Yemen, racked by worsening anti-government protests, issued the country's first Islamic bond, or sukuk, last week, as part of a broader bond plan to finance development projects. Local Islamic banks subscribed to the four billion Yemeni rial ($18.5 million) bonds issued by the central bank with proceeds expected to finance three local road projects, IFR Markets, a unit of Thomson Reuters reported.
Every three months, the Islamic Sukuk Unit at the central bank will issue sukuk worth $125 million, officials at the unit were quoted as saying in The Yemen Post earlier this month. Protesters in Yemen, which is among the least developed of the Gulf Arab states, have clashed with security forces since the end of January, echoing movements across the Arab region which have already toppled leaderships in Tunisia and Egypt.
The events have exacerbated an already fragile security and economic environment. In January, Yemen increased a planned 2011 sukuk plan to $500 million, to diversify government financing and help lower a budget deficit currently running at around 8 percent of gross domestic product.
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