THE BEGINNINGS OF A MODERN EXPORT ECONOMY
The founding of the British port city of Singapore in 1819 ended the Malay entrepot empire of Johor-Riau-Lingga-Pahang at the southern tip of the Strait of Melaka. The Malay entrepôt had begun to decline as a result of the new trading system introduced by the Portuguese, Dutch and English traders. The northern Malay entrepôts such as Kuala Kedah, Kuala Perlis and Pulau Pangkor were all affected by the opening in 1786 of the British East India Company's free trade centre on Penang, which quickly attracted foreign traders. Though Penang provided a market for Kedah's exports, it was a competitor for ports in Kedah, which demanded to be compensated for lost revenue. Kedah was forced to concentrate on its rice industry.
Singapore's strategic location and its policy of free trade enabled the new port to overtake Penang as the main focus of regional trading networks. From 1819 to 1821, 3000 ships (both European and Asian) visited the port and generated trade worth $8 million. By the time of the first census in 1824, the population was nearly 11,000. Melaka's role as an entrepôt had also declined, partly because the harbour was silted up. European mercantile firms engaged in the export of local products found it convenient to appoint agents in Singapore. These agency houses sold imported manufactured goods, such as textiles, on commission and provided return cargoes of local products. They also handled shipping lines and banking facilities.
In Johor, gambier and pepper were the first cash crops grown. The ruler allowed Chinese from land-scarce Singapore to establish plantations under the kangchu system. Temenggong Daeng Ibrahim and his son Temenggong Abu Bakar laid the foundation of the modern state, establishing the capital of Johor Bahru.
Chinese immigrants also became involved in tin mining, first in Melaka and Negeri Sembilan and later in Selangor and Perak. The best example of Sino-Malay partnership in tin mining was Long Jaafar of Perak and Chinese tin miners of the Larut district. Long Jaafar obtained capital from Chinese merchants in Penang to mine tin and recruited Chinese workers of various origins and secret society affiliations. His success led to the bestowal on him by Sultan Jafar Muadzam Shah of Perak the title of Mentri Larut (Minister of Larut), giving him the right to govern Larut and its dependencies, a rights later passed to his son, Ngah Ibrahim.
By the 1880s, the role of the Straits Settlements ports (Singapore, Penang and Melaka) had changed from that of an entrepôt to that of a staple port as a result of the growth of tin and rubber exports from the Malay Peninsula. Throughout the 19th century, the economy of the Straits Settlements was such that it drastically influenced and transformed the economy of the other states on the west coast of the Malay Peninsula (Johor, Negeri Sembilan, Selangor, Perak and Kedah).
