13.06.2012 - Should Afghanistan issue a sovereign sukuk?
An article in Bloomberg discussed the prospects for Afghanistan to issue a sukuk to fund its budget deficit when international troops in the country leave (along with a lot of aid that accompanies them) in 2014. I have offered a skeptical comment to an earlier Bloomberg article that reported about a proposal to allow Islamic banking in Afghanistan. A sukuk provides a different set of opportunities and challenges from Islamic banking. It is easier in many ways to issue a sovereign sukuk than it would be to develop a prudently regulated Islamic banking system, because the investors would demand a higher return (whether sukuk or conventional bond) based on the ability to get recourse in case the government defaults in the future...............................................Full Article: Source
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