بسم الله الرحمن الرحيم
Hizb
ut-Tahrir Wilayah Pakistan has issued the following Publicized Policy Position
(PPP), over the the great increases in prices, particularly over the last
decade, from the time of the Musharraf-Aziz regime until the Kayani-Zardari
regime, that have broken the backs of the people.
A. PREAMBLE:
The
huge and constant rise in prices is due to currencies that reduce their values
constantly, as they are not based on gold and silver
Like other currencies, the Dollar, the Pound and the
Franc, originally, the Rupee was backed by real tangible wealth in the form of
a precious metal. In the case of the Dollar, it was gold, in the case of the
Rupee it was silver. This system stabilized the value of the monetary unit both
internally within the country and externally in international trade. The
evidence for this was that the standard prices of gold in 1910 were almost the
same level they were in 1890. Today, there is sufficient gold and silver in the
world to support the actual economy, transactions such as buying and selling
food, clothing, shelter, luxuries, manufacturing machinery and technology and
so on. However, due to capitalist practices, the demand for the creation of
money outstripped the supply of gold and silver. The states abandoned the
precious metal standard, so that currency became backed only by the authority
over the state, allowing more and more notes to be printed, without being
backed fully by gold and silver, such that each new note has less value than
previously. However, money is used to buy commodities and services, so the
money became worthless, if not almost worthless. More of it was needed to buy,
so the price of all commodities and services began to rise. Continuous rises in
price is now so much part of the system that inflation is a widespread measure
of how fast they are rising. Thus, the
rupee that was once worth over eleven grams of silver before the British
occupation, after over two hundred years of the capitalist system is now worth
around one nine hundredth’s (1/900th) of a gram of silver. Before America's war
on Muslims, on 14 June 1994, 30.97 Rupees were needed to buy a single US
Dollar, then during the Musharraf-Aziz regime on Friday 15 August 2008 it rose
to 76.9 Rupees , with inflation in Pakistan at its highest ever in 30 years.
And now in January 2013, under the Kayani-Zardari regime over 98 Rupees are
required to buy a single US dollar. With each passing year, the Rupee is
worth less and can buy less with huge increases in prices, such that buying
meat is beyond the reach of most, fruit is a luxury and vegetables are becoming
a great burden. The Rupee is worth today less than a Paisa was a few decades
ago. Despite the false reassuring claims of the government to the contrary, the
Rupee is collapsing constantly, which is leading to huge increases in prices.
Yet, the government continues to print more and more money unheeding of the dire
consequences, busily digging a grave for the lifeblood of the economy, its
currency.
B. POLITICAL
CONSIDERATIONS: Addressing factors leading to the demand for the creation of money,
beyond the gold and silver supply
B1. Inflation is a direct consequence of interest-based
loaning. Capitalism mandates interest rate manipulations to control the
economy. The privately-owned banks use depositors’ money and deposit it with
Pakistan’s state bank in special accounts to earn higher rates of interest.
Historically, between 1992 and 2013, the average interest rate has been 12.75%.
As the State Bank does not have surplus money to pay back the interest to the
private banks, it "creates money" by printing more, in order to pay
interest to the depositing banks. The private banks then receive money in the
form of interest from the State Bank and use it to pay their depositors at a
slightly lower rate of interest and pocket the difference as profits. So
instead of reducing inflation, interest itself is a cause for it as it forces
the creation of more money, of less worth. Were banks not privately owned, there
would be no need for them to regard loans as a “business” and seek
"profit" on loans through interest. Thus, in capitalist banking,
whilst a thin slice of society benefits immensely, most of it is reels under
the shocks of “bunya” interest based-loans, reduced spending, loss of value of
the Rupee, price hikes, closure of businesses and unemployment, all in a
continuing spiral of economic destruction.
B2. The capitalist balance of trade policy through
devaluation of the Rupee also leads to inflation. Being a net importer country
with a weak manufacturing base, Pakistan's capitalist government oversees the
devaluation of the Rupee, in accordance to IMF orders. This was claimed to be
primarily done to address Pakistan’s balance of trade. This is where the state
actively discourages the import of goods and encourages the export of domestic
goods. However, by devaluing the Rupee, the Pakistani government increased the
costs of manufacturing inputs, which caused havoc in the agricultural, textile
and other sectors that were already reeling from the policy of high interest
rates. Hence, the high cost of borrowing, together with the increase in
manufacturing costs, rendered many industries and companies unable to compete
internationally. Incapable to find buyers for their expensive products, key
exports declined and Pakistan’s balance of payments deteriorated. This was
further compounded by the continued import of basic food stuffs. Despite being
the fourth largest agricultural economy in the world, Pakistan is a net
importer of foodstuffs. This means Pakistan must pay more for its food imports
(after devaluation), thus causing domestic food inflation to greatly rise. In
recent years, food inflation has been made worse by the declining value of the
Dollar and the Pakistani Rupee’s peg to the dollar. To conceal the
failure of its devaluation policies, the Pakistani government has relied more
and more on expatriate remittance and the export of domestic staple foods to
boost Pakistan’s balance of payments. The latter is particularly cruel for the
Pakistani population, as in a desperate bid to earn foreign exchange and
improve the balance of payments, the Pakistani government exports much needed
staple foods, such as rice and wheat, which leads to shortages at home.
Moreover, the hard earned foreign exchange is not re-invested back into the
domestic economy, but is repatriated in the form of debt service payments to
strengthen foreign economies. Thus, the Pakistani government is forced to
borrow from international institutions to redress a shortfall in balance of
payments compounding its problems. These new loans come upon interest, such
that Pakistan, like most “developing” countries have paid back the principles
several times over and are actually never allowed to “develop,” because these
loans come with conditions to strangle the economy, ranging from
interest-rates, devaluation of currency, as well as a whole host of fetters on
agricultural and industrial growth.
B3. Return to the gold and silver standard for Muslims is
eminently practical. The lands of the Muslims in which the Khilafah state is
likely to arise contains a lot of gold and silver resources, such as the
Sandaik and Reko Diq fields in Pakistan. The Ummah possesses great resources
that are direly needed by other countries, such as oil, gas, coal, minerals and
agricultural commodities, which can be used to exchange for more gold and
silver. The banks in Muslim Lands have international currency as Forex
holdings, such as the Dollar, the Euro and the Sterling which can be used for
exchange as well. The Muslim Lands are self-sufficient in basic commodities, so
the real economy is stable and resistant to manipulations and speculation, once
the parasite economy is abolished.
C. LEGAL
INJUCTIONS: Pertaining to restoration of the gold and silver standard
C1. Islam has mandated that the currency of
the state is backed by precious metal wealth, ending the root cause of
inflation. RasulAllah صلى الله
عليه و سلم commanded the Muslims to mint Gold Dinars,
weighing 4.25g, and Silver Dirhams, weighing 2.975g, as the currency of the
state. This is why the Khilafah enjoyed stable prices for over a thousand
years. Today the Khilafah will employ exchange of commodities, such as copper,
and foreign exchange for gold and silver and will be mindful of net outgoing of
gold and silver during international trade, though the Muslim World is
self-sufficient in most matters. Moreover, re-establishing gold and silver in
international trade will end the unfair disadvantage that America has by
imposing the dollar on international trade. As Hizb ut-Tahrir has adopted in
its Introduction to the Constitution, Article 166, “The
State issues its own independent currency, and it is not permitted for it to be
linked to any foreign currency.” In Article 167 it has
adopted, “The currency of the State is to be restricted to gold and silver,
whether minted or not. No other form of currency for the State is
permitted. The State can issue something as a substitute for gold or silver
provided that the Bayt al-Mal has the equivalent amount of gold and
silver to cover the issued coinage.” In Article 168, it has
adopted, It is permissible to have exchange between the State currency and the
currency of other states like the exchange between the State’s own coinages.”
C2. The State Bank in the Khilafah will be a
financial institution to support the growth of the real economy, including
agricultural and industrial development. It is not a parasite that bleeds
wealth from the economy through Riba, as the current private banks have become,
creating the need for constantly expanding monetary supply, loss in value in
the currency and the resultant increase in the prices. Its sole focus will be
to develop a vibrant and powerful economy, by using loans to stimulate the
local agricultural and industrial sectors. As Hizb ut-Tahrir has adopted in its
Introduction to the Constitution, Article 169, “It is
completely prohibited to open banks, and the only one permitted will be the
State bank, and there are no transactions upon interest. This will be dealt
with by a particular department of the Bayt al-Mal.”
C3. Rather than destroying the economy and
then going cap in hand for more loans, the Khilafah having established Pakistan
on a firm footing, will raise a global cry for the end of the injustice of
Western colonialist interest based-loaning with condition. It is this unjust
system which prevents countries from standing on their own feet, with
suffocating conditions, even though they have bled the principle loan several
times over from their economies, in the form of interest. As Hizb ut-Tahrir has
adopted in its Introduction to the Constitution, Article 165, “It is
confirmed by the senses and by information whose authenticity is trusted that
the use of foreign funds for development in the country is the method to extend
the influence of the disbelievers over them, and extending their influence in
the land is haram.”
Note: Please refer to the
following articles in Hizb ut-Tahrir's Introduction to the Constitution, for
the complete evidences from Quran and Sunnah: 165, 166, 167,
168, 169. To see
relevant articles of the constitution for the Khilafah state please go to this
web link: http://htmediapak.page.tl/policy-matters.htm
D. POLICY: Propelling the Khilafah as the economic model
for the world
D1.
Strengthening and stabilizing the currency by backing it with real wealth, gold
and silver, to end the generalized inflation, which has crippled households,
industry and agriculture, once and for all.
D2.
Ending the “business” of private interest-based banking and re-introducing interest-free
state banking so as to fuel a vibrant economy, steered by creative and
supportive financing of the agricultural and industrial sectors.
D3.
Working for the eradication of the colonialist loans and conditions globally,
that have reduced the world’s most resourceful nations to the state of beggars.
Hizb
ut-Tahrir 30
Rabiul Awwal, 1434 AH
Wilayah
Pakistan
11 February, 2013 CE
Or,
See this Link:
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