LANGKAWI, Wednesday 15 December 2010 (Bernama) -- Global trade should have reverted to the use of gold dinar following the decline in the value of the US dollar, said former prime minister, Tun Dr Mahathir Mohamad.
He said since the price of gold was difficult to fall, it was suitable for use worldwide compared with the US dollar now.
"At one time, US$35 was equal to one ounce of gold. But today, it is worth US$1,400, meaning the US dollar has already depreciated.
"That's the problem with fiat currency ... it devalues quickly and by very much. Gold never devalues like that.
"So, when you buy and sell using gold dinar, you get the real value," he told reporters after delivering his keynote address at the 2nd Langkawi Islamic Finance and Economics Conference, which ended here today.
On the gold dinar in Kelantan, he said, it was not suitable to be used as legal tender but for import and export.
Dr Mahathir said Islamic countries should use Islamic financial system to help poor Islamic nations.
"Although there are rich and poor Islamic countries, there must be a balance. We use Islamic finance to invest in the poor Islamic countries and help make them rich," he said.
He said it was important Islamic system grew by itself and the countries use it to benefit the Islamic countries.
"The Islamic financial system will grow when we are successful. Nowadays, we see that non-Muslims are using Islamic banking," he said.