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

November 14, 2025

President Prabowo Subianto 's flagship free nutritious meal program has hit a critical juncture. Launched with the ambition of feeding millions and cementing his populist image, the program is now marred by reports of food poisoning, poor governance and slow budget absorption. In response, Prabowo has formed a high-level coordinating team to rescue the initiative before it collapses under its own weight.

The new team is designed to tighten oversight and restore public confidence after a string of incidents, including more than 8,000 reported food poisoning cases and allegations of mismanagement in the field. Without swift reform, the government risks missing its ambitious target of reaching 82.9 million beneficiaries next year, despite allocating a massive Rp 268 trillion (US$16.06 billion) in the 2026 budget.

The coordinating team is chaired by Coordinating Food Minister Zulkifli “Zulhas” Hasan and includes representatives from 17 ministries and agencies. Yet, the daily operations will be led by Nanik S. Deang, one of Prabowo's closest confidants, who serves as executive director. Nanik is also deputy chair of the National Nutrition Agency (BGN), the main implementing body for the free meals program.

A former journalist and longtime member of Prabowo's campaign team, Nanik has no formal background in nutrition or food security. Her rapid rise from serving as deputy head of the Poverty Eradication Agency and independent commissioner at Pertamina to her current position underscores how political loyalty continues to shape key appointments in Prabowo's administration.

Under the new structure, the coordinating team will oversee the synchronization, monitoring and evaluation of 7,477 nutrition food supply centers (SPPG) operating across 38 provinces and 509 regencies. These centers form the backbone of the program's food logistics system, linking local farmers and food suppliers to schools and communities.

Prabowo recently touted the program's progress, claiming the government had distributed 1.4 billion meal portions to 36.2 million recipients. He downplayed the food poisoning reports, noting that the incidents represented "only 0.00017 percent" of total distributions. Critics, however, quickly pushed back. Reducing a public health issue to fractions, they argued, trivializes what should be treated as a serious failure of oversight. Each sick child reflects a breakdown in quality control and accountability. The creation of the coordinating team may be an acknowledgment of those concerns.

The coordination team lacks representatives from the military and the National Police. This stands out given Prabowo's reliance on security institutions to execute many of his policies, including the free meals program. Many SPPGs are owned by military and police-linked entities, raising long-standing suspicions that the program has doubled as a tool for distributing political and financial rewards to different factions.

Governance shortcomings have been a recurring theme in the program's rollout. The free meals program currently lacks a solid regulatory foundation, making coordination between ministries and local governments uneven at best. Zulhas said one of the team's first tasks will be to draft a presidential decree to clearly define responsibilities and strengthen governance mechanisms. Critics have long warned that the program's top-down management style has alienated local governments that are essential to on-the-ground implementation.

The government appears to have taken that criticism to heart. The revised plan will involve local administrations more directly, alongside the newly established "Red and White" village cooperatives, an ambitious network that could reach up to 80,000 cooperatives nationwide. Greater decentralization of the program could improve both efficiency and accountability as the program scales up.

For now, though, the challenge remains enormous. Despite a Rp 71 trillion allocation for this year, the BGN managed to spend only about 30 percent of its budget by September. Poor coordination, weak local capacity and bureaucratic bottlenecks continue to hamper delivery, and all while public expectations soar.

Prabowo's free meal program was meant to embody his promise of a strong, caring state. But unless the new coordinating team can turn rhetoric into real reform, the initiative risks becoming yet a potentially case study of failure to deliver.

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