Social Aspects
The commercial opportunities caused by arrival of the Dutch attracted many Indonesian and Chinese immigrants to Batavia. However, due to epidemics, the city began to move further south.Culturally, the Dutch promoted schooling in the Malay and Javanese languages, not in touch. This promoted the native cultures, and slowed the impact of westernizing ideas such as democracy and nationalism, which otherwise might have threatened the empire.
By 1930, there were 17 cities with populations over 50,000 with a combined population of 1.87 million. Batavia had more than 500,000 inhabitants,including 37,067 Europeans. In 1898, the population of Java numbered twenty-eight million with another seven million on Indonesia's outer islands.
Political aspects
There were two periods: The Cultivation System, the Liberal Period. Due to the cost of the Java and Padri Wars, the Netherlands was at the brink of bankruptcy, and a concerted Dutch exploitation of Indonesian resources commenced. An agricultural policy of government-controlled forced cultivation was introduced to Java. Known as the Cultivation System (Dutch: cultuurstelsel) which required farmers to deliver fixed amounts of crops. Although much of Java became a profitable, self-sufficient colony and saved the Netherlands from bankruptcy, the Cultivation System, brought much economic hardship to Javanese peasants, who suffered famine and epidemics in the 1840s.
The Liberal Period opened up the Indies to private enterprise. Dutch businessmen set up large, profitable plantations. However, the resulting scarcity of land for rice production, combined with dramatically increasing populations, especially in Java, led to further hardships. Changes were not limited to Java, or agriculture; oil from Sumatra and Kalimantan became a valuable resource for industrialising Europe. Dutch commercial interests expanded off Java to the outer islands with increasingly more territory coming under direct Dutch government control or dominance in the latter half of the nineteenth century.
In 1901 the Dutch adopted the Ethical Policy, under which the colonial government had a duty to further the welfare of the Indonesian people in health and education. Other new policies included irrigation programs, transmigration, communications, flood mitigation, industrialisation, and protection of native industry. Political reform diverged power from the central government to more localised governing units However, the humanitarian policies were ultimately inadequate as the overwhelming majority of Indonesians remained illiterate. Primary schools were established and officially open to all, but by 1930, only 8% of school-aged children received an education. Industrialisation did not significantly affect the majority of Indonesians, and Indonesia remained an agricultural colony. By 1930, there were 17 cities with populations over 50,000 with a combined population of 1.87 million. However, the education reforms, and modest political reform, resulted in the creation of a small elite of highly educated indigenous Indonesians, who promoted the idea of an independent and unified "Indonesia" that would bring together disparate indigenous groups of the Dutch East Indies. A period termed the Indonesian National Revival, the first half of the twentieth century saw the nationalist movement develop strongly, but also face Dutch oppression
Economic Aspects
Large expanses of Java, for example, became plantations cultivated by Javanese peasants, collected by Chinese intermediaries, and sold on overseas markets by European merchants. Before World War II, the Dutch East Indies produced most of the world's supply of quinine and pepper, over a third of its rubber, a quarter of its coconut products, and a fifth of its tea, sugar, coffee, and oil. Indonesia made the Netherlands one of the world's most significant colonial powers. The increase in number of plantations led to a migration of labourers from China as they provided attractive wages. However, the wages varied according to the global economic situation.
