[10] Becoming a Tropical Plantation, 1780–1900

In the economically sluggish century before 1760, the VOC sufficiently succeeded in its aim to monopolize key arms of trade to repay its huge outlays in forts and garrisons to protect them. Long before these spice monopolies were broken by the French (1771) and British (1784), however, monopoly conditions had removed all incentives to innovate. The slave-tended nutmeg trees of Banda never recovered from a tsunami that destroyed half of them in 1778. Malukan spices had already become a small part of the VOC system (less than 5% of homeward cargoes), and an insignificant part of Asian or world trade. The growth in long-distance world trade in the eighteenth century was in Indian textiles, Chinese tea and ceramics, West Indian sugar and American tobacco and cotton. Southeast Asia had again become a crossroads rather than a major beneficiary of world trade.

Judging only by the more measurable long-distance trade, the Southeast Asian economies began to grow again in the 1760s, with real dynamism from the 1780s. Much of the growth was generated by Chinese enterprise essentially serving the expanding China market, as described in Chapter 9. Both the junk trade and the Asia-based European “country traders” found Southeast Asia’s Asian-ruled ports more attractive in the new quest for products to exchange against Chinese tea and manufactures.

The revolutionary upheavals in Europe and America also shook up the somnolent monopoly systems of the European enclaves in Southeast Asia, and forced some overdue changes. The British occupied Manila in 1762–4, making clear that new types of Asian regional trade had to replace the Manila galleon lifeline to Mexico. The Revolutionary and Napoleonic Wars allowed Britain to occupy Dutch Melaka and Padang (1795), Maluku (1796 and again 1810), and Java itself (1811–16). This British activity in the islands served to increase the opportunities for Asian rulers to throw off monopoly arrangements with the Dutch and Spanish, and to create a freer market in both imports and exports. American vessels, freed by independence from the East India Company’s monopolies, became major buyers of the pepper and coffee Southeast Asians grew outside the stifling monopoly systems. Southeast Asians rediscovered their entrepreneurial taste for producing for the world market, though now more as individuals than as states.

Pepper and Coffee

The Chinese planters helped bring competition back to the pepper market, but more crucial was the cooperation of enterprising Acehnese and Americans. The western coast of Sumatra was virgin forest land ideal for pepper, probably because it had been exposed to fierce tsunamis every few centuries. After the forest was cleared and burned, pepper vines flourished for several decades under the extensive Sumatran methods, though with diminishing returns as the soil became exhausted. Forced pepper deliveries to the Dutch and British companies were faltering when, in 1787, some officials from British Bengkulu started a private company to contract with independent producers further north. A deal was made with Leube Dapa, the energetic Acehnese ruler of a little river-port, and within a few years this area of what is now southernmost Aceh became the new frontier for pepper-growing. Cultivators were recruited from more settled rice-growing areas of Aceh’s north coast and given advances by the entrepreneurial chiefs who opened new river-ports. Fortuitously, enterprising American ship captains discovered this new source of supply in 1793. By 1818 there were 35 ships from Salem and Boston on Aceh’s west coast, and they took away most of the harvest of 4,500 tons. French and English country traders soon joined the scramble, some dropping an initial cargo of pepper in British Penang and going back for a second. Throughout the 1820s and 1830s this relatively lawless Aceh frontier produced between 6,000 and 10,000 tons of pepper every year, about half the world’s supply.

With a local chief at each small river-port on this exposed coast, competition was robust and conditions were lawless. The Aceh sultanate could neither impose its will nor extract more than a tiny fraction by way of tribute from the competing pepper-rajas. Britain tried to intervene on one side of an Aceh succession dispute in 1819 to establish an alliance with the sultan, while both the United States and France sent gunboats to burn a coastal village as punishment when their nationals were killed in disputes. But neither strategy changed the dynamics of the coast. Both buyers and sellers of pepper preferred dealing with each other directly, with the attendant risks, to buttressing state authority in the area. The profits of the trade appear mostly to have been spent on pilgrimages to Mecca, jewelry, opium, and building fine houses in the more settled Aceh homelands of the planters. Only when the Dutch threatened the southern borders of Aceh territory in 1838 was there a new rallying behind the sultan (Chapter 11). Pepper remained a relatively “free” crop outside state controls for most of the nineteenth century, in contrast to its earlier history.

Coffee was another cash crop well suited to individual enterprise on higher ground previously devoted to shifting agriculture or forest. The coffee tree, native to Ethiopia, had spread around the central Islamic lands in the fifteenth and sixteenth centuries. In 1669 the Turkish ambassador to Paris popularized it as a medicinal drink and by the 1680s cafés were proliferating in France, England, Germany, and Italy. The Dutch Company began by purchasing the beans in Mocha, but when prices were exceptionally high, in 1696, it experimented with planting beans in the environs of Batavia. There was no significant success in these lowlands, and experience would later show that the best results from Arabica coffee were obtained at between 1,000 and 1,700 meters in altitude. Fortuitously, the VOC at the end of the century was beginning to explore the sparsely settled Priangan highlands around modern Bandung in west Java, over which it claimed sovereignty through a Treaty of 1677 with Mataram. In 1707 Governor-General van Hoorn had seedlings distributed to the chiefs in this area, with such brilliant results that by the 1720s west Java eclipsed Mocha to become the main supplier for Europe’s burgeoning demand. An average of 1,850 tons of Java coffee a year were delivered to Europe in 1725–39. “Java” became synonymous with coffee. Thereafter, however, Europe’s growing coffee demand was met by slave production in the West Indies.

Only after the disruption caused to Atlantic supply by the Revolutionary and Napoleonic wars in Europe did coffee prices rise high enough to stimulate further expansion in Southeast Asia. The same American ships that sought the pepper of Sumatra began buying coffee in Batavia and Padang in the 1790s. The “Priangan-system,” whereby coffee quotas at fixed prices were forced on the Sundanese population through chiefs appointed by the Dutch, could not respond as well to this opportunity as free farmers. Minangkabau and Javanese smallholders, who planted coffee on the hillsides above their valley-floor rice paddies, filled about half of Southeast Asian production during the wartime period. The return of Dutch authority and attempts at control after 1824 curbed the Sumatran expansion, but, nevertheless, total Indonesian coffee exports expanded very rapidly up until the 1840s, when it comprised about 60,000 tons a year, over a third of world supplies. By comparison, the high-colonial period that followed was one of stagnation as world leadership passed to other areas such as Brazil.

Commercialization of Staple Crops

The observable late eighteenth- and early nineteenth-century expansion of trade indicates some more profound changes that would otherwise be difficult to trace. Agriculture was again becoming commercialized, even for staple crops on the valley floors such as rice, cotton, and sugar. Three factors seem to be the most general here: population increase, especially in new frontiers of sedentary agriculture; the spread of Chinese and other entrepreneurs into the agricultural sector; and greater freedom and efficiency in marketing.

Despite the political upheavals that affected Mainland Southeast Asia in the latter part of the eighteenth century, there appears to have been increased population growth, as documented by the new regimes in the early nineteenth century.  The same climatic factors that boosted populations in southern China may have been effective further south. In both the Irrawaddy and Mekong deltas there was exceptionally rapid population increase as land-hungry farmers from the crowded northern rice bowls moved to open up newly pacified frontiers in the south. Vietnamese registers showed three times the population in 1847 that they did in 1803, significant even after allowing for under-registration in the earlier period. Land-holdings in these new frontiers were large and surpluses relatively easy to generate. Java’s wars finally came to an end at Dutch hands in the Giyanti peace (1755), making possible population increase around 1% a year over the next 80 years. The Philippines population also benefitted from a “colonial peace,” rising at similar levels. In the Islands, as in the Mainland, rising population brought intensive irrigated rice cultivation into deltaic and other new areas of relatively high yields.

Much of the production of the new rice frontiers entered the long-distance market, either by going north to feed the capitals of Burma at Ava and of Viet Nam at Hue, or to south China. The Symes mission to Ava in 1795 reported several thousand river boats engaged in taking rice up the Irrawaddy to the capital from the delta. Sugar and cotton production were inherently commercialized since most of the product was exported to China. The advent of Chinese entrepreneurship, labor, and consumption facilitated the new production for the market, whether it went to the cities, the mining communities, or the longer-distance markets in southern China. Chinese merchants also moved into Upper Burma from the 1770s, and there were reportedly 3,000 in Ava alone in 1826. Many focused on cotton production in the dry zone, giving advances to farmers or village headmen to persuade them to plant cotton. In the Philippines, too, the mestizo Chinese were reported by 1809 to be advancing money to peasants to secure their rice and sugar crop. In all the core population areas known for intensive agriculture we see a marked increase in the monetization of economies, observable through the mechanism of tax payments in cash.

The relative freedom of trade in the period of revolutionary upheavals in Europe was of course the major external factor that attracted Southeast Asians again into the world market. The success of American free traders helped ensure that the monopolies of the English and Dutch companies did not survive the wartime period, and that Britain’s “second empire” in the nineteenth century would be built rather on free trade, opium (see below), and the export of manufactures. The establishment of Penang and, more particularly, Singapore as free trading entrepôts proved a powerful magnet to lure producers into the market. Penang’s main trade was in the pepper and betelnut of Aceh, worth over three million dollars in 1858. Singapore quickly became a place where Southeast Asian traders could acquire almost anything they needed in return for their rice, sugar, tin, coffee, or pepper. The Viet Nam emperor Minh Mang, despite his neo-Confucian official preference for self-sufficient agriculture, sent a mission to Singapore in 1825 that opened the door to a flourishing trade exchanging silk, tea, sugar, and rice for cotton cloth, firearms, and opium. At the peak of this trade, in the 1840s, about 150 Euro-Vietnamese hybrid vessels of about 100 tons, known in Singapore as “topes,” visited the port each year carrying a trade worth 600,000 Spanish dollars. Siam’s trade on Singapore followed a similar pattern, while Bugis and Chinese shippers from around the Archipelago quickly made Singapore the preferred regional entrepôt. Still-independent Bali and Lombok evaded Dutch pressures by shipping their rice to Singapore in exchange for firearms, a trade worth $240,000 at its peak in 1843–4. Overall, Singapore’s trade to independent states such as Siam, Viet Nam, Aceh, Asahan, Siak, Trengganu, and the Balinese states doubled or tripled in the period 1825–45, whereas that to European-controlled Java and the Philippines rose only modestly.

Sugar was one of the biggest global growth stories of the eighteenth and early nineteenth centuries, alongside tea, to which English drinkers became equally addicted. England alone imported about 150,000 tonnes a year in 1800, out of a total world production of about 280,000 tons. Because sugar production was labor-intensive, most of the growth occurred under slave conditions in the West Indies. Southeast Asia exported only about 8,000 tons in 1800, though exports rose rapidly as slave production elsewhere faltered. About 44,000 tons per year were exported in the 1830s and 100,000 in the 1840s, by which point it became Southeast Asia’s leading export by value.

The earlier history of commercial cane-growing in Southeast Asia had been primarily at the initiative of Chinese, who pioneered production for the China market in the seventeenth century in northern Java, central Siam, and the Quang Nam area of Cochin-China. Typically, a Chinese entrepreneur would find his own Chinese labor for milling, but contract with a local ruler over land and labor for growing the cane. The VOC in Java and Spanish authorities in Luzon had tried to control the industry and channel some of its product to Europe in the eighteenth century, with greatest success in Java during the 1720s and 1730s. The increased demand from China at the end of that century, together with disruptions in Caribbean supply to Europe, provided new stimulus to each sugar frontier. Pampanga in the central Luzon valley, long the rice bowl of the Philippines, began exporting sugar to China in the 1790s and briefly became Asia’s biggest sugar exporter in the 1820s. Teochiu Chinese growers in Siam opened a third major frontier of exports on the higher ground of the Chao Phraya valley around 1810, and later extended this in the Southeast of Siam. Sugar became Siam’s major export in the 1830s and 1840s, but declined later in the century as domestic consumption took most of the crop and more profitable opportunities opened for exporters in the booming rice trade.

In short, commercialization and world markets returned to playing a major part in Southeast Asian life in the period 1780–1850. This was not a product of the new or high colonialism after 1870, but rather of the liberalization of trade conditions a century earlier.

The New Monopolies: Opium and Tobacco

The relative success of India-based British traders in this new expansion was inextricably linked to opium. The East India Company succeeded in monopolizing the supply from India in 1773, but its sale to the east remained a quasi-legal undertaking best left to private merchants. Firearms were the other British trade item in demand, and they too were regarded as illegal by established powers. Their quasi-legal status made the trade in opium and firearms dangerous but highly profitable, focusing on markets that were inherently uncontrolled. The rise of British and British-supported state systems in Southeast Asia in the nineteenth century was made possible by these large profits, especially those generated by monopoly opium production.

Poppies can be grown in a great variety of locations, and it was in West Asia that the habit of chewing the opium derived from its seeds began. Though reported much earlier, opium became a major part of medical equipment in both Europe and China by the fifteenth century. It was in eastern Asia that opium began to be smoked in a mixture with tobacco, equally novel an introduction. The mixture was noted in Batavia in 1689. The next step, to dispense with the tobacco altogether by smoking a small drop of a heated syrupy mixture of raw opium and water known as chandu, is thought to have been the work of Chinese even though the term is Malay. This made opium consumption both more instantly gratifying and safer than the older practice of ingestion. Sometime in the eighteenth century it began its modern career as a recreational addictive drug, as well as an aid for those enduring heavy labor, arduous travel, or warfare. Controlling the supply to East and Southeast Asia, where it was consumed but not produced, became the new prize of the Asian trade contest.

The VOC had preceded the British in the quest to gain super profits by monopolizing opium supply to any state with which it gained an unequal treaty. Its 1677 treaty with Mataram, which then claimed to rule the Javanese-speaking area of east and central Java, already provided a VOC monopoly on opium supply. The VOC brought an average of 56 tons of opium into Java each year in the eighteenth century, making this one Southeast Asian market where indigenous customers predominated over Chinese. The eighteenth century brought two key advantages to the British: more direct access to the China market through arrangements in Canton from 1716, and a dominant position in Bengal (then including Bihar) after the Battle of Plassey in 1757. Governor Warren Hastings made the purchase of opium a Company monopoly in 1773, and justified this on the grounds that opium was too harmful to be allowed for domestic consumption, but should be controlled for export. Governments in China and parts of Southeast Asia took the same view. By banning cultivation they ensured high prices for the import. The vigorous new dynasties of the Mainland – Burma, Siam, and Viet Nam – all sought to ban opium and keep European traders at arm’s length. The struggle around the issue contributed to the downfall of each dynasty except Siam’s, which quickly accepted the British model of using the monopoly as a tax on Chinese.

Although strict Muslims and moralists condemned its use in the nineteenth century, there were mystics, aesthetes, and bohemians who applauded its effects. Javanese aristocrats frequently shared an opium pipe as part of important festivals and rituals. The Dutch retained this lucrative monopoly of distribution throughout their dominance in Java, even though they had to buy the opium from the British. Dutch imports for Java rose to 208 tons by 1904, but declined under stricter controls thereafter. There were still more than 100,000 registered smokers in 1929.

In Island Southeast Asia outside Java it was poverty rather than state prohibition that limited consumption to elites in the negeri, and to Chinese miners and laborers whom it helped to endure the harsh conditions of the frontier. British country traders and Americans dominated the trade through the Revolutionary and Napoleonic Wars, though progressively losing out in the nineteenth century to Straits-based Chinese vessels. Opium enabled them to buy Southeast Asian tin, pepper, and tropical products valued in Canton in exchange for tea. In the early 1800s, despite repeated imperial bans, China itself became the biggest market. The age-old European “drain” of silver to Asia was now reversed as silver flowed out of China and Southeast Asia to pay for opium and guns. The quantities of opium imported rose ever higher after the East India Company lost its trading monopoly in 1834. From less than 10,000 chests in 1820, India exported over 90,000 at the peak in the 1870s and 1880s, when it was India’s most lucrative export with by far the largest profit margin. By then, however, opium was massively produced in China, and its importance in the trade system declined quickly as China became the dominant world producer as well as consumer. Production in Southeast Asia itself was a minor factor among the hill peoples of the north. The colonial powers did everything possible to avoid competition for their highly lucrative importing monopolies. Only in the turbulent 1940s, with the breakdown of monopolies and supplies from India, did the “golden triangle” on the borders with China begin to be a major source.

Opium was in its prime in the nineteenth century as a state revenue earner. Taxing its distribution through a revenue farm allocated to an influential Chinese became a crucial resource of states. Siam, Johor, and British Singapore could not have survived without it. British success in abolishing restrictive levies on trade but instead taxing mostly Chinese consumers through the opium monopoly became a kind of model for Malay states and Siam as well as other colonial regimes. In the second half of the nineteenth century, opium was providing between a quarter and half of the revenues of the more successful port-rulers of the region, and about a sixth that of Netherlands India, through the mechanism of the Chinese revenue farmer.

Revenue farming by contracted agents was a near-universal practice, but it acquired a distinctive form in Southeast Asia through the interaction of Chinese merchants, Dutch Company, and indigenous rulers in the seventeenth century. The VOC, from the outset, had found the commercialism, hierarchy, and unthreatening outsider status of the leading Chinese indispensable. They collected taxes for the VOC on both commercial transactions such as weighing, marketing, and river ferrying, and traditional “vices” including alcohol, opium, and Chinese gambling. Javanese rulers adopted the practice after the Giyanti peace of 1755, and the Sino-Thai regimes in Bangkok, after 1782. Revenue farms concentrated capital in the hands of a handful of wealthy Chinese who became the key mediators between the Chinese community and state power. So central did this institution become in the nineteenth century that the Dutch word for a tax farm (pacht) is the source of the modern words for tax in both Indonesian (pajak) and Thai (phaasi). The battles for control of new frontiers of mining and plantations in the Peninsula and Borneo were often about which Chinese tax-farmer would act on behalf of which ruler.

In Singapore, deprived of revenues from commerce by its free-trade status, the opium farm alone formed about 40% of government revenue for much of the nineteenth century. When a newcomer muscled in at the thrice-yearly auctions, as happened in 1879 with the Governor’s support, a major battle ensued as the defeated party tried to destroy the newcomer by smuggling cheaper opium. The stakes were high, since the successful farmer could control many other lines of business. Opium farmers were given legitimacy through Thai, Malay, or Javanese titles and places in the Dutch and British colonial councils. The opium farmers of Singapore usually controlled also the Chinese economy of neighboring Johor and Dutch-ruled Riau, while those in Penang were also involved in monopoly arrangements in Sumatra and the Peninsula. The most spectacular magnate, Thio Thiau Siat (Chang Pi-shih) gained the opium and spirits farm in Aceh after supplying the Dutch military there in the 1870s, and moved into rubber and coffee in east Sumatra, shipping around the Straits with three steamers, and opium and spirits farms in Penang itself (1889) as well as various Sumatran centers. A China-born Hakka, he became Vice-Consul in Penang and Consul-General in Singapore for Beijing in the 1890s, and eventually a major investor in modernizing China itself.

Without direct access to Indian opium, the Philippines did not develop opium as a major revenue source for government. Another narcotic, tobacco, provided the lucrative alternative tax that replaced the defunct exchange role between American silver and Chinese silks. Tobacco had its greatest success in the Philippines, where by the eighteenth century the Filipinos “learned to smoke before they learned to think” according to one Spanish administrator. Another declared that “all over the islands tobacco generally serves as their food and drink … [and] the most effective remedy for the cure of all their deficiencies” (cited de Jesus 1980, 29, 128). The Spanish government, having seen how lucrative a tobacco monopoly could be in Mexico, pressured Manila into developing a similar program to resolve the perennial crisis in its finances. In 1781 Governor José Basco declared all tobacco trade and manufacture a government monopoly, as well as cultivation of the crop in the provinces surrounding Manila. In 1785 the monopoly of cultivation was extended to the unruly and lightly settled Cagayan valley in northern Luzon, which effectively extended the monopoly to the whole island. Despite much initial unrest, the fertile valley became the core of the forced tobacco cultivation system in the nineteenth century, with an influx of growers from Ilocos and Pampanga (Map 10.1).

 

Map 10.1 Export-driven plantation agriculture in the 1920s.

The manufacture of cigars, cigarettes, and snuff was easier to monopolize, since, in contrast with Mexico, there was an almost blank slate. By 1790 the government had succeeded in forcing all tobacco dealers in Manila to sell to the royal contractor, who then centralized the production of cigarettes in Manila. A factory was built in 1782, and in less than two years was employing 5,000 Filipina women to roll the cigars that in the following century became the trademark of Manila. Even though sales were purely domestic in the first decades of the monopoly, they were large enough to make tobacco the Philippine government’s prime source of revenue in the 1790s, with profits averaging 338,000 pesos (Mexican silver dollars) a year. Manila cigars using Cagayan tobacco conquered the world in the following century. The net profits passed 500,000 pesos a year in 1800 and a million by 1840, constituting the principal government revenue until 1870. As the tide turned against government monopolies everywhere, official corruption gave it an odious smell, and sugar became a much more profitable export. The tobacco monopoly was finally abolished in 1882.

Java’s Coerced Colonial Agriculture

Java has been labeled the “cradle of colonialism” because of the accident of the VOC headquarters being centered there, but the term more appropriately describes the precocious transformation of the island’s economy in the nineteenth century. At the dissolution of the VOC on the last day of the eighteenth century, Batavia was still a declining Euro-Chinese enclave, not unlike a Southeast Asian court held together by marriage networks, a theatrical style of state ritual, and personalistic relations of overlordship with the sultans of Banten to the west, Cirebon to the east, and more tenuously the heirs of the Mataram Dynasty in Yogyakarta and Surakarta. Private estates were distributed to wealthy, often hybridized, Europeans and Chinese in many of the lands closest to Batavia and other Dutch-controlled ports. Within a half-century, however, Java had the tightest system of state control in Southeast Asia, refashioned in the interests of producing a marketable profit through tropical agriculture. A mobile population still able to rely on a diversity of agricultural and forest resources, and very unevenly taxed by various authorities, had been replaced by a system of villages responsible to relatively central control through their appointed headmen. The agents of this change were revolutionary new ideas from Europe, a ruinous war, and a new phase of mercantilism in response to Holland’s critically weakened commercial position.

It was Napoleon’s brother Louis, as king of the Netherlands, who sent the revolutionary general Herman Willem Daendels out in 1807 to govern Java and rid it of British influence. Contemptuous of the pretensions of foppish monarchs, Daendels began the process of disrupting the old order, starting by abolishing the sultanate of Banten in 1808 (Cirebon would follow at British hands in 1813). Daendels was determined to make Java an efficient military bastion, and forced Javanese convicts and peasants into building the great post road along the north coast of Java, as well as massive public works in Batavia. Thousands died, and the Javanese rulers were sufficiently alarmed to respond warmly to British overtures against him. When Britain took over Java (1811–15), its governor, Thomas Stamford Raffles, proved equally radical a reformer. He sought to abolish forced cultivation and slavery, and to raise revenue through a land tax. This had in the end to be collected on a village basis and required even more compulsion. Since he took the very radical view that all land belonged ultimately to the state, he raised further revenue by selling large holdings as private estates. He cut down the number and privileges of the Javanese elite. On the positive side, he began a system of inoculation against smallpox that eventually contributed to the rapid upturn in Java’s population.

Full-scale war came to the Java heartland in 1825, and placed the Dutch for the first time in full control of Java, with the remaining monarchs subordinate both in theory and practice. The innovations of Daendels and then Raffles, followed by the return of an indecisive Dutch regime in 1816, had caused great anxiety in Yogyakarta and Surakarta that the dignity and resources of the kings were endangered, and perhaps their very survival. When a charismatic Yogyakarta prince, Dipanegara, began a revolt that placed the Dutch garrisons under siege, much of the old elite rallied to the cause of restoring a purer kingdom free of barbarous and infidel influence. The Dutch colonial army lost 8,000 of its men and 7,000 of its Javanese allies over the five years of warfare, while Javanese casualties are estimated at about 200,000, or 10% of the affected population. At the end of the Java War, in 1830, Dutch resources were exhausted, but Java lay prostrate and unable to resist a new colonial regime. Since the more industrialized south of the post-Napoleonic greater Netherlands had just seceded as a newly independent Belgium, Holland was desperate to create a system in Java that could restore the fortunes of the homeland.

The Netherlands returned to its colonial outposts in Southeast Asia after 1816 in a much weaker position than that in which the VOC had originally acquired them. Britain was now the master of the seas, and British cloth manufactures and British-controlled opium were the dominant imports to exchange against tropical produce. Whereas Britain had much to gain from its free-trade ideas, and obliged Holland in the 1824 London Treaty to impose no more than double the duty on British ships and imports that it charged on its own, Holland had every incentive to return to an extreme form of mercantilism. Its ingenious means to achieve this was the Netherlands Trading Company (NHM), known as Kompeni kecil (little Company) in the Indies because of its resemblance to the monopolistic VOC. After much dispute with Britain over more blatant violations of the 1824 Treaty, a 12.5% tariff was for the first time imposed on Dutch imports to Java in 1835, so that the British could be charged 25%. This 12.5% was then given to the NHM to help it build and subsidize a viable textile industry in Holland. Under Johannes van den Bosch (Governor-General 1830–3) a system of forced cultivation (cultuurstelsel) of export crops, chiefly sugar, coffee, and indigo, was imposed upon Java for delivery to the NHM at artificially low fixed prices. He argued that an allocation of one fifth of their land and labor for this type of taxation was consistent with earlier impositions by their own rulers. The system quickly exceeded the expected profits to the Netherlands, averaging 9.3 million guilders per year in the 1830s and fourteen million in the 1840s, speeding the recovery of the Netherlands. The exports of the then Netherlands Indies (basically Java) increased from thirteen to 74 million guilders in the first ten years of the system, two thirds of it in the hands of the NHM.

Its effect on Java has been much debated. It was the most spectacular example at the time of profitable colonization, and more recently of “drain theory,” the exploitation of a periphery by a center, and of Clifford Geertz’s (1963) theory that “agricultural involution” could multiply a peasant population without increasing its wealth. In practice even the unprecedentedly pervasive administrative arrangements built up to extract these crops could not control more than a small percentage of all arable land. It did impose sugar and indigo on the best irrigated rice land (sawah), rotating these crops with rice in a sequence that often occupied a third of the land time, and as much as a half of the labor time of peasants on it. Coffee was grown permanently on higher land, and occupied as much as 5% of Java’s total arable land in 1875. Production of sugar increased 50-fold, to 233,000 tons, by 1876, and coffee eighteenfold, to 91,000 tons, but rice too tripled in production to 2.4 million tons in that period. Population grew rapidly under the stable and hierarchic conditions of the pax neerlandica (see Chapter 13), but all the growth was stuffed into the rural sector, where landlessness increased, average land-holding decreased, and the amount of labor extracted per family increased considerably. Peter Boomgaard (1989, 97–9) has shown that although agricultural production per capita did increase throughout the cultuurstelsel, income and consumption per capita declined by a third or more between 1815 and 1840, and was still below the 1815 figure in 1880, as the system was beginning to be dismantled under pressure from its many critics. The key problem was that farmers were obliged to devote their land to crops for which they were paid only a fraction (24% in the case of sugar) of their market value, whereas they had previously had some freedom to move between food crops and the market. The hierarchic nature of Javanese society became far more marked, though already notable in the seventeenth century as the rulers and the VOC together squeezed Javanese out of trade and industry. A “dual economy” emerged in which the modern sector was almost exclusively the affair of Europeans and Chinese, and the Javanese were confined to agriculture, with no middle class.

These factors changed little when a harsh time of famine in the late 1840s forced The Hague to examine its conscience about the cultuurstelsel, or when a set of new laws in 1870 began what was generously labeled a “liberal” period. In theory this meant that forced labor was dismantled but private European entrepreneurs could acquire land rights which often had the same result. Sugar milling and transportation became the key driver of capitalization of the sector, with the NHM transformed from a monopolistic buyer of crops to a finance house competing with other banks to promote the industry. “Liberalism” in no sense reached the Javanese farmers, for whom sugar cultivation for uneconomic returns remained an obligation even beyond independence in 1945.

Plantations and Haciendas

The rapid industrialization of Europe and North America in the later nineteenth century created an ever-greater demand for raw materials. The abolition of slavery in the Americas, regular steamer routes, and the opening of the Suez Canal (1869) removed most of the disadvantages Southeast Asia had suffered in supplying it. The capital derived from various forms of nineteenth-century monopolies began to be used to pioneer plantations for tea, coffee, tobacco, sugar, nutmeg, and indigo, and with success came further mobilization of capital from abroad. Marginal land was made available as colonial authority expanded; but labor was the principal constraint. Only in parts of Java and Tongking, where landlessness and poverty had become acute by the late nineteenth century, was it possible to find Southeast Asians willing to work under the regimented conditions of European-owned estates. The rapid expansion of the plantation sector after 1870 would not have been possible without importing labor from one of these places or India and China, under some form of contract with a punitive element.

In contrast to the state-imposed sugar production of nineteenth-century Java, Filipino Chinese mestizos were the main providers of capital and enterprise for the Philippine sugar industry. Having relocated from Manila to the Chinese parian of Iloilo (on Panay, Visayas) in the eighteenth century, many Chinese integrated through Christianity and hybrid Spanish names and lifestyles into a mestizo commercial class there. They sponsored in Iloilo the Philippines’ leading textile industry, but as this fell to the pressure of manufactured cloth, they seized the new opportunities that came with Iloilo port opening to international trade in 1855. These Iloilo mestizo entrepreneurs began buying land for sugar production in Negros Island, across the strait from Iloilo but still scarcely inhabited with a settled population of less than 36,000 in 1850. Best documented is Eugenio López (1837–1906), who used the capital his family had acquired in trade and textiles to make successive purchases of Negros land amounting to about 4,000 hectares in the period 1864–92, typically from Europeans or church bodies who had acquired titles from the colonial state for very little but been unable to develop them. Like other mestizo entrepreneurs, Lopez and his brothers managed to persuade workers from heavily populated Iloilo and Cebu to work the sugar land, often on a seasonal basis when labor was required for cutting, laying the foundation for one of the great landed families that would dominate Philippine politics in the following century. The population of Negros expanded to 104,000 in 1879 and 372,000 in 1887, boosting Philippine sugar production to 75,000 tons in 1870 and 200,000 in 1885 (half that of Java; Map 10.1). This unique domination of the Philippines sugar industry by an indigenous planter class would mean in the longer term that instead of being attacked and marginalized by twentieth-century nationalism, as elsewhere in tropical Asia, the planters became a hereditary upper class who did much to shape both Filipino nationalism and the conservative cast of the modern Philippine state.

In the open frontiers of Indonesia and Malaysia, by contrast, the same period saw Chinese enterprise grow more separate from indigenous land-holding. European capital was there more prominent, and its alliance proved lucrative with advancing colonial states on one hand and ambitious port-rajas willing to grant concessions to vast tracts of forest land on the other. The local Chinese who did invest in plantations in Malaya (like Tan Kah Kee) or Sumatra (like Tjong A Fie) tended to do so on the established European-run model. This high colonial pattern of large-scale European-managed estates with migrant labor had begun tentatively with Dutch pioneering of tobacco, tea, and coffee plantations in upland areas of Java, and some problematic British experiments in Penang and adjacent areas of the Peninsula. The great boom, however, began in the coastal plain to the east of Lake Toba, the rich volcanic soil of which had been only lightly exploited by Karo and Toba Bataks for hill rice, pepper, and tobacco. A Dutch tobacco trader, Jacobus Nienhuys, went there as soon as Dutch authorities established relations with the local sultans, initially to buy the local tobacco. The Sultan of Deli proved generous with land concessions, so Nienhuys contracted some Chinese labor from Singapore and grew an initial crop in 1863 which suggested the soil was remarkably suitable. Deli leaf quickly became the preferred wrapper in the world’s cigar production, and the forests of east Sumatra were felled and burned to create choice tobacco fields. By 1889 its estates produced 40 million guilders’ worth of tobacco, prompting attempts all over the tropical world to replicate this type of plantation agriculture for export. Only in the first year after clearing was the soil judged rich enough for the famous Deli leaf, after which it was left fallow for six years. In the later years, with increased population pressure and better regulation, those deemed the sultan’s indigenous subjects were given an allotment of prepared fields to grow food crops in the year following the tobacco harvest and before fallowing.

Labor was initially brought from south China via Singapore and Penang, and from 1888 directly from Swatow (Shantou, eastern Guangdong). Chinese, especially Teochew farmers from the Swatow area, were regarded as more responsive to the cash incentive for high-quality tobacco leaf. Chinese planters and tin-miners in Sumatra and Malaya had their own means to control Chinese labor recruitment to their advantage, but the dominant European plantation mode required cooperation with colonial government to enforce a secure and submissive supply. In east Sumatra, Javanese labor began to be recruited under paternalistic Dutch-colonial auspices in 1887, and by 1900 became the principal labor source, especially in non-tobacco crops such as tea, rubber, and oil palm. Some 30,000 Javanese were even sent to plantations in Dutch Guyana (later Surinam) between 1890 and 1914, as well as to many other economic frontiers in Indonesia. Provision of Javanese labor beyond the Dutch sphere was less successful, though a little occurred for Malaya, North Borneo, French New Caledonia, and even Queensland, Australia, before the white Australia exclusions were enacted. In British Malaya the recruitment of Tamils from south India was regulated under legislation of 1880, and reached its peak in the 1910s when between 50,000 and 80,000 Tamils entered every year to tap and maintain the rubber trees that fueled Malaya’s early twentieth-century growth. Such labor migrants, whether in Sumatra, Malaya, or elsewhere, tended to be insulated from others in paternalistic plantation labor barracks, and were less likely than other migrants to rise up the social ladder over the generations. Several million Tamil migrants in Malaya, and Javanese in east Sumatra, remained a relatively disadvantaged proletariat throughout the twentieth century.

Mono-crop Rice Economies of the Mainland Deltas

While the plantations had a spectacular effect on the environment, turning tropical forests into vast centrally managed gardens, it was the rice trade that directly altered millions of Southeast Asian lives by drawing rice farmers into commercial production for the world. Commercialization of the rice crop took place in many areas for domestic markets, but the vast commercial expansion of the deltas of the Irrawaddy, Chao Phraya, and Mekong Rivers made Southeast Asia the center of the international rice trade (70% of world exports before 1930). The three deltas had remained relatively scarcely populated until 1850. They had been malarial and swampy, unattractive sites for smallholder mixed agriculture, and all had been subject to ruinous warfare over the previous century. They boomed when stable political conditions and government stimulus and infrastructure enabled them to respond to a new international demand for rice from Europe and Asian rice-deficit areas like Malaya, east Sumatra, and Japan. In the process, an exceptional combination developed of smallholder production with mono-crop dependence.

Siam’s transformation may be considered the most “natural,” without the additional disruption of colonial conquest. The rice export trade became theoretically possible when the Anglo-Siamese Bowring Treaty opened Siam to international trade in 1855, ending the virtual monopoly that Chinese traders had exercised. European investment was on a much smaller scale than in Burma and Viet Nam, though it produced the first steam-driven rice mill in Bangkok in 1858 and dominated rice milling and exports. Neither the state nor foreign investors played as significant a role as in the colonial cases. The digging of canals to facilitate communication in the Chao Phraya delta was the work of Chinese labor and royal or noble initiative, as a way to provide more accessible land to their relatives and dependents. Rice milling and export was initially dominated by Europeans who broke the dominance of the Chinese “merchant lords” (jao sua) who had dominated the old China-oriented economy, but by 1890 a new generation of Chinese migrants had taken over both rice collection and milling. Siam’s rice export trade looked modest in comparison with its neighbors, but nevertheless grew 25-fold between 1860 and 1930. Holdings were generally smaller, indebtedness and landlessness less salient, and social conflict less pronounced than in the colonial cases. Siam/Thailand was therefore less affected by the crisis of the 1930s depression, and surpassed Indochina to become the world’s second exporter in those years.

The star performer was the Irrawaddy delta, annexed by Britain after the second Anglo-Burmese war in 1852. Once the milling and export infrastructure was established, the industry expanded at extraordinary speed. Between 1885 and 1906, the area under rice cultivation in the delta grew eightfold and rice exports twelvefold, making Burma the world’s leading rice exporter with over two million tons a year by 1910. The favourable conditions in this open land frontier made it a magnet for landless migrants from Upper Burma and eastern India, who might hope to become independent landowners with a substantial house and disposable income. Much higher wages in all sectors of the economy drew Indians of their own volition into the delta, unlike the controlled estate labor and clerks of Malaya. The population of Lower Burma as a whole grew fourfold in the second half of the nineteenth century, and while most of the increase was ethnically Bama, about 2.6 million Indians had entered by 1937. Indians formed 51% of Rangoon’s population by 1901. The wealthiest of them were Chettiar money-lenders, who by 1930 had come to supply about 60% of the agricultural credit in the delta. Burma became the only Southeast Asian “plural society” in which the largest migrant minority was Indian rather than Chinese, and their roles in the economy eventually made them even greater targets of majority nationalism. Conflicts over credit as well as competition for urban laboring jobs would give rise to racial riots in the crisis-ridden 1930s and expulsion in the 1940s (Chapter 17). Once the open land frontier closed in the early 1900s, poor farmers lost their bargaining power, vulnerability to the market increased, and landlessness and landlordism became serious problems.

The Mekong delta was the other spectacular success story, following French annexation of the area in 1862–7. French engineers, like the British in Lower Burma, took pride in opening up new frontiers of agriculture through the building of canals and dykes. The land under rice cultivation increased fourfold and rice exports tenfold in the three decades before 1900. The delta had already been more commercialized than other areas of Viet Nam, but French control exacerbated both commercialization and social conflict between landlord and tenant by auctioning off large tracts of land to French or Vietnamese investors willing to cooperate in the new regime. This became the most polarized of the three rice frontiers, with a quarter of peasants being landless while the richest 2.5% of landholders controlled almost half of the rice land. Far from maximizing communal land and “shared poverty” by extracting surpluses from the village through an increasingly bureaucratized hierarchy as in nineteenth-century Java, southern Viet Nam was a relatively raw example of rapid commercialization, large landholders, and considerable class tension.

Pre-colonial and Colonial Growth Compared

The spectacular transformation that European colonial capital wrought on Southeast Asian infrastructure in the “high colonial period,” 1870–1930, long mesmerized economic historians. The mushrooming of railways, roads, harbors, and port-cities was often seen as the consequence of a new economic dynamism contrasting with the static, chaotic, or unknowable conditions which preceded it. Enough work has now been done on the less accessible statistics of 1780–1850, however, to show that the rate of increase even in export income was in fact greater in that period than under high colonialism, and growth in per capita exports, and indeed incomes, must have been markedly more favorable in the earlier period. The even higher export growth in the region after 1970 leaves the century preceding it looking like an interlude of relatively sluggish growth in exports, and stagnation or decline in per capita incomes, while population grew rapidly.

Taken overall, there is no doubt that the Southeast Asian economies underwent a marked expansion in the late eighteenth and early nineteenth centuries after the consolidations of the previous century. Although some of this was due to the expansion of tobacco, coffee, and sugar cultivation under semi-colonial conditions in the Philippines and Java, the expansion appears to have been faster in that great majority of the region which lay outside effective European control. Chinese miners and cultivators tended to avoid the European colonies after the mid-eighteenth century in favor of the open frontiers and weak polities elsewhere. The world economy again had a stimulating effect on Southeast Asian economies, after the monopoly systems of production established in the seventeenth century had lost their grip. The relative economic freedom and dynamism of the period had its counterpart, however, in instability and piracy. The raiders known as Iranun (Illanun) and Balangingi in the Island world, or as Chinese pirates in the Tongking Gulf, reached a peak of notoriety in this period. The profits of trade, mining, and cash-cropping tended not to accumulate in visible investment in infrastructure or production, but in personal consumption, political conflict, remittances to more stable areas, or at best investment in state-building that ultimately failed. Colonialism, by contrast, provided more stability and infrastructure, and a rapidly increasing population, but less commercial dynamism.