Maldives struggles with $500 million sukuk debt crisis

The Maldives, a small island nation in the Indian Ocean, is currently experiencing significant financial challenges due to a heavy debt load. It has borrowed around $500 million using sukuk, a type of financial investment that complies with Islamic law by avoiding interest payments. This borrowing method allows the Maldives to secure necessary funding while adhering to religious principles found within Islamic finance. However, concerns are rising regarding the country's capacity to repay this debt, which may have serious implications for its financial stability and economic future. The show delves into the mechanics of sukuk, emphasizing its growing role in financing projects in Muslim-majority countries. The discussion aims to raise awareness on the overarching implications of sukuk financing on the global stage and the challenges faced by countries like the Maldives if debt obligations cannot be met.