The Dutch East Indies, or Netherlands East Indies, (Nederlands-Indië; Hindia-Belanda) was the Dutch colony that became modern Indonesia following World War II.
It was formed from the nationalised colonies of the former Dutch East India Company that came under the administration of the Netherlands in 1800. During the nineteenth century, Dutch possessions in the archipelago and its hegemony were expanded, reaching their greatest extent in the early twentieth century. Following the World War II Japanese occupation, Indonesian nationalists declared Indonesian independence in 1945. Following the subsequent Indonesian National Revolution, the Netherlands formally recognised Indonesian sovereignty in December 1949.
For most of the Dutch East Indies history, and that of the VOC before it, Dutch control over these territories was tenuous; only in the early 20th century did Dutch dominance extend to what was to become the boundaries of modern-day Indonesia. Although Java was under Dutch domination for most of the 350 years of the combined VOC and Dutch East Indies era, many areas remained independent for much of this time including Aceh, Lombok, and Borneo.
There were numerous wars and disturbances across the archipelago as various indigenous Indonesian groups resisted efforts to establish a Dutch hegemony, which weakened Dutch control and tied up its military forces. In the seventeenth century the VOC had used its superior arms, and Buginese (from Sulawesi) and Ambonese (from Maluku) mercenaries to expand and protect its trading interests across the archipelago. During the Dutch East Indies era, the most prolonged conflicts were the Padri War in Sumatra (1821–38), the Java War (1825–30) led by Prince Diponegoro, and a bloody thirty-year war in Aceh. Although each resulted in an eventual Dutch ascendancy, Indonesians used Islam as a vehicle for opposition to the Dutch, which along with communism and nationalism, would be used to a much greater extent and eventual success in the twentieth century struggle for independence (see Indonesian National Revival and Indonesian National Revolution).
Disturbances continued to break out on both Java and Sumatra during the remainder of the 19th century, and between 1846 and 1849, expeditions to conquer Bali were largely unsuccessful. The Banjarmasin War in south east Borneo resulted in the Dutch defeat of the sultan. In Aceh, guerrilla leaders fought off Dutch invasion in what was the longest and bloodiest conflict from 1873 to Acehnese surrender in 1908. As exploitation of Indonesian resources expanded off Java, most of the outer islands came under direct Dutch government control or influence. Significant Indonesian piracy remained a problem for the Dutch until the mid-19th century.
Under the 1904–1909 tenure of governor-general J.B. van Heutsz, the government extended more direct colonial rule throughout the Dutch East Indies, thereby laying the foundations of today's Indonesian state. Although relatively minor, Indonesian rebellions broke out, but control was taken off the remaining independent local rulers although their wealth and splendour under the Dutch grew; southwestern Sulawesi was occupied in 1905–06, the island of Bali in 1906, and the Bird's Head Peninsula (West Papua), was brought under Dutch administration in 1920. This final territorial range would form the territory of the Republic of Indonesia proclaimed in 1945, with the exception of Netherlands New Guinea territory, which came under Indonesian administration in 1965.
Despite increasing returns from the Dutch system of land tax, Dutch finances had been severely affected by the cost of the Java and Padri Wars. The Dutch loss of Belgium in 1830 brought the Netherlands to the brink of bankruptcy, and a concerted Dutch exploitation of Indonesian resources commenced. In 1830, a new Governor-General, Johannes van den Bosch, was appointed to make the Dutch East Indies pay their way. An agricultural policy of government-controlled forced cultivation was introduced to Java. Known as the Cultivation System (Dutch: cultuurstelsel); much of Java became a Dutch plantation, making it a profitable, self-sufficient colony and saving the Netherlands from bankruptcy. The Cultivation System, however, brought much economic hardship to Javanese peasants, who suffered famine and epidemics in the 1840s.
Critical public opinion in the Netherlands led to much of the Cultivation System's excesses being eliminated under the agrarian reforms of the "Liberal Period". From 1870, producers were no longer compelled to provide crops for exports, but the Indies were open up to private enterprise, which developed large plantations. Sugar production, for example, doubled between 1870 and 1885; new crops such as tea and cinchona flourished, and rubber was introduced, leading to dramatic increases in Dutch profits. 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 1898, the population of Java numbered twenty-eight million with another seven million on Indonesia's outer islands.
In 1901 the Dutch adopted what they called 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 increased the autonomy to the local colonial administration, moving a degree from central control from the Netherlands, whilst power was also diverged from the central government to more localised governing units. Although far more progressive than previous policies, the humanitarian policies were ultimately inadequate. While a small elite of secondary and tertiary-educated Indonesians developed, 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 effect 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 repression.
The 1949 agreement, however, left out Western New Guinea, which remained under the auspices of Netherlands New Guinea. The Indonesian government under Sukarno pressured for the territory to come under Indonesian control. Skirmishes took place between 1961 and 1962, including a brief naval engagement in 1962. The United States pressured the Netherlands to surrender it to Indonesia in August under terms negotiated in the New York Agreement. At the same time, the Australian government reversed its policy and supported Indonesian control of the area. It remains under Indonesian control, although resistance continues in various parts of the region.