The Role of Sukuk: Post Sovereign Sukuk Act in Attracting Middle East Investment in Indonesia

Abstract

In the middle of this year, DPR (House of Representative) authorized the UU No 19 tahun 2008 (UU Surat Berharga Syariah Negara) or Sovereign Sukuk Act.  Government motives to propose this kind of act is especially to attract liquidity from the Middle East in the form of project investments. The sukuk instrument has a great opportunity to be developed as an alternative for government in financing its development without any dependence to debt investment form. The problem will exist when the issuing of this instrument depends on some part of foreign investor, which worried as kind of geopolitical startegies. This paper analyze what the impacts of the Middle East investment using the sukuk instrument in Indonesia related to its role for national developments. This paper is correlated with the international investment theories which give some views from political, macroeconomic, cultural, social and financial sector.

This is an abstract for a paper which was presented marked as the best paper in Global Business Subject (short semester 2008) in FEUI.

Special thanks to Mr. Edward Tanudjaja, my teammates: M. Rifqi and Firdaus

If you want a soft copy of the full paper (in Bahasa Indonesia), please contact me.