\u300cTHE GOLD DINAR IN MULTI-LATERAL TRADE SEMINAR\u300d\uff0f2002\u5e7410\u670823\u65e5<\/p>\n
I would like to thank the organisers for inviting me to
\nspeak at this seminar on the Gold Dinar in Multi-Lateral
\nTrade. I hope I can help to make clear the idea and the
\nconcept of the Gold Dinar.<\/p>\n
2. For some time now the Muslims and their countries
\nhave become synonymous with backwardness, authoritarian
\nand frequently unstable Governments and lately with
\nterrorists and terrorism. Yet Islamic states were not
\nlike that before, nor were Muslims involved in acts of
\nterror. In fact Muslim countries were where the
\npersecuted of Europe, in particular the Jews, sought
\nrefuge. The pogroms and the inquisition in Europe
\nforced the Jews to migrate to the Muslim countries in
\nNorth Africa. Yet before that when Muslims ruled Spain,
\nthe Jews, the Christians and the Muslims were able to
\nlive together in peace.<\/p>\n
3. If today there is so much animosity between Jews
\nand Muslims it is not because of religious differences.
\nThe fact is that the Europeans who in the past never
\nliked the Jews and massacred them every now and then,
\nwanted to get rid of the Jews. Together with the
\nZionists they took Arab land in Palestine and gave it to
\nthe Jews for the setting up of the state of Israel. In
\nthe process the Palestinian Arabs were expelled from
\ntheir homes and their land and ever since these people
\nhave been living in makeshift refugee camps in Lebanon
\nand Jordan.<\/p>\n
4. When the Arabs attacked Israel in a conventional
\nwar, they were not only defeated but more of their land
\nwas seized by Israel. The Israelis were able to win
\nbecause they were strongly supported by Europe and then
\nAmerica. Every time the Arabs fought to get back their
\nland, they actually lost more land.<\/p>\n
5. The conflict is therefore about land, not about
\nreligion as it is made out to be. If the Palestinians
\nindulge in acts of terror today, if other Muslims
\nindulge in acts of terror, it is because conventional
\nwar has become impossible for them. We do not condone
\nacts of terror by anyone. Suicide bombing against
\ncivilians must be considered as acts of terror. So are
\nthe killings of Palestinian children and civilians by
\nthe Israeli armed forces — all are acts of terror. And
\nthe Israeli army is no less a terrorist organisation now
\nas is Hamas, as was the previous Jewish Irgun Zvai
\nLeumi, the Stern Gang and others, all are terrorist
\norganisations.<\/p>\n
6. The events of September 11 2001, have however
\nfocused the world’s eyes on Muslim terrorists and this
\nhas lead to a very distorted view of Islam and the
\nMuslims. This view has affected Muslims in all areas.
\nThey are being discriminated against everywhere.<\/p>\n
7. This unfortunate repercussion of September 11 has
\nresulted in the whole world’s economy being unable to
\ngrow. And now, as a direct consequence we are being
\nthreatened by a war against Iraq, a Muslim country and a
\nmajor oil producer. Without doubt this will make the
\neconomies of the world even less able to grow,
\nespecially those of Muslim states.<\/p>\n
8. The West and in particular the Americans are very
\nangry. So are the Muslims. Angry people cannot act
\nrationally. But if we want to solve the problem we have
\nto strive to be rational, to remain calm and not let
\nemotions control us.<\/p>\n
9. At the moment most Muslims are only bent on
\nrevenge. They are hitting back because of anger. They
\ndo not seem to care whether they achieve ultimate
\nsuccess or not. Every time they hit, the other side
\nwould hit back. And every time the other side hits back
\nthey would retaliate in kind.<\/p>\n
10. The question is how long will we go on like this.
\nThe Palestinians have been fighting for the past 50
\nyears. Their position has not improved. In fact it has
\nbecome worse. In fact the position of the Muslims
\nworldwide has become worse. And if what is happening
\nnow is any indication it would continue to be so for
\ndecades. The Muslims of this world, all 1.3 billion of
\nthem, will continue to be oppressed and humiliated.<\/p>\n
11. There are of course some of us who believe that it
\nis the fate of the Muslims to be oppressed in this world
\nbecause in the akhirat we would be in heaven. If this
\nis the fate of the Muslims, why did the Prophet strive
\nto save the Muslims from the oppression of the Khuraish?
\nWhy did he and his followers migrate to Madinah; why did
\nhe unite the Ansars and the Muhajirin and gather them
\ninto a strong force in order to repel the enemy? Indeed
\nthe Al-Quran enjoins the Muslims to equip themselves for
\ntheir defence, to educate themselves, to achieve success
\nin life even as they must seek merit for the hereafter,
\nso they may impress the Jahilliah and spread the
\nteachings of Islam. In a matter of 100 years the
\nMuslims had created a powerful Muslim world extending
\nfrom Spain in the West to China in the East.<\/p>\n
12. Did the Prophet preach to his followers that they
\nshould suffer in silence because for them there will be
\nheaven in the next world? In fact he prepared them to
\ndefend Islam with their wealth and their lives, to
\ndefeat the enemy. He did not advocate just seeking
\nrevenge upon the enemy in anger through attacks and
\nkillings.<\/p>\n
13. It is clear that we Muslims are openly and
\nblatantly ignoring the clear teachings of our religion
\nin favour of quarrelling over contentious issues and
\ninterpretations while ignoring the oppression by the
\nenemies of Islam, while failing to prepare for the
\ndefence and safety of the ummah and Islam.<\/p>\n
14. One of the clearest teachings of Islam is that all
\nMuslims are brothers and that no one should question the
\nreligion of anyone as long as he takes the oath that
\n“there is no God but Allah and Muhammad is His Prophet.”
\nThe split amongst the Muslims into hundreds of different
\nsects is due to the denial of the Islam of rival groups
\nin order to justify the fight against them.<\/p>\n
15. All who submit to “Allah and His Prophet” must be
\nconsidered as Muslims and must be brothers of each
\nother. Race and nations and borders should not stand in
\nthe way of Muslim unity nor should ideologies and
\npolitical parties. There is only one Islam that was
\nbrought by the Prophet. The breakup of the Muslims into
\nsects and groups all occurred after the death of the
\nProphet. It follows that the differences in the
\ninterpretations of Islam, differences which lead to the
\nmany splits and the formation of splinter groups, which
\nare opposed to each other, is due to different
\ninterpretations of the teachings of Islam. But we all
\nsubscribe to the basics and it is a basic creed of Islam
\nthat all Muslims are brothers. If we can forget our
\ndifferences in the interpretations of Islam, if we go
\nback to the basics which we all accept then it is
\npossible for us to unite. Certainly now, when the
\nMuslim ummah everywhere is threatened and oppressed,
\nwhen our holy places are being desecrated, when we are
\nso weak and poor, particularly poor in knowledge and
\nskills in this age of technology, certainly now we must
\nforget our differences and unite.<\/p>\n
16. However, our unity should not be for the purpose of
\nfutile attacks on the enemy. We should unite in order
\nto build up our capacity and our strength. Simply by
\nbeing united and strong, we would be freed from
\noppression. It will take time but Allah has enjoined
\nupon us to be patient.<\/p>\n
17. “Innallah hamaassabirin”. The Prophet was patient;
\nHe did not seek revenge for the humiliation and
\noppression he was subjected to. He retreated to a safer
\nplace in order to build up his strength. And he created
\nsufficient wealth among his followers to support his
\nstruggle to return to Makkah.<\/p>\n
18. We have to do the same. The Muhajirin and the
\nAnsars among us must unite, must build up our capacities
\nin terms of wealth and technology, in terms of stable
\nIslamic communities, in terms of following all the
\nundisputed injunctions of Islam.<\/p>\n
19. Pure materialism is abhorred by Islam but there is
\nno injunction against the legitimate acquisition of
\nwealth. Tithe must be paid on our wealth but we are
\nalso enjoined to be charitable. We know that the third
\nCaliph, Saidina Othman, was wealthy. During the
\ncampaigns by the Prophet he donated camels and other
\nsupplies for the defence of the Muslims.<\/p>\n
20. If the Muslims are going to protect themselves they
\nmust have sufficient wealth. Allah has endowed Muslim
\ncountries with inexhaustible wealth. These need to be
\nadministered for the good of the ummah.<\/p>\n
21. But wealth can also be acquired through commercial
\nactivities, through the production and distribution of
\ngoods and services and through trade.<\/p>\n
22. Today trade between Muslim countries is small. It
\nis not suggested that we reduce our trade with the non-
\nMuslims. But we should endeavour to increase the trade
\nbetween Muslim countries.<\/p>\n
23. We can trade through the exchange of goods, through
\nbarter. But today we use money. Since we don’t have a
\ncurrency which is strong enough and stable enough in
\nexchange rate terms, we have to use the American dollar.
\nBut the dollar is also not stable. Today the dollar has
\ndepreciated against many other currencies. This means
\nthat despite the increase in the price of oil for
\nexample, we are actually earning less due to the
\ndevaluation of the dollar. It is the same with the
\nother currencies. It is the same with our own
\ncurrencies. They all fluctuate in value. And they are
\nall subject to speculation and manipulation as happened
\nin Malaysia and other East Asian countries, in Russia
\nand in Latin America.<\/p>\n
24. The reason for this is that paper currency has no
\nintrinsic value. You can print any figure you like on
\ncurrency notes but in exchange rate terms the figure
\nmeans nothing. The Malaysian Ringgit is 3.8 to one U.S.
\nDollar. The Turkish Lira is 1.5 million to one U.S.
\nDollar. The Indonesian Rupiah is 9000 to one U.S.
\nDollar. The purchasing power within the country is
\ndifferent from the purchasing power outside the country.
\nSometimes countries have as many as four exchange rates
\n— one official, one for domestic economy, one for
\nexport and one for import.<\/p>\n
25. Clearly this situation in terms of international
\nfinance is chaotic and anarchic. But since the system
\nbenefits the powerful countries they are unwilling to
\ncorrect it.<\/p>\n
26. If we want to avoid being short-changed we must
\nhave a currency that has intrinsic value. Gold does
\nfluctuate in price but the fluctuation is minimal. It
\nis not possible to devalue gold by one hundred percent
\nor one thousand percent. Nor is it possible to revalue
\ngold by the same percentage. The fluctuation in the
\nvalue of gold can only be by a few percentages, up or
\ndown.<\/p>\n
27. When the Allied nations met in Bretton Woods to
\ndetermine the principle for the rate of exchange of
\ninternational currencies in order to facilitate trade,
\nthey decided to use gold as a standard. The value of
\nthe U.S. Dollar was fixed at one dollar for 1\/35 ounce
\nof gold or 35 U.S. Dollars per ounce. All other
\ncurrencies were valued in gold through the rates of
\nexchange with the U.S. Dollar.<\/p>\n
28. This worked quite well until some countries wanted
\nto devalue their currencies in order to become
\ncompetitive in the international market. Then other
\ncountries also decided to devalue in order to remain
\ncompetitive. Finally the U.S. Dollar was devalued
\nagainst the Gold.<\/p>\n
29. At this stage the gold standard could not be
\nsustained. The market claimed that it could determine
\nthe exchange rate through the demand and supply of
\ncurrencies freely traded in the market. But profiteers
\nmoved in and they manipulated the value of the
\ncurrencies so that there was chaos in terms of exchange
\nrates of currencies. Business became very difficult.
\nIndeed many good businesses went bankrupt when the
\ndomestic currency gets devalued. The hedge Funds which
\nclaim to insure the value of the currencies made huge
\nsums of money speculating and manipulating the values of
\nthe currencies.<\/p>\n
30. This anarchy in the international financial regime
\nwill remain because it benefits the rich and the
\npowerful. If we want to protect ourselves we must
\nevolve our own payment system, our own trading currency.<\/p>\n
31. The Gold dinar can provide the currency for trade
\nbetween nations. If we value all trade items against
\ngold, then we will have no problem with the exchange
\nrate. We know that in the last resort we can melt the
\ngold and sell it in the market. You obviously cannot do
\nthat with paper currency, worst still with figures on a
\ncomputer. They have no intrinsic market value as gold
\nhas.<\/p>\n
32. But gold is bulky. We cannot be carrying gold all
\nover the world in order to pay for goods we want to
\nimport. But we need not do that.<\/p>\n
33. It is not intended to use the gold dinar as
\ncurrency for everyday transactions in the domestic
\nmarket. For this we can use national currencies. If
\nthere is inflation then the currency can buy less gold
\nand other goods. And vice versa. So there is no
\nnecessity to carry bags of gold coins for transaction
\nwithin the countries.<\/p>\n
34. But even for international trade the transport of
\ngold bullions or gold coins would be very minimal.
\nThrough bilateral payments arrangements the imports can
\nbe balanced by the exports and the differences settled
\nin gold dinars. The Central Bank can provide a
\nguarantee for the gold required for the payments of the
\nbalance. In the following weeks or months the deficits
\nmay be reduced or a surplus achieved. In that case the
\npayments of the balance can be made through accounting
\narrangements between the Central Banks. It is only
\noccasionally that a necessity might arise for the actual
\ngold dinar to be used to pay for the purchase of
\nimports.<\/p>\n
35. We cannot really verify the amount of money a
\ncountry has. A country’s own currency cannot be
\nregarded as its reserve. But gold dinars or gold
\nbullion or gold ingots can serve as a country’s reserve.
\nStill in the end we have to trust each other. If we are
\ngood Muslims then the cases of fraud by Central Banks
\nwould be minimal.<\/p>\n
36. Assuming that Malaysia exports to a Dinar Area
\ncountry a hundred million Dinars worth of motor vehicles
\nand then imports 110 million dinars worth of oil, then
\nthe payment required by Malaysia would be just 10
\nmillion dinars. The ten million dinars is credited to
\nMalaysia’s trading partner. If in the following month
\nthe trading partner buys 110 million dinars worth of
\nMalaysian cars and Malaysia buys 100 million dinars
\nworth of oil, then no payment need to be made by either
\nparty. The 10 million dinars that has to be paid by
\nMalaysia’s trading partner for the motor vehicle can be
\noffset by the credit of 10 million dinars from the
\nprevious month’s transactions.<\/p>\n
37. Today with computers we can close account and pay
\nmore frequently. Through this method it is not
\nnecessary to purchase or earn hard currency.<\/p>\n
38. Of course there may be some countries which are so
\npoor that they cannot have gold dinars. We can buy some
\nraw materials to be paid in gold dinars. They can be
\nhelped to build up the reserves of gold dinars.<\/p>\n
39. There will be problems. But if we begin with just
\na pair of countries we would be able to minimise
\nproblems and demonstrate whether it works or not. We
\nwill be able to identify the weaknesses and the faults
\nand correct them.<\/p>\n
40. Gold is a precious metal. There has never been a
\ntime when there was no demand for gold. It is also not
\nso plentiful that its price will fall the way paper
\ncurrency or even other precious metals can fall. Yet it
\nis not so limited in quantity that anyone or any trader
\ncan corner it and manipulate the price.<\/p>\n
41. In different countries the price of gold will
\ndiffer in terms of the currency of that country. That
\nis a function of the currency of the country. The value
\nof one gold dinar is one gold dinar no matter what the
\nexchange rate of a currency is against the gold dinar.
\nIf the value of goods or services is expressed in gold
\ndinar, the value remains the same no matter which
\ncountry is involved in the trade.<\/p>\n
42. Thus an exporter can declare the agreed price in
\ndinar to the importer in another country and to the
\nCentral Bank in his country. Depending on the agreement
\nreached the Central Bank will pay the exporter the
\ncurrent local currency equivalent to the gold dinar
\nprice. At the importer’s end, he would pay to his
\ncountry’s Central Bank the local currency equivalent of
\nthe agreed price in dinar. At the end of the week or
\nmonth the Central Banks will total up the value in dinar
\nof the exports and imports between the two trading
\ncountries. If they are not balanced then the country
\nwith a surplus will have a credit account against the
\ncountry with a deficit. The difference can be paid in
\ndinar or in goods or the country with the surplus can
\nhold the dinar for future purchase from the country in
\ndeficit.<\/p>\n
43. In multi-lateral trade, the process may be a little
\nmore complicated but it is entirely, manageable. A
\nclearing house can be set up for a group of trading
\ncountries and the deficit and surpluses balanced. The
\nprocess is not unlike the clearing of the cheques of
\nnumerous banks at a central clearing house.<\/p>\n
44. Provided there are goods or services to be supplied
\nby all participating countries, the amount of gold
\ndinars that needs to be kept as reserve backing and for
\npayment in the last resort is very small. Ideally there
\nwould be no need to transport and pay in dinars. The
\nimports and exports in most instances would cancel
\nthemselves. The profits come from disposing of the
\ngoods or services domestically when the local currency
\nwould be used.<\/p>\n
45. There will be problems of course. But there are
\nproblems now. Countries with no “hard currency” i.e.
\nU.S. dollars cannot pay for their imports anyway. In
\naddition the U.S. currency is not as stable as gold.
\nNot only can it appreciate or depreciate widely but a
\ncountry’s currency can be made to depreciate so much
\nagainst the U.S. Dollar that its imports cannot be paid
\nfor, priced as they are in U.S. Dollar. The gold dinar
\ncannot depreciate much against the U.S. Dollar.<\/p>\n
46. Gold price can also be manipulated but not as
\neasily as U.S. Dollar or other currency. No one can
\nsell gold at below market price because he just will not
\nbe able to deliver when called upon to do so. Short-
\nselling will be very difficult if not impossible.<\/p>\n
47. However local currency prices of gold can still
\nfluctuate if left to the market. It is up to the
\ncountry concerned whether to control exchange rates or
\nnot. But speculation and manipulation will not be as
\neasy as when local currency is valued against the U.S.
\nDollar.<\/p>\n
48. It must again be stressed that the Gold Dinar is
\nexclusively for international trade. It is not to be
\nused as local currency. In a sense it is like the U.S.
\nDollar now. Some countries of course use the U.S.
\nDollar locally for paying hotel bills by foreigners.
\nBut the dinar is heavy and cumbersome to carry. So it
\ncannot be used as freely as the U.S. Dollar locally.
\nThis again lends credibility to the dinar and the local
\ncurrency, which has to be used for local payment.<\/p>\n
49. We should not be too ambitious as to launch the
\nGold Dinar for multi-lateral trade at one go. We should
\nbegin by pairing off the countries willing to use the
\nGold Dinar. A pair of good trading countries with a
\nfairly well balanced trade should initiate the use of
\nthe Gold Dinar. Problems that arise can be resolved and
\nthe system improved. After the bugs have been got rid
\noff then the trade using the dinar can be expanded
\ngradually to involve more countries.<\/p>\n
50. Traders in particular will be happy because their
\nprices in Gold Dinar would not be affected by changes in
\nthe exchange rates of the importing countries or the
\nexporting countries. In dinar, the prices will always
\nremain the same.
\n51. It is not the intention to make the dinar a common
\ncurrency for all countries. It is not really the Gold
\nStandard with a fixed value against local currency. If
\ncountries print more local currency there would still be
\ninflation within the country. But trade would be stable
\nand enhanced. Speculators and manipulators will not be
\nable to undermine international trade.<\/p>\n
52. Of course the Gold Dinar can be a trading currency,
\nfor all countries, not necessarily Muslim countries.
\nBut Muslim countries are in the best position to
\ndemonstrate the viability of the system. They are in a
\nposition to manage their economies rationally and in the
\nprocess show the world that they are capable of growing
\nwith stability and in peace. And this will do more
\ntowards countering oppressions by their enemies than the
\nfutile violent retaliations.<\/p>\n","protected":false},"excerpt":{"rendered":"
\u300cTHE GOLD DINAR IN MULTI-LATERAL TRADE SEMINAR\u300d\uff0f2002\u5e7410\u670823\u65e5 I would like to thank the organisers for inviting … \u7d9a\u304d\u3092\u8aad\u3080 \u30c7\u30a3\u30ca\u30fc\u30eb\u306b\u95a2\u3059\u308b\u30de\u30cf\u30c6\u30a3\u30fc\u30eb\u9996\u76f8\u306e\u6f14\u8aac\u2462<\/span>