Most efficient and super-infrastructures are preconditions for faster economic growth for any country. Most countries often finance such project by incurring public debt and such countries must pay interest every year on public debt until the entire accumulated amount is fully paid. However, interest-based financing is not only prohibited (haram) but it also drains billions of dollars to foreign creditors every year from most of the countries that have accumulated interest-based debts over the years. This paper attempts to explore how building a most modern Airport can be financed by pursuing Istisna-Sukuk based expansionary monetary policy (MP). Central Bank (CB) can buy and sell such Sukuk in open market as tools of monetary policy. Sukuk are interest-free modes of financing. They are issued against assets, such as, the Airport, and their holders are the true owners of the Airport who derive their income from this asset instead of coupon or interest rates. Istisna-Sukuk based expansionary monetary policy does not incurring public debt nor require payments of interest. In this paper, it has been shown that Istisna-Sukuk financing will have expansionary monetary policy effects and, as such, it will increase output and employment and consequently will reduce unemployment rate. In addition, it will also eliminate public debt and interest payments for the government, and the government will have more funds available for public spending. As a result, economic expansion and prosperity will continue to flourish. Eventually, it will help prevent transfer of domestic resources as interest payments to foreign creditors. © 2019, Statistical Economic and Social Research and. All rights reserved.

View