Dutch East Indies - Background

Background

See also: Dutch East India Company in Indonesia and Economic History of the Netherlands (1500 - 1815)

Centuries before Europeans arrived, the Indonesian archipelago supported various states including commercially oriented coastal trading states and inland agrarian states. The first Europeans to arrive were the Portuguese in the late fifteenth century and following disruption of Dutch access to spices in Europe, the first Dutch expedition set sail for the East Indies in 1595 to access spices directly from Asia. When it made a 400% profit on its return, other Dutch expeditions soon followed. Recognizing the potential of the East Indies trade, the Dutch government amalgamated the competing companies into the United East India Company (VOC).

The VOC was granted a charter to wage war, build fortresses, and make treaties across Asia. A capital was established at Batavia (now Jakarta), which became the centre of the VOC's Asian trading network. To their original monopolies on nutmeg, mace spice, cloves and cinnamon, the company and later colonial administrations introduced non-indigenous cash crops like coffee, tea, cacao, tobacco, rubber, sugar and opium, and safeguarded their commercial interests by taking over surrounding territory. Smuggling, the ongoing expense of war, corruption and mismanagement lead to bankruptcy by the end of the 18th century. The company was formally dissolved in 1800 and its colonial possessions in the Indonesian archipelago (including much of Java, parts of Sumatra, much of Maluku, and the hinterlands of ports such as Makasar, Manado, and Kupang) were nationalized under the Dutch Republic as the Dutch East Indies.