Sunday, October 2, 2011

Zubair Hassan VS Ahamed Kamel Meera on gold dinar

 I read paper through MPRA (Munich Personal ReREc Archive) written by Prof Dr.Zubair Hasan from INCIEF and former prof in IIUM about gold dinar. I think he is the one scholar who is not agreeing about gold dinar to be implemented. You could see his paper here. He strongly disagree about gold dinar. His paper titled of "Ensuring exchange rate stability: Is return to gold (Dinar) possible? continuously arguing of what have been researched and proved by Prof. Dr. Ahamed Kamel Mydin Meera about gold dinar and fiat money. Meera who is currently  Professor and Head Department of Finance in IIUM has been refused by Zubair in all ways and models that has been developed by him (Meera).

I pose Zubair's arguments on Meera's papers.

1st argument (on Meera's book titled of The Islamic gold dinar: 2002):

In Zubair's part of the paper particularly in the literature review, he argued about fiqhi matter regarding gold dinar. He questioned Meera's paper about the commandment of implementing gold dinar is not necessary to be compulsory. I quoted what he said, "Is the using of gold dinar (or gold) as money a Shariah obligation for Muslims? Moreover, he was taking lower rank status of evidence by only according to what has said by Haneef and Barakat (2006) compared to Meera who is straightly taken the sunnah in enlighting discussion.

In his paper, by mentioned again Prof Aslam Haneef and Barakat (2006), he stated that some of the scholars argued that only gold and silver can be used as money. Others maintain that there is no such compulsions: materials other than gold and silver could also be used as money.

2nd argument (on Meera's paper titled of "Seigniorage of fiat money and the maqasid al-Shariah: the unattainableness of the maqasid)

In this Meera's paper, again he refused to believe that fiat money system is not compatible with the objectives of the Islamic Shariah by redefining his own understanding about the of seigniorage. He said "seigniorage meant something claimed by the soverign of a feudal lord as his prerogative in relation to society. In the context of money, it was the percentage share of the crown in the bullion people brought to the loyal mint to get converted into coins. Now-a-days the term is aplied to all money, incluidng the credit banks crete. Such extension of the term is not appropriate. People do not pay for printing of notes the central bank issues. The objective is not to enrich the crown."

The 3rd argument:

He argued by questioning "Is the fiat money system inherently more unstable compared to the gold-based exchange rates? His taken the words from Paul Einzig to enlight his discussion by stating that prices in the world have been rising over the past five thousand years; the upward legs of the cycles tended to grow longer, and downward turns sharper, while the bottoms were agonizingly broader, recovery being slow and painful. Money incomes not necessarily money supply tended to expand faster during inflation than rel economy. Proving that fiat money system is inflationary does not cut much ice; one must, in addition, bring evidence from the history of gold standard to show that things were better under that system. Unless one juxtapose comparative pictures, one is not on firmer rounds."

Anybody would like to counter back his arguments? Please read Prof Zubair's research paper to know better about him.

That's why I mentioned before the gold dinar is not just system but the need of our belief!

Your truly,

Saiful Ramli

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