The Impact of Sukuk investment in Developing UAE Economy

By Dr. Abdussalam Ismail Onagun

Abstract

Purpose: Sukuk (Islamic bonds) is an integral part of Islamic economics and finance. It is an excellent source of funding for governments or companies who are craving for Shariah compliant tools which can foster the economic growth. The governments around the globe have taken deep interest in issuing and promoting Sukuk investment as the mainstream financial tools and the government of UAE particularly Dubai government has taken the lead in ensuring the Emirate being one of the first adapters of Sukuk in order to diversify its economy.

Design/methodology: A survey/interviews was conducted with Islamic banking professionals and investors The Data helped to examine the impact of Sukuk investment in diversifying UAE economy as the UAE possesses nearly 10 per cent of the world’s total reserves, and there is no doubt that oil will continue to provide the income for both economic growth and the expansion of social services for several more decades.

Findings:The Sukuk investment has always been preferred by the people who have preferences for the Islamic financial Systems. Thus it is imperative that the target market should be identified and the most attractive location has been identified as UAE as it has developed a strong market for Sukuk investment.

Originality/value: This research is to highlight the impact of Sukuk issued by Nasdaq Dubai on the UAE economy as one of the fastest growing financial products in Islamic Financial Institutions (IFIs). Finally, this research will analyze the potential of making Dubai as the centre of Islamic economics in line with the vision of Dubai government and foreseeable of economy growth opportunities in the Dubai Expo 2020.