Islamic common market a step closer

Islamic common market a step closer
Monday 03 October 2005, 7:36 Makka Time, 4:36 GMT

http://english.aljazeera.net/NR/exeres/95E93539-27BF-443E-A3C1-863A01F85C87.htm



So, is there a possibility of an unified Islamic currency, like the euro, in this case the gold dinar, in our future? Will there be petro dinars? How would this impact the dollar? Probably not in a positive way.

If by a "gold dinar" you mean an actual employment of a gold standard currency, that would probably not work out too well. The idea that the metals have more inherent value than paper has long struck me as amusing. In modern circumstances, the inherent limitation on the amounts of money available in a specie based system would hamstring economic activity.

There could be a great many positive results from an Islamic trading bloc, though. It could create a great deal of economic activity not based on resource extraction, and that would be a creator of a wealth that could spread its benefits much more widely through the societies. Resource extraction is a very poor basis for an economy, and where it is accompanied by political and military weakness, is a standing invitation to predatory action by a stronger customer.

would or should be based upon a gold standard. I think I have heard the term "Gold Dinar" floated as a potential name for the common currency by the Malaysian PM at one point, IIRC.

Although this move toward a common market could indeed be of benefit to the participating countries as you mentioned, it will require a bit more unity between these countries than we are used to seeing from the Islamic sector. World events may be providing the needed pressure, economical and otherwise to either "hang together or hang separately".

It is telling that the real initiative and support for such a resolution is coming from the eastern Islamic countries and not from a fractured middle east.

Wishing you a good day sir,
Peace

In my view the reasons for that would owe to two interrelated factors, namely population size and existing form of economic activity. The Eastern Islamic countries are much more populous than the Middle Eastern ones, and so even where they have natural resources to sell, necessarily have much more diverse economic activity, that is not dependent on the simple transaction of selling something extracted from the ground. Their leaders, and even their populations, would be much quicker to see the advantages to such an arrangement. One of the problems with resource extraction as the basis for an economy is that, being a species of windfall, since it is unrelated to anything those deriving its benefits have done for themselves, it encourages a sort of laziness and sense of entitlement. When this double-edged boon is conferred on a society still permeated by an aristocratic ethos, which seems to me to be the case in the Arab societies of the Middle East, there is a synergistic reinforcement of attitudes that can be most pernicious to economic and even social development, and particularly effects the leadership.

There does not seem to me to be any particular real reason to expect greater unity among Islamic countries, as a general thing, than among Christian ones, or Confucian ones. After the first expansions, Islamic unity, whatever the ideal of the faith might prescribe, has not been much of a political factor, though it has remained a popular ideal that has sometimes found popular expression among the people. It is worth mention in this connection that Europe took a very long time to construct even the Common Market preceeding the current Union, and met with much local opposition in the effort. The existing ties of trade between the European countries then were closer and of more current standing, and they were as well cheek by jowl on a single continent. But a commonality of religion is as good a basis for association as any, and there is certainly the potential for unifying ties of trade: there is no reason Indonesia and Pakistan and even Iran could not serve as centers of industrial and agricultural production for the Islamic world, rather than mere sinks of cheap labor for the West.

To my mind the greatest benefits of this would be part of the greatest benefit of developing the European Union to an even greater extent. Just as a society benefits by competion between ideas, and needs differing power centers for healthy development, so the world benefits by the existence of differing blocs in competition. Though it seems counter-intuitive, a unipolar world is really much less stable than a multipolar one. There must be potential checks on the actions of powerful bodies: humans do not seem to be constructed in a way that enables confidence any good will come from one waking up in the morning with the thought, "I can do anything I damned well please! Who's going to stop me?"

They have been waiting for another superstate, another "evil empire", to come along so they can have another cold war.

They even tried to find it in the EU.