Category: Publications

Over 30 years of heavy investment in infrastructure development has seen the emirate of Dubai transformed from an under-developed backwater into a hub for project finance which is often cited as the poster child for the type of metropolis that can be created through dedicated infrastructure investment. With the growing appetite for public private partnerships (PPPs) in the UAE, Rahat Dar analyzes the role Islamic finance will play in this new era.

As with other countries in the heavily oil-dependent Gulf region, the UAE has taken active steps in recent years to expand its revenue streams (including the implementation of value-added tax, effective the 1st January 2018). Afterall, relying on treasury reserves, albeit substantial, to plug spending gaps in the national budget was only going to be a short-term solution to the long-term problem of low oil prices.

While it is now abundantly clear that the Sukuk market has failed to realize the predicted surge in sovereign Sukuk issuances following the drop in the prices of oil in 2014, when it was assumed that oil revenue-dependent GCC
countries would rush to the Sukuk market in order to fill shortfalls in their spending budgets, the current Sukuk market still presents a mixed picture. Against the backdrop of the current uncertainty in the Sukuk market, Rahat Dar looks at some of the likely drivers, challenges, and prospects for UAE Islamic banks looking to issue Sukuk in 2017 and beyond.