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

October 1, 2026

Indonesia has barely had time to digest one high-profile corruption scandal before another has breached the surface, this time striking at the heart of the country's land administration. The latest case centers on the Agrarian and Spatial Planning Ministry/National Land Agency (BPN). A sweeping bribery probe by the Corruption Eradication Commission (KPK) has ensnared senior bureaucrats, a prominent property developer and multiple operatives identified as close associates of minister Nusron Wahid, a Golkar politician.

The investigation does not establish criminal liability on Nusron’s part, yet it forces a critical question to the fore: How much political and administrative responsibility should a minister carry when an alleged graft network operates freely within an agency under his purview, manned by figures from his own inner circle?

On Sept. 14, the KPK launched a sting operation in Bogor, West Java, targeting illicit payoffs tied to the right to build (HGB) permit of developer PT Summarecon Agung. Eight out the 19 people questioned initially have been named as suspects, the roster reading like a nexus of bureaucratic authority, corporate capital and political patronage: Lampri, director general of land and spatial control; Sontang Coin Manurung, head of the Bogor Land Office; Adrianto Pitojo Adhi, president director of Summarecon Agung; Fahd El Fouz A Rafiq, a Golkar politician; Arif Sugiyanto, former regent of Kebumen, Central Java; and three private intermediaries.

Investigators seized Rp 106.3 billion (US$6.3 million) in cash, including Rp 104.96 billion from Arif’s residence. Critically, the KPK has tied four of the suspects, Arif, Fahd, Erwin and Muhammad Fakhry, directly to Nusron. Investigators allege that Arif collected illicit fees from land service transactions and funneled the proceeds to Fahd, whom the antigraft agency described as a trusted confidant of the minister.

The KPK previously warned of eight systemic vulnerabilities plaguing the land sector, ranging from arbitrary service delays and illicit levies to lax oversight of HGU concessions and land certificate fraud. The Bogor sting’s findings do not reveal an institutional aberration; they expose an open wound. The ministry, combined with the BPN, wields absolute discretion over who acquires, transfers and exploits land: decisions that carry immense economic and political capital.

Nusron has pledged to cooperate with the legal process and denied any knowledge of the scheme, while the KPK maintains it is following the evidentiary trail rather than targeting individuals. Holding political custody of a compromised ministry does not make a minister a criminal accomplice. Yet political accountability cannot hide behind the threshold of criminal guilt. The core issue is administrative failure: Did ministerial leadership establish the internal controls necessary to detect an illicit network operating across multiple tiers of the bureaucracy, especially one allegedly piloted by its own political allies?

Fahd’s reappearance makes the case particularly toxic, given this is his third brush with the KPK. Having served prison sentences for his role in the regional infrastructure adjustment fund (DPID) scandal and the notorious Quran procurement graft at the Religious Affairs Ministry, his enduring influence exposes an endemic institutional rot: Why do graft convicts continue to enjoy frictionless access to the corridors of power?

Despite his criminal record, Fahd has remained entrenched within Golkar's central leadership, retained access to ATR/BPN's orbit and allegedly served as the pipeline's primary collector. Formal punishment may strip an operative of public office, but it routinely fails to dismantle the illicit patronage networks that facilitate state capture. The spotlight on Nusron has intensified amid overlapping developments. News recently emerged that he had stepped down from Golkar's central executive board. While Golkar secretary-general M. Sarmuji clarified that Nusron resigned more than six months ago, and Nusron noted he had discussed his exit with party chairman Bahlil Lahadalia as early as 2025, the timing of the disclosure amid an active KPK probe has inevitably compounded public scrutiny.

At the same time, Nusron’s name has surfaced in the ongoing trial over the 2023-2024 haj quota allocation, in which witnesses testified that roughly $400,000 had been channeled to the 2024 Haj Special Committee. The Supreme Audit Agency (BPK) estimates the scheme incurred Rp 622.09 billion in state losses. The timing could not be worse. On Sept. 22, the House of Representatives passed the landmark agrarian reform bill, establishing the National Agrarian Reform Agency (BRAN) to curb historical land inequality and resolve territorial disputes. Yet the very apparatus tasked with land administration is now deeply compromised.

Genuine agrarian reform cannot simply be drafted into existence through new agencies or legislation. Its legitimacy hinges entirely on the integrity of the gatekeepers who issue, register and enforce land titles. If the administrative machinery remains hostage to unofficial levies, discretionary favors and shadow networks, statutory reform becomes an empty, cosmetic exercise. The probe into the ministry/BPN cannot merely conclude with eight indictments and a disclaimer from the minister. The real test is whether administrative accountability can survive beyond a KPK press conference, and whether the state can finally guarantee that bureaucratic authority over the nation's land cannot be bought.

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