Group Prefers Gold as Dollar Loses Shine
Guided by a Scottish-born convert to Islam, a group of devout Indonesian Muslims is shunning “worthless” paper money in favour of gold and silver coins for their daily transactions.
The followers of Sheikh Abdalqadir as-Sufi – born Ian Dallas – trade goods like food, medicine, clothes and phone cards with gold dinars and silver dirhams in line with a strict interpretation of Islamic law.
Their anti-modern views sit uneasily with the naked capitalism of Indonesia’s teeming capital, the financial and political centre of one of the fastest growing economies in the world.
“History has proven that, since the prophet Mohammed, the value of one gold dinar for thousands of years has always been equal to the value of one goat,” said 33-year-old Kurniawati, who runs a shop in southern Jakarta.
Hoping to follow the example of Mohammad and the first generations of Muslims, the sheikh’s followers do their shopping with dirhams worth around Rp30,000 (US$3.20) and dinars worth Rp1.43 million ($153).
And they want the government – or preferably a worldwide Islamic caliphate – to replace paper currencies with the dinar that was used, in the words of the sheikh, “until the incursions of the kafir financiers in the Muslim lands”.
Wakala Induk Nusantara (WIN) is the body responsible for regulating the issuance and distribution of the dinar in the world’s most populous Muslim-majority country.
Coins minted in Indonesia are also in circulation in Australia, Malaysia and Singapore, WIN official Riki Rokhman Azis said.
The number of dinars on the local market more than doubled in 2009 to 25,000 pieces, reflecting the movement’s growing popularity, he said.
“We decided to mint silver and gold coins in Indonesia following a fatwa issued by Sheikh Abdalqadir as-Sufi in Cape Town of South Africa, banning Muslims from using paper money,” Azis said.
Abdalqadir, a former playwright and actor who converted to Islam in the late 1960s, bitterly opposes modern capitalism and advocates a return to forms of Islamic law practised by the first generations after Mohammed.
These include seventh-century systems of trade and, in particular, the requirement of “zakat,” or obligatory sharing of wealth, which he says must be done with gold or silver if it is paid in money.
Recent global economic upheavals, with their origins in the US mortgage and derivatives markets, have confirmed in the eyes of the sheikh that the final victory of Islamic finance is at hand.
In a blog dated February 7, the sheikh pronounces the “historical, demonstrated end” of capitalism, and claims Western governments are using the threat of terrorism to distract people from this failure.
“It is time for the enslaved billions of our world today to fear no more the exploding shoes and underpants of the idiot agents of capitalism and to learn what Islam really is,” he writes.
One of the key elements to being Muslim, he continues, is “following the messenger in all trade and contracts with honour (and) … with real-value instruments of exchange like gold and silver.”
Some Muslims have countered that a world economy based on gold coins would lead to a powerful cartel of gold-producing countries, while others have noted the potential for market chaos if gold replaced the greenback.
But for the sheikh’s followers, such issues seem remote compared to the straightforward injunction to obey the Koran and emulate Mohammed.
“At least four people on average shop here every week with dinars, mostly buying things like rice, cooking oil, soap and clothes,” said Kurniawati, a mother-of-three who also runs a dinar exchange service.
She became convinced of the wisdom of using dinars after her husband gave her a wedding dowry in gold coins eight years ago.
“A gold coin was worth Rp400,000 in 2002 but now it’s at Rp1.45 million,” she said proudly.
Several dinar users expressed a belief that gold never lost value, even though the currency has dropped 14 percent over the past year, according to rates tracked on local website Gerai Dinar.
The rupiah, meanwhile, has gained 29.17 percent against the US dollar since February 2009, while inflation last year was a record low of 2.78 percent. Consumer prices rose 11.07 percent in 2008.
Despite its recent gains, dinar users expressed a deep distrust of the rupiah, which tanked during the 1998-1999 Asian economic crisis.
“The value of the dinar and the dirham always goes up because the price of gold never falls,” said food vendor Faturrahman.
“The price of food in rupiah, in contrast, is always rising. It gives me a headache as my income is becoming smaller and smaller.”Filed under: The Nation