KUALA LUMPUR Oct 23 - Malaysia will consider setting up a secretariat
to explain the concept of using the gold dinar for settlement of international
trade, Datuk Seri Dr Mahathir Mohamad, said today.
"I will inform the Cabinet and if (they) agree, we will ask Bank Negara
Malaysia to set up the secretariat," the Prime Minister told a press
conference after closing the international seminar on the "Gold Dinar
in Multilateral Trade" here.
The idea of a secretariat was raised earlier by an Iranian participant
at the two-day seminar organised by the Institute of Islamic Understanding
Malaysia (IKIM).
Dr Mahathir said the idea of using gold dinar was now at the phase
of explaining the concept and discussing problems associated with its
proposed implementation.
He said that countries planning to use the gold dinar might have to
amend their laws as well as ensure that it conforms to the existing
international financial regime.
Answering questions from the floor after delivering the closing speech,
Dr Mahathir said that many people are interested in the gold dinar but
they see obstacles in the way.
"It is a good idea (to have a secretariat) because wherever I go now,
I get the same question what gold dinar is all about.
It is not possible for me to explain in detail how it is going to be
used and what it is all about," he said.
"So if we have a secretariat, this secretariat can communicate with
central banks in other countries," Dr Mahathir said.
He said that the secretariat would not only prepare booklets containing
information on the gold dinar but also send someone abroad to explain
the concept and to examine the laws in other countries as to whether
those laws could be made compliant with the usage of gold dinar.
When asked why Malaysia was still unable to find partners to implement
gold dinar, he said that the proposal has to be approached patiently,
noting that Malaysia has been talking about it for over a year.
He said that Malaysia and Muslim countries presently are parties to
international agreements and they might be breaching these agreements
if pressed ahead with the gold dinar usage.
Dr Mahathir said that Malaysia and its potential partners would need
to amend the laws and convince the international community that gold
dinar is a currency and not a gold standard.
It was pointed out today at the seminar that there is an existing prohibition
by the International Monetary Fund on the use of gold as a medium of
payment and therefore the proposed gold dinar is a potential violation
of the (IMF) rule.
"It (gold dinar) is in a way a foreign currency as much as the US dollar
is a foreign currency.
We should be allowed to use gold dinar without being accused of breaching
international law and practices," he said.
"It is just another currency. We can trade now in the US dollar but
if we like we can also trade in yen or euro. If we trade in euro, it
does not mean we are working against the US dollar," he said.
"It is just a matter of choice. Now we have the gold dinar, it is
just another alternative," he added.
He noted that some Muslim countries might "not be as free as they like"
to implement the gold dinar concept.
This is because they are under an obligation to some countries from
which they owed a lot of money or have received some aids, Dr Mahathir
said.
But he noted that out of the over 50 Islamic countries, there were
not many which were under any obligation to anyone and were economically
strong.
At the moment, these countries are trading in the US dollar, Dr Mahathir
said.
He said that Malaysia would try to identify countries which were free
of or with minimal problems to implement gold dinar and work with them
to expand the usage.
"At this point of time, I wouldn't be able to identify the countries
but we do know some countries which are very liquid, not indebted to
anyone and have resources," he said.
Dr Mahathir added that if he had his way, he would like the gold dinar
to be already implemented.
As for allowing the public to use gold dinar, he agreed that there
was a great deal of interest from the people to use the dinar as currency.
But using the gold dinar for daily transactions would pose problems,
especially if the transactions involved large sum as the gold dinar
coins are bulky, he said.
As it was cumbersome to use gold dinar in daily transactions, it would
be best to use the local currency, which has a proper exchange rate
against the gold dinar, he added.
"But we cannot prevent people from collecting dinar because it is gold.They
can keep it as you (now) can keep the US dollar. We cannot arrest you
because you have the US dollar in your pocket," he added.
He said that as it was gold, the gold dinar would not be devalued over
time.
"If you have the gold, the gold appreciates in value. Of course sometimes
it depreciates but largely it will appreciate," he added.
As for dinar notes, he said that many countries are using dinar as
currency but currency notes have no value.
"I have in my pocket 500 billion dinar. It was issued 15 years ago
by a country which you don't usually associate dinars, Yugoslavia. Yugoslavia
uses the dinar and at one time the value of the Yugoslavian dinar was
so low that they have to print currency note of 500 billion dinar, and
at the time it was issued, the value was 12 US cents."
"Today it has zero value. I carry it in my pocket because I want to
show that paper currency has got no value. You can print any number,"
the prime minister said.
GDRG Home
THE GOLD DINAR RESEARCH GROUP 