Ethical Policy (Indonesian history)

The Dutch Ethical Policy was an Indonesian government policy instituted in 1901 by Dutch Queen Wilhelmina and in force until 1942. This was the end of the period when Indonesia, then called the Dutch East Indies, was ruled as a colony by the Netherlands. In 1942, the Dutch lost control of the islands when Japan invaded, and after World War II, the old European colonial empires were dismantled and Indonesia regained its independence.

"Ethical" policy referred to the liberal nature of the government’s attitude, especially relative to the Dutch Cultivation System of the midnineteenth century, which had imposed forced labor on the native inhabitants. While a caste system preserved notions of race- and class-derived privilege, the Dutch government began to invest in Indonesian education, as well as to modernize the local economy through irrigation and banking reforms. Though an improvement over previous attitudes, this new practice of "developing" colonial holdings reflected the paternalistic attitudes of European powers in the late nineteenth and early twentieth centuries.

Background

The Dutch East Indies, part of the colonial holdings of the Dutch Empire, was formed in 1800, when the colonies held privately by the Dutch East India Company were nationalized and transferred to the Dutch government for administration. The Dutch East India Company had first come to the Indonesian archipelago—then home to a number of separate states, both coastal and inland—in the late sixteenth century, seeking to follow the Portuguese example by establishing trade with the spice-rich region. Spices were an especially valuable trade good because of their high price per pound. In addition to exporting nutmeg, clove, pepper, and cinnamon, the Company planted cash crops like tea, cacao, tobacco, opium, and coffee, goods that had either been introduced to Europe from the New World or via other Asian trade routes.

Dutch control of the Indonesian archipelago was never consistent or steady, however, in part because of the difficulty of establishing control over a large system of islands that was not yet politically and culturally unified and in part because of conflicts with other European powers, notably the French and British, who occupied and threatened numerous Dutch ports in Indonesia in the early nineteenth century. The Cultivation System, which had been implemented primarily in Java in response to the Java War (1825–30), an uprising of the Javanese against the Dutch imperialists, required that Indonesian agriculture work toward Dutch benefits; instead of paying taxes on land, Indonesian peasants now had to spend either sixty days a year laboring on government-owned plantations or their villages could devote 20% of their land to the creation of those plantations. In both cases, the crops were grown purely for export, a system that resulted in recurring famines in the 1840s because not enough land was put aside to grow food for the local population. When political pressures ended the system around 1870, the change was attributed to Dutch capitalists’ resentment of the local middlemen who prevented the operations of a free market, rather than to the inherent inequities of the system.

Overview

The Cultivation System was followed by the Liberal Period, named for the Liberal Party, a Dutch political party devoted to free market fundamentals and private enterprise. Indonesian natives were no longer compelled to produce goods for export, and middlemen were no longer given monopolies over export-producing plantations. Instead, the Dutch East Indies became a playing field for private enterprise as Dutch businessmen established new plantations, introducing new cash crops like rubber and cinchona (from which quinine is derived) in Java, razing jungle in the outer islands to plant tobacco, and extracting Sumatra’s oil resources. On one hand, this meant an end to the famine periods and forced labor. On the other, Dutch control of the Indonesian economy spread to a greater proportion of the islands than ever before and included imported labor from China and India at previously unseen levels.

Instituted in 1901, the Ethical Policy was a response both to the abuses of the Cultivation System and the continued inequities of the Liberal Period. Wilhelmina had ascended to the throne in 1890 as a child but had reigned without a regent only since 1898. Her shift in policy toward Indonesia may have been not only a display of a monarch coming into her own but also a way to distance her country from the British, who had annexed former Dutch territories. The British Empire’s war with Dutch colonists in Africa, the Boer War, was nearing its end when the Ethical Policy was instituted,.

While the two previous systems had focused on strategies of getting the most economic benefit out of Dutch holdings in the East Indies, the Ethical Policy sought to repair the material damages to the lives of the colonized peoples of the archipelago and to empower them to better participate in the modern world. Where British policies in India sought to import British culture for the comfort and convenience of expatriates while Anglicizing Indian elites in the process, Ethical Policy was a rudimentary indigenous development policy: keeping Indonesia Indonesian but building and staffing local schools, introducing irrigation so that farmers would be more likely to have crop surpluses, instituting a banking industry that made it possible for locals to participate in the world economy without Dutch middlemen, and encouraging the development of a middle class. The program was under-funded because of the Great Depression but succeeded in educating more than 100,000 Indonesians, though the literacy rate remained below 10%. Many Dutch in both the colonial and home governments objected to the Ethical Policy because it would contribute to Indonesian nationalism, although given the course of history this proved largely moot. Before funding levels could recover, Dutch rule in the region ended, and Indonesian independence was attained after World War II.

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