page_title: Economic history of Indonesia
section_title: The arrival of Europeans and the spice and cash-crop trade
hierarchical_section_title: Economic history of Indonesia / Colonial era / The arrival of Europeans and the spice and cash-crop trade
caption_attribution_description: Deutsch: Muskatnussbaum. A blühender Zweig mit männlichen Blüthen, nat. Grösse; 1 Staubgefässsäule mit Staubgefässen, vergrössert (stimmt mit der Zeichnung in Hayne, jedoch nicht mit Bâillon in der Beschreibung überein); 2 dieselbe im Längsschnitt, desgl.; 3 dieselbe im Querschnitt, desgl.; 4 Pollen, desgl.; 5 weibliche Blüthe, desgl.; 6 Stempel im Längsschnitt, desgl.; 7 Frucht mit der aufgesprungenen fleischigen Hülle, natürl. Grösse; 8 dieselbe mit halbirter Hülle, desgl.; 9 Nuss mit Arillus, desgl.; 10 dieselbe ohne Arillus, desgl.; 11 Nuss im Längsschnitt, desgl.; 12 Embryo, vergrössert. Latina: Myristica fragrans. Русский: Мускатник душистый. A — цветущая ветвь с мужскими цветками; 1 — тычиночная колонка с тычинками; 2 — то же в продольном разрезе; 3 — то же в поперечном разрезе; 4 — пыльца; 5 — женский цветок; 6 — пестик в продольном разрезе; 7 — плод с раскрывшейся оболочкой; 8 — то же с половинкой оболочки; 9 — семя (мускатный орех) с ариллусом (мускатным цветом); 10 — то же без ариллуса; 11 — семя в продольном разрезе; 12 — зародыш. English: Myristica fragrans illustration by Franz Eugen Köhler in Köhler's Medizinal-Pflanzen
context_page_description: The economic history of Indonesia is shaped by its geographic location, its natural resources, as well as its people that inhabited the archipelago that today formed the modern nation-state of the Republic of Indonesia. The foreign contact and international trade with foreign counterparts had also shaped and sealed the fate of Indonesian archipelago, as Indians, Chinese, Arabs, and eventually European traders reached the archipelago during the Age of Exploration and participated in the spice trade, war and conquest.
  By the early 17th century, the Dutch East India Company, one of the world's earliest multinational companies, had established their base in the archipelago as they monopolised the spice trade. By 1800, the Dutch East Indies colonial state had emerged and benefited from cash crop trades of coffee, tea, quinine, rubber and palm oil from the colony, also from the mining sector: oil, coal, tin and copper. The colonial state would be succeeded by the Indonesian Republic after World War II.
context_section_description: The Portuguese were the first Europeans to reach the Indonesian archipelago. Their quest to dominate the source of the lucrative spice trade in the early 16th century, and their simultaneous Roman Catholic missionary efforts, saw the establishment of trading posts and forts, and a strong Portuguese cultural element that remains substantial in modern Indonesia. Starting with the first exploratory expeditions sent from the newly-conquered Malacca in 1512, the Portuguese fleet began to explore much of archipelago and sought to dominate the sources of valuable spices. However, the Portuguese presence was later reduced to Solor, Flores and Timor (see Portuguese Timor) in modern-day Nusa Tenggara, due to their 1575 defeat at Ternate at the hands of indigenous Ternateans, and its defeat to the Dutch.
  In the early 17th century, the VOC was founded. Its main business was profiting in intra-Asian trade and establishing direct spice trade between the archipelago and Europe. One by one, the Dutch began to wrestle Portuguese possessions that started with Dutch conquests in Ambon, northern Maluku and Banda, and a general Portuguese failure for sustained control of trade in the region. Statistically, the VOC eclipsed all of its rivals in the Asian trade. Between 1602 and 1796, the VOC sent almost a million Europeans to work in the Asiaan trade on 4,785 ships and netted for their efforts more than 2.5 million tons of Asian trade goods. The VOC enjoyed huge profits from its spice monopoly through most of the 17th century. VOC took huge profit from monopolising the Maluku spice trade, and in 1619 the VOC established a capital in the port city of Jacatra and changed the city name into Batavia (present-day Jakarta). Over the next two centuries, the VOC acquired additional ports as trading bases and safeguarded their interests by taking over surrounding territory. It remained a paramount trading concern and paid an 18% annual dividend for almost 200 years.
caption: The nutmeg plant is native to Indonesia's Banda Islands. Once one of the world's most valuable commodities, it drew the first European colonial powers to Indonesia.
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