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Former Malaysian leader renews call for gold dinar

Section: Daily Dispatches

By Harpreet Bhal
The Edge, Petaling Jaya, Malaysia
Wednesday, July 25, 2007

KUALA LUMPUR -- Former prime minister Tun Dr Mahathir Mohamad has called on the Islamic world to embrace the use of the gold dinar for international trade and as an alternative to US dollar reserves in central banks.

Delivering the keynote address at the International Conference on Gold Dinar Economy 2007 here yesterday, he said such coins could be used as a means of wealth creation without running the risk of losing its value and purchasing power as in the case of paper currency.

"Such coins are not legal tender but may be exchanged with currency at gold value at a given time.

"This is quite simple. It is nothing more than keeping gold bullions as savings. They can be traded and they retain their value in terms of purchasing power quite well," he told delegates at the conference held at the Putra World Trade Centre.

Stating that the US currency is "worth nothing" and should not be accepted as a payment instrument, the former prime minister said that countries with US dollar foreign reserves and bonds were deluding themselves as the downfall of the greenback was inevitable.

He said countries that continued to propagate the use of US dollars in international trade were keeping themselves hostage to Western monetary policies, and should instead explore using the gold dinar for international trade.

"With the use of the gold dinar, some of the power of the Western banking system and the US dollar would be diminished. With this, the clout of these powerful countries would also diminish. On the other hand by refusing to use the gold dinar, Muslims could be impoverishing and weakening themselves," he noted.

Speaking to reporters later, Dr Mahathir said the delay in implementing the gold dinar policy was due to the absence of a country that was willing to partner Malaysia in the initiative.

He said there was a need to persuade the Malaysian government to enter into bilateral payment agreements in gold dinar with other countries as the mechanism was already in place.

Last year Kelantan became the first state in Malaysia to launch its own minted gold dinar and silver dirham coins, based on the Islamic financial system.

On a separate matter, Dr Mahathir said Malaysia still needed the New Economic Policy as the affirmative action policy had not hampered the country’s efforts in achieving economic prosperity.

"In any case it's not doing anybody any harm. Malaysia is still the fastest growing developing country in the world. Other countries with no affirmative policy cannot do as well as Malaysia. Why are people questioning the policy?" he asked.

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