The war raging in Libya since February is getting progressively worse as NATO forces engage in regime change and worse, an objective to kill Muammar Gaddafi to eradicate his vision of a United Africa with a single currency backed by gold. The Libyan case is interesting as questions have arisen for months about NATO’s motivation. Why all of a sudden, this rush to destroy Gaddafi?
For some, it is about protecting civilians. “Our resolve is quick, the people of Libya must be protected”, Obama said. Others say it is about oil. “Do you think that we went to Iraq if its main exports were broccolis?” some analysts remark. But some are convinced that the intervention in Libya has been about currency… and more specifically Gaddafi’s plan to introduce the gold-dinar, a single African currency made from gold. There were two conferences on this: one in 1996 and another in 2000 called Mathaba World Conference, organized by Gaddafi. It has been reported that everybody was interested and most of the African countries were keen.
Gaddafi did not give up and a month before the intervention, he called on African and Muslim nations to join together to create this new currency that would rival the dollar and the euro. They would export oil and other resources only for gold-dinars. It is an idea that would shift the economic balance of the world. Countries’ wealth would then depend on how much gold they have, not on how many dollars they trade. And Libya has a 144-ton stock of gold. The UK has something like the double of that but 10 times more population.
This kind of move happened before when Saddam Hussein announced that the Iraqi oil would be traded in euro and no more in dollar. Sanctions and an invasion (justified with wrong proofs) followed. Similarly, an implementation of gold-dinar would have important consequences on the international financial system which is mainly based on the trust that countries have in the dollar… whose real value is probably overvalued. It would have also empowered the people of Africa. Let us remember that Gaddafi created the African Investment Bank in Sirte (Libya) and was promoting an “African Monetary Fund” (to be based in Cameroon) whose aim is to supplant the IMF and undermine Western economic hegemony in Africa. The moves are also bad for France because when the African Monetary Fund and the African Central Bank in Nigeria starts printing gold-backed currency, it would 'ring the death knell' for the CFA franc through which Paris was able to maintain its grip on 14 countries.
Collectible coins and banknotes at a number of auctions in the first half of the year did well, particularly those from the Islamic and Asian worlds, making a case for rare old money. "We have many new buyers from emerging markets," says Bonhams numismatic specialist Edouard Wyngaard. For instance, the Muamalah Council plans to implement the dinar system in Malaysia's northern state of Kelantan. If information on its website is to be believed, the council has the blessing of the state's Islamist government, Parti Islam SeMalaysia (Pas), to kickstart the dinar in 3 moves. First, the state will pay a quarter of its public servants' salaries using the dinar. Second, all state companies will accept dinar payments. Lastly, some 600 commercial enterprises will also embrace this currency. The idea was first mooted by Malaysia's former PM, Mahathir Mohamad, in the aftermath of the 1997 Asian financial crisis. He argued that the coins would never hang their possessor out to dry in the same way that paper money had. As precious metals with intrinsic value, gold and silver are more resistant to market fluctuations and devaluation compared to the US dollar – an argument he took to the 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 of gold – 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 by his 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 minting Islamic gold coins for use in Australia, Malaysia and Singapore. Its spokesman, Riki Rokhman Azis, claims that the number of dinars used in the world's most populous Muslim nation has more than doubled in 2009 to 25,000 pieces. 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 of Islamic 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, Birmingham and Edinburgh.
According to the propagators of the gold-dinar, the currency is the “only credible anti-capitalist doctrine that exists today”. However, this concept has limits: like paper money, gold is also vulnerable to the manipulations of valuers. Who is to prevent gold-rich nations from banding together as a cartel to fix prices at exorbitant amounts in the same way that the oil-producing nations of OPEC did? Moreover, how many of the poor have stacks of gold already in their possession??
Billet inspired from :
- Mr. Nazry Bahwari’s very good paper in The Guardian titled “Can Malaysia's Islamic gold dinar thwart capitalism?” (2011/07/17)
Link: http://www.guardian.co.uk/commentisfree/belief/2010/jul/17/malaysia-gold-dinar-thwart-capitalism
- Mr. Brian E Muhammad’s article in The Southern Times titled “Africa's curse of gold and oil” (2011/08/01)
Link: http://www.southerntimesafrica.com/article.php?title=Africa's_curse_of_gold__and_oil&id=6129
