Klisman Murati – An investors guide to world affairs: Why short term thinking is killing your business
In this episode of #TheSpeakerShow, Maria Franzoni interviews Klisman Murati.
Klisman is the founder and CEO of Pareto Economics, a boutique London based consultancy that tackles some of the biggest and most important challenges in the world of geopolitics, business, technology, and defence. He serves as an expert adviser to the European Commission and is also called upon for his views and insights by leaders in financial services, defence, and industry. His thought leadership is head and shoulders above the rest and has been read by world leaders in politics, finance, and business. He has been quoted alongside former CIA Directors and is regularly invited to give his expert insights on world affairs for international news agencies like the BBC and Al Jazeera.
With an innate ability to truly understand and dissect complex and multifaceted geopolitical trends and unsatisfied by the lack of thought leadership on important emerging geopolitical, societal, and technological developments – my guest became that voice. He is now leading the charge and is sought after by the most significant entities on earth.
In this fascinating episode, we discuss:
- Long term investment and policy strategy
- The 100-year Outlook
- Centers of Power Concept
- Factors that will impact the world in 2022
- Global Power Index
Episode audio & transcript
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00:00:16 – 00:01:04
Welcome back to The Speaker’s Show with me, your host, Maria Franzoni. Today we’re talking about emerging geopolitical, societal and technological challenges. The Speaker Show is brought to you by Speakers Associates, the global Speaker Bureau for the world’s most successful organisations providing keynote speakers for events, conferences and summits. My guest today is the founder and CEO of Pareto Economics, a boutique London based consultancy that tackle some of the biggest and most important challenges in the world of geopolitics, business, technology and defence. He serves as an expert adviser to the European Commission and is also called upon for his views and insights by leaders in financial services, defence and industry. His thought leadership is head and shoulders above the rest and has been read by world leaders in politics, finance and business.
00:01:04 – 00:01:44
He’s been quoted alongside former CIA directors and is regularly invited to give his expert insights on world affairs for international news agencies such as the BBC and Al Jazeera, with an innate ability to truly understand and dissect complex and multifaceted geopolitical trends and unsatisfied by the lack of thought leadership on important and emerging geopolitical societal and technological developments. My guests became that voice. He is now leading the charge and is sought after by the most significant entities on Earth. Please welcome Klisman Murati! Klisman, Thank you so much for joining me. How are you today?
00:01:44 – 00:01:45
Very well, thank you. Maria. How are you?
00:01:45 – 00:02:13
I’m great. I love it. I mean, people who are listening to the podcast won’t see this. But you’ve dressed up for me. You’re in a wonderful suit. You look fantastic. I feel very underdressed. So I really appreciate that. Thank you so much for that. So I want to get started. I want to go to really the heart of understanding about your work and you have a concept called the Centres of Power Concept. How was that created? And what is that about?
00:02:13 – 00:04:07
So when we first decided to launch this company or these ideas, we really wanted to base it on a fundamental understanding of how the world actually works. Because a lot of analysts based their insights into themes meaning what’s happening today and they’re basically their analysis on ever changing dynamics, which isn’t, which isn’t something you should be doing as an investor or as a policymaker because things change all the time. And if there’s no underlining, um, sort of paradigm that you work from it makes your your investments are very susceptible to black swans and to great rhinos and too many things that you wouldn’t have prepared for. So the centres of power concept allows one to really, truly understand how the world works and the dynamics which occur in the world and in the most basic way possible to explain it is that we take the nation state as fundamental starting point of our conversation meaning nothing is superior to the nation state in power. That’s the case. We also assume that all interstates want power and power is defined not as being the most, you know, military strong. But power, in most simplest terms, is defined as being able to fill your agenda as a nation state. If you can do that, then you are powerful and you’re you’ll increase in power as you do this. But power is based on six fundamental concepts which make you powerful, which include things like a nation states technological leadership. It’s active consumer market. It’s, um, military strength, it’s geo strategic positioning, it’s, uh, it’s availability of commodities and other such dynamics. And once you analyze this, you’re able to truly understand the opportunities and risks that nation states faces. If you’re an investor, or if your policy maker yourself, you’re better able to strengthen your country or see how your competitors are strengthening their country so you can compete in the global marketplace.
00:04:07 – 00:04:17
That sounds amazing. That sounds incredible information for somebody to have. I believe you call it the Global Power Index is that right? That’s something that’s what you’re creating. Tell us a bit more about that.
00:04:17 – 00:04:56
So what we’ve done is from the basis we’ve quantified these things, and we’ve created essentially six indices, which are reflective of the Sixth since the power. And then we put them all together in our own proprietary way to create a Super index, which is the global power index, which again, if you’re an investor, it is sort of probably one of the best tools you can use to truly understand emerging markets, frontier markets and also more established economies. And if you’re a policy maker, you’re again able to use this to better understand what investors will be looking for and how you can improve your own policies so that you are more stronger so you can attract foreign direct investment, for example.
00:04:56 – 00:05:00
and is this available now? Has this been launched already?
00:05:00 – 00:05:14
So what we’re doing is the 2022 version of the index will be launched on the 24th of February in collaboration with the London School of Economics. And if anyone would like to learn more about that or attend, then we have information on our site that you could probably point into.
00:05:14 – 00:05:33
Wow, that’s amazing. That’s an incredible opportunity. Thank you for that. So you’ve talked about investors a little bit here as an introduction. Obviously, the area that you advise one of the mistakes you see that investors and policymakers make that if they put them right, could absolutely change everything could be game changing,
00:05:33 – 00:07:06
I think in a large part, and this is from conversations with investors. A large part of it is that when things as the world changes, a lot more variables need to be considered and for better for worse. Investors are short of time when it comes time to making decisions again that if you’re a trader, That’s one thing if you’re as a manager of a hedge fund or family offices. Different. But not all investors are sort of built equally. But in general I have noticed that there’s been there’s been a wide push to getting the fastest piece of information out and making decisions off the back of that. So that is really newspaper headlines and headline risks is becoming predominantly, um, much more prevalent in the investing world, and they rely on headlines, and they rely on the general measured sentiment, which isn’t mathematical scientific in any relation performed. But it’s what the extreme read and they that will create the basis of the understanding of what to do next. And this, I think, is very detrimental only because again, I’m probably not doing myself a favor because I get quoted by journalists a lot, and I’m on TV a lot. But when journalists write articles they’re not writing for you specifically as an investor, they’re writing for the general investor for their benefit. But if you want more tailored insights, you need to go to the source of where the journalists go to get their information. So if they’re quoting a report or piece of analysis, then don’t read the interpretation of the analysis through the lens of an article that goes straight to the work itself.
00:07:06 – 00:07:39
To do that, that’s already cut out a lot of the perception that journalists put in there because they’re they’re vying for their own audience, which could be you, which probably is you. And they want to make sure they get enough eye on the piece so instead of doing that go straight to the article, which they’re talking about so you can have a much more holistic understanding if you can do anything better. That’s what I would suggest investors do to really, truly understand. What exactly are the dynamics happening, as opposed to just picking out sessions and then using that as as fodder for your investment strategy.
00:07:39 – 00:08:05
That makes absolute sense to me. Because, of course, as you said, the journalists will be doing it through their lens. They have a different objective to you, so to go to the source, that makes really excellent sense. When you look at all these various, all this various information and what’s going on in the world, you’re looking a hundred years ahead and you’ve got hundred year outlook that seems a very long way ahead. I mean, a lot of us won’t still be alive. Why is that important?
00:08:05 – 00:09:12
Well, naturally, you know, we may not be the things that we put into in the world will continue to happen. Meaning if an investor these days or even the policymaker, if your outlook is only every quarter or every election cycle, the issues that we’re facing now really, as a human species needs much more longer term considerations, you can’t really make investment decisions if you’re only looking at the short term. And actually there are individuals in the organisation that can only really look at the short term because it’s their job. But you should always have someone in the organisation who is responsible for the long term trajectory outlook and to get insights from different experts to feed their own decision making abilities so that they make decisions for the long term. And actually, the hundred years is what we stretch them to think about. But actually, you’re gonna have to think in the short to mid term for day to day, you know, execution. But you really need to have a longer term outlook. If you are going to be successful in this ever changing and dynamic world that we’re living in, where the rules that applied yesterday have changed and you’re not going to get the same results if you apply the same earnings yesterday to today until tomorrow,
00:09:12 – 00:09:25
That’s interesting. Because, of course, many governments are working on short cycles, aren’t they? They’re not thinking ahead. They’re not planning ahead. They’re working in these to the next election, really, aren’t they? And that’s all they’re planning to, which is obviously not what they should be doing.
00:09:25 – 00:10:23
Yeah, it’s worrying as well, because if again, if we take the nation state as, uh, as the most essential element of our of of human activity, then you know, nation states set laws and policies, you know, wars happened between them. Taxes happen because of them. People are citizens of them. Trade happens between them. So if if a nation state has a longer term outlook and their policies can not only be reactionary, which is what a lot of them are doing, especially in crisis times like this of Covid, if they have, even if it’s the next 10, 20 years. If you can project something worthwhile into your policy, which which would benefit the people that you’re serving for that long period of time, not only will you be doing good, but again for those politicians who care about your legacy will also be imprinted at something worthwhile remembering, as opposed to being a reactionary prime minister or president, which only thought about the now which sacrifice now for tomorrow.
00:10:23 – 00:10:38
Wow, wow, gosh! So here’s a huge question, and I don’t know if you can answer it now if it requires a whole speech, really. But what are the things that you are seeing that will impact the world the most?
00:10:38 – 00:13:22
That is a big question, but we are prepared for that answer only because this is what we help our clients understand, even in the key notes that I give and also in the consulting work that we do. That’s typically what we try to answer. Anyone that comes through our doors virtually or physical doors and from the basis of understanding the nation’s sense of power and the index which we’ve created. We have said that over the years over the next 100 years. The four themes that will impact the world the most are the following globalisation number one becomes much more important. It becomes much more relevant to even the most, uh, forgetful, uh, sort of worker in the most, uh, in the most sort of un un unattractive market. So, for example, even a farmer in Afghanistan will be impacted by the tectonic plates of globalisation, so that’s one of them. Geopolitics becomes ever more important only because this nation states grow in their power their ambition and their ability to execute on their agendas as we mentioned for growth. So their voice becomes a lot more greater because they have the financial capabilities to because they have networks of different partners to stamped their authority in the best way they see possible and we can see throughout time through different nations doing this as their power grows. So geopolitics becomes ever more increasing in parts of the world where you never saw it before. Technological transformation of transformative technology as innovation grows and not only the West and in Asia but other parts of the world, the ability to use this technology to change society for better or for worse sometimes will increase. So even if you’re I mentioned a farmer in Afghanistan or a dentist in Germany or you’re a car salesman in London, technology will impact you in in many different ways and the last one societal change. So that could mean demographic change migration patterns That could mean even the rise of E. S G as an investing concept and the rise of a more, uh, sort of a more, uh, intelligent, I guess consumer who pays more attention to the supply chains to what they’re consuming, which will change the supply chains as a result. These are things which governments and investors will need to really, truly understand much more so than now. And these four things aren’t happening separately. They’re all converging together and happening at the same time, just causing a very destabilising effect on those investors aren’t considering these factors in their investing decisions. That’s what we try to do day in, day out, as a firm using our Global Power Index and other methodologies and other innovations we’ve created to help them on this process.
00:13:22 – 00:13:46
I can see that when they all come together, it becomes for quite complex. I can see why people need you to come in and help explain. So tell me. You know an organisation wanted to bring an expert in to come and speak on the topics on geopolitics on what’s going on. How do you differ from other speakers who speak on these on these topics? What is it? Why would they choose you? I mean, I’m really being really aggressive with my questions today here.
00:13:46 – 00:15:06
You have to be. You have to be not because the thing is a lot of the thing is and it annoys me a little bit, only because when we have the world as we see it, many professions are you need expertise in it, right? So if you’re speaking to about the economy, an economist with years of experience is a natural person you turn to. If you’re talking about medicine, you turn to a doctor, right? But when you turn to the issues like geopolitics, typically the experience levels in things like these are people who may have worked in politics in the past, or people who have somehow taken an academic route to understanding these changes and challenges. But you cant’t I don’t think you can sell geopolitics as a service or as a key, as a speech, really anymore as just isolated on that. Because geopolitics again is impacted by the other three g force as we call them, you know, Global four, the other three of them. And if you strictly say to yourself of I only speak on geopolitics, then what happens if technology comes into the fray or globalisation comes into the trade? Or how technology will impact the decision making processes of this government? If you are not keeping your finger on the pulse of these other development at the same time, then your analysis going to be very reduction. You’ve got to bring it back down to geopolitics, what you really understand and you’re missing out a whole universe of analysis and insights for your audience.
00:15:06 – 00:15:39
And that’s what we don’t do because if you’re speaking about, really, you really need to understand, is it geopolitics you’re talking about, or is it political risk you’re talking about? These are things which sometimes are interchangeable, but they mean something truly to those who care about it. And if you say to yourself, I’m only a geopolitician, if that’s even a word or I speak on typically this topic, then everything else which is connected to that you’re gonna cut off, really is that is that the analysis is going to bring to people. So I realised early on from hearing, you know, much more senior people that may speak when geopolitics was the one thing to watch.
00:15:39 – 00:16:00
But as the world becomes more complex, that concept cannot live by itself any more it needs to be connected to the wider, changing, changing dynamics in the world. And that’s what I would bring to a talk when speaking not only talking about geopolitics, but including other aspects of the world, which would matter so much to the audience. And we see great results when we do that.
00:16:00 – 00:16:13
Fantastic. It makes sense to me to have that whole you know 360 view. If you like you mentioned audience who would be your ideal audience? who would benefit most from hearing your expertise?
00:16:13 – 00:17:00
Now, when Maria, when I first started speaking, I would test my material on different audiences so I would bring our topics to the military side of things, speaking at different military conferences, and they would love what I’d say for their own audience. I would bring them my my my talks to, you know, the chief of the chief investment officers of the world in the investing world, and they’d find something of value in it. And then I would bring it to also to the policymakers so different international organisations and policy making body bodies and they would find something value from it. So I think it really depends on what you want from the material that we deliver. But our audience are typically anyone who has a stake and changes the challenges of this world, who really need to better understand it.
00:17:00 – 00:18:16
And if you have, if you come to this from an investor point of view, then we have material. In fact, our event on the 24th of February, what is typically targeted towards investments and investors and government officials are not the military. So if you’re coming in from that point of view, then anyone from the HSBC s of the world to the family offices of of the world to different kinds of hedge funds across the world, not only in emerged markets and more developers in emerging markets who more increasingly have a stake in what they do because they have more money at their disposal no interest rates being so low and capital being so cheap they are able to do a lot more with what they have, so they need better insights into how the world sees them and how they can impact the world. So that’s a big audience policymakers. So, uh, again, as I mentioned, you know what it is like the imf in the past, the world bank, these kinds of organisations too would be sort of a demographic of ours and the military side of things. But again, with military gets more complicated because you don’t know a lot of what they’re thinking about, and there’s a lot of security clearances that you have to go through. But the easiest most lowest hanging fruit would be in the investor community to begin with, and those who are connected to that as well.
00:18:16 – 00:18:29
And what specifically they’re asking you to come and talk about? Are they asking you about what’s going on now? Are they asking for the 100 years? Are they? What are the topics they’re asking for? Are they taking a specific topic and asking you to go deep on that?
00:18:29 – 00:19:22
Well, typically, when we do speak, they there are certain hooks that they see me speak on, and they want to jump on those whether it’s geopolitics, whether it’s changing demographics, whether it’s how globalisation is impacting the world. But then once we have conversation before the token, hey, you know, we actually have this concept of the C, O. P s and and the index, then the conversation growth. And they say let’s talk about this because it wouldn’t really be aware of the angle that we’re bringing and probably that’s due to our promotion, which is why we’re having these events too, I guess. Educate the market more on what we’re doing. So it would be on different facets of the G4 the global four, and then once they’re hooked in for these things and again every talk that I give, I insist on making as bespoke as possible only because the talk you give to the corporate insurance world is going to be different to the talks you give to the hedge fund world. And that’s natural. So you can’t use the same material the same angle. When talking to these audiences.
00:19:22 – 00:19:46
Wow! And I imagine also it’s continually changing and evolving. So you’re constantly having to update to keep up to date. And that’s the value of having you coming in, that it’s tailored to the audience. It’s updated. It’s up to the minute. Okay, I’m gonna give you I’m going to give you another difficult question. I’ve given you a hard time. Even I like you, but I’m making we work here. So final question here, what should we keep be keeping an eye out for in 2022?
00:19:46 – 00:20:23
2022 again that’s a big question, and I would push back and ask. It depends on who’s asking the question, because that’s the X factor in giving proper analysis. Because if you ask anyone, what are you expecting? They give you one generic answer. They’re not thinking about the audience as much as they should do. So if you’re coming to me and you are a policymaker in a sub Saharan African country, who needs more foreign direct investment, for example, and you’re seeing that Covid has really impacted your own domestic markets and also the sentiment of investing in emerging markets. My answer would be different.
00:20:24 – 00:21:44
If you’re asking me as a as a hedge fund manager or chief investment officer in London, who has exposure to the Chinese, uh, mining, uh, industry, that my answer would be different. But in general, I think what we’re going to see now, especially with interest rates rising, we’re going to see a lot of behaviour that we saw last year, meaning investments coming from all angles into projects, which really didn’t have any longevity in them. Investing in startups and investing in different kinds of, um industries and different types of concepts which don’t have a long term ROI being cut short very fast. That’s going to impact again sentiment in the market. And it’s also going to impact what the consumer, um, has available to them, meaning if your startup and you’re rolling out specific projects and because interest rates are high and because now you’re investors, see, hold on. Now that money is low, we need to cut off sort of dead weight or investments that are doing well, and you promised your consumers certain things and you can’t deliver. That’s going to impact not only the business but also what you’re training to consumers think about business in the future for theses start up, start and offering all of these solutions and all of these different products and services. And then, for whatever reason, you can’t afford anymore. It gets cut. You’re really frustrating the consumer not really buy into these things in the future.
00:21:44 – 00:22:15
But again, the answer is very bespoke, depending on who is asking but in a general sense again, given you’re asking me from chief investment officer point of view, for example, that’s what I would say. So be very cautious and where you put your money in this year because the markets are going to be very volatile, especially as things that crypto have different upswings and down springs. Confidence rises. Confidence, you know, it dies down. These are things which need to be kept in mind by this specific audience. But then again if you’re a different audience, my answer would be different. And that’s not bespoke nature, which I mentioned at the beginning.
00:22:16 – 00:22:23
Mind you have given a huge amount of value for those particular audiences that you’ve highlighted incredible value. I hope they’re going to transcribe what you said.
00:22:23 – 00:23:12
You need to. But that’s a theme where you need to do this because you can’t just approach the world now in in a cookie cutter. Uh, you know, point of view, you can’t say in general, this is what’s going to happen because generalities are of the news media. Who can speak that way? If you’re a consultant if you’re keynote speaker, you can’t say in general, this is what’s going to happen because you don’t speak to a general audience. You speak to a very specific audience and they’re bringing you in for a very specific issue. So if you say in general guys, this is what I think will happen in general terms in these general years. And what value are you bringing? You’re not really doing yourself a favour, so if you say these are the insights, I’ll give you if you’re facing these kinds of issues. But if you’re facing these kinds of issues, this is what I would say to you, you know. And that’s that bespoke, you know, X factor that I bring to a talk, and I and, uh, I will continue to bring, especially in 2022 rolls out.
00:23:13 – 00:23:55
that is excellent. Thank you so much. It’s been I’ve learned so much, and I also want to thank everybody for listening to the speaker show. And if you enjoyed this episode, please leave a rating on apple podcasts. You can keep up with future episodes on the Speaker’s Associates website, which is speakersassociates.com, or your favourite podcast app. If you would like to invite Klisman to speak at your next conference, please contact Speakers associates and plenty of time to book him so you won’t be disappointed. And also, we will add notes in this podcast so that if you want to join him on the 24th of February to grab that 2022 report and those insights, you can do so. So thank you all very much for listening. I will see you next week.
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Maria Franzoni is an established and recognised speaking industry expert and one of the most experienced speaker bookers in Europe.
As well as working with speakers, Maria also hosts live shows and podcasts. She currently hosts The Speaker Show podcast for Speakers Associates.