The Middle east, um, is not going anywhere. And I think there's a lot of innovation which is just beginning to start. And I think they're outstripping the rest of the world. And they can get the best perhaps of what's going on from the west through Israel and imec, which we may talk about this India, Middle east and European corridor, and then what's emerging out of Asia. So it's of that. It's ideological, it's capital, it's technology, it's demographics, it's trade.

Speaker B: I like this. The return of the golden age. Sure, that's a great backdrop. Uh, there's a lot of rebuilding that needs to happen, not just physically. Uh, right, Obviously there is. Uh, I saw in my research there's around, uh, if you look at just Syria, Lebanon and Gaza, you're talking about $300 billion in, uh, needs for reconstruction. Uh, so there's the rebuilding piece, uh, the physical rebuilding piece, but I feel like there's also the identity piece. You talked a little bit about, uh, kind of the finding their voice. Right. But when I look at the Middle east today, I don't see, uh, obviously a block. I think this is something we always used to say to people outside of the Middle East. Like when you say Middle east, they're like completely different countries there. Right. So what I'm seeing is you have the gcc, which is incredibly powerful, very rich, doing multi billion dollar investments in AI and the latest technologies. Dubai here is a, uh, paradise when it comes to everything, the latest and greatest and so on. And you have obviously the rest of the Arab world, uh, which is in a completely different situation. Right. If you look at Egypt, for example, and the devaluation of the Egyptian pounds, if you look at Lebanon, with all its problem, problem Syria. So, um, how do you, if we look at, if we take the economic lens, not the political lens, as a, as a business owner here in the uae, uh, in the region, or an investor, um, how do you look at that? Like, how do you, where can you spot opportunities?

Speaker A: So I would say, I mean, you know, so we run this lens, ideological lens, that somehow the world should be perfect and of course it's not. And this is cognitive dissonance between what we see and what we experience. European Union is a union, but the idea there's not fractures in Europe is not true at all. The United States is not really A United States? Who are you talking about? There's conflict and divisions all over the place. Why should the Middle east be any different? That's the first thing. Egypt was the center of the Arab world, uh, for a long time, and perhaps that has shifted. I remember I was, uh, advisor prime minister in Iraq for some time.

Speaker B: In Iraq.

Speaker A: In Iraq for some time. After my stint in Afghanistan and the 1970s, the Gulf leaders went over to Basra to say, wow, could the Gulf states ever be like Basra? And then you just quarter of a century later, it's all changed. And I think one of the things here is all of this is you're as good as the political and intellectual acumen that you attract. And this is what the Gulf states are doing now, inevitably. Um, the Emiratis, the Saudis, Bahrain, Kuwait, Qatar, all of these are separate economies and they're all competing for a brand. Right? What sets us apart, what differentiates us, how do we attract FDI and so forth. But I think the Middle east have been pretty successful in this regard. They've also known, I think, very well is that they know what the future lies. And they're not backing one particular horse, but they benefiting hugely from what's going on in Asia, particularly India, but also China and in Central Asia. Um, Iran piece is a whole other separate discussion. And then what's coming out of the west, they're also delving significantly into Africa. Africa has a very young population and we'll have a population of 4 billion people by the end of the 21st century, unless there's some major crisis, a huge market itself. So the Middle east is sitting here now. There's always winners and losers and there's always moments of mild turbulence like we've just seen. But people seem to be very myopic and a very short memory. So in a year's time, maybe no one's even talking about this.

Speaker B: Hm.

Speaker A: It's quite possible. Markets move day by day and so forth. So I know it's been a quiet period. I know probably lots of people are hurting as a result of this, but it will bounce back of that, I'm sure. And sometimes you have growing pains. This is a growing pain. It was the Persian Gulf became the Arabian Gulf. I mean, how does the balance of power sit within all this? Right? Iran has a population of what, 93 million? All the Gulf states, GCC 63. But it's largely foreign. But if you look at the major differentiator GDP of the Gulf states is much, much, much higher than that of Iran. So is fdi, so is innovation, so forth. Um, Iran is an amazing civilization too, and it sits there between Russia and China and all this kind of huge trading block as well. So the extant reality is that there's huge opportunities here and progress. When you say here, Middle east, anywhere you want to go, if you want to be part of that solution, people are open to it. Of that I'm absolutely sure. Now we see what happens with Syria, we see what happens there. Lebanon is a whole other separate case. If we ignore the politics of all of it, it's, um, a very sad situation. It certainly is. But if you project out 10, 15, 20 years, it might be slightly different. I think that might be true.

Speaker B: Um, you know, we say that, we say that every decade. As a Lebanese, like, I was born in 1981, right? So we were talking, you and I, before we started this conversation on the air, we were talking about like when you are born, right? Whatever you're experiencing, it's sort of like the base of how you view things, how you.

Speaker A: Reference point.

Speaker B: Exactly. It's a reference point. Right? So my reference point has been always instability. And I speak to a lot of my, uh, friends in Lebanon and honestly, people are very hopeful there. Right. It's gonna end soon, it's gonna get better soon, Everything is gonna feel better soon. And then obviously, uh, it doesn't. So I like what I'm hearing.

Speaker A: The world is always. So this is the thing is, uh, I'm from uk. UK is probably not doing that well. There was a period in history where it was dominating. It's not doing that well. But this is an oversimplification. But if you go back, we used to have religious states and nation states. The idea of that now sovereignty still exists, but we're moving into a hybrid reality where transnational corporations and AI and other things become really important. So which is your biggest identity? Is it your virtual identity? I mean, get rid of your podcast, get rid of everything, and then ask who you are. So much of your identity is actually not necessarily fixed in the fixed assets of the place that you live.

Speaker B: Mhm.

Speaker A: In this world. And we're beginning to go even further than that. So it's what we call this hyper global, hyper local reality. Where can you explain that? Yes, M. So this point of singularity, which I'm already at, I can't differentiate myself between where automated AI, AGI and I come together. We seem to be fully in the same space.

Speaker B: Is that what you mean by singularity?

Speaker A: The point of singularity is the point you can't differentiate between the virtual and physical realms. Right. They're interoperable. And so that interoperability is something which humans are striving to achieve. And if you stand right back, this is a uh, wider discussion. We always say we're a type zero civilization and we're trying to become a type one or type two civilization. And that means we need to be collaborative, not competitive. Much needs to change and we should welcome that.

Speaker B: So for business owners, for investors, for people that are looking at a kind of the uh, post conflict now, uh, Middle, uh, East, uh, where do you see the opportunities again? Is it mostly uh, obviously the GCC which is becoming a talent magnet where all the investments are happening, or do you see that there are also opportunities outside of this block like people like uh, the rest of the Levant, like Iraq, like Syria, like Lebanon, like Egypt?

Speaker A: If you're an investor, you're investing long term into this space. Um, the reason I mentioned about this hyper global, hyper local is the reality is most businesses trade online. That is their interface with the world, that becomes their identity. Um, and so you want a government that facilitates that. And the UE has done a great job on that. I mean they really have. I mean they're still pushing the boundaries in all of this. Um, so we're going to end up with a frictionless world. We're going to end a world with. It will attract talent by definition. Um, if you give people, certainly if you give people a tax break and they can't get ahead somewhere else, they're going to come here and do it. Relative stability, great lifestyle. And I know there's competition amongst the various countries but there's competitions between businesses. So I think there's huge opportunity. I think the demographics are good, I think they're a great market. China needs to get access to rest of the world. So does India. If you look at imac, the India, Middle east and European corridor, um, and that's.

Speaker B: Can you, can you say a little bit that uh, on that just for the listeners if they.

Speaker A: I can. Um, so IMEC is a kind of um, uh, I guess it was forget where the brainchild came from but it became a G20 move. Chinese wages used to be very cheap and now they're relatively high. So if you want to force the industrial complex that has dominated there into a slightly lower uh, wage earning place, India is a great way to start for that. And so imec, which arrived a couple of years ago is a strategic trade corridor that would go from India, so Mumbai through Jabal Ali, through the industrial Clusters of Saudi out through Haifa port and into Piraeus port, or perhaps potentially even to Alexandrupoli, uh, in uh, Greece. And don't forget the Nord Stream pipeline was bombed and that allowed the Middle east to get access to European markets as well. So the new corridor is exactly that. It's east to west and west to east. Now the, uh, interesting part of it is countries such as Greece, I was advising the Ministry of Foreign affairs through the EU on these issues. They're not the biggest player in imec, they're a recipient. It's largely India and the Gulf states who are driving it west as well. Now it's held up because of what's going on in the Middle East, Gaza in particular and others as well. But at some point, and a lot of this infrastructure is built at some point, this is a major new corridor that will begin to emerge. And it's not by accident that it comes through Devil Alley, the largest free zone in the world. DMCC has what, 26,000 companies. These are not accidents, they're designs in all of this as well. So there's lots of spin offs from that. Um, so anyway, we'll see the pace of that, but there's a lot of interest around that because it makes good economic and business sense. So what you get is you get these directions, um, indirect catalytic and spinoff effects that go into the economy from these big investments and that's really good for businesses and SMEs as well. So that corridor's been defined now how long it takes to build. There's other competing corridors too, don't get me wrong.

Speaker B: So what about, uh, demographics? You touched a little bit on that. Um, I believe your PhD was around that, right?

Speaker A: Yeah, indeed. Yeah.

Speaker B: Um, so maybe let's talk a little about that. Everybody talks about in every single business pitch I hear, um, about this region. There's always like, it's, you know, 60% of the population are under the age of 30. I hear this all the time. And how, you know, how could this be, uh, an opportunity in your opinion, in an age where things are slightly shifting. Right. So one thing that we all know as well is this region has one of the highest unemployment rates. Ah. In the world. Um, there's also something called need, which I discovered, which is basically they choose not to be employed or in training. There's about 30%, uh, of the, of the population, which is huge. So. And now obviously you have AI with. With everyone's talking about that and everyone's saying how it's going to Impact jobs at large and so on. And I'm going to touch on that in a little bit. But firstly, you know, why is it an advantage basically to have a, uh, young population here, even though you have very high unemployment, even though a lot of them choose not to work? Why is it always in the, in the pitch in your op?

Speaker A: That's a question. You know the story of uh, Pandora's box, which was actually a jar, but you know, she let out all the evils of the world and then she kept hope in because she closed it quickly. So no major innovation AI is just good. It has good and bad. It does both things at the same time. It will lead to a lot of transformation for a lot of people's lives and a lot of people will be lost in the process. I mean, that's inevitably true. The economic point of view is that, uh, there's a thing called the demographic dividend. And the younger people.

Speaker B: What's a demographic dividend?

Speaker A: Demographic group. So if you have a, something that

Speaker B: will continue to pay off, if you

Speaker A: have a population distribution in a country, right. If you have a very aging population, then people don't invest in the same way, they don't innovate in the same way. They're not from the future, they're from the past and they're transacting. But if you have a demographic where it's shaped like this and there's a lot of young, young people there, then you know very well the, the, the rate of return to an individual and their contributions to GDP just by the nature of having twice the length of life to go, is a significant driver. So the younger population is. Now if you have large scale unemployment, it's not necessarily an advantage. That's definitely true. And the biggest challenge, and I don't think it's just to the Middle east, but I think globally, is that what AI, um, in all its brilliance, most likely will do is to destroy a lot of the traditional kind of white collar workers. And these are those who invested in the tertiary education system, accountants, um, auditors, uh, coders, all of these people. And these people do what? Well, they pay the debt and they pay for the social protection system. So when you strip out the white collar, you have a problem because you have too many people who can't necessarily be employed within this. So look at the UK for example. We're a capitalist system. We have a socialist budget. I mean 70% of our spending is probably on pensions and welfare and a bunch of other issues. So as you get into and you go Back to Marx and Engels and all of this. If you get into a mature society, a climax capitalist system does what it gets, like Elon Musk, a trillionaire class M and then a lot of disenfranchised people. And that, I think is true everywhere. It's certainly going to be true in the West. So that is a real challenge, uh, for us. And we have a real problem because there's no kill switch on AI. There's no way of saying we want to slow this down to allow society to be able to adapt. Now, for the Middle east, if you get the next generation of productivity and, um, industrialization and trade through hubs like this as well, probably employment multipliers are probably quite good. But in certain places, I mean, we were doing work on employment multipliers in Egypt, for example, there are pockets of unemployment of 40% or 50%. And so how do you build a social contract in a society when people are completely disenfranchised and don't have the same view on their lives and their careers? That's, uh, a troubling situation, I believe, philosophically, I think we can solve it, but from a market economic point of view we can't. And so it's one of the challenges we face and it's not an easy one. What do you say to somebody when they spend 30 years of their life and they still haven't earned a dollar and they're very educated, but they'll never work? Yeah, it's a horrible situation. So, I mean, part of the. I've always been pushing for a global political party and part of the reason for that has been that some of these issues don't seem to be picked up anywhere. These are huge issues. Unemployment, who mean unemployment, underemployment, people not even knowing the purpose of their life. I mean, this can happen writ large because of this. So we need to navigate these new waters.

Speaker B: So when you talk to governments, for example, you were advising the government of Egypt, again, it does look like a m very dire situation. So what do you think needs, uh, to happen?

Speaker A: And this is a very complicated one, um, with Egypt, I helped them draft their sustainable financing strategy, which we launched with the Prime Minister last year. Um, and there's some very smart people there. Um, but governments are also a little bit monolithic. I mean, they're slow to adapt, they're full of civil servants who may or may not know. And so even if the leadership knows, they need to transact it through. Um, but I, you know, the question is, for me is, you know, at what moment of history has any different challenges, the kind of ones we face today? They've always been slightly different in nature and somehow we've managed to be able to, to get through them. Now inevitably we may not end up with a universal minimum wage. I mean you could, you could tax the most wealthy and we find.

Speaker B: But there's a lot of talk around that by the way.

Speaker A: But you know, I would say it was a misallocation of capital. I mean you have, and I can't remember the figures exactly, but you have anywhere between 500 and $700 trillion in futures and derivative markets. There's not a money problem. We've extracted all of this wealth. Now how to reinvest this? You know, this is a real problem. There's people on this world who earn in one week what the entire UN would spend in a year. And there's many reasons to support the un which I do thoroughly. There's many reasons to ask it to do a better job is a completely separate question. Um, so on the global governance side, I mean part of this hybrid reality is that you end up with a lot of the globalizing factors tend to be uh, in the um, digital sort of domain. I'll give you an example. Any cryptocurrency that's initiated is not national, it's instantly global. M, any app is instantly global. AI is instantly global. So this is a thin veneer that people are representing themselves and then they come back through and they say, well you know, I always ask this question, uh, you know, if you had a choice between having your phone and your laptop or your government, what would you choose?

Speaker B: Your phone.

Speaker A: Right, because. But that is governance. It's not government, it's governance. So governance, uh, factors, uh, are changing. I think most governments are aware of it, um, but they're still running a fairly conventional game. Education, health, macroeconomic and fiscal frameworks as well. But the best countries, the city states in particular, are doing very well. Um, places like Ethiopia are beginning to do quite well. Kenya's been doing quite well. Rwanda's doing quite well.

Speaker B: On employment, are we talking about, or are we talking generally, uh, economically?

Speaker A: So the employment thing is, if you have a slightly more agrarian society, people tend to be employed that way. I mean, uh, urbanization is going to increase, I think the levels of unemployment are likely to increase substantially. But then we're going to have to change the nature of employment. It's not necessarily going to be 40 hour weeks or whatever. I mean we can figure that out.

Speaker B: So the definition of what employment is

Speaker A: but my point is this, is that somehow, as a species, we're going to have to change. The capital which exists and it's been extracted is going to have to find a market. There's no point in producing all this, stripping the labor out because of robotics, which is definitely going to come very quickly, and then not having people with a disposable income to be able to buy what you produce, how to do this. This is the human crisis. I mean, what's new? And by the way, if you took these challenges away, life would be very boring.

Speaker B: Exactly.

Speaker A: It would.

Speaker B: So, you know, you know, uh, we talked about it a lot in the private sector here. We always say, uh, I mean, I was an entrepreneur. I started my business back in 2011. And, uh, my business was actually an online marketplace for freelancers to connect basically companies with freelancers.

Speaker A: Ahead of the curve.

Speaker B: Exactly. So the idea was to connect the money, or from the Gulf with basically the talent pockets, uh, uh, in the Middle east, definitely ahead of its curve. But you always hear about the role of the private sector. So a lot of business people here in the uae, very prominent ones, they always say maybe the government should just step away or kind of leave us sort of work, uh, on these solutions. And I think, I mean, you said not, uh, a great thing. There's a lot of money. We don't have a money problem, but we have, uh, um, distribution problems. So is there a role here maybe for the, uh, especially in our part of the world, for the private sector?

Speaker A: As economist, I always see it ideologically. You had, how I put it, you know, one economic model of structuralism. You know, the extremes of communism, where the state did everything and what the state couldn't do. You know, the private sector would do coffee shops and so forth. And then there's the other stream, which is let the private sector do everything. And where there's public goods that it can't provide, the state will step in. And all governments around the world are somewhere across that linearity between these two extremes here, for example, Gulf states, there would appear to be quite liberal markets, but they're not necessarily liberal markets. They may be owned in a different kind of way.

Speaker B: Yeah, government does a lot here.

Speaker A: Absolutely.

Speaker B: Do you see AI as being, um, something that would level the playing field for the Arab world? Again, when I say Arab world, obviously you have the gcc, which I think is completely separate from the rest of the Arab world in terms of all the investments that they're doing. Um, but I guess what I'm trying to say, um, what's the on ramp, let's say, for people like for this, uh, cohort of uh, uh, people under 30 that make up the majority of this region that we believe are gonna be part of its uh, prosperity and so on. So what's the on ramp for them?

Speaker A: I think that is AI an on ramp for them. I mean, I don't know. I don't think anyone necessarily has the answer to what eventually happens with AI. I think there is a risk. You know, I meant when I went through university, you had to go in the library and read everything. We used to have these microfiches. You'd put them under a microscope, you'd read old newspapers. Right. But you had to read it and you had to know it. Here. We're now in a different world. You don't have to know any information, you just have to know what question to ask. And that's what's happening here. So the way I think about it is this is everything which existed in the physical realm in terms of knowledge is now in the virtual realm. So you can find it here. Now the argument would be for any child who is born in a disadvantaged society, all they need is a smartphone and they have access to all of the information in the world. There's never been a moment in history where that has ever happened. It's absolutely liberating for that individual. It doesn't mean to say that individual is going to be successful. There may be other things in their family that stop them from happening. Gender might be a big issue, that stops them getting ahead or whatever. But the reality is, I think, uh, in terms of access to tools for learning, obviously there's a huge potential for anybody who wants to do it to dedicate themselves, to work, 100 hour weeks, whatever it is, are going to be successful. And there's those who probably will fall behind, um, and they may be demographic enclaves, people in southern Afghanistan, for example, who don't have access to public good infrastructure and so forth as well. So I don't know, but we'll see what happens. Uh, I would be in favor of slowing AI down, trying to model how society responds to it, trying to look whether the multipliers are positive and negative and where they might be substantially negative. For example, white collar gets dripped out, can't fund debt, can't fund social protection, create instability.

Speaker B: Mhm.

Speaker A: Do we want to do that? The answer is no. What's the alternative? So I'd all be in favor of that. Um, but I don't know. It's already here.

Speaker B: It's the global discourse at the moment is that the cat is out of the bag. AI is out there, it's in the hands of everyone. The argument is that if you don't uh, keep improving it, let's say if you look at the US big, uh, frontier models, if you can't keep improving

Speaker A: these models, China comes with a kind of low cost model that everyone has access to.

Speaker B: So the Chinese open source models will gain an advantage and you don't want that. So I think that race is not

Speaker A: slowing down, that race is there. I mean the advantages of all of this is that AI is going to allow us to solve some problems that would have taken a thousand years. We're going to solve them in weeks. So there's lots of rounds of innovation which are definitely going to happen. There's no doubt about that at all. I don't know whether it eventually becomes a public good because everyone competes with each other and the only way they can stay in the market is that. And I would say this is a good example. So if you take your phone, you think about, you buy an Apple phone, for example, it cost €1,300 and you use it for four years, for example, okay. It's a dollar a day.

Speaker B: Mhm.

Speaker A: To get access to the entire universe. It's pretty good price, pretty good price. And I think the AI is going to happen the same thing. I think it will become ubiquitous. So it's just watch, the next generation knows. Right? Of course, you can ask any question on anything. Right. M and my school has its own model and it doesn't cost me anything. So the age of 0 to 25 for when people come out of their undergrads, it's always been free. There's always going to be competing model. There's lots of issues with AI you to what extent can it be used for nefarious purposes? And it certainly can. You know, there's elections in a country. How do you sway opinion? Well, you could modify the answer. I mean, but that control framework's always been there. It was true of the World Wide Web as well. But uh, I mean I'm excited by it, but you know, I'm also worried by it at the same time. But that's the human condition. I mean, you know what I'm trying

Speaker B: I guess, to figure out, at least for me as someone in business as well and as an investor is, you know, what kind of unlock will AI do for this region specifically. Right. Will it level uh, the playing field? Will it be uh, an equalizer or are people Just gonna have access to this and not necessarily know.

Speaker A: I think most likely, I don't know. But, um, you know, and if you are a government.

Speaker B: Sorry, Piranha. If you are a government. Right. Um, I think that's where the investment should be. I mean, if you look at actually what Saudi Arabia did recently with the cancellation of, or let's say the paus of all of these mega real estate projects, uh, and they're spending a lot on, uh, AI, for example, a lot of investments going that direction. So it tells you that the government is thinking about it in a specific way.

Speaker A: Absolutely. And if you look at Europe as an example, France is putting a lot of money into this and UK is putting remarkably little. Um, and there's resistance in the UK to having a digital id.

Speaker B: So as someone, as a labor expert like yourself, who advises governments on these types of things, do you think it's a, uh, um, it's a positive thing for a region or.

Speaker A: So the way I see it is this, I always say this is if in 1985, as a country you said you don't want to be on the Internet, it would have been impossible. How do you stop it? It's impossible. I remember being in northern Ethiopia in the 1990s and the government banned satellite dishes, right. Because they didn't want independent media. You can't ban satellite dishes. People were putting them up everywhere. They lost control of it. Right. So AI is out the box. It's the Pandora, right? It's out the box. The good, the bad and the ugly. We see what comes with it. Some brilliant things.

Speaker B: It.

Speaker A: Without any doubt, any country that invests in a digital ID can lower the cost of transacting businesses, can lower the costs of getting things from a driving license to a tax identification number to a death certificate to real estate, which can be transacted in a second. The lower the cost of business, the more competitive you can be. The m. More advantageous it is. The quicker the Internet is, the better it is for trading. The more people get access to AI. You see, the government here is providing people with access to free education for trading. Sure. You think we do that in the UK and in Europe, we don't teach people how to trade. That was the capital class. Okay, so the reality is. Yes, I mean, will be an enabler, basically. I think it's an enabler. But that doesn't mean to say it works for everybody. Clearly it won't work for everybody. And there's many ways of experiencing this world. You don't have to get sucked up into this. You can spend your life in forests, being involved in conservation, or you can become an historian. Go and look at what's really underneath the great pyramids which they've just discovered that no one seems to want to look at. So there's lots of little universes that you can probably look at. Um, so I don't know. M. But the idea that this gives us all full employment and everyone's happy and at peace is unlikely. No, actually, because the human condition is not like that, unfortunately. We're never happy.

Speaker B: No, the worry, the worry is it actually will create a lot of unemployment. That's the fear. Especially in the younger.

Speaker A: So then all that means is you have to figure out what your new purpose in life is. It's not a career. Mhm. But maybe you're still a sentient person, so maybe you focus on your community. We'll see. We're gonna have to. Society is gonna have to change.

Speaker B: When you say society has to change, what do you mean by that?

Speaker A: Well, I'll give you example. Um, you know, in the 1970s, we all grew up, we were kind of matriarchal family, nuclear based society. Right. Everyone went home. Gemini, the father was away, the mother was the matriarch. That was the reference point certainly for me and my generation. And then there was a period where everyone split up, everyone was away, the nuclear family got broke. But now people don't have money, so young people are staying with their parents much longer like they were.

Speaker B: Mhm.

Speaker A: I'm an optimist in the sense that there are things that are happening now that people 50 years ago would have dreamed, dreamed of having access to. That now once you get access to a lot of information, does it make you happier? That's a whole other separate question. How does society then deal with that? I have a bigger concern at the moment, particularly with AI and what I named in my recent book, what I called the sixth Estate. You know how the estates work. It was the clergy, the aristocracy and everybody else was the old state, nation state structure. And you had the fourth estate, which was programming tv. It's called programming because it makes you think, allows you to think a certain way. The BBC's and CNNs and the Fifth Estate emerged, which was social media, started to critique the fourth estate. So now what I've called the sixth estate, which is AI, which is you won't be able to differentiate between the truth and fiction. And we're already there videos. Is it correct? So what happens in a society, and this goes back to the hardcore of Science, because science was basically on inductive and deductive logic was about how do we know that this is the outcome, how do we know if we do this is what's going to happen? But I think the risk is now, and what you'll see is people distancing themselves from this because they. Look, look, take the current war, um, going on in the Middle east, for example. What is the truth? Nobody knows. Maybe.

Speaker B: Well, depending on who you're listening to.

Speaker A: No, I mean, you may get closer to decision makers who may know a lot. Nobody knows everything. And it's quite possible you see this, you see a video which shows something which appears to be from today, and then someone finds out it was taken 10 years ago. So we're going to get to the space. And this is a really big problem for governments is if we don't know what the truth is and we can't prove it now, the private sector is not going to be the regulator for that. It's going to have to be the public sector. The public sector is going to have to be the arbiter on what truth is still, otherwise there's nothing to know. So that's an interesting time. And I think for young kids, they're going to have to figure it out, which they will, as we did with the challenges of our day. I think that's inevitable.

Speaker B: So, uh, that's the next big threat, I guess, to humanity. Is it like the disinformation, basically, the fact that you won't be able to.

Speaker A: Just not being able to, like the source of truth, not being able to know or say anything definitively. So people will have to say, I suspect this is what's likely to happen. Um, and I think it's going to become harder because, I mean, I think it's possible at the moment you can have a war in a country that doesn't exist, but the whole world think there's fighting going on. I mean, you could certainly do that at the moment. And I think the AI, and that's the one part of it, the second part, which you've seen here in the conflict here, is asymmetric. And I lived in Afghanistan for 10 years, and you can do a lot in the air, but people are people. They're very resilient, remarkably. And you get what we call these exogenous shocks that come in Dubai is an example of that. The big real estate crisis that happened in the United States, which spun over here because it's an open economy, hit everything. Covid hits everything again. And now this situation, which Was not started, hits everything again. That's the price of being an uh, open economy situation, meaning the war.

Speaker B: We're talking about the world. Yeah.

Speaker A: This coming situation, these are exogenous factors and they have what we call domestic amplifiers. Something happens. So for example, if the UAE didn't produce oil, that's something else. But if they bang out of OPEC and OPEC and they can trade independently, they do have oil. That's a hedge against this crisis. And uh, some countries don't have that. I mean the Arab Spring, what you saw is the countries that did well are those who are producing oil and the countries that did badly were those who are having to buy oil. These are different kind of outcomes in all of this as well.

Speaker B: I do believe that, that uh, at least in the uae. I mean I haven't experienced the other gcc, I live here. Uh, but every crisis has sort of created a lot of uh, steps and measures that the government has taken to make it more uh, resilient. I think this one is not going to be any different.

Speaker A: So there's the old saying, never waste a crisis.

Speaker B: Never waste a crisis.

Speaker A: I think that is critical here. The question is how you learn from it. Um, the UE is not an accident. This has not happened accidentally. Um, the major structural changes are taking place to demographics and trade are not an accident. Chinese population is coming down hugely, but they could replace it with robotics if they did quite well. So labor could be robotic. It wouldn't have to be people. Right. There's all this element which is going to happen as well.

Speaker B: I think they still have a lot of people, but.

Speaker A: Okay, no, they, they, they do, they, they have, um, they've had a lower cost of production, but, but they do have issues. I mean you saw, I mean Venezuela was taken out of their energy field. There was an attempt to take Iran out of their energy supply side. So they certainly had their constraints to it. But they're very adaptive. And this is the thing is. Right. I think so. I mean, uh, one of the challenges, I like the idea of democracy, but as I always say, you get a genius and an idiot and you cancel each other out. There is a risk of that. And the private sector says if you're a genius, well, you just go for it. Right, Right. And it's hard to find these people coming into government because the cost benefit is on the other side of it. So what you need is a, um, model where the state, uh, and this is some interesting models beginning to emerge where the state sees these kind of issues and mediates a uh, path that is more successful. I think this is an interesting one. Dubai is quite like a corporation, the way it works. Right. Um, the social contract is an interesting social contract. But for example, do people believe here that, that government is effective and strong leadership and they know they're trying to build the future? Absolutely. 100%.

Speaker B: Yeah.

Speaker A: Elected or not? 100%.

Speaker B: Actually for me it was the first time I believed in that. Obviously coming from a place like Lebanon and even looking at the rest of the Arab world, uh, I always uh, thought, wow, how remarkable is it that actually the people in government actually care about the people.

Speaker A: Uh, so this is the thing.

Speaker B: How sad is that? Actually, that's the basic. Basically.

Speaker A: So the basis was you're a taxpayer and everyone in public service is your employee.

Speaker B: Yeah, exactly.

Speaker A: That's the basis for it. But you know, good public service individuals which come out of good civil service traditions, they do that, they do it very well. I think the problem that we have is that uh, and you can see it globally, is that the political model we had have often led to us uh, electing really the wrong people. They didn't really represent us, they represented themselves or something else. And that's uh, a real problem. There's this great French quote from years ago. I forget who it's from. Uh, it says, there go my people, I must follow them because I am their leader.

Speaker B: Mhm.

Speaker A: It's really, really powerful. And you can look here for example. If this society is moving a certain direction, help it. If it's not moving direction, you think it should move it, encourage it to be able to do so in that regard. And um, effective governments do that very, very well. Yeah.

Speaker B: So if I have to wrap this discussion and maybe just share some key takeaways from what we discussed, basically what I heard from you is the following. Um, the Middle east is situated in a. Geographically situated in a place that's gonna become even more advantageous, let's say moving forward. It is truly the link between the east and the West. Uh, economically that means that if this IMEC corridor happens, it means that, that a lot of uh, additional trade, a lot of potentially additional services, uh, economically it will benefit the entire region. But this project is not, I mean it's not completed. Right. And it has its challenges. Um, if we look at the young population, uh, um, from what I understood from you, there aren't many clear on ramps, uh, into the job market. AI could be an opportunity. The challenge though is um, what you talked about, the sort of this blending of uh, fiction and Reality where you don't necessarily know what's right and what's wrong. Um, but I think that could be an opportunity by the way for the private sector as well.

Speaker A: Absolutely.

Speaker B: To create services and products to solve that. I mean maybe this is, is maybe actually you know how they say AI is going to kill a lot of jobs but create some new jobs and maybe this is the new uh, job which is um, helping people understand what the truth behind all of this mirage is.

Speaker A: Yeah, I'm sure.

Speaker B: What else did we talk about?

Speaker A: I would say first of all if anyone outside, I would say the Middle east is going through a transformation and a great convergence, a convergence of ideas of capital, of people, of trade hubs and all of it. It um, and where it's located at the moment, particularly given the relative decline of the west, uh, Israel's desire to pivot to Asia, which makes sense. I mean if the future's in Asia, why have your feet in a place which has challenges? You won't, you're going to move. That's what successful cultures do, they always navigate in that way. And uh, I mean there's nothing new about this. This has been known for a long, long time. That's why these investments have taken place. Um, A.I. the governments that are best at introducing them. So there's ah, in um, Eddie Rama in, in Albania introduced the first AI minister to cabinet and they've also created AI for procurement. Lots of issues around that. But in other words individuals won't be corrupt on procurement. For example, you put all your bids into an AI machine and it will grade them and tell you what the result is empirically. Right, okay. So there's all these things that are probably going to happen. The Middle east seems to be on good governance side. They've done a lot. Saudi's tried to play catch up. Saudi is a big player here in all of this. So convergence, transformation, um, and interestingly because the demographics is substantially expatriate as well that you get, all of those people are coming in here with their best ideas as well.

Speaker B: So it's UAE specific though.

Speaker A: Uae, Qatar. We'll see what eventually happens in the other states. I mean it's not necessarily going to happen in Syria or Iraq in that way. Um, but 20, 30 years might look a little bit different. Um, but I would say for long term investor you're in the right place. Um, if you're just looking to flip houses then that's the price of flipping. Right. But if you want to be a long term investor in this then I think It's a really very uh, good place to be, um, great place for bringing up kids. No great insecurity drugs, none of this horrible uh, rubbish which is going on. Um, and I think a government that, that probably in the, some, some governments that can mediate um, what is good or bad social practice. That's a very difficult thing to do. You saw Australia for example beginning to say social media should be banned and so forth. So listen, it's trial and error. Nobody knows. The problem with a lot of these technologies, AI and digital is we don't know what they're going to mean necessarily when they're out. We don't know how they're going to work. I mean Bitcoin could eventually go to zero. And all this did, was fund um, central bank digital currencies were funded through this innovation. We don't know how it all goes down. Bringing good people, allow good people to be in government. But strident leaders, you have the world governments based here. This ah, summit not by accident, not by accident at all. So in all this I think it will be fine. Um, and then it's a final question which you should get into is there's a lot of people who are unemployed maybe, but is it the problem is the state or their parents or their society or their culture. It's a combination of factors as well. The state's job is to be an intermediary in all of this and we see who goes to.

Speaker B: If you ask me, I feel like this is where the biggest investment need to be.

Speaker A: Absolutely.

Speaker B: It's to give people, as you said, give people a purpose, need a society, give people a purpose. And I think people without a purpose, uh, that's a very dangerous uh, thing to have.

Speaker A: You can get, I mean I have property and business in the United States and there's lots of great things that happen there. But if you walk down the street and there's someone homeless and you just don't care, you just walk past. Yeah, that can be you. Yeah, it can be you. Not even for your own fault. So a caring society cares for everybody, is structured that way. When you break that social contract you create these fractures of not caring. You can see it with drugs in LA and things like this as well. So these are very, very negative things. These are governments not doing their jobs, not doing their jobs. Um, life is an experiment. I think that's inevitably true. And this is a good place to view it from, probably.

Speaker B: Agreed. Well thank you so much Peter. It's my pleasure for uh, being here. People can reach you on your website, right?

Speaker A: Indeed. Peter middlebrook.com or geopolicity.com. exactly.

Speaker B: Or geopolicity.com. uh, and obviously they can check out your books as well.

Speaker A: They certainly can if they're desperate.

Speaker B: Okay, so can you just, uh, you have two books at the moment?

Speaker A: I just put out two books. One, which is the title, almost needs defending. What I did it delivery. It's called how to Make Britain Great Again. Has nothing to do with the US Movement because we have deep problems in the UK and they're not going to be fixed unless we go back and fix them. And I'm thinking about that. And one, which is a book called Rich Student, Poor Student, which, uh, I'd encourage people to get. It's on Amazon, obviously. And it was predicated on one thing. I was the head boy in my school. I was the head of my football team, rugby team and everything. But I left with no qualifications because I didn't like education. I didn't like what I was being taught. I felt like I was much freer than that. And I realized, and I put the philosophy in the book, uh, which is, as a student, you're taught to be, uh, an employee and a consumer, not an entrepreneur and a producer. It's a completely different mindset. So if the software you're running determines who you are, if you're running the software to be an employee, you're just waiting for a job. We're not going to be living in that world. Right. Okay. So you have to change the software you're running, which means you need to change the entire education system. So the book was around that, probably.

Speaker B: Brilliant. Brilliant.

Speaker A: Interesting. Thanks for having me, by the way. It's been a pleasure.

Speaker B: Thank you for, uh, this conversation. Thank you to everyone who tuned in, and I hope you found it beneficial. If you want to know more about my work, you can Visit my website, withlulu.com um, make sure you're subscribed wherever you're listening to or watching this podcast. And, uh, spend half a minute to leave us a rating and a review. It really helps in getting the show discovered. Um, I'll see you in a week or so.