Erosion in intrinsic value of money has left no developing country out of distress

June 16 - 22, 2003



According to Umer Latif author of the book, "Decades of brain storming into intricacies led me to believe that economic equilibrium blended with social justice can be mobilized, harmonized and promoted by combination of fiscal and monetary policies and pursuit on equitable basis. This will put requisite supportive structure in place, accelerate positive and sustainable contributions compatible by contribution of each on merit."

Quite vivid and exhaustive definition of money has been that money is a matter of four functions a medium of exchange, a measure, a standard and a store of value. However, according to Umer, these four functions could not define its functions well. Therefore, he has added two more unit of deferred payments and transferability of ownership of assets. He also believes that in the real life the role of money has not been fairly and equitably stretched to all the six functions.

He says that money has gone far beyond and much wayward, to the extent of making individuals salve. Chase for money has been a contagious evil, extending from country to country and getting globally widespread. Stretched distress-state of developing countries has not been due to lack of their economic potentials or laggard performance in growth gains but due to inequitable distribution of money.

Injection of additional currency and creation of money more than the real growth of gross national product has led to erosion in purchasing power of money internally. Similarly such currency fails to hold its par value externally in its exchange parity. This chronological follow up of such trend has been a persistent devaluation. This trend has denuded developing countries of their material resources. Devaluation has never been and would never click to be the remedy for economic revival and progress is the proclamation of the author.

According to Umer, money is being mismanaged, so much so that each individual, group, society, country, is dumped by it into deep distress. Concurrent inflation and recession, named as 'stagflation' occur by dint of paper money floating freely, creating complicated problems of debts, making massive transfer of resources from poor to rich. Spread of violence and rebellions are the byproducts of mismanagement of money.



The author in his previous book, 'New Treatise on Taxation in Developing Countries' and the latest book has tried to provide prescription for restructuring economies of developing countries. Umer's approach and sequence has not been his own but inspired from the everlasting source of guidance, Al-Qura'n. From countrymen to global population, he has offered solution to myriad fiscal and monetary intricacies, in simple spirit and true perspective.

Umer believes that peace dawns, springs and flourishes by economic emancipation, education, and knowledge. For this, equitable fiscal and taxation plus equitable monetary systems and structures tend to be the meticulous and meritorious exponents. Other tools are but taboos. The author has contemplated, rather completed codes of integrating fiscal, taxation and monetary components, covering entire economic spectrum in his two books.

Addressing the book launching ceremony Saifuddin Zoomkawala, Managing Director, EFU General Insurance company, said, "Like a thorough gentleman, but a tough critic, with quality of not to spare and no compromise, he has lived on. His criticism has not been against a person or institution but related to deeds and performance. That has been a beauty, loved also by those criticized. His approach in writing and speaking has been bold to the bitterness a virtue coming off devotion to truth."

S. G. M. Badruddin, a veteran journalist in his Editor's epigraph said, "The sense of happiness emanates not just from sentiments. It arises from the firm recognition of the fact that the book provides a fresh and undaunted view of our monetary system and related issues, which is rare in our context. Spread over 18 plus chapters, the book deals in considerable detail with money related issues. The author has no doubt taken pains to provide relevant facts and data as well as his analysis and interpretation of the subject matter. The author has discussed several issues relating to the economy, which have remained significant over the decades. A reference to them appears relevant as the author does not conform to the traditional approach and offers his own analysis and interpretation."

Much is being talked about Riba free banking and economy that cannot be achieved in Umer's opinion without reforming the monetary system and practices. The concept, Dr. Mufti Nizamuddin Shamzai observed, is in perfect consonance that Imam Ghazali is his famous work 'Al-Ahyanul Uloom' underscored need and justification of holding intrinsic value of currency intact.

According to Umer, "Well defined and coded in form of studies has not been there, This dangerous deficiency has led to degeneration of lofty values, which Islam upholds. An ideological state stands fragmented and dumped into perpetual crises, both political and of economics."