Coming to India, Powell says the BRICS meeting is going on in Russia and we have seen Prime Minister Modi embracing President Putin. Modi will also be sitting down with President Xi later today., India seems to be in a amazing position where on the one hand it is a cherished partner of the BRICS with huge positives, obviously energy and other dimensions and on the other hand, India is an absolute cornerstone of US policy, most obviously through Quad.
What is the future of finance going to look like and how can investors benefit out of it?
Ben Powell: The need to mobilise capital and fund all of the aspirations is the practical reality. That is something we are going to see more and more all over the world, but particularly, in the West where they have quite a relatively constrained fiscal position. There is a lot of debt in various Western countries. So, we are going to see the governments, just from a balance sheet perspective, are required to reach out to trusted partners on the capital side to bring private capital to the party. We are going to see more and more tie-ups between governments, in terms of legal framework, regulatory permissions, and societal buy-ins.
A partnership between governments and private capital is important because many Western countries do not have so much fiscal firepower. So, leveraging private balance sheets is something we are going to see more and more of in the West and perhaps elsewhere.
In the light of fintech and new finance forms getting created, how do you see AI and technology changing the future of retail financing, consumer financing because that is where large technological disruptions have happened. I do not know when was the last time I went to a branch. I do not know about you.
Ben Powell: No, that is right. Technology marches on day by day. At BlackRock, one of our favourite technologies is ETFs, just as an example., ETFs have allowed a substantial increase in the democratisation of access to capital markets. It has allowed moms and pops households to be able to access the fruits of capitalist growth in a way that a generation ago really would have only been straightforward for bigger institutions.
Now, at the click of a button, one can access ETFs and get exposure to any of the mega forces. I have just mentioned and almost anything else you can imagine. I think it is only going to continue. We are all hoping that the efficiency of capital markets and the ability for more and more people all over the world to access the benefits of capitalism, being able to fund unexpected health challenges, fund their pensions, fund their school fees, whatever it might be, hopefully more and more people are going to be able to do that.
Just speaking as a humble foreigner, India is surely at the forefront of having seen something like 100 million people become investors, many of those relatively recently. There is still 1.3 billion to go, I guess over time. So, we should not be too optimistic. There will be stops and starts, maybe some complications along the way. But as a capitalist, I am excited to see that there is more access and more availability for more and more people all over the world to be able to tap into the benefits of the genius of certain companies and their leaders benefiting all of us over time.If I put a gun to your head and ask you to pick your favourite theme, which one would you pick?
Ben Powell: It has to be artificial intelligence. This is just an extraordinary moment. Intelligence is not like other commodities. We are talking about the ability to think and solve problems in a general sense. This will take time. So, we need to be pragmatic and realistic and appropriately calm. But I think a degree of excitement is appropriate as we think about all of us being able to deploy more intelligence. We have our limited biological substrates here in-house, if you like. But we are all, over time, going to be able to access the silicon substrate and have more intelligence and that will be useful whether you are booking a holiday or whether you are a government trying to run a very complicated nuclear power plant. The democratisation of intelligence over time is very exciting for investors and if I may say so, is also a very exciting moment for humanity in general with likely very significant consequences. So, if you put a gun to my head and make me highlight one, it is hard not to choose artificial intelligence because it is such a big deal in every dimension.
I am putting the gun back. And we will talk about where do you see India moving? In India, all of us are excited about the demographics, about productivity gains, about stable government. But from your standpoint, when you look at India and you have options to choose between India and other countries, where does India stack up?
Ben Powell: Very highly. When I think about my favourite mega forces, all five of them, India comes to mind straight away across all five. Just to highlight, today, we have the BRICS meeting in Russia and we have really quite extraordinary scenes of Prime Minister Modi embracing President Putin. Prime Minister Modi will be sitting down with President Xi later today. So, India seems to be in a really amazing position where on the one hand it is a cherished partner of the BRICS with huge positives, obviously energy and other dimensions and on the other hand, India is an absolute cornerstone of US policy, most obviously through Quad.
So, India has a very interesting position where a more complicated geopolitical world is a little bit scary and is probably a net negative for the planet as a whole. But one needs to be more nuanced, more specific. When I think about a country like India, if they play the game skillfully, we can say that so far this is the case, and there is an ability to benefit from some of the geopolitical complexity, which for sure is causing worry, but also can create opportunity for those countries which are skillful and flexible enough to navigate what is a complicated environment.
I am extremely interested to see what is going on at the BRICS summit today and how India can continue to navigate this very interesting, complicated geopolitical backstory.