Analisis of Sukuk Utilization for Infrastructure Financing in Developing Countries: A Review of Islamic Banking Practries

Abstract

Sharia economy plays an increasingly significant role in driving Indonesia's economic growth. Based on the principles of justice, welfare, and balance, sharia economy contributes to creating an inclusive and sustainable economic system. Sharia economic policies, including the development of sharia capital markets, are important instruments in attracting ethical investment and supporting infrastructure development. Sharia capital markets not only provide investment alternatives that are in accordance with sharia principles, but also increase financial access and expand the reach of investors.

In the context of globalization, the sharia economy continues to grow through innovation, especially in the halal industry and financial sector. Globalization provides new opportunities for the sharia economy to compete in the international market, while digital innovation strengthens the competitiveness of this sector in the modern era. Innovation in halal product marketing and digital strategies are key to expanding market reach. The role of sharia institutions, especially in sukuk management, also shows a major contribution to national development. Sukuk, as a sharia-based financing instrument, has financed vital infrastructure projects that support Indonesia's economic growth. However, challenges in terms of regulation and public understanding still need to be overcome to strengthen the effectiveness of this institution.

On the other hand, competition among Islamic financial institutions is increasingly intense, especially with the merger of Bank Syariah Indonesia (BSI), which strengthens the position of Islamic banks in the domestic market. This merger strategy allows Islamic banks to be more competitive, both in terms of operational efficiency and the development of innovative financial products. This merger is also expected to strengthen support for the small and medium enterprise sector, which is the backbone of the Islamic economy in Indonesia. Thus, the role of the Islamic economy, supportive policies, and innovation in the Islamic financial sector show great potential in improving people's welfare and supporting sustainable economic development in Indonesia.