A Study On The Implementation Of Gold Dinar And Silver Dirham Usage At Taman Tun Dr Ismail Market
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Date
2015-10
Authors
MAHAMAD HAKIMI, SAKIINAH
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Abstract
The gold dinar and silver dirham (DD) gained special interest in Malaysia through Dr. Mahathir Mohamad who in 2001 proposed the implementation of DD as a multiple or bi-lateral international trading mechanism in responding to the 1997 Asian currency crisis. Community currency (CC) is an alternative form of money used during a failure in the functioning of conventional money. Community currency systems such as the Local Exchange Trading System (LETS), time exchange system, or Time Banks, and Humboldt Exchange Community Currency (HECC) are known to have been used in various countries in the world. However, over time, the CC gradually became unsustainable due to many challenges such as lack of business participation, value differences and lack of financial support. The CC used before this had no intrinsic values unlike the DD which are made of gold and silver respectively. This study attempts to examine the implementation of DD from the perspective of community currency at Taman Tun Dr Ismail (TTDI) market, Kuala Lumpur. The study aimed to achieve two objectives. The first is to identify the responses of the stakeholders at TTDI market since the implementation of DD and the second is to discover the strengths and weaknesses of using DD as a community currency. The responses of the stakeholders were gathered via interviews which were guided based on semi structured interview protocol developed. The findings indicate that the number of traders using DD gradually declined. The circulation of the DD ended at the door of the suppliers of goods at the market because they did not accept DD due to lack of confidence since DD are by law not a legal tender. The
stakeholders were either religiously motivated or economically driven by the intrinsic value of the DD or both in using the DD. The strength of DD is in their having intrinsic value since gold and silver are also commodities. However, the supply and demand of gold and silver is still tied to the current monetary system thus the DD price could be manipulated by currency speculators too. In general the DD also followed the patterns of the previously known community currencies which are related to people fear the authorities when using the CC since they are not legal tender and the declining business participation. Although the DD have strength in terms of intrinsic value but the weakness seems to be that the intrinsic value itself can obstruct the purpose of DD as a community currency because people are saving them and are not actively using them at the market confirming to Gresham Law where “bad money (Ringgit) drives out good money (DD)”. In conclusion, the implementation of the DD as a community currency at the TTDI market remains a very challenging task.
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A Study On The Implementation Of Gold Dinar , And Silver Dirham Usage At Taman Tun Dr Ismail Market