Speaker 1: But knowledge to work and grow your business with c
Speaker 1: i T from transportation to healthcare to manufacturing. C i
Speaker 1: T offers commercial lending, leasing, and treasury management services for
Speaker 1: small and middle market businesses. Learn more at c i
Speaker 1: T dot com put Knowledge to Work. Hello and welcome
Speaker 1: to another edition of the Odd Thoughts Podcast. I'm Tracy
Speaker 1: Alloway and I'm Joe Wisenthal. So, Joe, do you know
Speaker 1: It's been almost a year to the day that I've
Speaker 1: been living out in the Middle East. I did the
Speaker 1: time has I'm trying to think. I was gonna say
Speaker 1: time has flown by, but I don't know, but that
Speaker 1: would be the opposite of it's felt so long. It's
Speaker 1: felt like an eternity. I can't believe it's it's I
Speaker 1: can't believe it's only been a year because it just
Speaker 1: seems like an eternity since you were here. Is that
Speaker 1: I'm trying to think of? Which is the way to
Speaker 1: frame it? Yeah? Good, save, I think, Okay, okay, right?
Speaker 1: I mean that actually means that we've been doing Odd
Speaker 1: Thoughts um internationally for longer than we actually did it
Speaker 1: together in the same studio, which is kind of amazing
Speaker 1: when you think about it. That is, uh, that is
Speaker 1: pretty amazing. All right. What's the point though, what's the
Speaker 1: point of this intro? Okay, So when you think about
Speaker 1: the Middle East, obviously a lot of people think about
Speaker 1: it as a rather troubled region. What are some of
Speaker 1: the major issues that spring to mind when you think
Speaker 1: of the Middle East. Well, obviously one of them from
Speaker 1: an economic standpoint is the reliance of many countries on
Speaker 1: oil and the future of the petroleum economy. And then,
Speaker 1: of course, you know what you were saying, is the
Speaker 1: troubled aspects the sort of continued tension regarding you know,
Speaker 1: political systems and stuff like that. I think you want
Speaker 1: to say religion as well, right that as well? Yeah,
Speaker 1: all of that, all of that when I think of
Speaker 1: the Middle all of that seems combined, the tension of
Speaker 1: religious interest, political interest opening up to sort of attempts
Speaker 1: at democracy, and a version of capitalism all seemed to
Speaker 1: um to swirl around when I think of what's going
Speaker 1: on in the Middle East. All right, well, um, to
Speaker 1: celebrate my one year anniversary, I guess we're going to
Speaker 1: be discussing all these issues with someone in finance who
Speaker 1: is trying to solve pretty much all of them, so
Speaker 1: quite a hefty task, as you might imagine. That does
Speaker 1: sound like that does sound like a hefty task. Alright,
Speaker 1: we're going to have on in Mad most Stack. He
Speaker 1: is the co chief investment officer for Capricorn Fund Managers
Speaker 1: and really I think one of the smartest guys around
Speaker 1: when it comes to emerging markets, and Mad thanks so
Speaker 1: much for coming on. That's my pleasure. Two kind so
Speaker 1: emad uh. We got to it a little bit in
Speaker 1: the intro, but for the past year I've really had
Speaker 1: a front row seat, um to see the impact of
Speaker 1: low oil prices on golf economies and a lot of
Speaker 1: these economies have really built themselves around the energy industry
Speaker 1: and it's really interesting to see them try to wean
Speaker 1: themselves off of it. Now, why is it so or
Speaker 1: seemingly so difficult for them? Well, I think that ultimately,
Speaker 1: what you have is you've had a very established social
Speaker 1: contract for a number of years, and this is something
Speaker 1: we've seen across the world. It's like, what is the
Speaker 1: fundamental basis of your relationship with the governments In the
Speaker 1: Middle East, it was a case of they extracted energy
Speaker 1: rents and they provided almost a jobs guarantee for their citizens,
Speaker 1: and they bought an expatriate labor to actually have productive work.
Speaker 1: That's being rewritten now because it's a question of can
Speaker 1: you keep on with these public sector jobs, in particular
Speaker 1: when the oil prices have collapsed such a degree. Is
Speaker 1: this a cyclical collapse where the all price is going
Speaker 1: to fIF deal, go back to andrew and then you
Speaker 1: know it'll keep on weaving or is it permanently at
Speaker 1: fifty dollars or lower? And that's a that's really concerned
Speaker 1: them because they're like, maybe we can't afford to employ
Speaker 1: these millions of young people who are kind of coming through.
Speaker 1: You know, when you think about there's a sort of
Speaker 1: a famous fact that economies that are highly dependent on
Speaker 1: natural resources they get trapped. They get these overvalued currencies,
Speaker 1: they get overly dependent on that specific resource. The rest
Speaker 1: of the economy kind of atrophies. If you're not in
Speaker 1: that resource, then you really have nothing going for you. Um,
Speaker 1: you know, this idea of transitioning away from oil dependency,
Speaker 1: is it really plausible. I mean, it's a great thing
Speaker 1: to talk about diversifying the economy, but is it something
Speaker 1: that can actually be done. Well, you know, necessity is
Speaker 1: the mother of invention. Um. I think all economies, when
Speaker 1: then the core driver starts to come away, the question
Speaker 1: marks always can it rebalance? I mean China has been
Speaker 1: reliant upon debt plus obviously the base growth effect. These
Speaker 1: ones have been reliant upon the resource curse. Can they
Speaker 1: move away? And I think you need two things. First
Speaker 1: of all, you need to have that like impetus and
Speaker 1: then you need someone with a very strong hand to
Speaker 1: push it through. If you look at country like Abu
Speaker 1: Dabbi and Kuwait, they have so much cash that for
Speaker 1: the moment, the impetus isn't really there. You look at
Speaker 1: someone like Saudi Arabia. It's coming from a very low base,
Speaker 1: but there's tremendous potential for reformation there. And you have
Speaker 1: this millennial Deputy Crown Prince Mohammad been Salman really trying
Speaker 1: to push through everything possible in terms of societal economic,
Speaker 1: kind of corporate reformation there around COO I, p O
Speaker 1: S and things like that. Will they be successful, Well,
Speaker 1: they're not going to achieve vision because it's just far
Speaker 1: too aggressive, but definitely you will have improvement from where
Speaker 1: we are now, because you have to have improvement from
Speaker 1: where we are now or you're going to have increasing
Speaker 1: social tension. I'm glad you brought up Saudi Aramco. This
Speaker 1: is a huge story both in golf markets and internationally.
Speaker 1: It's the listing of Saudi Arabia be as state owned
Speaker 1: oil company, and I'm glad you brought it up because
Speaker 1: I wanted to pick up on your point earlier. Do
Speaker 1: you think the downturn in oil prices is cyclical or
Speaker 1: is it something more structural, because there are some analysts
Speaker 1: who have talked about Saudi Arabia listing Aramco because the
Speaker 1: country basically thinks that oil demand is eventually going to peak. Well,
Speaker 1: I mean, I think that if you are a sensible
Speaker 1: leader of a country that's so reliant on oil with
Speaker 1: revenues coming from it, you do need to diversify. I
Speaker 1: think realistically, the Southies don't know. Nobody knows if this
Speaker 1: is cyclical or secular um, but you have to be
Speaker 1: prepared for these eventualities. And what South Arabia is effectually
Speaker 1: doing if you read between the Lions for their kind
Speaker 1: of pension fund, putting two trillion dollars offshore, kind of
Speaker 1: trying to get FDI to come in and stabilize the
Speaker 1: real because all receipts aren't there is. They're trying to
Speaker 1: shift from basically having oil rents to having rents extracted
Speaker 1: from dividends and you know, from the creativity of others abroad.
Speaker 1: I mean, this is why they're investing in things like
Speaker 1: Uber with three billion dollars. They will eventually invest in
Speaker 1: companies like Tesla. I'm sure they're gonna do massive investment
Speaker 1: into US infrastructure. I mean, there was a hundred billion
Speaker 1: dollar fund with soft Bank. Half of that of which
Speaker 1: they're providing, forty five billion dollars is going to go
Speaker 1: into the US. So I think it's they're just trying
Speaker 1: to swap some cash flows now just in case, because
Speaker 1: they don't want to be caught out, just as they've
Speaker 1: been caught out over the last few years, and now
Speaker 1: is the time to do it when the pressure is on,
Speaker 1: so they can make these social changes as well as
Speaker 1: economic changes. I get that idea that they have all
Speaker 1: this cash and what they want to do is have
Speaker 1: all these investments abroad and then hopefully those investments pay
Speaker 1: off and they pay a recurring dividend and that sort
Speaker 1: of replaces the you know, the month the money they
Speaker 1: get all the time from oil, But what about long
Speaker 1: term in terms of the domestic economy, in terms of
Speaker 1: all these people, uh, in terms of jobs and stuff
Speaker 1: like that. New industry, it's just there any thought or
Speaker 1: is there any progress being made to uh new domestic
Speaker 1: industries that will replace oil if the eventually sort of
Speaker 1: fades away. I mean, definitely, there's obviously massive plans and
Speaker 1: things like that, But the bottom line is you've got
Speaker 1: six d seven hundred thousand young Saudis coming through, increasing
Speaker 1: amounts of women in the workforce. Need to create jobs
Speaker 1: for them. And what they're trying to do is they're
Speaker 1: trying to cluster around big industries and really encourage Sames
Speaker 1: to come through. Whether or not be successful, I think
Speaker 1: it's going to take time. I mean, you can't change
Speaker 1: the mentality of a country overnight from basically being guaranteed
Speaker 1: a public sector job with six of Saudis in the
Speaker 1: public sector to having to work in the private sector.
Speaker 1: But you know, initiatives such as saying, well, foreigners are
Speaker 1: no longer allowed to work in Mores, it must be
Speaker 1: Saudis and things like that, they're kind of stealth tacks
Speaker 1: on the private center. But they are getting more people
Speaker 1: into the workforce who are Saudies. But like I said,
Speaker 1: this thing is going to take time, and the question
Speaker 1: mark is do they have enough time? UM? I think
Speaker 1: the jury is still out on that. So let's take
Speaker 1: a step back, because of course, diversifying the economy and
Speaker 1: building up domestic industries is something that's going to take time.
Speaker 1: You can't really snap your fingers and have it happen.
Speaker 1: Let's talk about the low oil prices themselves. UM. This
Speaker 1: is obviously a hot topic in markets, and it seems
Speaker 1: like not a day goes by that we don't have
Speaker 1: a headline that says something about OPEC versus the US
Speaker 1: shale industry, and a headline questioning opex ability to actually
Speaker 1: impact prices in the face of rising American production. What
Speaker 1: power do Middle East producers actually have when it comes
Speaker 1: to influencing the price of a barrel of crude? I mean,
Speaker 1: I think, just on one quick final point about the
Speaker 1: previous thing, the template there is Dubai, where it took
Speaker 1: about ten years to rediversify because they ran out of oil.
Speaker 1: Now hopping on to see the question you just asked, Look,
Speaker 1: OPEC is not a cartel. There have been lots of
Speaker 1: studies done. It's just too diversive. There's too many competing interests.
Speaker 1: Everyone's kind of tapped out when all prices are low
Speaker 1: because they overspend when all prices are high for it
Speaker 1: to be a cartel um what it approximates in kind
Speaker 1: of economic terms of the Stackleberg competition and what happens
Speaker 1: there is the leader moves and everyone else follows. But
Speaker 1: the only way that kind of they can punish, in
Speaker 1: this case Saudi Arabia everyone for not following is to
Speaker 1: just increase production and collapse the prices. And that's kind
Speaker 1: of like what you saw when Saudi Arabia wants to
Speaker 1: try and push out shale. But also it played out
Speaker 1: the scenarios if we cut, are we going to get
Speaker 1: into repeat of the nineties when we went from like
Speaker 1: ten million pounds and to two and a half million
Speaker 1: barrels and everyone else will cheat and Shell will just
Speaker 1: come and take the money that we're leaving on the table.
Speaker 1: That was the dynamic in two thousand and fourteen. Right now,
Speaker 1: I don't think anyone is thinking that there won't be
Speaker 1: an extension of the Opeqe cut and it has stabilized
Speaker 1: all prices. Why is that it's because Aman, Saudi everyone
Speaker 1: are starting to cash in on the long term cash
Speaker 1: flows of the oil production through bond issuances and equity issuances,
Speaker 1: So the payoff structure for them is different. You know,
Speaker 1: it costs Satibe a four and a half billion dollars
Speaker 1: a quarter at fifty dollar oil to cut to the
Speaker 1: amount that they have. They're just raised the seventeen billion
Speaker 1: dollar bond, you know, the around co I p O
Speaker 1: of fifty undred billion dollars crystallized. The payoff is very
Speaker 1: different to the extent that I think they can cut
Speaker 1: probably two million barrels by themselves if they really really
Speaker 1: need to and still come out ahead on cash terms.
Speaker 1: That would impact the market because the oil market is
Speaker 1: fascinating because you have ninety six million barrels of production
Speaker 1: but over supplies only one two million barrels in each direction.
Speaker 1: But the price moves, it doubles, it halves. It's incredibly
Speaker 1: sensitive to small shifts in production. It's just that OPEC
Speaker 1: can't get his act together to actually synchronize that usually
Speaker 1: and definitely to over extend from where they are now.
Speaker 1: So moving from one point two million barrels to two
Speaker 1: you'd need to see the op price drop below forty
Speaker 1: again probably as an example. So they're kind of in
Speaker 1: the comfort zone. So just to be clear, going back
Speaker 1: to what you said, what's different now is the ease
Speaker 1: with which the oil producing countries are able to monitor
Speaker 1: his future production via the bond market, which sort of
Speaker 1: makes it a little more economical to hold production down.
Speaker 1: My understanding that right, Yeah, I think that it's a
Speaker 1: change in mentality. Um, you know, they didn't know what
Speaker 1: the elasticity of shale would be. They've got some points
Speaker 1: of that. You start to see us, she'll come back online,
Speaker 1: but obviously the easiest stuff and you're not getting into
Speaker 1: the hardest stuff and oil service companies prices are going
Speaker 1: up and things like that. But they didn't know what
Speaker 1: that response function would be, and the payoff was just different.
Speaker 1: Now they've done all the groundwork, led by Saudi Arabia,
Speaker 1: they can start having these cash flows because really without
Speaker 1: Saudi Arabia you can't have any cuts. So it comes
Speaker 1: down to the South Arabia want cuts or not. That's why,
Speaker 1: like I said, if you model it as a Stackleberg competition,
Speaker 1: which is one where everyone follows the leader as it were, Um,
Speaker 1: because if Sally didn't move, you wouldn't have an ipeck deal. Right,
Speaker 1: let's pause for a second and take a short break
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Speaker 1: but knowledge to work and grow your business with c
Speaker 1: I T. From transportation to healthcare to manufacturing. C i
Speaker 1: T offers commercial lending, leasing, and treasury management services for
Speaker 1: small and middle market businesses. Learn more at c I
Speaker 1: T dot com. Put knowledge to work, and we are
Speaker 1: back with ammad most ack of Capricorn fund Management. Aman,
Speaker 1: you are just making the point that the price of
Speaker 1: oil or oil prices tend to be very, very affected
Speaker 1: by relatively small swings in production two million barrels. I
Speaker 1: think you said. If that's the case, then how come
Speaker 1: ope can't get its act together and actually control the
Speaker 1: price of oil in the way that some people you
Speaker 1: know used to think that it actually did well. I
Speaker 1: think that if you look historically at proper cartels, diamond
Speaker 1: in etcetera, the cartel members typical control of the market,
Speaker 1: but the dynamics were a bit different. In the case
Speaker 1: of Opeque and oil. What they're really focusing on at
Speaker 1: the moment is the supply side of things, and the
Speaker 1: methodology in terms of OPEC cuts is a very crude methodology.
Speaker 1: You know, we will cut one point two million barrels
Speaker 1: over the next six months. That's the current cut. That's
Speaker 1: cost them ten and a half billion dollars of lost
Speaker 1: income from the barrels they didn't produce and sell. If
Speaker 1: you assume fifty dollar oil, if the market shifts, if
Speaker 1: you know there's too much heavy versus light, where there
Speaker 1: any cutting heavy crude, they can't really adapt for that,
Speaker 1: and you can't really enforce it either. The enforcement this
Speaker 1: time in terms of compliance, so that should been very
Speaker 1: good compared to previous cuts. But then when once party
Speaker 1: starts cheating, historically everyone starts cheating and then it's just
Speaker 1: sadly left by themselves at two and a half million
Speaker 1: barrels while they were on kind of makes merry with
Speaker 1: lots and lots of cash because you don't find out.
Speaker 1: I mean, we've seen all these discussions about the OPEC
Speaker 1: monitoring and things like that, and loads of people say, well,
Speaker 1: this is the number, rock saying no, this is the number.
Speaker 1: It takes two to three months to actually see if
Speaker 1: anyone's cheating. So it just doesn't have the enforce ability.
Speaker 1: It doesn't have adaptability. Um, and that's why it's so
Speaker 1: difficult to really get everyone together on the same page
Speaker 1: unless they're terrified. So let's go back. When we started
Speaker 1: the episode, Tracy introduced you as someone who had was
Speaker 1: working on the solutions to some of the region's biggest
Speaker 1: vexing problems. And so let's get into this from an
Speaker 1: oil perspective. How could the Mid East oil producers sort
Speaker 1: of rearrange their affairs such that they didn't get you know,
Speaker 1: such that they weren't so susceptible to these traps. Yeah,
Speaker 1: I mean, I'm just trying to give my kind of
Speaker 1: tuppence and try and help out wherever I can. But
Speaker 1: my suggestion is what I call the tactical Petroleum Fund,
Speaker 1: which is to flip the focus from supply onto demand
Speaker 1: and effectually can create a marginal consumer for oil. So
Speaker 1: rather than have this very blunt instrument where you cut
Speaker 1: x million barrels and you lose ten billion dollars every
Speaker 1: single six months, Instead, if the aim is to remove
Speaker 1: barrels from the market now because you think now there's
Speaker 1: over supply, in the future, there will be under supply
Speaker 1: because you're not doing the investments the trillions of dollars
Speaker 1: that have been canceled to maintain the future supply in
Speaker 1: the face of declining production, because you know, you lose
Speaker 1: four or five million barrels a year from existing fields
Speaker 1: of production. That's huge and shall can fill some, but
Speaker 1: it can't fill that oil. Um my sugestion is that
Speaker 1: rather than cut you know, exper cent of your production,
Speaker 1: put half of that amount equivalent, produce a maximum and
Speaker 1: put it into a fund. And then what the fund
Speaker 1: can do is the fund can leverage up two to
Speaker 1: three times because you can effectually head against the oil
Speaker 1: price dropping and go out and purchase barrels from the
Speaker 1: market and move them off the market being available to
Speaker 1: the market. Because the most fascinating thing for me, for
Speaker 1: the oil prices and the oil market is that not
Speaker 1: every barrel is equal. When you get a headline out
Speaker 1: of Iraq, you know, che hun Kirkuk pripelines down four
Speaker 1: hundred thousand bows a two hundred thousand bollars a day,
Speaker 1: or Nigerian crew down three hundred thousand bollars day, the
Speaker 1: market often doesn't even flinch a little bit of a
Speaker 1: shift on us shell and the market goes ballistic. Oil
Speaker 1: in a strategic petroleum reserve is treated as effectually not
Speaker 1: available to the market. Oil in US inventories, which is
Speaker 1: the current focus, is treated as massively available to the market.
Speaker 1: So what you need to do is effectually create a
Speaker 1: buffer stock, just like Joseph in the Bible, you know,
Speaker 1: with the seven years of beasts and seven years of famine,
Speaker 1: whereby you take these barrels and you just move them
Speaker 1: off the market. And because you don't actually care about
Speaker 1: going to zero on that fund, there are so many
Speaker 1: ways you can do it, and you can really have
Speaker 1: things like if you've got too much light oil, you
Speaker 1: can move the light toil too much heavy, or you
Speaker 1: can move the heavy oil. If the oil curve and
Speaker 1: the oil market is not in oversupply, you don't make
Speaker 1: any purchases. You know, you have that flexibility and importantly
Speaker 1: you have enforceability because it's not a case of two
Speaker 1: months later have you cut production, no, it's have you
Speaker 1: paid at the start of this month yes or no? Um.
Speaker 1: So it's also a lot fairer because for example, now
Speaker 1: Saudi Arabia is cutting. They produce thirty percent of production,
Speaker 1: but they're bearing to the cost of this OPEC cut.
Speaker 1: So realistically, given the dynamics within Opeque, and you know
Speaker 1: what we've seen so far. What do you think are
Speaker 1: the chances that they would do something like this, because
Speaker 1: in some ways it means you have to seed a
Speaker 1: little bit of influence to an independent party, right like
Speaker 1: I'm assuming the oil fund would be somewhat independent from
Speaker 1: individual producers. Yeah, I mean, I think the typical way
Speaker 1: that these types of buffer stock systems, although there hasn't
Speaker 1: been coming quite like this given the interesting nature of
Speaker 1: the all market is that anyone who participates gets a
Speaker 1: vote and a share, and you get kind of a
Speaker 1: view into that. It becomes a bit of an invisible
Speaker 1: hand in the market. And what it can do is
Speaker 1: it can smooth out the volatility of the price, but
Speaker 1: then if you start to get greedy, you will eventually
Speaker 1: get taken out. Um. I think probably the optimal solution is,
Speaker 1: once they've gained through the scenarios and you know, the
Speaker 1: lessoners can do this at home, just introduced this as
Speaker 1: a player into the game. It works out a lot
Speaker 1: better financially is to have a hybrid system whereby you
Speaker 1: have an opequ cut just as you have now, but
Speaker 1: then you introduce this as a small player in the
Speaker 1: market and see where is it balancing. Just like Saudi
Speaker 1: Arabia want to see how is shail going to balance
Speaker 1: the market, because it becomes very interesting there. So you
Speaker 1: don't it's not either all you can have a hybrid,
Speaker 1: but I think in the long term this well, you
Speaker 1: can show mathematically, you can show qualtitatively, this is a
Speaker 1: superior option than very crude OPEC cut. Let's take a
Speaker 1: turn a little bit from this tracy. And also in
Speaker 1: the beginning we were talking about some of the other
Speaker 1: tensions that existed in the region, beyond just the challenges
Speaker 1: of oil economics, the questions about the long term viability,
Speaker 1: the sort of game theory, aspects of how the OPEC
Speaker 1: countries deal with each other. There's obviously a lot of
Speaker 1: issues related to politics, religion, There's the refugee crisis emanating
Speaker 1: out of Syria, all kinds of things that people sort
Speaker 1: of see as never ending issues one after another in
Speaker 1: the Mid East. You will also are very interested in
Speaker 1: those areas, and you've sort of thought through some ideas.
Speaker 1: Tell us a little bit about some of the stuff
Speaker 1: that you're working on there. Um So yeah, I mean
Speaker 1: I think that there are two main things. One is
Speaker 1: on religion and one is on kind of the refugee crisis.
Speaker 1: M just to touch on the religion one, because I
Speaker 1: can't talk too much about it. Um. You know, we've
Speaker 1: done a lot of work in terms of really understanding
Speaker 1: extreme smism and Islam and kind of the various aspects
Speaker 1: of that, because obviously you don't have the Sunny Sia
Speaker 1: divide and then you have these extremists burning up the
Speaker 1: place in Syria. When you start kind of really doing
Speaker 1: and analyzing Islam in a very structured way, it's becomes
Speaker 1: very clear that kind of the politicization of it, as
Speaker 1: with many other religions, stems from a lack of access
Speaker 1: to available information. Um. And it's actually quite fascinating because
Speaker 1: when you see in terms of Johar, this recruitment is
Speaker 1: that they provide a little bit of information which is
Speaker 1: more than you get from the established authorities, and then
Speaker 1: people believe they know everything. And what happens then is
Speaker 1: when you believe you know everything, that's when you're the
Speaker 1: most dangerous in many different fields. Right, Um, kind of
Speaker 1: this has been shown and this is what allows people think, well,
Speaker 1: I know better in that person, and then I can
Speaker 1: go and kill or do all sorts of dangerous things.
Speaker 1: The most optimal solutions away. You know a bit and
Speaker 1: you know you don't know that much, or when you
Speaker 1: know a lot, you know you don't know that much. Um.
Speaker 1: And so my question is kind of how can you
Speaker 1: provide a resource to avoid this because when you look
Speaker 1: at the data, I don't know, if you guys know
Speaker 1: about engineers are ten times more likely to become extremists
Speaker 1: than any other group as an example. Huh why is that?
Speaker 1: It's because if you think about what you do as
Speaker 1: an engineer or an education individual, you build models, right,
Speaker 1: and so if they get information that's a little bit
Speaker 1: better than what's publicly available, it seems like a plausible,
Speaker 1: coherent hole the message of these jahadis, especially if they
Speaker 1: are marginalized for some reason or another, usually political. Um.
Speaker 1: And so I thought was for me was the most
Speaker 1: fascinating thing, And I thought about how do individuals access information?
Speaker 1: How does Islam work? Just in kind of one minute,
Speaker 1: how Islam works or Sunni Islam? Should I say is
Speaker 1: that during the time of the profit, it was really
Speaker 1: eased to find out what Islam was because you asked
Speaker 1: him and he had revelation. When he died, it became
Speaker 1: a bit more complex, and then everyone all his disciples. Disciples,
Speaker 1: the disciples said all sorts of things. So three centuries
Speaker 1: after they decide to codify it by getting the eternal
Speaker 1: Koran and building a picture of the temporal life of
Speaker 1: the profit and figuring out the links between them and
Speaker 1: applying it to today. That's actually quite an interesting thing
Speaker 1: because what subjective versus subjective in the religion, Because in
Speaker 1: certain religions you have this hierarchy where you have a
Speaker 1: large amount of subjectivity because the revelation, whereas Islam is
Speaker 1: actually quite ordered. So one of my projects analysis an
Speaker 1: attempt to provide the information access in an ordered basis um.
Speaker 1: And we're starting with the Koran and having a really
Speaker 1: nice version of the Koran where you can have full
Speaker 1: contextual access um in terms of being able to dig
Speaker 1: in as much depth as you want into the language,
Speaker 1: into all of the sources, really consumrified. And hopefully by
Speaker 1: building that up and doing the same for Shia, Islam
Speaker 1: and other religions will have a kind of standardized kind
Speaker 1: of Wikipedia Google Age system where you have reliable access
Speaker 1: to all of these sources and you can start to
Speaker 1: compare and contrast because the difference between Shia and Sunny
Speaker 1: aren't that big, right, the differences between mainstream and fundamentalist.
Speaker 1: Is a fundamentalist believe they know everything. If you can
Speaker 1: provide resources where you can object to be show they
Speaker 1: don't know everything, or introduce that element of doubts, maybe
Speaker 1: that will have an impact, you know. And so that
Speaker 1: is kind of what I'm hoping, because, like I said,
Speaker 1: when I start breaking it down from the research we've done,
Speaker 1: there isn't that much difference between some of these groups
Speaker 1: warring with each other on an ideological basis. And definitely
Speaker 1: these extremists they literally cherry pick. But sometimes people don't
Speaker 1: know better. More people google Isis than Islam. Now, so
Speaker 1: what are they going to think? Can I ask? I
Speaker 1: know you can't say that much about this, but can
Speaker 1: I ask a very quick question? You said you're starting
Speaker 1: out with the Quran? Um, how do you plan on
Speaker 1: dealing with the hadiths? And I should say, you know,
Speaker 1: I'm an outsider looking in UM, but my understanding is
Speaker 1: the hadiths, which are basically UM, the reports of what
Speaker 1: the pro fits said UM while he was living, and
Speaker 1: they kind of exploded after he died. Um, how are
Speaker 1: you going to go about treating those? Because that seems
Speaker 1: to be where some of the confusion comes from. Yeah,
Speaker 1: so I mean he said the hitdi through the stories
Speaker 1: to the prophet, and three cents, three generations after the
Speaker 1: prophet died, these were collated to build a picture of
Speaker 1: the life of the prophet, which is what's called the Sunna,
Speaker 1: which is why kind of the major group of Muslim
Speaker 1: is called the Sydneys. They're the ones who followed this model.
Speaker 1: But you know how you have this whole thing about
Speaker 1: fake news now right, how do you judge authority. There's
Speaker 1: a whole science in Islam about trying to figure out
Speaker 1: which one of these are true and which of these
Speaker 1: are fake. And a lot of the issue comes where
Speaker 1: things with a bit of dubious quality, potentially in terms
Speaker 1: of only one chain of narrators, for example, versus lots
Speaker 1: of people saying the same thing Chinese whispers style from
Speaker 1: Gibraltar to Kazakhstan and agreeing on the content those come through.
Speaker 1: So people just hang their hats on just this one
Speaker 1: transmission and then say that women can't drive as an example.
Speaker 1: I think that again that need to be systematized with
Speaker 1: the help of the scholars, because what I see from
Speaker 1: my studies of Islam, and kind of the research recommissioned
Speaker 1: is that, look, you had a thousand years of Islamic
Speaker 1: caliphate and it wasn't like isis. It wasn't great, it
Speaker 1: wasn't perfect, But what you had was process and reasonable doubt.
Speaker 1: For example, for amputation, um, you know, the whole Aladdin thing,
Speaker 1: Princess Jasmin who gets a hand grab because he's stolen
Speaker 1: an orange and then drop it off. There were eighty
Speaker 1: four preconditions for that under a thousand years. You know,
Speaker 1: they had to have seen you stealing three and a
Speaker 1: half thousand dollars worth of stuff from someone's pocket and
Speaker 1: you've kind of been hungry, and you had to have
Speaker 1: two witnesses to that. You know, this whole stoning for adultery,
Speaker 1: you need to see four witnesses to penetration, which is
Speaker 1: kind of weird, but if you didn't have four witnesses
Speaker 1: to penetration, then the accusers would get lash eighty times.
Speaker 1: What you had was harsh punishments, but a massive amount
Speaker 1: of process. You've lost that process now and that's why
Speaker 1: you're seeing the really negative side of things. But again
Speaker 1: this needs to be systematically done, the whole community backing.
Speaker 1: But this is the fun thing about data now, right,
Speaker 1: we can assemble data. It just needs to be done systematically.
Speaker 1: So you know, hopefully I'll plant the seed and those
Speaker 1: working with me well, and then it's up to the
Speaker 1: Islamic community to kind of take that forward, kind of
Speaker 1: google Wikipedia for Islam with a little bit of Ai
Speaker 1: thrown in, and we'll see how it grows. Again, this
Speaker 1: is going to take most of my life, but if
Speaker 1: it works, you know, it will help my kids at
Speaker 1: the very least. That I really like that perspective. Before
Speaker 1: we wrap up, we just have a couple more minutes, um,
Speaker 1: but tell us a little bit about you also are
Speaker 1: interested in the you know, pursuing things regarding the refugee crisis.
Speaker 1: Tell us quickly about what you're working on there. Yeah,
Speaker 1: so this is actually my wife's project. It's called Humanitory. Basically,
Speaker 1: hopefully in the next she wants to give every refuge
Speaker 1: a biometric smartphone. Um so Galaxy S four equivalent costs
Speaker 1: about forty five dollars. Now, this is really interesting because
Speaker 1: what you have is a group who really need to
Speaker 1: have help and access to information, who have lost their identity.
Speaker 1: Biometrics have a lot of ethical issues around them. In
Speaker 1: terms of fingerprint iris scans. But imagine giving a refugee
Speaker 1: a phone in coming to the UK. They can suddenly
Speaker 1: get a bank account, oyster card for the transport. But
Speaker 1: the most interesting thing is they can suddenly have access
Speaker 1: to work. And this is about God us thinking about
Speaker 1: the future of work in terms of you go, you
Speaker 1: log in, you can start working for a charity. You
Speaker 1: can build up a biometric CV for yourself which shows
Speaker 1: who you are, and that's incredibly important, giving people back
Speaker 1: their identity. And again it's kind of like it's going
Speaker 1: to be difficult, but I think it's achievable because everyone
Speaker 1: wants to help the refugees. This is forty fifty dollars
Speaker 1: when the average refugee costs three thousand to thirty dollars
Speaker 1: a year, and you know, as you can start building
Speaker 1: this at least it's an option. Because I don't know
Speaker 1: about you guys, but I'm scared about kind of the
Speaker 1: next five ten years, UM, kind of looking where global
Speaker 1: trade is going, looking where artificial intelligences go, looking when
Speaker 1: jobs are going. So, you know, again, trying to do
Speaker 1: a little bit to help UM, but really trying to
Speaker 1: pull together a lot of different strings to do so
Speaker 1: all right, Ammad, most tack, we're going to have to
Speaker 1: leave it there. Thank you so much for joining us.
Speaker 1: So Joe, I think, um well, I think Amad has
Speaker 1: given himself a pretty hefty workload, right, Yeah, solve the
Speaker 1: sort of game theory stuff that's vexed opex OPEC for decades, uh,
Speaker 1: defeat extremism, and solve the refugee crisis. But I loved
Speaker 1: love that conversation. I mean, we've I've talked to Mod
Speaker 1: before on TV. He's definitely one of the sort of
Speaker 1: more interesting people around and I like that, rather than
Speaker 1: just talk about all this stuff which we all do
Speaker 1: all the time, he actually has ideas that he's putting
Speaker 1: into actus and or trying to put into practice. Yeah.
Speaker 1: I think there's a tendency in market sometimes to just
Speaker 1: kind of throw your hands up and say, well that's
Speaker 1: the way it's always been, and people don't really think about,
Speaker 1: well could you actually change the structure and make it different. Um,
Speaker 1: So it's really interesting to hear from someone who's actually
Speaker 1: trying to do that on a number of levels, absolutely, right,
Speaker 1: Like we just sort of just sort of accept Okay,
Speaker 1: this is how OPEC works, or this is the information
Speaker 1: asymmetry that allows extremism to thrive. But I thought that
Speaker 1: was really interesting because it related to his ideas, related
Speaker 1: to a conversation that we had several months ago with
Speaker 1: Graham Would who wrote that book about Isis and it
Speaker 1: is very similar stuff, which is that in in Graham's view,
Speaker 1: the solution to combating extremism was not to dismiss the
Speaker 1: extremists or say something, you know, say catchphrases like oh,
Speaker 1: that's not really Islam or whatever, but to actually sort
Speaker 1: of compete with them on the information front and say, no,
Speaker 1: here's more information, and actually out argue them with data.
Speaker 1: And so here's an example of what a MOD is
Speaker 1: doing that's very much along those lines. Yeah. Well, we'll
Speaker 1: have to get them on once the project has moved
Speaker 1: a little further and see how it's going. Yeah. No,
Speaker 1: but I think it's really cool. And also, again, like
Speaker 1: the refugee stuff, we we always talk about how awful
Speaker 1: it is, but how many people are actually trying to
Speaker 1: think of something new that might might address it. Yeah.
Speaker 1: Didn't you ask me once where refugees charge their phones?
Speaker 1: That was that? Actually? Yeah? I mean, because you see
Speaker 1: all these photos of um, you know, Uh, you hear
Speaker 1: about you know, refugees using their phones to get across
Speaker 1: waters and stuff like that, and I was just thinking
Speaker 1: about the logistical aspects of that. It's not surprising that
Speaker 1: refugees have phones, of course, it's a mainstay technology all
Speaker 1: around the world. But you know, you just think about
Speaker 1: like the challenge of actually using a phone while you're
Speaker 1: dealing with, you know, the challenges of being refugee. So
Speaker 1: the technical aspects are still very interesting to me. Yeah,
Speaker 1: for sure. I guess soon you might be asking where
Speaker 1: they're charging their biometric phones, right, hopefully so, and then
Speaker 1: we can see how the project is working. All right,
Speaker 1: should we leave it there, Let's do it. This has
Speaker 1: been another episode of the Odd Lots podcast. I'm Tracy Alloway.
Speaker 1: You can follow me on Twitter at Tracy Alloway. And
Speaker 1: I'm Joe Wisenthal. You can follow me on Twitter at
Speaker 1: the Stalwart and you can follow Immad at imo Stock.
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