Mahathir Mohammed, the 94-year-old Prime Minister of Malaysia, has proposed that the Islamic nations, who are suffering from International sanctions, must consider gold and barter as medium of exchange to trade among them. The 94-year-old Prime Minister probably wants to go back to the Islamic roots to beat the global sanctions, from which many Islamic nations including Iran, Turkey, and Malaysia are suffering.
In the Islamic Summit in Malaysia, which was attended by countries like Qatar, Iran, and Turkey despite vehement opposition from Organization of Islamic Countries (OIC) and Saudi Arabia, Mahathir praised Iran and Qatar.
“I have suggested that we re-visit the idea of trading using the gold dinar and barter trade among us,” referring to medieval Islamic practice, which was prevalent among Muslim countries, due to lack of sophisticated modern technology. “We are seriously looking into this and we hope that we will be able to find a mechanism to put it into effect,” he added.
Qatar and Iran are suffering from sanctions of Western Countries, as well as allies of the United States in the Islamic world- Saudi Arabia, the United Arab Emirates, Bahrain and Egypt.
The new Islamic alliance, which is being viewed as counter to Saudi led OIC, was attended by 20 countries, despite the fact that all 57 members of OIC countries were invited. Even Pakistan, to which Malaysia stood by on Kashmir issue, refused to attend the summit after being snubbed by Saudi Arabia.
The four-day summit was expected to discuss the issues faced by Uighur Muslims in China, Rohingya Muslims in Myanmar, and Kashmir issue; but so far, no statement has been issued.
US dollar is the world’s preeminent currency, and accounts for more than 90 per cent of the International transactions. Through the dominance in the financial markets, the United States dictates the terms of global economy and therefore global politics too.
After Iran refused to fall in line on the nuclear program, the United States imposed economic sanctions on the oil-rich country. This has led to further deterioration in macroeconomic condition in Iran, with inflation in double digits and foreign exchange at an all-time low.
The dominance of dollar and American use of currency to blackmail other countries has forced the countries to trade in local currency.
Recently, the US threatened to block dollar-denominated transactions on the purchase of weapons from Russia and oil imports from Iran. However, later the US exempted India for oil imports and also weapon purchase from Russia.
But, the Islamic countries do not have proper financial infrastructure to trade in their local currencies. Therefore, they are forced to go back to Islamic roots, of trading in gold and barter.
The shortage of foreign exchange; the unilateral sanctions by the United States, and unstable global financial environment has forced many countries, especially those with weak financial infrastructure, to consider the option of barter exchange.
A few months ago, Zambia, Ghana and Rwanda have approached India with the proposal to ‘exchange’ minerals like copper and gold in return of completion of projects.
Two Indian companies ‘Ircon International’ – a subsidiary of Indian Railways and the ‘State Trading Corporation of India (STC)’, an arm of Ministry of Commerce are already in talks with African nations to swap commodity in return of project completion. Icron International will build projects in African nations while STC will import minerals.
Now the Islamic countries are forced to trade like the poorest African nations; with America sanctions in place. So far, the United States had not imposed financial sanctions on Malaysia, but, given the aggressive stance of Trump administration, the 94-year-old leaders has already started taking measures.
“With the world witnessing nations making unilateral decisions to impose such punitive measures, Malaysia and other nations must always bear in mind that it can be imposed on any of us,” said Mahathir Mohammed.
Under the leadership of 94-year-old Prime Minister of Malaysia- Mahathir Bin Mohamad, the country is suffering one setback after another. Riding on the resentment against corrupt regime of previous Prime Minister Najib Rajak, Mahathir registered an unexpected victory and became prime minister of Malaysia in May 2018.
But, since then, Mahathir has taken many wrong moves which have harmed the political economy of Malaysia, as well as its foreign relations. And the latest blow by Chinese community could prove last blow to 94-year-old leader.
