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.

The Gold Dinar
Malaysia has stated that it plans to start a gold dinar scheme as early as mid 2003. Malaysian Prime Minister Dr. Mahathir bin Mohamad has hosted conferences to explain and "Sell" the concept of the gold dinar. It is not intended that there should an actual gold dinar coin, or that it should be used in everyday transactions, the gold dinar would be an international unit of account for international settlements between national banks. If for example the balance of trade between Malaysia and Iran during one settlement period, probably three months, was such that Iran had made purchases of 100 million Malaysian Ringgits, and sales of 90 million Ryals, the difference in the value of these two amounts would be paid in gold dinars.

What is the Value of a Gold Dinar?
Although we have seen a claim that the first gold dinars was issued in 1992, we do not know of any such Malaysian coin, although we believe a private company may have issued their own unoffical version. From the reports of the Malaysian conferences, we deduce that the gold dinar would be one ounce of gold or its equivalent value.

The Islamic Dinar
Malaysia has suggested that its trading partners in the Islamic world should all use the gold dinar. This appears to be politically motivated, as one of its main aims appears to be to reduce the dependence of the Islamic world on the US dollar for international settlements. It may also be intended to attack the value of the dollar by means of Islamic nations and their people, selling dollars and switching into gold dinars. Malaysia has stated its hope that other non-muslim countries would also use the gold dinar, although this may have been to deflect any criticism of the scheme as a closed-shop muslims only, anti-western club.

The Malaysian Dinar
The Malaysian currency system uses the ringgit as its main denomination, and all its gold coins have been issued with values in ringgits. No Malaysian gold dinar coins have ever been issued.

The Effect on the Gold Price
If the entire Islamic world were to ditch the US dollar, and use gold as its main or only reserve currency, then this could have a major influence on the gold price, and a similar but opposite effect on the value of the US dollar. We have seen very bullish opinions about this, but we believe that a gold dinar scheme for interbank settlements would not necessarily create a huge and sudden demand for gold, but a switch by businesses and individuals out of dollars and into gold could have a greater effect over the long term.

No Gold Dinar Coins
We have been receiving a growing number of enquiries about the availability of gold dinars, and as you can gather from the above, it appears unlikely that any will be issued as gold coins. There is certainly no plan to issue a competitor to the Krugerrand and other one ounce bullion coins.

Privately Issued "Dinars"
One source quotes the following specifications for what appears to be an unofficial privately issued version of a "gold dinar"
We also show an image of one of these coins.
Please note we do not have any stock of these "coins", or any plans at present to deal in them. Specifications

Denomination	Diameter	Weight	Alloy	AGW Gms	AGW Ozs
Dinar	23	4.25	.9166	3.895833	0.1252

Real Gold Dinars
Many countries in the arab world have used dirhams or dinars as part of their currency systems as various times during the last two thousand years. The word dinar derives from the latin word denarius, which was actually a silver coin, and the origin of the "d" in the British "£.s.d" system, abbreviations for the latin words libra, solidus, and denarius.

Taken From: http://www.taxfreegold.co.uk

The technical meaning of Siyasah Shar’iyyah is that it is the understanding and guideline of rule that is created by the imam (leader), judge or authorities based on the Maqasid of Syar’iyyah (Objectives of Syariah) and do not contradict with the primary (Al-Quran and Sunnah) and also secondary sources in Islam to help them in manage ruling based on the syariah. It must be preserved, organized, established, purity. The Ijtihad that are to be made must be relevant to Islam and also make consideration of Maslahah. It must based on the way of Islam and fulfill the teaching of Islam in many aspects.

The legality of it is based of the aspects of the policies that is created by the imam (leader), judge or authorities must give benefits and advantages to the society as a whole without concern of any trick and wrong elements that is contradicts with the teachings of Shariah and also ruling of Shariah. The policies must be made with the reference of the sources of Islam and must be adherence of the command of prohibition of Allah. The Command must be follow and the prohibition must be avoided. Furthermore, the perseverance of Al-Quran As-Sunnah and secondary sources need to be look into well.

The ruling must be adherence to the current situation. Such as one of the leader when there is victory in war in Iraq do not separate the land to the Conquerors. In this, it is because in Al-Quran stated when it is victory the land have been separated by the imam to the conquerors, but at that time it is told that they are all poors. So because of the conquerors of Iraq is in wealthy condition so it is wise decision not to separate the land to them.

Another example is in the case of giving zakat to the Asnaf especially in the case for the people who come or converted to Islam (Muallaf). It is the real objectives of Zakat to distribute the Zakat to Muallaf to to help and appreciate them to purify their condition because when they come to Islam they do not have anything and also they have many problem occurred. The distribution actually to the Muallaf who had problem and maybe he will come back to their previous religion when they is in trouble. In case of wealthy and rich a person who is converted to Islam they should not get the Zakat contribution as they have fulfilled the wealth for their own. Furthermore, there maybe many others poor and needy people that should more get the zakat contribution.

The scopes of Siyasah Syar’iyyah in Maqasid As-Shariah that needs to be fulfilled in order to make the rulling or polices aspects are:

1. Dharuriyyah (Basic Necessities such as shelter, cloth, food, marriage)
2. Hajiyyat (Complementary aspects for example Dowry for marriage)
3. Tahsiniyyah (Desirable which means that it is want that can be fulfilled by the effort and luxury for example jewelery)

In aspects of state and also authorities or government, the first scope of Siyasah Syar’iyyah needs to be fulfilled and completed to all people in the country. If the aspects of basic necessities do not completed, the government should not go for the second and also third scope eventually. They need to make sure basic necessities of the people have been fulfilled. After that they can make anything possible to make the country developed in many aspects such as industrial and construction.

There are two ways to actually implement siyasah based on Imam As-Syatibi.

1. Subjective ways
2. Methodology ways

Based on the subjective ways there need to make sure that the ways must be on the context of definitive text, speculative text, command and prohibition, original objectives and also the establishment of the policy. Then within the methodology it is based on the causes, research and study of work. They are within the current situation (Maslahah) and also based on the customs of the shariah.

There are about five (5) thing must be preserved that is told by Fakhrudin Ar-Razi. The preservations are:

1. Preservation @ protection of religion.

2. Preservation of life,

3. Preservation of mind,

4. Preservation of wealth

5. Preservation of lineage.

One of imam adds from 5 to 6 preservation. He adds the aspects of dignity. This is because he said that the 5 preservations is not include the thing of punishable. But other scholar said that there should be more than 5 or 6 preservations.

When we said about the context of Al-Quran, there is an objective and means in the context itself. For example:

“When there is a calling for Salah (Jumaat prayer) then leave your sale”

The calling for salah itself is the objectives and leave your sale is the means.

In Al-Quran also there are definitive words and also speculative words. The definitive words cannot be argues for example Riba’. But in the speculative words we can make ijtihad based on it. Considerations of Maslahah need to be made to make sure that it is legitimate to the aspects of Islamic ruling.

Siyasah Syar’iyyah is statted at the time of the prophet itself when prophet make some ruling that is not in the Al-Quran. This is we call Sunnah. At the time of Khilafah the siyasah is implemented well.

The first writing of Siyasah As-Syariah had emerged has happen on the the writing of to Imam Ibn Taimiyyah then it has been passed to his student Ibn-Ashur. Many other scholars also had writing based on the Siyasah Syar’iyyah. There are many articles stated and talked about Siyasah Syar’iyyah such as Al-Ahkam fil Siyasah Syar’iyyah. Imam As-Syatibi.

The current and present scholar who has writing about the Siyasah in aspects of ruling is Syeikh Dr. Yusuf AlQardhawi. He demonstrates in his writing about how to make an effective ruling based on the siyasah.

The aspects of Siyasah As-Shar’iyyah are many. Based on Dr.Syeikh Yusuf Al-Qaradhawi in his writing (Al-Muwafaqat) he said that five elements must be adhered.

1. The fiqh of Objective Shariah (Maqasid As-Syar’iyyah)
2. The fiqh of Contemporary life
3. The fiqh of priorities
4. The fiqh of weighting and preference
5. The fiqh of combining/ balancing

There are many scholars talk and mentioned about it because to lead the mufti, Imam, leaders, authorities, policymakers and also individual to make them really understand how to make ruling that is in line syariah principle and also true ruling in Islam. They must make sure that all aspects of objectives of syariah have been fulfilled.

If there is no writing about it, then maybe people will make their own ruling that is just given advantages to them and do not care how the society react. It is also help the Muslim state in formulating Shariah oriented public policies.

In doing their applicatory Ijtihad, they need to know well how the siyasah is really based on the shariah. If not it will effect to the society as a whole. The ijtihad must not contradict to the primary and secondary sources. The perseverance of the ruling must not let a way to the legality and scope of syariah.

They must preserve the condition that that be mentioned. Consideration of Maslahah needs to be observed well in accordance to the syariah. But, the Ijtihad must be look into aspects of legal view. If the legal view has in it, then the Maslahah is not acceptable. The Maslahah can be considered when there is none legal view. I must give benefit to all.

Gold Dinar and Fiat Money

Gold dinar is an alternative system to fiat money whereby the value of the currency is Gold value rather than paper note. The implementation and usage of Gold Dinar give more value added as opposed to the fiat money. Furthermore, in the usage of Gold as a currency and financial instrument it leads us to follow the way of Islamic society in the past. The usage of Fiat Money is actually first implemented by the west which is Non-Muslim community. They establish the usage of fiat money e.g. paper money to change the system of Gold Dinar. It is actually after the feel of Khilafah system in 1924. They gradually use the fiat money in everyday life.

The speculative issue in using fiat money is available. This is because the value of fiat money itself a ‘paper’. It leads to much speculative issue (Gharar). It is not correct manner because it makes the efficiency and effectiveness of trading will be drop, for example in the financial crisis in the 1997-1998. The crisis of the value of money happened because people try to speculate of it.

Besides that, there are many disadvantages of using fiat money:
1. It generates inflation
2. It makes countries become more indebted through the current system of borrowing in case of deficit.
3. Printing money easily by the central banks take away purchasing power of the money
4. It brings injustice in monetary transaction by dominant currencies/countries
5. Do not have intrinsic value

As opposed to the usage of the fiat money, I recommended to go back to the reality of usage of financial instruments which is Gold Dinar. Below are the advantages of using Gold Dinar as financial instrument.
1. It has intrinsic value
2. It leads to harmonization in currency system that people cannot make injustice for the usage of it
3. Inflation maybe happened in natural way
4. it can solve the problem of overproduction in printing money. Do not lead to discrimination
5. The value of Gold stable

Some Ulamaa’ are calling for abrogation of fiat money, because of the above mentioned reasons. The question arise here is will it working effectively to change from fiat money to Gold Dinar? Time will make sure it happens. Then, it is true the current fiat system generates more harm than good to the people. But how to change the financial system to make it reality in using Gold as transaction? Actually the role of changing the system by the leader, should not be sudden, as that may create more harm than the benefit, like say changing the currency suddenly. People that have money are bound to loose at least most part of their money if not all.

As for the suggestion before by the former Malaysia Prime Minister, Tun. Dr. Mahathir Mohammad, he suggests to go back in using Gold Dinar as a transaction. Many ways that he has suggest bringing unity in the Muslim leaders in one community.

The implementation that can be use to start direct of usage Gold Dinar is with the Muslim country itself in the issue of trading. For example, if Country A wants to buy or trade the commodity from Country B they can pay it with Gold Dinar and they get what they want from Country B. This also can lead the unity of the Muslim country and bring together into one Muslim world that should not be lead by the foreign country such as Europe.

As for that, America under their presiden George Bush condemned the action. They said that Gold Dinar is Useless. It is totally wrong because the usage of Gold Dinar give many advantages to Muslim World. Maybe the presiden have their own agenda.

To make Islam as a unity Muslim in the world, the secularism in using fiat money need to be change gradually. It is to make sure that the problem in using fiat money will not harmful to Muslim society. With using Gold Dinar it will bring us together (Islamic World) into one wonderful system and make many advantages of it. Recognition of Muslim world needed to be done to make it using Gold Dinar a reality. Basically it is not impossible. Only time will make it happen. A lot of study and implementation need to be done.