The credit crisis has breathed new life into the Middle East’s young bond markets, both of the Islamic sukuk and conventional variety. Companies realise that a healthy local currency bond market can provide an alternative source of funding to bank loans and equity issuance.

An active sovereign bond market would give governments an additional policy tool to control domestic credit. It would facilitate implementation of open market operations of the region’s central banks, and make it possible for them to use quantitative easing, as in more developed countries.