ABSTRACT
The islands of Indonesia have entered more and more into the mainstream of world affairs. The total capital investment in Indonesia before Second World War is estimated at some four billion guilders, about seventy per cent of which was held by Dutch interests. When Japan invaded Indonesia in 1942, the Netherlands had had a stake in the area for more than three centuries. The Dutch effort, which contributed greatly to the development of some sectors of the Indonesian economy and brought some social improvements, especially in public health, was directed almost entirely towards making Indonesia an effective support of the Netherlands’ economic system. The divisions within colonial Indonesian society proved a most serious barrier to nationalism. When the Japanese arrived, the Indonesian people possessed only the barest semblance of self-government. The Dutch returned to Indonesia after the war with pledges of extensive reform in the structure of the Netherlands empire and in the political and economic life of the Indies.
