Over the past two years, there have been numerous defaults on Islamic bonds (better known as Sukuk). In fact, default rates on Sukuk are apparently higher than those of conventional bonds. This is likely due to the higher fees associated with Sukuk which are arrived at from a series of convoluted machinations designed to keep Sukuk in line with interest on conventional bonds.
The latest example of trouble from Sukuk issuers comes to us from Ground Zero in the Sukuk disaster, the United Arab Emirates.
Keep in mind as you read this article that Shariah-Compliance is supposed to insulate the Islamic world from the impact of economic downturns…
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100330/BUSINESS/703309976/1005
