Continued from previous page
In the International trade strong currencies
like dollar, Euro etc serve as a standard of value for measuring the relative
worth of different goods and services. As imports exceed our exports we
suffer trade deficit every year and depend on IMF and other loans to meet
our liabilities for hard currencies. We carry heavy burden of international
loans. There appears to be no escape from payment of interest to our creditors
for the next many years. But the balance of payment is just one problem.
Corruption, incompetence, political instability and despotism are great
hurdles in achieving economic independence.
The problem with most of the
loans acquired by us has been that they provided transient solution
and increased our dependence on the donors. Although the World Bank invites
different countries to depute officials to serve the bank, most of the
bureaucrats, who manipulate to get the lucrative job, can hardly be regarded
as experts. The consultants and experts of the aid agencies who come to
evaluate or monitor our projects see things from a different perspective.
Their heavy fee, expenses and solutions increase the burden of our
debts. The opinions of local experts are not given credence.
Purchase of the things that we need badly
on credit is often linked with the sale of the things that are not absolutely
necessary for us but being redundant or outdated in the West, we are forced
to buy them on credit. Some of our indiscreet politicians and bureaucrats
are said to have acquired (for their personal gains abroad) the loans
for the country for things that were not necessary.
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As
imports exceed our exports we suffer trade deficit every year and depend
on IMF and other loans to meet our liabilities. We carry heavy burden of
international loans. There appears to be no escape from payment of interest
to our creditors. But the balance of payment is just one problem.
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The Need for Adopting Islamic
Money Standards!
In the 7th century AD at the time of dawn
of Islam, money consisted of metallic coins and gold and silver bars. That
was the kind of money whose purchasing power was not only stable but also
tended to appreciate, like the worth of land or gold.
It was and still is the simplest and straightforward
method of fulfilling the promise of the Rulers who issue coins and currency
to give you the real worth of the money - not less than what you acquired
when you took that money in your custody. In this respect our Governments
have been guilty of breach of the trust as it is incumbent upon the
rulers, according to Islamic precepts to protect the interests of his people.
Having a gold base for paper money is a
sound practice. But the Governments have issued currency notes up to umpteen
times of their actual gold reserves and thus they may not be able to switch
over to commodity base. Morover, IMF rules prescribe that a
member country must not have any commodity base for money.
Devaluation of money constitutes
as a breach of trust of the people According to the standards of Good
Governance of Islam the rulers are required to protect the life and property
of the people and their interests. If the net worth of their money or savings
goes down due to devaluation or deficit financing it might well constitute
breach of trust according to the standards of trust, measures, weight and
balances as prescribed in Quran-e-Hakim and the Sunnah. It can also be
termed as a practice akin to indirect form of 'Riba' strictly prohibited
by the Holy Quran
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Having
a gold base for paper money is a sound practice. But the Governments have
issued currency notes up to umpteen times of their actual gold reserves
and thus they may not be able to switch over to commodity base.
Morover, IMF rules prescribe that a member country must not have any commodity
base
for
money.
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These days we have paper and credit
money besides coins. The face value of commodity money (coins) may be about
equal to the value of the material contained in it, usually silver, and
copper. Gold is now rarely used for coins.
All other kinds of money including Credit
money or Flat money are paper backed by promises by the issuer, and the
manner that become redeemable and the value that is assigned to them merely
by government edict or the laws. Thus the currency notes and credit forms
of money are generally made acceptable through a government decree that
all creditors must take the money in settlement of transactions; the money
thus becomes a legal tender.
In Pakistan the purchasing
power of Rupee has been declining since 1947 when the Rupee was worth
more than a Riyal and you could get a US Dollar for less than RS. 4/-.
The 10 gram gold piece was worth about RS. 70 or so. The value of Rupee
has regressed against them by almost 15 to 18 times. At one time you could
have bought 16 loafs of bread in a Rupee and now the bread of the same
weight costs about RS. 3/-
Right from 1947 our imports have
been exceeding our exports. We can blame our trade deficits for devaluation
of the Rupee but there are many other reasons. Our dependence on IMF loans
to meet the obligations of our trade deficits has been growing and the
cost of living has been going up and up adding to the miseries of the people.
Our money system needs to be modified
to meet the standards of trust, measures, weight and balances as prescribed
in Quran-e-Hakim and the Sunnah.
The original money system in early days of Islam consisted of silver and
gold coins and bars that had stable value. In fact their value, in terms
of consumer items, tended to appreciate with the passage of time like the
value of gold or land.
But as stated earlier switching over to
the gold backed currency system is not easy as more - much more money has
been printed and pumped into circulation than that can be backed by the
our own resources. Moreover, IMF policies are against it.
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The
ideal of brotherhood of Muslims, unity of Ummah , the building of the Just
Society or a Khilafa state, is one that cannot be discarded without lifelong
feelings of disappointment and loss. But, if we are to live in the real
world, discard it we must. Its very nobility makes the results of its breakdown
doubly horrifying, and we have seen its break down, in the events following
the assasination of Hazrat Ali (RA) and now the best that seems possible
is to make OIC a Socio -economic union or an Islamic Common Market.
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Prohibition for usury is given
in Bible also and in many countries maximum limits are prescribed
over which the bank cannot charge interest on any loan or advance.
For instance on credit card in many States of US, the bank Cannot
charge more than 9 to 12 % interest but the same bank or its subsidiary
is free in Pakistan to charge 52% compound interest in the name of monthly
service charge of 3,50 % pm over and above the normal annual service charges
of a few thousands of Rupees. This is all happening in a country which
vows to have laws in the light of Quran and Sunnah but only to fool people
and itself.
Islamic Currency
The ideal of brotherhood of Muslims,
unity of Ummah , the building of the Just Society or a Khilafa state, is
one that cannot be discarded without lifelong feelings of disappointment
and loss. But, if we are to live in the real world, discard it we must.
Its very nobility makes the results of its breakdown doubly horrifying,
and we have seen its break down, in the events following the assasination
of Hazrat Ali (RA) and now the best that seems possible is to make OIC
a Socio -economic union or an Islamic Common Market.
Euro is the new currency launched by the
memebers of European Economic Community. It is helping the member countries
in stabalizing the purchasing power of the money and minimizing the exploitation
by the big business that manipulates swings in the exchange rates.
Islamic Oil Producing Countries, with the
bounty of Allah, were in a position to help evolve a fair and equitable
economic order for the world. But first the Iran-Iraq war and then Iraq's
attack on Kuwait have helped the forces of exploitation in maintaining
the economic hegemony
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In
many countries maximum limits are prescribed over which the bank
cannot charge interest on any loan or advance. For instance on credit
card in many States of US, the bank Cannot charge more than 9 to
12 % interest but the same bank or its subsidiary is free in Pakistan to
charge 52% compound interest in the name of monthly service charge of 3,50
% pm over and above the normal annual service charges of a few thousands
of Rupees.
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Islamic countries can float common
Dinars and Dirhims but backed by Gold in case of Dinar and silver for Dirham
and OIC May manage the Islamic Reserves Bank. There may be some hindrances
but there is still time to sell the oil in exchange of Gold and silver.
The Islamic countries must resolve their
own internal conflicts and adopt the virtues of austerity and cut down
their imports and avoid trade deficits to pave the way for a fair and equitable
economic order and to get out of the clutches of G8 countries.
Kings and dictators in Islamic countries must encourage democratic movement
on the lines of Great Britain, lay more great emphasis on education and
development of science and technology , industrialization and modernization
of agriculture and make their countries true welfare states. (End of
the Article)
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