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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For nearly four months wildfires have ravaged Indonesia, exposing acute, systemic failures in government response and law enforcement. While the ongoing dry spell has exacerbated the crisis, suspected corporate land clearing by burning points to a deliberate, recurring practice that authorities have repeatedly failed to halt.
The scale of the destruction is alarming. At an emergency meeting with President Prabowo Subianto on Oct. 12, the National Disaster Mitigation Agency (BNPB) reported that 129,899.6 hectares of peatland had burned across six priority provinces: Central Kalimantan, South Kalimantan, West Kalimantan, South Sumatra, Jambi and Riau. Although officials claimed most blazes had been extinguished, active firefighting continued across another 639.2 ha. Furthermore, these figures omitted fires that had been burning unchecked across Papua for weeks.
Prabowo’s downplaying of the crisis, insisting that only a small area was still ablaze, contradicts the humanitarian toll on the ground. By Oct. 13, cases of respiratory infections linked to toxic haze had reached 283,270 across seven provinces.
Air quality measurements expose the depth of the public health emergency. On Oct. 15, the air quality index (AQI) in Pangkalan Bun, Central Kalimantan, spiked to a staggering 982, more than three times the minimum for the “hazardous” level, while Pontianak in West Kalimantan logged 280, near the upper range of the “very unhealthy” level. Even Jakarta, notorious for chronic pollution, recorded a far lower AQI of 176. Progress cannot be measured merely by hectares extinguished; it must be judged by the state's capacity to protect human lungs and prevent recurrent catastrophe.
The fallout has long breached national borders: Singapore recorded its highest PM2.5 readings of the year on Oct. 14, Timor-Leste shuttered classrooms for three days starting on Oct. 15, and Malaysia closed schools across several states as transboundary haze intensified. The crisis has evolved from an internal ecological disaster into a regional health and diplomatic liability.
Public patience has run out. Grassroots outrage has surged across social media, where campaigns like “Our Forests Are Still Burning” have amassed millions of shares. Yet the backlash targets not only environmental devastation but also presidential priorities. While millions choke on toxic smoke, President Prabowo has maintained routine appearances at soccer events and taken foreign trips. Whatever diplomatic or political justifications these engagements carry, the optical disconnect is glaring: a presidency conducting business as usual while citizens gasp for clean air.
The fury has migrated to the streets. On Oct. 13, student protesters picketed the South Sumatra Police headquarters in Palembang, demanding criminal accountability for corporate fire starters. The previous week on Oct. 5, they had rallied outside the South Sumatra Governor’s office demanding transparency in wildfire management expenditure, real enforcement against offending agribusinesses and institutional accountability.
El Nino alone cannot serve as an alibi. In South Sumatra's Ogan Komering Ilir regency, firefighters from the Forestry Ministry’s Manggala Agni brigade uncovered burned plots in Pedamaran district that had been leveled by heavy machinery and prepared for planting, while neighboring oil palm concessions remained untouched. The site bore all the hallmarks of intentional arson to facilitate cheap plantation expansion.
The state’s diplomatic posturing has also invited skepticism. After Japan deployed Self-Defense Forces helicopters to help fight blazes in Kalimantan throughout September, Indonesia abruptly terminated the mission on Sept. 29, saying it could handle the rest domestically. Neighbors Malaysia and Singapore have likewise offered assistance.
The national emergency apparatus is undeniably active: Tens of thousands of personnel are deployed alongside heavy-duty pumps and deep well rigs. However, self-reliance is admirable only when backed by results. When toxic haze crosses international boundaries, national pride must yield to regional responsibility.
Subsurface peat fires are notoriously obstinate, smoldering underground for weeks before flaring anew. But precisely because these conditions are well understood, prevention must take precedence. Indonesia has grappled with this disaster cycle for decades; nothing about this year’s crisis was unpredictable.
The fundamental flaw remains the chasm between reactive mobilization and structural prevention. Credible governance demands year-round surveillance, early intervention, firm prosecution of corporate culprits and total transparency in burned area data. When civil society groups document burned acreage far exceeding official reports, public trust erodes.
Prabowo’s rhetorical calls for prevention will mean nothing if enforcement lapses persist before the next dry season. The government must blacklist culpable firms, protect peatlands and prosecute offenders before seasonal haze hardens into an annual public health crisis. These wildfires are a test of whether Indonesia can enforce its own laws, protect its populace and honor its international commitments. Quelling the flames is not enough; the state must end the culture of impunity that ignites them.
