8/9/2019 Can Malaysia's Islamic Gold Dinar Thwart Capitalism

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Muslim advocates of the dinar believe it will stop the excesses of capitalism, but it is justanother avenue for exploitation

Nazry Bahrawi

Saturday 17 July 2010 11.00 BSTImagine a world trading solely in gold and silver coins. Imagine the size of your wallet.Yet this is the ideal world envisaged by some of Malaysia's activists championing the Islamic gold dinar and silver

dirham as a new form of legal tender to replace paper money

a utopia that could see the light of day as early asthe middle of next month.This is when one such group, Muamalah Council, plans to implement the dinar system in Malaysia's northern stateof Kelantan. If information on its website is to be believed, the council has the blessing of the state's Islamistgovernment, Parti Islam SeMalaysia (Pas), to kickstart the dinar in three moves.First, the state will pay a quarter of its public servants' salaries using the dinar. Second, all state companies willaccept dinar payments. Lastly, some 600 commercial enterprises will also embrace this currency.Inspired by selective religious sources and backed by historical precedents within the annals of Islamic history, thegold dinar system is touted by certain fiercely proud Muslims as the Islamic answer to thwart capitalism's woes.The idea was first mooted by Malaysia's former prime minister, Mahathir Mohamad

, in the aftermath of the 1997 Asian financial crisis. He argued that the coins would never hang their possessor outto dry in the same way that paper money had. As precious metals with intrinsic value, gold and silver are moreresistant to market fluctuations and devaluation compared to the US dollar an argument he took tothe Organisation of the Islamic Conference as a tool to battle western hegemony.

Today, Islamic gold dinar advocates would cite the recent credit crunch as proof. Indeed, the rocketing price ofgold possibly transcending a record high of $2,000 an ounce can only strengthen their pitch.While Mahathir

's grand plan for Malaysia to implement the dinar system by 2003 may have been unceremoniously scrapped byhis successor, Abdullah Badawi, the idea has since gained currency beyond Malaysia's shores.In neighbouring Indonesia, for instance, an outfit known as Wakala Induk Nusantara (WIN) had begun mintingIslamic gold coins for use in Australia, Malaysia and Singapore. Its spokesman, Riki Rokhman Azis, claims thatthe number of dinars used in the world's most populous Muslim nation has more than doubled in 2009 to 25,000pieces.What is perhaps more striking is the UK connection to the increasingly globalised Islamic gold dinar movement.The Indonesian grouping is adhering to a fatwa issued by the South African-based cleric Sheikh Abdalqadir as-Sufi, a Muslim convert in Cape Town formerly known as Ian Dallas of Scotland.Then there is Dinar Exchange, the British equivalent of Indonesia's WIN. As the "official certified supplier ofIslamic gold dinar and silver dirham in the United Kingdom", the company had just concluded a month-long series

of roadshows in May that saw it promoting the gold dinar to Muslims in key UK cities such as London, Birminghamand Edinburgh. The group is inviting more to spread this Islamic vision as dinar agents. For a fee, of course.As the dinar movement gathers momentum, its propagators which include some of the Muslim world's mostpolemical figures such as the Trinidad-born cleric Imran Hosein would doubtless dismiss Antony Lerman'srecent suggestion in the Guardian that no credible anti-capitalist doctrine exists today. To them, the Islamic golddinar is perhaps mankind's best-formulated answer to beat capitalism's excesses.Yet, as an anti-capitalist weapon, the Islamic gold dinar is far from mint.It is motivated by politics more than benign religious values. The Kelantan example is instructive. Implementingthe Islamic dinar serves as a political statement to Muslim voters that Malaysia's Islamist opposition party, Pas, ismore Islamic (and hence more legitimate) compared with its competitor, the United Malays National Organisation

. Even in its pristine form, the idea as it is originally propagated by Mahathir could be read as a radical attempt atpower politics.But a more serious flaw lies in its contradiction. At the heart of the dinar system can still be found the samecapitalistic spirit of commodification.

It lacks the egalitarian spirit embodied in socialism's virtue of the common good. Its advocates say that the poorcould never be taken advantage of because the coins they own have intrinsic value. But Britain's recent gold-rushdilemma suggests that the poor do not always get their money's worth even when trading gold.Like paper money, gold is also vulnerable to the manipulations of valuers, our gatekeepers of wealth. And let's behonest, how many of the poor have stacks of gold already in their possession? Gold is a precious metal preciselybecause it is so rare.On a wider scale, who is to prevent gold-rich nations from banding together as a cartel to fix prices at exorbitantamounts in the same way that the oil-producing nations of OPEC did?Or multimillion corporations from exploiting poor but gold-rich nations? This is best exemplified in the case ofPacific Rim, a Vancouver-based firm that has filed an appeal via the Central American Free Trade Agreement(Cafta) to bypass local legislation so they can mine for gold in El Salvador despite local objections. In a worldmired by climate change troubles, one also needs to mind the environmental cost of gold mining an operationthat involves huge amounts of water and toxic chemicals.The Islamic gold dinar could not thwart capitalism's excesses. It is only providing one more avenue for

Can Malaysia's Islamic gold dinar thwart capitalism?Monday, July 19, 2010

9:12 AM

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http://www.guardian.co.uk/profile/nazry-bahrawihttp://en.wikipedia.org/wiki/Islamic_gold_dinarhttp://www.muamalatcouncil.com/news/34-general-articles/103-kelantan-launches-dinar-and-dirham-on-12th-august.htmlhttp://en.wikipedia.org/wiki/Pan-Malaysian_Islamic_Partyhttp://www.oic-oci.org/http://www.guardian.co.uk/business/2010/jul/11/gold-shines-uncertain-markethttp://wakalanusantara.com/index.phphttp://www.google.com/hostednews/afp/article/ALeqM5jkDhZzDU2Bdx8AUFKXgi2SGK-s2ghttp://www.google.com/hostednews/afp/article/ALeqM5jkDhZzDU2Bdx8AUFKXgi2SGK-s2ghttp://www.dinarexchange.co.uk/index.phphttp://www.imranhosein.org/books/103-islam-and-the-future-of-money.htmlhttp://www.guardian.co.uk/commentisfree/2010/jul/13/anti-capitalist-ideology-economic-crisishttp://www.guardian.co.uk/commentisfree/2010/jul/13/anti-capitalist-ideology-economic-crisishttp://en.wikipedia.org/wiki/United_Malays_National_Organisationhttp://www.guardian.co.uk/business/2010/apr/12/gold-gordon-brown-sell-offhttp://www.guardian.co.uk/business/2010/apr/12/gold-gordon-brown-sell-offhttp://www.guardian.co.uk/commentisfree/cifamerica/2010/feb/05/el-salvador-gold-pacific-rim-mininghttp://www.guardian.co.uk/commentisfree/cifamerica/2010/feb/05/el-salvador-gold-pacific-rim-mininghttp://www.guardian.co.uk/commentisfree/cifamerica/2010/feb/05/el-salvador-gold-pacific-rim-mininghttp://www.guardian.co.uk/commentisfree/cifamerica/2010/feb/05/el-salvador-gold-pacific-rim-mininghttp://www.guardian.co.uk/business/2010/apr/12/gold-gordon-brown-sell-offhttp://www.guardian.co.uk/business/2010/apr/12/gold-gordon-brown-sell-offhttp://en.wikipedia.org/wiki/United_Malays_National_Organisationhttp://www.guardian.co.uk/commentisfree/2010/jul/13/anti-capitalist-ideology-economic-crisishttp://www.guardian.co.uk/commentisfree/2010/jul/13/anti-capitalist-ideology-economic-crisishttp://www.imranhosein.org/books/103-islam-and-the-future-of-money.htmlhttp://www.dinarexchange.co.uk/index.phphttp://www.google.com/hostednews/afp/article/ALeqM5jkDhZzDU2Bdx8AUFKXgi2SGK-s2ghttp://www.google.com/hostednews/afp/article/ALeqM5jkDhZzDU2Bdx8AUFKXgi2SGK-s2ghttp://wakalanusantara.com/index.phphttp://www.guardian.co.uk/business/2010/jul/11/gold-shines-uncertain-markethttp://www.oic-oci.org/http://en.wikipedia.org/wiki/Pan-Malaysian_Islamic_Partyhttp://www.muamalatcouncil.com/news/34-general-articles/103-kelantan-launches-dinar-and-dirham-on-12th-august.htmlhttp://en.wikipedia.org/wiki/Islamic_gold_dinarhttp://www.guardian.co.uk/profile/nazry-bahrawi

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exploitation. For this reason alone, it will not have my buy-in.

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http://www.guardian.co.uk/commentisfree/belief/2010/jul/17/malaysia-gold-dinar-thwart-capitalismhttp://www.guardian.co.uk/commentisfree/belief/2010/jul/17/malaysia-gold-dinar-thwart-capitalismhttp://www.guardian.co.uk/commentisfree/belief/2010/jul/17/malaysia-gold-dinar-thwart-capitalismhttp://www.guardian.co.uk/commentisfree/belief/2010/jul/17/malaysia-gold-dinar-thwart-capitalism