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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It is hard to conceive of a national political landscape without constant maneuvering among political parties, trying to shape its direction. Recent speculation over a potential unification of the NasDem Party and Gerindra Party has brought a recurring question to the forefront: Do parties function as institutional channels of representation, or have they become mere instruments of elite bargaining?
The issue escalated into a controversy on April 14, when hundreds of NasDem Party supporters rallied outside Tempomagazine’s office in West Jakarta. They had gathered to protest a cover story featuring party chairman Surya Paloh, which alluded to a possible merger between NasDem and President Prabowo Subianto’s Gerindra Party. NasDem swiftly rejected this characterization, insisting that the discussions concerned the formation of a “political bloc”: a looser yet potentially more durable configuration of power compared to a “merger”.
The discourse had gained traction following reports of a closed-door meeting in mid-February between the two political bigwigs at Prabowo’s private residence in Hambalang village, West Java. Gerindra executive chairman Sufmi Dasco Ahmad confirmed the meeting took place, but insider accounts suggested their discussion was far from informal, reportedly covering a proposal to raise the parliamentary threshold from 4 percent to 8 percent. According to these sources, the pair also discussed Surya’s stalled business ventures, specifically the Indonesia 1 twin towers project in Central Jakarta.
At the center of their meeting, however, was a political agenda: formalizing deeper cooperation that could evolve into a more consolidated arrangement. In fact, NasDem and Gerindra share a similar historical lineage: both were founded in the wake of post-reform internal fractures in the Golkar Party.
From a political economy perspective, these discussion areas are not incidental. They reflect a convergence of electoral strategy, regulatory engineering and economic interests, a pattern that has long characterized Indonesia’s party system.
At first glance, NasDem’s openness to forming a stronger political bloc appears paradoxical, as its electoral performance indicates increasing stability rather than a decline. Since its establishment in 2011, the party has demonstrated consistent growth: NasDem secured 6.68 percent (35 seats) of the vote in the 2014 election, increased its share to 9.05 percent (59 seats) in 2019, and gained 9.66 percent (69 seats) in 2024. Among mid-tier parties, this trajectory positions NasDem as one of the most resilient players.
NasDem also has significantly outperformed its peers. The Democratic Party, for instance, has experienced a steady decline since its 2009 peak, with its vote share falling to 7.43 percent in the last election. Meanwhile, the United Development Party (PPP), an Islamic outfit that recorded a comparable, albeit slightly higher, share of the votes in 2014, has since lost all seats in the House.
However, electoral strength does not automatically translate into political leverage, and both internal and external pressures have intensified. Several senior NasDem figures, including Ahmad Ali, Bestari Barus and Rusdi Masse Mappasessu, recently left the party to join the Indonesian Solidarity Party (PSI). Led by Kaesang Pangarep, the younger son of former president Joko “Jokowi” Widodo, the PSI reflects the increasing attraction of parties closely aligned with the executive.
NasDem’s long-standing association with Jokowi further complicates its positioning. After supporting Jokowi over two terms, the party endorsed Anies Baswedan in the 2024 presidential election, in opposition to the Prabowo-Gibran ticket. Reports linking this shift to state-owned banks’ withdrawing support for Surya’s Indonesia 1 project illustrate how political alignment can intersect with business ventures, especially with negative impacts for the latter.
Simultaneously, communication missteps have affected the party’s public image. Statements by NasDem lawmakers Ahmad Sahroni and Nafa Urbach were widely criticized for their apparent dismissiveness toward public concerns, intensifying scrutiny of the party’s messaging and responsiveness. The two were among the several lawmakers blamed for triggering the mass protests in August last year and were suspended for several months.
Taken together, these developments suggest that Prabowo and Surya’s discussion around a potential unification, whether “merger” or “political bloc”, is less about electoral survival and more about strategic repositioning within a changing power configuration.
The proposal to increase the legislative threshold reinforces this interpretation. Surya has advocated for raising it to 7 percent, arguing this would streamline the legislative process. However, because this figure closely mirrors NasDem’s average performance, the proposal appears to be based on careful political calculation rather than purely on institutional reform.
NasDem’s current developments therefore reflect a broader pattern in national politics: Maneuvering is rarely about ideological alignment, but rather about recalibrating access to power. Whether framed as a coupling or cooperation, they illustrate how parties continue to operate at the intersection of electoral strategy, elite negotiation and institutional design.
