I

ndonesia will see its economy expand at a higher rate this year as the government and business players seek to develop untapped potential and spur higher investment realization from China, an investment forum concluded on Wednesday.

The event, dubbed the '€œMandiri Investment Forum'€ and hosted by state-lender Bank Mandiri and its subsidiary Mandiri Sekuritas, saw the attendance of high-ranking government officials, central bankers and business players, among others.

In his speech at the event, Finance Minister Bambang Brodjonegoro said the Indonesian economy had started to recover, as shown by the expansion in gross domestic product (GDP) in the third quarter of last year.

'€œWe saw moderate growth in the first half of 2015, but that has since changed. Government consumption increased and we have already begun shifting from the commodities sector to the manufacturing sector,'€ he said, adding that the change was also reflected by data on regional GDP.

The third quarter of 2015 saw GDP rise to 4.73 percent from 4.67 percent in the second quarter, according to data from the Central Statistics Agency (BPS). Java '€” with its factories and manufacturing businesses '€” accounted for 58.27 percent of the economic distribution, and grew 5.39 percent year-on-year (yoy).

Sumatra and Kalimantan '€” known for their commodity resources '€” only grew at an annual rate of 3 percent and 0.4 percent yoy, respectively.

'€œSome regions in Indonesia had higher growth than the national GDP, such as Bandung and Central Java, which grew by 8 percent and 5 percent, respectively,'€ Bank Mandiri president director Budi Gunadi Sadikin said, pointing out the need to push investment and economic growth across different regions.

Bambang acknowledged the dampening effects of the ongoing economic slowdown in China, but insisted that China was still in a strong position and offered a lot of opportunities for Indonesia.

'€œWe want to change the products that we export to China to finished goods from commodities. We want to attract higher investment from China as well, not just commitments, but also realized investments.'€

'€œSo we have to remain optimistic and find new opportunities. We have to maintain close economic ties with China,'€ he said, adding that he was optimistic that Indonesia could achieve its 5.3 percent GDP growth target this year.

Meanwhile, Asian Development Bank (ADB) country director Steven Tabor said that Indonesia had not fully explored its export potential.

'€œIndonesia accounted for 1 percent of global exports in 2014. There is still 99 percent to be captured, plenty of room for expansion.'€

Tabor also highlighted the importance of tourism and e-commerce as new growth sectors. '€œE-commerce contributes 9 to 10 percent of GDP in China, 40 percent of GDP in western Europe, but less than 1 percent of GDP in Indonesia.'€

The event was attended by more than 700 international and local participants and business practitioners. The event aimed to connect regulators, private companies, investors and state-owned enterprises (SOEs) through new partnerships and networking.

In order to invite more investment into the country, Mandiri Sekuritas president director Abiprayadi Riyanto said the event was also attended by 60 mutual fund managers with assets under management worth at least Rp 270 trillion (US$19.48 billion).

Despite looming market volatilities, Abiprayadi said investors and companies were confident that the Jakarta Composite Index (JCI), the country'€™s main stock exchange barometer, could hit 5,000 this year due to accelerated government spending.

'€œWith an improved situation, we hope our clients who delayed and rescheduled their equity issuances in 2015 will continue their corporate actions this year,'€ he said, adding that Mandiri Sekuritas had already booked seven mandates of debt paper issuances worth about Rp 9 trillion for this year.

Bank Mandiri finance director Kartika Wirjoatmodjo said the event also wanted to promote the digital economy and encourage the formation of startups as new players in the private sector.

Meanwhile, Gatot Trihargo, the State-Owned Enterprises Ministry'€™s deputy for business services, said the ministry had completed a new roadmap for SOEs that would push them and their subsidiaries to build more partnerships with private companies and become global players.
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