English Articles

MMJ Press Statement – Government Considering Changing Paper Currency

We are informed the Government is considering changing its paper currency in order to combat corruption, in a similar manner as was done by India recently.

Whilst the subject of national currency is being discussed Movement for Monetary Justice, an NGO dedicated to Reform of the Monetary System for the better wellbeing of the people, feels the time is now opportune for the Nation to consider a Reform of its Monetary System.

A Reform that will remove insidious inflation causing inter alia high food and rocketing house prices, reverse a persistently widening poverty gap, increase economic output, remove unemployment of youth and graduates, apart from addressing other more international monetary concerns.

Debt

We look at debt and no longer think it is a strange thing for us to take and for a country to incur. There is nothing wrong with debt if it is to be repaid without interest or any add on by whatever name. Such a debt is called a benevolent debt and can forever be repayable as long as it is owed, and we can even take collateral for it.

Islamic Gold Dinar: The Historical Standard

Lately, there have been questions on what the standards for gold dinar and silver dirham are. Since the dinar and dirham indeed formed the Shari’ah monetary standards from the time of the Prophet pbuh, our work can, therefore, only involve in the rediscovery of that classical standard. Henceforth no parties or organizations can come up with their own standards. Since the Islamic gold dinar did not come into existence until after about 50 years of the Prophet’s pbuh demise, it is obvious from history that the solidus of the Eastern Roman Byzantine Empire was the monetary basis for the Shari’ah. Hence the best way to determine the standard is to look at the definition given by its issuer, the Byzantine Empire. Coins unearthed by archeologist cannot be relied upon for this purpose because such coins generally suffer from wear and possible tempering like clipping etc. It was found that the actual historical standard for the dinar to be 4.5gm of pure gold and the dirham to be 3.15gm of pure silver. However, since the role of dinar is simply as a measure of value that depends on the gold-content and if zakat is based upon 1-year’s provision of foodstuff, then the 4.25gm dinar of pure gold and 2.975gm dirham of pure silver, as those circulated during the Prophet’s pbuh era, is also a standard.

Case for Gold Dinar Idea

I refer to the letter “Gold dinar impractical” (The Star, July 6) where Goh Hoe Hoe of Penang argued that the gold dinar initiative by the Kelantan government as impractical. From an economic reasoning this would be true so long the legal tender law stands. The paper notes would drive the gold and silver coins out of circulation, known as Gresham’s Law in economics. However given the current global monetary and economic crisis faced by the world, significantly due to the effects of the dollar and euro crises, it is worthwhile to give the gold dinar idea some consideration. The matter is not of the concept but rather how to implement it.