Islamic Dinar vs. Euro

It might seem that the effort of the Muslim countries to create an Islamic Dinar is similar to the efforts of the European Union to adopt the Euro. This statement however, is far from the truth.

The European Union’s job was a lot easier than that of the Muslim countries due to a number of factors that need to be explained for better understanding of the whole scenario.

• The European countries already had a strong representative organization by the name of the European Union, which is respected by all. The Muslims also have the OIC (Organization of Islamic Conference), which perhaps does not have enough authority or power to make important decision. This is very unfortunate as Islam is the second largest religion on earth and a large number of nations are Muslims whereas the organization that represents them is weak one and can barely fight for their cause. This means that the Muslims will have to make OIC stronger so as to empower it to make such an important strategic decision. For this, they will have to first unite themselves and ensure that they will support any decision made by OIC either financially or in any other way possible. This should then enable OIC to unite the Muslim nations into accepting the need for a single currency that will be used by them all.

• Another factor that differentiates the Muslim nations from their European counterparts is that, the European nations have more unity than the Muslim nations. They all trust and respect each other, in other words, the European Union is like an umbrella that further brings them together.

The European countries know and understand that they will become prosperous and successful only if they cooperate with one another. Their strength lies in their ability to unite for the same cause and this is exactly the strategy that they have adopted. The Muslims on the other hand, unfortunately lack the unity that would put them in a position to join hands together and make such an important decision. One reason for the lack of unity is that, Muslim countries are too busy solving their internal problems to pay attention to other problems. This fact can be clearly stated by the war in Palestine that has directly or indirectly affected Muslim countries around the globe. Then there is the fight in Bosnia and Kashmir whereas Somalia is busy in its battle with famine, hunger and starvation. Moreover, some Muslim countries are having conflicts with one another, which makes this goal of Islamic Dinar even more difficult. How can a unanimous goal be achieved if opposing parties are present at the table? The European countries were fortunate that they did not have to face many of these problems but that does not mean that they did not face any problems at all.

• A major problem that they faced was the level of interest in the Euro was different for every country. Some countries were very enthusiastic as they had much to gain whereas others where lukewarm since the transition from a national currency to the Euro would not do much for their country’s economy. In fact, some of the countries might even be affected adversely. To solve this problem, the European countries decided to create a fund whereby the countries that would suffer from the Euro could be financially assisted. This would remove their fears of economic suffering and they too will be able to have at least some benefits from the Euro. The Muslim countries are also faced with the same dilemma and will have to decide their approach.

• Another problem for the Muslim countries is that, each country has its own distinct culture even though the religion is the same. Some countries might look upon this single currency as a step away from their tradition and will end up opposing the whole plan. The European countries did not have to overcome this obstacle as the culture and tradition of the European countries is almost the same with very minor differences.

• The value of the currencies in the Islamic world varies tremendously, for example the currency of Malaysia is much stronger than that of Pakistan and Bangladesh. The US Dollar is equivalent to 3.8 Ringgits whereas the value of the Bangladeshi Taka and the Pakistani Rupee is much lower. The question here is that, at what value should the Islamic Dinar settle itself ? The Malaysian government might not be willing to accept a currency that is lower in value than their own whereas Pakistan and Bangladesh will not go for a higher currency as it will affect their economic performance.