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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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.

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.

Latest News

May 20, 2026

There is renewed hope for police reform following President Prabowo Subianto’s approval of the police reform committee’s recommendations. Although several points merely preserve the status quo, the recommendations also call for more substantive action, particularly a revision of the 2002 National Police Law.

On May 5, the President approved the six-point reform recommendations proposed by the police reform committee. This marks an important milestone following his long-awaited pledge to reform the National Police, coming shortly after the committee completed its work in early March.

Of the six recommendations, two largely maintain existing arrangements. First, the National Police will remain an institution directly under the president rather than being moved under a ministry. Second, the appointment of the National Police chief will continue through the confirmation hearing mechanism in the House of Representatives.

The third recommendation is more consequential. It seeks to strengthen the National Police Commission (Kompolnas), the government-sanctioned oversight body, by granting it broader authority to hold officers accountable and by removing ex officio seats for government officials. Kompolnas needs to be institutionally strengthened so that it possesses investigative authority and the capacity to issue binding recommendations. At present, the body can only provide non-binding advice to the president, which limits its effectiveness as an accountability mechanism.

Committee chair Jimly Asshiddiqie argued that the National Police’s direct accountability to the president must be balanced by strengthening Kompolnas as an independent institution. This reflects a fundamental governance principle: concentrated executive authority requires equally robust oversight to prevent the abuse of power and ensure democratic accountability.

The fourth recommendation is equally essential because it directly affects the public: the demilitarization of the National Police’s work culture. Demilitarization involves more than just reducing the excessive use of force; it requires transforming organizational culture, command structures and public engagement strategies. The goal is to ensure policing becomes more civilian-oriented and rights-based.

The fifth recommendation concerns tighter regulations governing the placement of police officers in civilian posts, such as ministries and state agencies. This issue has long been debated because the expansion of police influence into civilian institutions risks blurring the boundaries between security functions and civilian governance. Stronger limitations are necessary to preserve democratic checks and balances.

Finally, the sixth recommendation proposes eliminating the “special quota” pathway in police recruitment. This reform is significant because recruitment systems shape the long-term integrity of the institution. Privileged pathways often perpetuate patronage networks, systems where power is used to benefit specific groups and undermine meritocracy. A more transparent system would improve institutional credibility and reduce opportunities for favoritism.

Taken together, these recommendations require serious political commitment to be effective. The House has stated its readiness to discuss revisions to the National Police Law, as the bill is already included in this year’s National Legislative Program (Prolegnas) priority list. Lawmakers have noted that the committee’s findings will serve as the foundation for these upcoming deliberations.

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