Social Synergy Sukuk (Double-S Sukuk): A Solution for Pandemic Crisis

The COVID-19 pandemic crisis is projected to plunge over half a billion people (580 million) globally into extreme poverty. This exploratory paper proposes an innovative Social Synergy sukuk (Double-S sukuk) for alleviating the alarming upsurge in extreme poverty triggered by the pandemic in the face of limited resources. The Double-S sukuk is designed with Multilateral Development Banks (MDBs);such as Islamic Development Bank subscribing to the sukuk at a discounted profit rate, issued by a country facing the pains of the pandemic. The profit will be paid by a charitable Non-Governmental Organization;such as Bill & Melinda Gates Foundation as an incentive to the crises country contingent upon judicious utilization of the funds for the pre-agreed social targets achieved within timely milestones that trickle down to uplift the citizens from the pandemic pains of extreme poverty. The country will only pay the principal component. Furthermore, a suitable MDB;such as Multilateral Investment Guarantee Agency (MIGA) will issue a charitable guarantee to enhance the sukuk rating and cut issuance costs. This enhancement makes the sukuk an attractive BASEL III High-quality-liquid-asset (HQLA). Instead of begging the public for charity, the Double-S sukuk will be open to the public to invest alongside MDBs for a discounted profit rate to crowd-in the social/ethical conscious private sector to raise cheaper and larger funds for an apt synergistic crisis alleviation. The methodology used in this study is qualitative based on content analysis of relevant academic journals, industry reports and policy documents.