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First of all, Movement for Monetary Justice would like to call to attention of the Government, all Economists and the people, on two new discoveries in Economics.

Firstly, in a nation, money are not created by central banks or governments, but by banks. In any country, the government through the Central Bank only creates on average about 3% of the nation’s money i.e, the paper notes and coins we use. Whereas on average 97% of money is created by banks when they make loans. In Malaysia the percentage is 5% and 95% respectively.

Money created by the banks however is not in the form of paper notes or coins. It is in the form of numbers that appear in our bank accounts online, when the bank disburse a loan or financing.

And when we and companies make payments through internet, online portals, interbank transfers, cheque books, ATM machines and so on we do not need this money to be in the form of paper and coins. It is sufficient in the form of numbers that can be transferred online.

This is 95% of the money in this country that is being used for development and expenditure.

The fact that the Banks are money creators has been confirmed no less than by the Bank of England, the European Central Bank and the Federal Reserve. Please refer to our website at for articles proving this fact.

Movement for Monetary Justice has repeatedly tried to meet the Government to explain this phenomenon but we have consistently failed to get their serious attention. We are pleased to inform that Movement for Monetary Justice is not alone in the world in advocating this new knowledge.

Movement for Monetary Justice is now the newest member of the global movement called International Movement for Monetary Reform. In many countries today there are NGOs like Movement for Monetary Justice fighting for Reform of Monetary System, nationally and internationally.

Among them are Positive Money from the UK, Positiva Pengar from Sweden, Monetative from Germany, Gode Penge from Denmark, Mouvement Monnaie Juste from France and First Source Money from South Africa. Of course, the solutions proposed by  Movement for Monetary Justice will comply with the demands of Islam.

Why is it important to understand this new knowledge for a country, including Malaysia?

A government’s economic policy relies heavily on the assumptions the policymakers believe and executes.

If policymakers are incorrect in their assumptions and beliefs, when they recommend and execute an economic policy then the results will not be achieved, much to the detriment of the nation.

For example, the economics being studied at the university and even perhaps believed by people drafting our national economic policies today is that there must be a certain saving in a country before investment can occur.

When we however understand that a bank is a money creator, then the new reality is that investment will take place wherever the bank points the money hose, and does not depend on whether or not there are savings before the investment.

This new economic discovery is now upheld by the most prominent economists in the world today ie it is an investment that creates savings, not savings that create investments.

Therefore, the right policy to achieve the best results for the country’s economy must be ones that allow the government to control and point the banks’ money hoses to the most apt industries and sectors of the nation.

It should, of course, be pointed to the real economic sector, such as the SMEs, the manufacturing and agriculture sectors, and not to personal debts and credit card sector as preferred by banks.  It turns out that of loans from banks today, 80% go towards personal loans, credit cards and housing. Bank loans must be directed to the real economy which will create jobs and increase economic output.

Movement for Monetary Justice invites a paradigm shift consideration by society by posing a question. Should we hand to the private sector such a very important ability of the nation, as money creation? We have actually handed this right to create money, knowingly or unknowingly, to banks in the private sector.

Please refer to our website at for solutions that we have provided to address this problem.

Turning to the Wuhan Virus or Covid19 outbreak, among the government’s declared measures through its central Bank is to increase liquidity by lowering interest rates.

The first question is, do loans taken by the companies really depends on low-interest rates. Many studies have been conducted that refute this assumption; a company assumes loans based on its needs, which have nothing to do with prevailing levels of interest.

But the more relevant question is whether the debt industry is the solution, or is it actually the cause of all problems?

In the Islamic Worldview, debt is never a component in the development of an Islamic economy. The only Islamic form of debt that is recognised is Qardhul Hassan, or interest-free loan to help the poor. Other debts such as Murabahah and the like, are just usual trading practices of Muslims, and cannot and must not be a mainstay of the Islamic debt industry; a growing industry that many are sceptical as to whether it is truly Islamic.

Debt should not be an industry. The economy of an Islamic State should be mobilized and driven by Islamic equity principles of Musyarakah and Mudharabah, in sync with the Qaiddhah Fiqhiyyah, AlGhunum bi Alghurm – meaning rewards only with risk. That is, a Muslim is not entitled to receive a reward unless he is willing to accept the risk.

The country’s unwillingness to move its paradigm from debt to equity is actually the legacy of mind gripping Western couched education, contrary to Islamic world views, that has gripped the minds of people to this day.

Movement for Monetary Justice is also intrigued by the recent statement by the Minister of Finance that the government is willing to restructure loans to SMEs allowing them to make no payments during the Corona Virus crisis. This means actually “the loans will remain unchanged, and maybe even increased in amount but we allow you to stop paying for it in the meantime”

This statement illustrates the example of a solution derived from a debt gripped mind described above. The Ministry of Finance’s response should be that to help SMEs, the Government is willing to turn its debt financing into equity financing, running the tide together with the SMEs, true to its call of a caring government.

If the Minister of Finance worries about how to handle equity replacing debt, Movement for Monetary Justice, God willing, is able to assist him for we have had the detailed solution a long time ago.

We look forward to sit down with the policymakers if invited.

Thank you.

Monetary Justice Movement,
Kuala Lumpur.

Friday 20th March 2020.