The role of Islamic sukuks in light of the sovereign debt crisis in pushing the state’s general budget deficit

Authors

  • Belhoucine Fatima Zohra University of Tahri Mohammed, Bechar, Algeria
  • Tehirichi Djoumana University of Tahri Mohammed, Bechar, Algeria

Keywords:

debt crisis budge, deficit, Islamic sukuk, sovereign debt

Abstract

Islamic sukuks, in their various forms, make significant contributions that foster both economic and social development, driving the economy forward. They also offer a range of benefits to individuals, institutions, investors, and issuers, creating a positive impact that serves both the issuer and society. Therefore, a primary objective of this research paper is to explore Islamic sukuks as an Islamic financing mechanism, which has recently garnered global attention. This includes examining their definition, types, and issuance regulations, as well as highlighting the crucial role Islamic instruments can play in addressing budget deficit challenges. The key findings indicate that sukuks are an effective tool for accumulating liquidity, thereby providing essential financing for both institutions and governments. By mobilizing financial resources and channeling them into real, productive investments, sukuks have the potential to bridge the gap between the real economy and the financial sector, as their issuance requires underlying assets prior to securitization.

References

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Published

2024-10-10

How to Cite

Zohra, B. F., & Djoumana, T. (2024). The role of Islamic sukuks in light of the sovereign debt crisis in pushing the state’s general budget deficit. International Journal of Economic Perspectives, 18(10), 1783–1792. Retrieved from https://ijeponline.org/index.php/journal/article/view/676

Issue

Section

Peer Review Articles