There are those who believe that the economy will function best on a return to the gold standard. Whether you agree or disagree with that idea, you will find this article interesting.
Imagine a world trading solely in gold and silver coins. Imagine the size of your wallet.
Yet this is the ideal world envisaged by some of Malaysia’s activists championing the Islamic gold dinar and silver dirham as a new form of legal tender to replace paper money – a utopia that could see the light of day as early as the middle of next month.
This is when one such group, Muamalah Council, plans to implement the dinar system in Malaysia’s northern state of Kelantan. If information on its website is to be believed, the council has the blessing of the state’s Islamist government, Parti Islam SeMalaysia (Pas), to kickstart the dinar in three moves.
First, the state will pay a quarter of its public servants’ salaries using the dinar. Second, all state companies will accept dinar payments. Lastly, some 600 commercial enterprises will also embrace this currency.
Inspired by selective religious sources and backed by historical precedents within the annals of Islamic history, the gold dinar system is touted by certain fiercely proud Muslims as the Islamic answer to thwart capitalism’s woes.
The idea was first mooted by Malaysia’s former prime minister, Mahathir Mohamad, in the aftermath of the 1997 Asian financial crisis. He argued that the coins would never hang their possessor out to dry in the same way that paper money had. As precious metals with intrinsic value, gold and silver are more resistant to market fluctuations and devaluation compared to the US dollar – an argument he took to the Organisation of the Islamic Conference as a tool to battle western hegemony.
Today, Islamic gold dinar advocates would cite the recent credit crunch as proof. Indeed, the rocketing price of gold – possibly transcending a record high of $2,000 an ounce – can only strengthen their pitch.
While Mahathir’s grand plan for Malaysia to implement the dinar system by 2003 may have been unceremoniously scrapped by his successor, Abdullah Badawi, the idea has since gained currency beyond Malaysia’s shores.
In neighbouring Indonesia, for instance, an outfit known as Wakala Induk Nusantara (WIN) had begun minting Islamic gold coins for use in Australia, Malaysia and Singapore. Its spokesman, Riki Rokhman Azis, claims that the number of dinars used in the world’s most populous Muslim nation has more than doubled in 2009 to 25,000 pieces.
What is perhaps more striking is the UK connection to the increasingly globalised Islamic gold dinar movement. The Indonesian grouping is adhering to a fatwa issued by the South African-based cleric Sheikh Abdalqadir as-Sufi, a Muslim convert in Cape Town formerly known as Ian Dallas of Scotland.
Then there is Dinar Exchange, the British equivalent of Indonesia’s WIN. As the “official certified supplier of Islamic gold dinar and silver dirham in the United Kingdom”, the company had just concluded a month-long series of roadshows in May that saw it promoting the gold dinar to Muslims in key UK cities such as London, Birmingham and Edinburgh. The group is inviting more to spread this Islamic vision as dinar agents. For a fee, of course.
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Do you recall when Ireland guaranteed the deposits in their banks, what followed was mad panic to follow suit as money was moving with some speed into Irish banks. Well, is this the ignition that will set us on the road to a gold standard, stranger things have happened!
Have a good one.
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