 to capture national government in order to bring about Islamic change, we have to work with communities and create change at the community level. So we come to part three of this talk, which is state level interventions, which is exactly contrary to what I have said, that we don't need to worry about the nation state. But as any part of any transitional strategy, because nation states play an important role today, we have to deal with them, we cannot ignore them and we cannot bypass them. But we have to recognize what these things are. These are creations of European politics and they are responsible for enormous amounts of bloodshed and violence. And over the Islamic world, nation states were explicitly created as a part of the divine and rule strategy. And there is some very important book by Vail and Locke, which should be read by everyone, the impossible state. He says basically the fundamental, the foundational basis of the nation state is contrary to the concept that contrary to Islam and cannot be reconciled. So the Islamic strategy that we want to capture state power to implement Islam is impossible to succeed because a state itself is in conflict with Islamic ideas. So nonetheless, as I said, we still have to deal with the state. So with the understanding that state is not a permanent solution, this is part of a transitional strategy, we have to deal with the state because they are so powerful, but hopefully we will evolve beyond that limitation. And states today are dividing the Muslim ummah and so they are very causing great harm to us. So with this warning, we go into study how the what happens at the state level. So again, we deal with economic myths. And one of the most popular is that export promotion is the path to development and growth. Also that the government must raise money by taxes and borrowing to finance expenditures. Banks do not create money. Inflation is due to many creation. All of these are totally false ideas. Four, the truth is that path to economic growth and development requires development of local productive capacities. And if you want to build an industry in Pakistan today, we have to protect it from foreign competition because it will naturally be weak and imperfect. And free trade, which is recommended by economists, benefits the strong economies and destroys the weak. So today, Pakistan is caught in a debt trap. We have exports of 60 billion and imports only of we have import 60 billion. So we need to borrow. And when we need to borrow, then we become enslaved by the lenders. Lenders are happy to lend even if they know this will never get repaid because they get control of our policies. And using this control, they can get enormous advantages, much more than the money that they lend us. And the money they lend is just paper. So it costs them nothing to lend any amount of money. So Jason Nicol has calculated that data was available for 2012 that about two trillion dollars was sent by poor borrowing countries to rich lending countries. And a large portion of this is in terms of interest rate. So this interest based system, financial system, is a tool for trapping the poor. So why are we in this debt trap? Well, basically it's due to economic theory. Pakistan was fine. The crisis, the crunch in BOP occurs in 2003. Up until then, we had high levels of production. But basically in 1995, Pakistan joined the World Trade Organization and started lowering the tariffs until they reached this critical point of 15%. And now they are around 8%. And when our tariffs are low, then the imports come in heavily because imports are cheap. And so there was a point at which we are importing oil seeds from Brazil. The Pakistan is an agricultural country. Why should we be importing oil seeds from Brazil? That's because our both our duties and our foreign exchange policy made the dollar cheap and the tariffs low. And so basically this destroyed local industry. And so it's useful to understand the history of free trade theory. It was invented by England, not by anybody else. After England acquired a 50 year lead over Europe via the industrial revolution. When Europeans countries implemented free trade, this created a recession in Europe and growth in UK. A German economist List invented the infant industry argument and he protected the German industry via trade barriers. And today the WTO, which enforces free trade on the weaker nations, has brought great benefits to the rich countries and brought cause great losses to the poor countries. Here is a picture of the benefits. This is the exports of goods and service. If you look at the green graph, that's the what has the high income countries started exporting and the gains to the poor countries are very low. The gains to Pakistan are not even worth mentioning. So basically the system is asymmetric favors the free trade favors the rich and is so what can we do? Well, Pakistan is really caught in a big crunch now. And so there is a short run solution which has to be political medium term requires self sufficiency in energy and agri products. And this can be achieved in three to five years. And in the long run, we need to develop local industries. Self-reliance strategy is necessary. And there is a drastic version in which we can go full Islamic and say that we renounce interest payments on foreign debt. But this will have massive political implications, which can be managed. There is a report of the Council of Islamic Ideology on Elimination of Industry in 1980, which mentions this idea and provides a detailed step by step transition plan. It needs to be updated, but the outlines are there. Now, in a short term transition to an industry economy, modern Islamic banks are the only available option. But this is not a satisfactory long term solution. So how do we resolve the short term burning problems facing the Pakistan economy? Well, the main problem is actually political. We have power struggles between the bureaucracy, politicians, army, and foreigners with their own agendas and huge amounts of money to influence outcomes. And so the solution required engineering a united front on defending Pakistan. And at the same time, protecting local industries from collapse, which is happening daily. In the medium term, we need to put all our efforts into creating energy and agricultural self-sufficiency. This will prevent us from needing so many imports and therefore allow us the once we don't need to borrow money, then we can craft our own economic policies. It's worth noting that we had industries in silk, mobile, small electronics, large electronics, telecommunications, aviation industry. And all of these industries have collapsed due to competition, free trade, and other factors. And this has caused massive damage to producer confidence. We need to understand that all of these magic tricks that we are trying to follow that lower corruption do this, do that. There are 10 forms of the Washington consensus formula, lower tariffs, encourage free markets. All of these are nonsense. They are meaningless. What we need to do is to develop local productive capacity, protect them from foreign competition and stimulate them to grow into world competitive industries. And this can be done. And there are a number of methods which have been used effectively in other countries. In the long run, if you want to create a Islamic economy, we have to eliminate inflation because if you want zero interest, you have to have zero inflation. Now, the problem is that economists have no understanding of inflation. And to understand this, you can just see around the world that they have been unable to control it despite their best efforts. Now, we have a minority school of thought, which is not being taught anywhere except for a few universities, which are called modern monetary theory, modern monetary theory is intellectual air to gains. And they have exactly an understanding of inflation. They have a policy recommendation for zero interest and zero inflation economy. And they have the mechanics of how to create it.