PUTRAJAYA: The international community should be encouraged to use other currencies or even gold as the benchmark in international trade because the domination of the US dollar in global transactions is distorting the world’s economy, Datuk Seri Dr Mahathir Mohamad said.
Even the economy of the United States had been affected, the Prime Minister said.
“When we put too much value on a certain currency, it becomes very powerful and that currency actually works against us,” he said.
He added that since no nation would like “just one single policeman in the world,” the Euro, yen or even gold should be used for transactions.
“We should be given the choice to use whatever currency that we want,” he said at a meeting with 31 foreign editors and senior journalists at his office yesterday.
The editors and journalists, who were here to cover the just-concluded Non-Aligned Movement summit and the informal OIC meeting, later paid a courtesy call on Deputy Prime Minister Datuk Seri Abdullah Ahmad Badawi and Foreign Minister Datuk Seri Syed Hamid Albar at their offices.
Dr Mahathir said it was clear that when a single currency was used for all international business, it would expose the world to the danger of manipulation.
“We don’t want this to happen. So we should work out a strategy where we can use other currencies.
“For the purpose of trade, we shouldn’t say that oil should be quoted only in US dollars.
Today, the oil price has gone up but the value of the US dollar has gone down, something that the people do not point out,” he added.
The oil price today, he said, was not actually US$36 if this was compared with the value of the dollar a year or three years ago.
This was because the value of the currency had come down compared with some major currencies like the yen, which had appreciated over the years.
Dr Mahathir said the movements of the currency were sometimes due to manipulation and that was very bad for the world, especially when only one currency was used as benchmark.
He said he had read an article which pointed out that the United States was actually living on borrowed money and that it always faced a huge deficit.
Despite that, he said, the US economy continued growing at a tremendous rate for the past 10 years while Japan, which had made a lot of money and had very healthy reserves, was facing economic problems.
“This is a contradiction. Why is this happening?
“It is simply because we are giving value to the US dollar which it doesn’t really have.
“There is nothing to back the US dollar other than people’s belief in it,” he added.
Asked about the growing negative sentiments of the United States, Dr Mahathir said it was a pity because it used to enjoy the reputation of being a country that everyone looked up to and its people could travel safely anywhere in the world without fear owing to its contributions to the world.
However, he said, things had changed and US nationals tended to face problems and threats whenever they travelled outside their country because there were many people in the world who did not like anything American because of its insensitivities towards other countries.
Did you find this article insightful?