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How were different groups impacted by these economic changes?

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How were different groups impacted by these economic changes?

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The farmers(no)/Local people(no)
Western investors,Western entrepreneur (yes)

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What were some key changes introduced by contract labour?

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What were some key changes introduced by contract labour?

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More locals now transitioned from working as farmers to working as contract labour. They were now paid salaries , but this income was unstable and varied with the rise and fall of prices of Indonesia's exports on the global market. Because they were contracted, they now had less freedom to change their jobs.

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Javanese workers generally found themselves exploited regardless of economic conditions.

During the Great Depression, many were retrenched or had their wages and working hours reduced. Even in times of prosperity working conditions were poor and hard to escape. Even when the Indonesian economy was booming the farmers continued to be exploited through land alienation and remained poor.

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The Great Depression was a global economic crisis caused by the collapse of the American stock market, an event which badly affected Europe as well. As a result, demand for Indonesia's exports dropped quickly. The Dutch government refused (until 1936)to devalue its currency to make Indonesian goods cheaper, prolonging the crisis.

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Indonesia's plantations and mines utilized more modern technology.
New industries opened.
Transport network expanded
A huge increase in the number of jobs and wealth that the country was able to generate.

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What improvements did western capital bring to Indonesia's economy?

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What improvements did western capital bring to Indonesia's economy?

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Scientific Research, irrigation systems, Modern Equipment and Larger Workforce were all areas in which the productivity of the Indonesian economy was expanded and improved.

the dutch did research on soil and the use of fertilisers and brought all these technological advancements to indonesia. the dutch also established irrigation systems  which increased crop yields. they had enough capital to pay for expensive and modern equipment. they also managed to afford the large workforce needed in those labour intensive industries.

the entire country's economic growth was significant and many new industries were created. for example, new plantation estates and extractive industries were created since they produced crops and raw materials to be exported to other parts of the world. they also cleared large tracts of virgin forests (a forest in its natural state before man's developmental or exploitation) to make room for plantations for rubber, tea, sugar and coffee, this caused indonesia to be one of the largest suppliers of tropical products on the world market & sumatra to be the world's largest producer of tobacco. all these effects tied the indonesian economy to the world economy , as the prices of the products for export would rise and fall according to the demand for them in the countries that purchased these goods , and the indonesian economy is now subjected to fluctuations of the world economy.

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What new opportunities were created by the new economy?

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What new opportunities were created by the new economy?

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Chinese and Indian migrant workers were able to get jobs not available in their homeland. Tey took up work as coolies, miners, shop-owners, tax-farmers or small holders, however only a minority would end up becoming wealthy.

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What were some drawbacks for those who took on jobs as contract labour?

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What were some drawbacks for those who took on jobs as contract labour?

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The price of sugar fell from 13.66 guilders per quintal to less than half its price of 5.61 guilders per quintal between 1929 to 1934, the value of agricultural exports also fell from 1237 million guilders to 294 million guilders.

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For Local workers, their pay was unstable and once they joined they could not leave their jobs easily due to the Coolie Ordinance: this law  gave plantation owners the right to punish (in any way they saw fit)
Coolies that broke their contracts. Workers who ran away from their plantation or mine were hunted down by Bataks hired by the Dutch. Moreover, working conditions were very poor, with Malaria a common disease which plagued them.

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The economic impact of the great depression was severe. Half of the 1700 European employees on the Sumatran plantations were dismissed. Javanese labourers were retrenched or had their wages and working hours reduced. The total wage paid to Javanese fell from 29 million guilders to 10 million guilders. Many people in Indonesia were forced to turn to rice cultivation or fishing in order to survive.

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Source 4.9 Statistics on the Ethnic composition of a plantation's workforce in one plantation in Sumatra.

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Source 4.9 Statistics on the Ethnic composition of a plantation's workforce in one plantation in Sumatra.

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1881: 15,000 Chinese, 5300 Locals.
1902: 55,287 Chinese, 36000 Locals.
We can infer that the number of jobs available increased over time, but that a large portion of these jobs were taken by immigrants instead of locals.

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Locals and immigrants benefitted from having more job opportunities as well as attractive wages (particularly during periods of prosperity)

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It refers to the process of using one's land as a guarantee that one will pay back on loans. Landowners who are unable to pay back their loans have to give up their land to the money lander, or pay him back in other ways.

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Many farming peasants borrowed money from Chinese money-lenders to pay taxes or buy seeds. When they could not repay loans, they were forced to sell their crops to these creditors at low prices. The Chinese would then sell these cheap crops to the Europeans at a profit. Both the Europeans and Chinese would make a profit, while the Indonesian farmer would not.

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It is a small farm under 50 acres in size. This land is leased from the Dutch government and used to grow rubber. When rubber prices fell, smallholders could switch to growing rice.

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Smallholdings allowed for a new group of landowners and entrepreneurs.