Enabling beneficial right for sovereign ṣukūk issuance in Indonesia: challenges and analysis
International Journal of Law and Management
ISSN: 1754-243X
Article publication date: 14 August 2023
Issue publication date: 27 October 2023
Abstract
Purpose
This study aims to investigate beneficial right as a new legal concept and term accepted by the Indonesian legal system. The new concept was ratified to endorse government decision to use ṣukūk (as an Islamic financial instrument) in the financing of state budget deficit. Some legal issues emerged after the ratification such as the necessity to synchronize the beneficial right with other property rights in Indonesia and the disharmony between laws related to sovereign ṣukūk issuance.
Design/methodology/approach
The study uses a qualitative method with library study and interviews with relevant legal experts in Indonesia as the data collection techniques.
Findings
The findings show that the passage of Sovereign Ṣukūk Law 2008 that ratified beneficial right deemed as a concession point by the government to solve conflicts between legal restriction and employment of state-owned assets as the underlying asset of sovereign ṣukūk. The study deemed the necessity to improve the use of beneficial right in the Indonesian legal system which by the concept is not exercised for the issuance of sovereign ṣukūk only. There is the need to harmonize the administration of this right with other property rights in Indonesia.
Research limitations/implications
The scope of study will be limited to the Indonesian regulation related to the use of beneficial right concept in the issuance of sovereign ṣukūk in Indonesia. The regulation as mentioned will be in the form of statutes, presidential or ministerial regulations, and also opinions of Indonesian legal and sharīʿah scholars regarding the matter.
Originality/value
This study may explore significantly the use of beneficial right for the issuance of sovereign ṣukūk by the Government of Indonesia. Specifically, the study reveals and addresses the issues that are following the ratification of beneficial rights originated from the common law system into the Indonesian civil law system.
Keywords
Acknowledgements
This paper is a part of PhD dissertation in Islamic banking and finance that the corresponding author submitted to International Islamic University Malaysia (IIUM), Kuala Lumpur, Malaysia. The corresponding author acknowledges the IIUM Institute of Islamic Banking and Finance, the dean, the supervisors, all the lecturers, and staffs which patiently assisted and supported the author to study and research. Additionally, the appreciations are presented to STEI SEBI (in Depok, West Java, Indonesia), the Ministry of Finance of Indonesia (Directorate of Islamic Financing), and National sharīʿah Board of Indonesian Ulema Council (DSN-MUI) that facilitate the data collection of the research. As well, the corresponding author expresses gratitude to Badan Amil Zakat Nasional or BAZNAS which has provided the scholarship (Beasiswa Kaderisasi Seribu Ulama) for competing the study. Lastly, the authors acknowledge the editor (Assoc. Prof. Zahid Hussain) and the anonymous reviewers for constructing comments and suggestions.
Since acceptance of this article, the following author has updated their affiliation: Engku Rabiah Adawiah Engku Ali is at IIUM Institute of Islamic Banking and Finance (IIiBF), International Islamic University Malaysia (IIUM), Kuala Lumpur, Malaysia.
Citation
Armen, R.E., Engku Ali, E.R.A. and Dewi, G. (2023), "Enabling beneficial right for sovereign
Publisher
:Emerald Publishing Limited
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