Tun Dr Mahathir on Gold Dinar

Tun Dr Mahathir Mohammad

Previously, at the time or crisis 1997, Tun Dr Mahathir Mohammad had put stressed blame on the speculators which they have ability to manipulation paper money, an inherent weakness of the fiat money system. He also stressed to come back to gold which gold should be recognized to be real money and stable unit of account. The purported purpose of this move would be to reduce dependence on the United States dollar as a reserve currency, and to establish a non-debt-backed currency in accord with Islamic law against the charging of interest.

Tun Dr Mahathir suggested to established Bilateral Payment Arrangement (BPA) and Multilateral Payment Arrangement (MPA) using Gold Dinar based system within country especially developing countries for example trading between Malaysia and Indonesia. The question arise on how and when gold dinar to be implemented in international trade? Tun Dr Mahathir also agrees that the implementation of gold dinar cannot be as immediately as it to be said. It needs to be step by step such as by pairs of countries then advancing to group of countries- to settle balance of payment.

Based on him the main objective of Gold Dinar proposal is to use surpluses to finance between the developing countries. Furthermore, with minimizing the use of developed countries currencies for settlement of the intra developing country trade, the developing country will help each other to grow and develop, buy and sell from each other. This will lead the flow of the trade itself come from the developing countries with the implementation of Bilateral Payment Arrangement (BPA) or Multilateral Payment Arrangement (MPA) using Gold Dinar. Furthermore, the dependency to foreign currency especially US Dollar will be demolished. Within this the future of developing country will be secured in stable condition and greater unity especially in Islamic Nations (OIC)

Implementation of Gold Dinar in International trade can lead to justice between import and export. They can help trading country especially in OIC country. It also helps the developing country to trade with develop country in fairness and justice value. There will be no fluctuation exchange rate involve. Currency denomination and currency settlement of trade should not be based on US Dollar instead but using the Gold Dinar.

All these problems arise because the world went off the Gold Standard. In the International Conference on Gold Dinar Economy 2007 Tun Dr Mahathir noted that in the case of paper people will have risk in losing their value and also purchasing power. He stressed back that only Gold Dinar really has a value in it.