Sector
Construction
As of 2022, Indonesia’s population stands at 275.8 million, a 1.17 percent growth from 272.7 million in 2021. With such a large population, Indonesia exhibits an exceptionally high demand for construction services. The total value of completed construction work in 2022 reached US$98.3 billion, with US$56.26 billion attributed to civil construction, US$32.87 billion to building construction, and the remaining US$9.17 billion to special construction work.
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As of 2022, Indonesia’s population stands at 275.8 million, a 1.17 percent growth from 272.7 million in 2021. With such a large population, Indonesia exhibits an exceptionally high demand for construction services. The total value of completed construction work in 2022 reached US$98.3 billion, with US$56.26 billion attributed to civil construction, US$32.87 billion to building construction, and the remaining US$9.17 billion to special construction work.
Subsequently, Indonesia’s construction sector has experienced accelerated growth. In 2023, its gross domestic product (GDP) reached US$133.7 billion with an annual growth rate of 4.91 percent – more than double the rate of 2022, which stood at 2.01 percent. The sector’s stable growth in 2023 is further reflected on a quarter-basis; from Q2 to Q3, the construction sector grew by 5.87 percent, and from Q3 to Q4, it grew by 5.84 percent.
The prospects of the construction sector are on the rise as the price of construction materials stabilized around 2023 following the end of the pandemic. Notably, the price index for the construction of public facilities, buildings, roads, and bridges recorded a 0.17 deflation from November to December 2023, leading to a slight deflation of 0.08 percent on the price index for construction.
The construction sector has also been seeing increasing interest from foreign investors. Throughout 2023, total foreign direct investment (FDI) that flowed into the sector reached US$281.8 million, a significant increase compared to the total FDI of US$165.3 million that the sector absorbed in 2022.
Meanwhile, the total number of construction businesses has been decreasing slightly over the years from a total of 197,030 businesses in 2022 to 190,677 businesses in 2023. Considering the rapid growth of the sector, this decrease in construction businesses is attributed more to mergers and acquisitions rather than the businesses’ ceasing operations. Additionally, it is worth noting that in 2023, the total number of Construction Labor Certificates (SKK) and registered construction expertise certificates (SKA) reached 261,720 and 38,328, respectively.
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President Prabowo Subianto officially dismissed National Nutrition Agency (BGN) head Dadan Hindayana and his two deputies through a surprise announcement by the State Secretariat early last week, marking one of the most abrupt leadership changes of his administration. The move was soon followed by the Attorney General's Office (AGO) naming all three officials as corruption suspects in the program.
Dadan was replaced by former deputy Nanik Sudaryati Deyang. Meanwhile, deputy heads Lt. Gen. (ret.) Lodewyk Pusung and Insp. Gen. (ret.) Sony Sonjaya were replaced by Development Finance Comptroller (BPKP) deputy head Agustina Arumsari and Maj. Gen. Trenggono, vice president director of state-owned food company PT Agrinas Pangan Nusantara.
The removal of Dadan and his deputies represents one of the most significant personnel changes since the agency was established. Neither the Palace nor BGN initially provided a detailed explanation for the leadership transition. Shortly after the announcement, however, AGO investigators searched BGN's offices before arresting the three former leaders.
According to the AGO, the three suspects allegedly manipulated the verification process on the BGN partner portal to ensure that foundations selected as partners for the Nutrition Fulfillment Service Units (SPPG) were linked to BGN officials or employees. These foundations reportedly received incentives worth billions of rupiah daily and were allegedly affiliated with, and in some cases owned by, the suspects.
Yet the allegations of financial irregularities represent only one of the challenges facing the government's free meals program. Since its launch in January last year, the initiative has encountered a range of operational and structural problems stretching across the entire supply chain, from land acquisition and facility licensing to procurement, workforce development and food safety oversight.
Labor has emerged as a particularly sensitive issue. While the program is often framed as a food distribution initiative, its core objective is to improve nutritional outcomes among schoolchildren and other beneficiaries. Achieving that goal requires more than simply preparing and delivering meals; it demands personnel capable of managing food safety protocols, handling storage and logistics and ensuring that nutritional standards are consistently met.
Critics have argued that the rapid nationwide rollout of the program has at times outpaced the availability of trained workers and nutrition specialists needed to support such an ambitious undertaking. The consequences have been most visible in a series of food poisoning incidents that have occurred throughout the program's implementation.
The issue is closely tied to the program's quota-driven implementation model. Success has frequently been measured by the number of meals distributed each day, creating strong incentives for officials and operators to maximize output. Critics contend that such targets, while effective at accelerating expansion, can inadvertently encourage shortcuts in compliance procedures when administrative processes are perceived as obstacles to meeting delivery goals.
Whether the leadership change will be sufficient to address these problems remains an open question. While Dadan's removal may signal the government's willingness to respond to allegations of misconduct and growing public criticism, many of the challenges facing the free meals program are structural.
The alleged irregularities identified by the AGO did not emerge in a vacuum. They occurred within a program that has been under constant pressure to expand rapidly, establish new kitchens, increase meal production and broaden beneficiary coverage across the archipelago. Such conditions can strain oversight mechanisms, particularly when administrative capacity struggles to keep pace with the program's growth.
