Artificially creating a dollar crises to float the Egyptian pound
Hizb ut Tahrir
Wilayah of Egypt
We have previously warned people that the dollar crises suffered by Egypt has been concocted by the Egyptian government, to pave the way for the flotation of the Egyptian pound. The flotation is in accordance with the structural adjustments imposed by the International Monetary Fund and the World Bank, and also, in accordance with the agreements with the World Trade Organization. They prevent support of the local currency, whether directly or indirectly, because this hinders the movement of capital in the securities and exchange market upon which the joint-stock companies are based. This is especially since the privatization of many state companies and utilities, and their transformation into these types of companies, and because of the presence of international companies in the country.
Mubarak’s government does not give a damn about the people, and still follows the policy of shocks and gradualism in floating the pound, by taking the economic decisions that lead to this flotation. A few months earlier the government took the decision to stop imports for three months, by stopping the opening of credits in dollars in banks for imports. Anyone who has even the slightest economic experience knows that the lack of a currency flow for importers, whilst opening all the doors to imports in accordance with the requirements of the agreements of the WTO, would inevitably drive the importers to search for other sources for the dollar, to cover their imports of purchased goods. This is what has led to the increased demand to buy dollars. Consequently, it led to price increases in the ‘black market’, until the price had reached approximately 5.50 Egyptian pounds, whilst the official price announced by the central banks was 4.15 Egyptian pounds. Here the state intervened and changed the price, following the market price and the central bank announced a new price, which is about 4.60 Egyptian pounds with a new fluctuation margin of 3%. It cancelled the decision to stop imports, after only one week of its implementation. It gave glad tidings to the people of a decrease in the price of the dollar, in exchange for the Egyptian pound to 4.60 Egyptian pounds. In reality the price had increased and the state had injected approximately 250 million dollars into the markets to back this price, so as to give the people the impression that they have been saved from a crisis. Now, despite the lack of confidence in the pound, the state has resorted to inventing another crisis. This is to close, or partially close, the money exchange shops, thereby implying to the people that those who exchange money are the cause of the crisis, and not the mishandling of the economy by the state; and not the reforms of the IMF, World Bank, nor the agreements of the WTO. They did this so that they can lower the price of the pound in relation to the dollar, and win over the public opinion for that. This is because it is natural that, after the closure of exchange shops and the scarcity of dollars in banks, the ‘black market’ would become prominent and the price of the dollar would increase in relation to the pound. Then the state would intervene and lower the price of the pound. This is how the government is proceeding in its policy of shocks, for gradually floating the pound and absorbing the anger of the people, and avoiding any blame for its bad handling of the economy.
O People: The Islamic economic system obliges the currency to be covered by gold and silver, and forbids the Islamic State’s (Khilafah) currency to be linked to another state’s currency. This is so to prevent any state from having influence and authority over the Muslims. He (Subhanahu wa ta'ala) says:
“And never will Allah grant to the disbelievers a way over the believers” [TMQ An-Nisa’: 141].
Similarly Islam forbids us from taking capitalist solutions and treatments, imposed by economic institutions which contradict Islam. Institutions such as the IMF and the World Bank, which entrench the economic dominance of the western colonialist in our lands, keep the people living on the verge of poverty.
Islam also forbids joining these organizations and trade agreements, which open up the Muslim lands as consumer markets for the Kaafir colonialist, without any Shar’ai controls. These also stand as an obstacle before industry and innovation in our lands. They lead to the hoarding of capital in the hands of a few people from the rulers and their entourage.
O Muslims: Indeed, the complete application of Islam, and looking after the affairs of all people via its state (the Khilafah), is a Fard obliged on you by Allah (Subhanahu wa ta'ala). The complete application in the Khilafah State is a practical example of how well affairs are looked after and how people’s problems are solved. That is why good governance by Islam carries the Islamic Da’wah to the world. Carrying the Islamic Da’wah to the people through the state is also a Fard. It is rather one of the most important obligations of Islam, which delivers the people from the worship of people, to the worship of Allah (Subhanahu wa ta'ala), from the injustice of capitalism to the justice of Islam, and from the misery of the Dunya to its happiness. So we invite you Muslims to the work to resume the Islamic way of life, and to carry Islam as an invitation to the world by establishing the Khilafah.
“O you who believe! Answer Allah (by obeying Him) and (His) Messenger when He calls you to that which will give you life” [TMQ Al-Anfal: 24].
20 Zul Qa’dah 1422AH
3 February 2002
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