Thursday, April 26, 2012
Keynote Address by Tan Sri Dato’ Seri Sanusi bin Junid in The Kuala Lumpur International Conference on Gold in International Trade: Strategic Positioning in Global Monetary System at Sheraton Imperial Hotel, Kuala Lumpur on 29th September, 2003
Assalaamu’alaikum Warahmatullaahi Wabarakaatuh
Chairman of the seminar,
Deputy Governor of Bank Negara Malaysia,
Secretary General of Ministry of Foreign Affairs,
Rector of International Islamic University Malaysia,
Fellow participants of the seminar,
Ladies and gentlemen.
Failure of Bretton Woods
Between August 19th and 20th, last year, at Putra World Trade Centre (PWTC), Kuala Lumpur, an international conference was held on stable and just global monetary system with the theme ‘Viability of the Islamic Dinar’ as a response to the 1997 East Asian economic and financial crisis by which Malaysia was ‘robbed’ of its economic well-being by the international currency speculators.
The gold dinar, whether Islamic or not, is propagated by the Prime Minister of Malaysia, the Honourable Dato’ Seri Dr. Mahathir bin Mohamad . It is simply a gold payment system. This propagation is a reintroduction of the role played by gold, as money, before the United States President Richard Milhaus Nixon removed gold backing from the US dollar as there was insufficient gold belonging to the United States to back up the dollars needed to finance the Vietnam war. It was either an admission of the failure of the Bretton Woods’ system to support the us or just the arrogance of Nixon and his close advisors, in not wanting to use the system.
East Asia Economic Congress
Between the 4th and the 6th of August this year an international congress was held again at the Putra World Trade Centre where delegates from East Asian countries unanimously agree that there is a need for an East Asian fund to assist countries which are in financial or economic problems or crisis. This implies a prevailing distrust in the present economic system entrusted to the Bretton Woods institutions.
After that, between the 14th and 16th of September, representatives from sixty nations attended an international conference of young Muslim leaders held at the Renaissance Hotel, Kuala Lumpur where a resolution was passed to create a world Muslim economic foundation. This again proved that there is an overall discomfort, even among the young, on the economic plight of Muslims all over the world.
The above three events were all officiated by the Prime Minister of Malaysia.
Our seminar today would have been graced by him too had he not been called to another unavoidable event sandwiched between his busy schedule overseas and the launching of the Langkawi International Maritime and Airshow
This seminar zeros into specifics. It is a seminar on ‘Gold in International Trade’ or GIT. With this seminar and previous seminars and conferences on related subject, our mind would have been prepared for the Organisation of Islamic Conference Summit next month.
Today we are gathered again to discuss the implementation of the gold payment system in international trade.
Historically, gold has held its value stable compared to any fiat currency. It was Roy Jastram, in his book “The Golden Constant” who showed that prices based on gold were relatively constant for 400 years.
Although at other forums we used the term ‘Islamic gold dinar’, we have excluded the words ‘Islamic’ and ‘dinar’ in the terminology for this forum, with the intention of removing the stigma and prejudice against gold. There was of course the Iraqi dinar before the fall of Saddam, although the Kuwaiti dinar is still in use. Hopefully the omission of the two words will remove the prejudice on gold, due to Western propaganda against Islam, thereby blurring their vision against a valuable commodity which can solve or minimise the world economic problems.
It must however be remembered that the word dinar is derived from the Latin word denarius which was the Roman Byzantine gold coin circulating among the Arabs during the time of the Prophet Muhammad s.a.w. It is therefore of western origin.
The dinar, equivalent to 4.25 grams of 22 carat gold (91.6 per cent gold alloy) remained the monetary unit for Muslims until the collapse of the Ottoman caliphate in 1924.