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rfmcdonaldThe Associated Press' "Malaysia central bank demands end to revival of ‘muslim currency’ dinar" caught my attention.
The Malaysian state of Kelantan's project--with its own official website, of course--besides illustrating the limits of Malaysian federalism, shows an interesting phenomenon. Like other east-coast state, Kelantan didn't benefit from the British colonial investment in local tin and rubber mines that built the upper-middle-income Malaysian economy (and its famously diverse population). Kelantan was left behind. How does it respond? By embracing another sort of economic globalization, this one rooted in Kelantan's particularly strong identification with Islam.
This isn't a viable project, as commenter Stude Ham at the above link notes.
Still, it's an interesting response: You can't get away from globalization, can you?
A Malaysian state's attempt to revive use of gold and silver coins common in early Islamic societies has run afoul of the country's central bank, which said Friday that local governments have no authority to issue their own currency.
The gold dinar and silver dirham coins provide an alternative to this Muslim-majority country's currency, the ringgit, in the northeastern state Kelantan, which is governed by the Pan-Malaysian Islamic Party, a conservative opposition group that promotes religious policies in its rule.
The gold dinar was the official currency of Muslim societies for centuries. The value of the coins used in Kelantan can fluctuate according to market prices, but officials say it remains a better alternative to currency affected by the U.S. dollar and other foreign currency.
Kelantan authorities also say the use of such coins is encouraged in the Quran.
State officials have produced coins worth about $630,000 for use at about 1,000 outlets in Kelantan's capital, said Nik Mahani Mohamad, executive director of Kelantan Golden Trade, which mints the coins.
“It's a great, great moment for Muslims,” Nik Mahani said. “We are providing an alternative means for the people to trade with.”
But the plan hit a snag when Malaysia's central bank said in a statement later Friday that the ringgit remained “the only currency that is the legal tender for payment of goods and services in Malaysia.”
The bank said it “has the sole right under the law to issue currency in Malaysia.” It was not immediately clear how the bank planned to block the use of the coins for transactions.
The Malaysian state of Kelantan's project--with its own official website, of course--besides illustrating the limits of Malaysian federalism, shows an interesting phenomenon. Like other east-coast state, Kelantan didn't benefit from the British colonial investment in local tin and rubber mines that built the upper-middle-income Malaysian economy (and its famously diverse population). Kelantan was left behind. How does it respond? By embracing another sort of economic globalization, this one rooted in Kelantan's particularly strong identification with Islam.
This isn't a viable project, as commenter Stude Ham at the above link notes.
gold prices also fluctuate since gold is a commodity traded in commodity exchanges and therefore highly subject to speculative and possibly unregulated transactions.
the same can be said for silver, and years ago everyone got badly burned with silver trading due to the speculative trades of the hunt brothers.
the price of gold today keeps rising... but that is due to forces which can best be described as highly speculative in these times of grave uncertainties.
therefore, circulating gold coins as currency solves no economic quandary.
Still, it's an interesting response: You can't get away from globalization, can you?
