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THE GOLD DINAR RESEARCH GROUP

Two countries can start trade using gold dinar, says Dr Mahathir

UTUSAN EXPRESS 24/10/2002

DR Mahathir Mohamad giving a speech at the closing of the International Seminar on the Gold Dinar in Multilateral Trade organised by the Institute of Islamic Understanding Malaysia (IKIM), Kuala Lumpur, Oct 23. - Bernamapix.

KUALA LUMPUR Oct 23 - Prime Minister Datuk Seri Dr Mahathir Mohamad today said that a pair of good trading countries with fairly well-balanced trade should initiate the use of the gold dinar for global trade rather than too many countries.

"We should not be too ambitious to launch the gold dinar for multilateral trade at one go," he said.

"Problems that arise can be resolved and the system improved (and) after the bugs have been got rid off, trade using the dinar can be expanded gradually to involve more countries," he said in his closing speech at the international seminar on the Gold Dinar in Multilateral Trade organised by the Institute of Islamic Understanding Malaysia (IKIM) here.

He said that through bilateral payments arrangements, the imports could be balanced by the exports and the differences settled in gold dinar.

Thereafter, the central banks could provide a guarantee for the gold required for the payments of the balance.

In the following weeks or months, the deficits might be reduced or a surplus achieved. In that case, the payments of the balance could be made through accounting arrangements between the central banks. "It is only occassionally that a necessity might arise for the actual gold dinar to be used to pay for the purchase of imports," Dr Mahathir said.

The Prime Minister also said that the Gold Dinar could be a trading currency for all countries, not necessarily Muslim countries.

However, he said that Muslim countries were in the best position to demonstrate the viability of the system.

"They are in a position to manage their economies rationally and in the process show the world that they are capable of growing with stability and in peace," he said.

"And this will do more towards countering oppressions by their enemies than the futile violent retaliations," said Dr Mahathir.

The Prime Minister emphasised that the gold dinar is exclusively for international trade.

"It is not intended to use the gold dinar as currency for everyday transactions in the domestic market," he said.

He said that the gold dinar can provide the currency for trade between nations.

"If we value all trade items against gold, then we will have no problem with the exchange rate," he said.

"We know that in the last resort, we can melt the gold and sell it in the market.

"You obviously cannot do that with paper currency (and) worse still, with figures on a computer, they have no intrinsic value as gold has," he said.

Another advantage is that prices in the gold dinar would not be affected by changes in the exchange rates of the importing countries.

"In dinar, the prices will always remain the same and trade would be stable and enhanced."

Dr Mahathir also said that speculators and (currency) manipulators would not be able to undermine international trade.