Sovereign Sukuk as investment Instrument in Kuwait
Omar Alabduljader
Law Department - School of Law - University of Boston - USA
Abstract
Topic: Sovereign Sukuk as investment Instrument in Kuwait By: Abdullah Khaled Alkandari (LLM) & Omar Salah AlAbduljader (LLM) Abstract As debt instruments, Sovereign Sukuk is the new financial sharia-compliant trend that has been widely utilized as debt-instruments by both financial institutions and state governments. In the past decade Sukuk has been appealing to Muslim and non-Muslim governments such as United Kingdom and Luxembourg. Government now follow those examples by adopting laws and regulations that ease the issuance of Sukuk in its local markets. Kuwait has joined the global trend lately by adopting a legal framework for Sukuk issuance. However, Kuwait’s legal framework is not yet complete to issue Sovereign Sukuk even though Kuwait’s existing economy need this instrument to absorb liquidity as part of the Central Bank monetary policy and to finance the budget deficit. On this paper, we will present the prior points in addition to offering a recommendation to policy makers to complete the legal framework and follow the best practices currently adopted by developed market. The methodology that will be used will be mainly analytical which will be based mainly on a critical analysis and assessment of both the Islamic Sukuk in Kuwait and in the international Best Practices. Various resources will be aid the research and a variety of sources will be consulted as part of the analysis; these will include, inter alia, primary sources such as statutes and laws The research also relies on secondary sources and literature: books on the subjects under discussion, journal articles and other scholarly publications. This paper hits upon an important question, does the State of Kuwait have an integrated legislative structure that allows the issuance and then trading Sovereign Sukuk? Is there an economic legislation recently issued for the state to legislate issue this tool of public debt? To answer the above, the paper will review the best practices adopted in the relevant countries where the major markets and the economics benefits from their issuance of Sovereign Sukuk.
Keywords
Gulf Countries, Sukuk Law, Sharia, Europe, Asia, Kuwait, Sovereign Sukuk, the financial market, central bank
