Tokyo: “Currently, the international market and economies of the world are linked with the dollar. Here, only one nation [US] manipulates it to suit their interests and has unfairly held the rest of the world hostage. The repercussions of the developments in a single nation, affect the world economies,” Malaysian Prime Minister Dr Mahathir Mohamad, thus, criticised the US dollar while putting forth the proposal for a new currency. The Prime Minister further added that the currency needed to be backed by gold and used primarily for international trade.
Dr Mahathir is on a three-day visit to Japan and participated in The Future of Asia international conference that was organised in Tokyo. While addressing the conference, Prime Minister Mahathir floated the idea of an independent currency for the ASEAN countries and even cited the 1997 economic crisis that had hit the Southeast Asian countries.
Mahathir severely criticised the international currency system based on the US dollar by saying, “After the emergence of the financial crisis in 1997 in Malaysia, the state associated their currency Ringgit with the dollar as a remedial measure. Resultantly, as the traders sold off the currency, the value of the Ringgit depreciated. Nevertheless, some purchased the currency once again in significant amounts after the depreciation. Such currency transactions are not much beneficial to the economy. They do not reflect upon the country’s economic performance.”
The Malaysian Prime Minister proposed that the adoption of a gold-based currency by the ASEAN nations could prove to be a resolution to the problem. He referred to the currency as the ‘Special Currency of East Asia’ while indicating that countries outside Asia may opt to transact in the currency as well. At the same time, the currency would be used explicitly as a standard trading currency amongst the Asian countries, Mahathir added.
For the past few years, Russia and China are striving towards establishing an alternative reserve currency for the US dollar. On the other hand, the two countries have tremendously grown their gold reserves while China is believed to be in the process of formulating a currency system based on gold.