Hans-Dieter Evers

Traditional Trading Networks of Southeast Asia

In: Archipel. Volume 35, 1988. pp. 89-100.
Citer ce document / Cite this document :
Evers Hans-Dieter. Traditional Trading Networks of Southeast Asia. In: Archipel. Volume 35, 1988. pp. 89-100.
doi : 10.3406/arch.1988.2418
http://www.persee.fr/web/revues/home/prescript/article/arch_0044-8613_1988_num_35_1_2418
Hans-Dieter EVERS
Traditional Trading Networks
of Southeast Asia
Introduction : The Debate on Asian Trade and Society
On 22 June, 1596, after a long and unlucky passage around the Cape of
Good Hope and northeast across the Indian Ocean, the four Amsterdam
ships of the first Dutch 'Company for Afar' came to anchor before the Java
nese town of Bantam, thus ending a voyage that had begun on 21 March,
1595... The accounts of the first voyage transport us into the midst of every
day life in the town of Bantam ceremonial visits are exchanged with the
town authorities, the governor, and the shahbandar; nobles and merchants
come on board : 'There came such a multitude of Javanese and other nations
as Turks, Chinese, Bengali, Arabs, Persians, Gujarati, and others that one
could hardly move... They came so abundantly that each nation took a spot
on the ships where they displayed their goods, the same as if it were on
a market. (Van Leur 1955:3)
With this lively description van Leur embarks on his well known analys
is of early Asian trade. The long distance trade spanning the whole of Asia
from the Mediterranean to Japan was, according to van Leur, organized
as a peddling trade of many merchants carrying small loads of valuable
goods over long distances. The economic mentality of the traders and the
organization of their international trade must be thought of in terms of
handicraft forms. Reviewing early reports one is constantly struck, says
van Leur, by the large number of traders, the bustle on shipboard and in
the harbours, and the trading voyages with hundreds of single merchants
(van Leur 1955:5).
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Because of the long duration of voyages settlements of merchants were
necessary. These settlements with their entrepot markets form a far-flung
market system on which also regional trading networks converged. Access
to trading networks and inclusion in the market system became a major
stimulus for state formation throughout Southeast Asia, giving rise to
powerful states like Aceh, Melakka or Makassar and a multitude of rich
coastal principalities like Passai, Lingga, Banten, Buton and Ternate.
The aristocracy and the rulers were passive in trade, the active ones
were the handicraft traders undertaking journeys with commenda money
or commenda merchandise and alongside them the indpendant handicraft
traders, among them peddlers travelling with packs on their backs, jour
neying individually or in company with peddler caravans. Shipping too mani
fested the same forms, the commander and crew carrying on trade on their
own account alongside the transport of people and goods (van Leur
1955:55). Nevertheless, it would be wrong to connect peddling with poverty
as one might be inclined to do today. The value of goods transported was
high and cash was needed to start on the peddling trade. This was often
provided by the local ruler or the aristocracy.
In the same way as van Leur tries to point out the similarity of trading
patterns in the ancient Mediterranean, in the Middle East, and in South
and Southeast Asia, he also stresses historical continuity. He argues that
pictures sketched above had undergone little change for at least two thou
sand years up to and into the seventeenth century (p. 56). The question,
of course, arises how far the basic trading pattern of peddling trade could
survive after the seventeenth century, possibly up to the present. Van Leur
seems to think so as his occasional reference to a description of present
day harbour principalities in the Persian Gulf indicates (p. 64). Trade, par
ticularly peddling trade, is indeed seen by van Leur as a historical cons
tant (p. 71). There was no evolution from barter to world trade (p. 47).
Van Leur's thesis was criticized by Meilink-Roelofsz (1962:8). According
to her Asian trade was not predominantly a peddling trade as van Leur
had suggested nor was it a shipping trade carried on mainly by indepen
dent citizens. In any case Southeast Asia trading patterns of the si
xteenth/seventeenth centuries were much more diverse than European ones
at the same time. Meilink-Roelofsz does not detect any signs of the format
ion of a local Southeast Asian middle group of traders carrying on trade
on its own account. Throughout the Malay-Indonesian Archipelago the local
ruler had a prominent share in trade and shipping or at least promoted his
interest with the help of foreign traders. Luxury goods but also mass pro
ducts were traded by rulers and officials and only cheap goods were left
to van Leur's peddlers.
The Portuguese were able to penetrate the Asian trading networks
91
because their trade was organized on a higher level and larger scale. But
they in turn had to succumb to the Dutch and British Companies. As Steens-
gard (1974:11) has pointed out they remained victorious both over the Por
tuguese and indigenous Southeast Asian trade by virtue of their greater
control of the market and the internalization of protection costs, i.e. by
subordinating the production of protection to the market mechanism, they
utilized the resources more economically than the older institutions.
European ascendency was already beginning to manifest itself, but it
was only around 1800 that Europe started to outstrip the East, though much
earlier Java was already transformed to a producer of bulk goods (sugar,
coffee) for the European market. But was as a result Southeast Asian ship
ping degraded to coastal trade, piracy or small-scale peddling trade ?
(Meilink-Roelofsz 1962:11). Was van Leur misled by the observation of
todays hawkers and petty traders, as described by Geertz (1963) and has
he just projected the present into the distant past ?
Indeed, an evaluation of Asian trade leads to a number of rather far-
reaching questions. How are we to explain the world of Southeast Asia up
to the eighteenth century ? Was precolonial Southeast Asia caught between
two world-systems, China and India ? or was there an independent Sou
theast Asian world-system at least during certain periods ? When did Sou
theast Asia become the periphery of the emerging European world-system ?
It appears that Wallersteinian world-system analysis is hard to apply to
the diversity of Southeast Asia though it might help to put our analysis
of trading networks into a wider perspective.
Another set of questions may be drawn from the work of Karl Polanyi
(1944). Was precolonial Southeast Asia a non-market economy according
to Polanyi' s theory ? This would be very hard to argue for the states on
the straits of Malacca thriving on entrepot trade (Srivijaya, Melaka, Aceh
et al.). On the other hand, Malay texts, like the Melaka code or similar works
from Makassar prove that serious attempts were made to regulate prices,
shipping and trade.
Van Leur' s thesis on peddling trade as a typical and enduring model
of Asian trade makes sense, even if it was not the only or the predominant
way of Asian trading at all times. But this peddling trade though carried
on by individual traders on a small scale was certainly not anarchic. Van
Leur stresses quite rightly the flexibility of this kind of trade but neglects
the systematic aspects of the trading networks that made its persistence
possible. Peddling trade appears to be a phenomenon on the same level of
generality as peasant production. The forms and customs remain stable over
long periods of time, but the configurations in which they occur, the art
iculations with other forms of trade, and the relative significance change
over time.
92
The persistence of the Southeast Asian peddling trade, similar to the
persistence of Asian peasant production, can convincingly be demonstrat
ed by the existence and even growth of contemporary trading networks.
But before embarking on this endeavour a general discussion on the defi
nition of trading networks is necessary.
Definition of Trading Networks
Trading networks are social processes of exchange. They are social pro
cesses in the sense that social interaction takes place between persons with
the primary purpose of exchanging goods over more or less greater geo
graphical distances.
Market places (as defined by Polanyi 1957) can be the nodal points of
trading networks. The interrelation of these more or less permanent mar
ket places can be called a market system. Trading networks can span
world-systems as defined by Wallerstein (1974:347-51), but also local
systems that have no place in Wallersteinian analysis. It is important to
note that these intermediate trading networks or market systems do not
have to be bounded by national boundaries. To the contrary, they seldom
are, e.g. an important type of trading network, namely smuggling is depen
dent on straddling national boundaries ! But this is rather an empirical ques
tion to which we are going to return later.
What are the criteria that define a trading network ? At least a prelimi
nary checklist can be provided as follows :
- there is usually an ethnic or religious homogeneity of traders, but diver
sity of partners,
- a regular interaction between trading partners along definite trade
routes,
- an evolution of the trading networks over time,
- a typical inventory of trading goods,
- the development of distinctive trading practices, customs and types of
exchange, including typical ways of travelling and typical means of
transport,
- the utilization of a market place system.
Trading networks can vary in extent without necessarily forming a hie
rarchy. In Southeast Asia thousands of small traders peddle fish directly
from the fishermen to nearby villages or peasants trade agricultural pro
ducts on weekly village markets (Mai 1983). Intermediate trading networks
extend over long distances but traders transact business in small lots and
individually. Their trade would be classified as part of the so-called infor
mal sector in contrast to the commerce of trading companies.
An Overview of Contemporary Nusantara Trading Networks
The identification of contemporary and past Southeast Asian trading
93
networks is a formidable task. Taking only Island Southeast Asia, the
Nusantara, into consideration, we should like to identify the following
intermediate trading networks that are still active or have been active until
recently in the Malay world :
Nusantara intermediate trading networks
(1) The northern straits of Malacca (Aceh)
(2) The Riau-Singapore network
(3) The Buginese network
(4) The Butonese network
(5) Minangkabau petty trade
(6) The Sulu network
(7) The Trengganu/Kelantan-Thai network
(8) Networks of the Java Sea
This list is by no means exhaustive and there are many other examples
of small scale and intermediate (i.e. intra Southeast Asian) networks. But
peddling trade networks can extend throughout Asia, like the network of
Nepalese peddlers and smugglers, connecting their Nepalese home valley
with Hong Kong, Singapore and many other Southeast Asian market pla
ces. The South Indian Chettiar community, peddling, at it were, money and
loans, had established a no less extensive network throughout Asia, the
Pacific and beyond (Evers 1978:636).
The following examples of trading networks will provide us with some
clues as to the long-term development and current workings of interme
diary peddling trade in Southeast Asia.
Analysis of Trading Network : The Maritime Peddlers of the Blacks
mith Islands
One of the most important and historically relevant trading networks
connected the spice islands of the Moluccas with Eastern Java. The sailing
route from the ports of the Javanese empire of Majapahit passed around
the two southern tips of Sulawesi where local chiefs rose to power and fo
rmed coastal principalities on account of their access to shipping and trade.
The Javanese inland states probably exported rice - a bulk trade overloo
ked by van Leur - through its ports on the Java Sea to the East Indone
sian islands, particularly the Moluccas (Pigeaud IV:503). Here the valua
ble spices were grown that eventually attracted Portuguese, Spanish and
Dutch merchants who vied for the monopoly of the spice trade to Europe.
One such harbour principality, the kingdom of Wolio, which after isla-
mization became the Sultanate of Buton, controlled the islands of southeas
tern Sulawesi. It was connected with the powerful trading Sultanate of Ter-
94
nate and came eventually in 1908 under Dutch colonial rule. To its realm
belonged the strategically located group of the Blacksmith Islands (Kepu-
lauan Tukang Besi) with the three major islands of Wangi-Wangi, Kale-
dupa and Binongko. Here, on these rather dry and unfertile islands, a group
of daring seafarers, shipbuilders and maritime traders became settled, who
up to now carry on a brisk maritime peddling trade throughout Eastern
Indonesia and the Java Sea.
It would be wrong, however, to argue that these maritime traders are
relics of the past. Their profound knowledge of the Southeast Asian world
and beyond, their quick adjustment to changing trading opportunities, and
their adoption of new maritime technologies demonstrate that they are very
much of this age, that they are fully integrated into the Indonesian, the
Southeast Asian, and eventually the world economy.
The maritime peddlers of the Tukang Besi islands build their own ves
sels {prahu lambo), a relatively modern type of sailing vessels of between
5 to 75 tons loading capacity. Their trade routes are still very much deter
mined by the changing monsoons but they are also happy to launch tra
ding expeditions to wherever their fancy and adventurous spirit might sug
gest.
Perhaps the best way to give an impression of the trading network is
to relate in some detail the recent voyage of captain Haji Ibrahim and his
crew.
Haji Ibrahim, a native of the village of Pongo, Wangi-Wangi, owns a
sailing vessel, a perahu lambo, of 20 tons, which he and his crew had built
themselves some years ago. In January 1983, he assembled a crew of six
villagers, borrowed some additional cash from relatives and set sail for the
Banda Islands in the Moluccas with a cargo of household goods, cement,
textiles and other small items they had bought in Surabaya on a previous
voyage. They arrived on the Banda islands after ten days but decided to
sail on to the Gorong and Watubela islands about 110 nautical miles to the
East between the southern tip of Ceram and Irian (New Guinea). Here they
traded their merchandise against nutmegs. By mid-April, when the Nor
theast monsoon (musim timor) started, they had assembled 12 t. nutmeg
nuts and 1 t. of nutmeg flowers.
With the brisk eastern monsoon they arrived back in Wangi-Wangi
within six days and nights, stayed with their families for ten days and then
continued to Ujung Pandang in South Sulawesi, where they arrived after
a fast passage of two days. When they contacted Chinese traders in the
market they were dismayed to learn that the price of nutmeg had dropped
considerably. After haggling and waiting for two weeks they decided, after
long deliberations among the crew, to cut their losses and to sell at a lower
price.
95
They had bought 15 t. nutmeg at Rp. 175.-/kg, which they had to sell
for Rp. 15O.-/kg. Losses due to price fluctuations occur occasionally, but
usually profits are made and distributed as follows : The creditor of the
advanced capital receives 50 % and the crew, including the captain, receive
an equal share of the remaining half of the net profit. Harbour dues, gifts
to officials and the ship's share of one-twelfth of the proceeds from the sale
of the cargo have been deducted beforehand. In this case the total proceeds
were used to buy new goods, among others rice, cement, household goods
(barang da/pur), and fashionable furniture. With this cargo they returned
to their home village on the Blacksmith Islands, without, however, dischar
ging it. In June they set sail again and arrived after four days and five nights
at Pulau Dowora at the southern tip of Halmahera. Here they started to
trade their goods around the villages on various islands for about four
months. Because on the earlier loss they decided not to buy any spices, but
to return to their village on the Blacksmith Islands. They arrived safely
in the first week of November, hauled the sailing ship up onto the beach
for repairs, distributed their profits which amounted to about Rp. 25000.-
per crew member and dispersed.
Similar trading expeditions are regularly undertaken by the 169 sailing
vessels (perahu lambo) owned by maritime peddlers on the island of Wangi-
Wangi of the Blacksmith Islands of Southeastern Sulawesi. The general
pattern is clear : merchandise is bought in a major market place like Gre-
sik near Surabaya or Ujung Pandang and then peddled around the islands
of eastern Indonesia. Though occasionally adventurous crews sail to new
destinations, like captain Ibrahim, who had once sailed to Singapore and
once to Kucing, Borneo, with the help of an Indonesian school atlas, trade
is usually carried on with groups of islands between Sulawesi, the Moluc
cas and Irian. Sea captains and their crew members tend to know village
headmen, with whom they trade. As quite often orders are placed for the
next voyage, long-lasting relationships are being developed. Kopra is still
the major item of trade though the efforts of the government bureaucracy
to monopolize trade in kopra and spices through government-dominated
cooperatives lead to frequent clashes with officials and with the police.
In recent years some traders have bought or rented land in the villages
of their trading partners and have started to open up plantations for coco
nuts or cloves. Other villagers have followed and established settlements
on many of the eastern islands. Considerable migration is currently taking
place, trading vessels now carry passengers and the motorization of ship
allows more regular services irrespective of the monsoon season.
The Deterioration of a Trading Network : Smuggling in Aceh
At the same time the Javanese empire of Majapahit extended its
96
influence to eastern Indonesia by activating the spice trading network to
the Moluccas, the Acehnese principalities of North Sumatra gained through
the pepper trade with Java (Meilink-Roelofsz 1962:23). From the fourteenth
century onwards Aceh and its trading networks gained in importance until
the Dutch-Acehnese war led to a decline at the beginning of the twentieth
century.
The Acehnese states were organized to serve long distance trade. The
Acehnese aristocrats (uleebelang) were not rulers of an area or state (nang-
grou), but rather traders in pepper from the Acehnese west coast or rice
from the coast along the straits of Melaka. The relation between subjects
and rulers in these states were all within the framework of commerce (Sie-
gel 1969:22). The Acehnese trading network during the nineteenth century
became increasingly concentrated on Penang, but also extended to other
ports along the straits of Melaka as far as Singapore and to India.
This trading network is now defunct or rather shrunk to miniscule pro
portions. Each week a coastal vessel from Singapore arrives at the free
port of Sabang discharging international merchandise, ordered by local Chi
nese traders. These in turn are picked up by Batak women who smuggle
these goods across to the mainland, where they are sold on a specific cor
ner of the pasar of Banda Aceh. Some of these articles, like drinking glas
ses from France, sarongs from India, or plastic containers from Singapore
eventually find their way to Medan and other Indonesian towns.
Similar smuggling networks are found all over Southeast Asia, particul
arly along the Thai-Burmese border, the Riau archipelago around Singa
pore, in Southern Thailand and the Sulu Sea of the Philippines. Most of
these networks have a long history, but are, of course, subject to change
through government policies and vacillating market relations.
The Rise and Decline of a Trading Network : Chettiar Moneylenders
in Southeast Asia
The term Chettiar refers to a group of castes found throughout South
India. In 1891 there were more than half a million members of these cas
tes in Madras State speaking either Tamil or Telegu (Census 1891, XV:15).
The typical caste occupation is commerce and moneylending, but as usual
other occupations are also found like weaving or farming. We are here con
cerned with one of the endogamous groups or castes only, namely the Nat-
tukottai Chettiar, who numbered 7,851 in 1891. They were, and apparently
still are, concentrated in an area popularly known as Chettinad, compri
sing the eastern part of Ramnad District (Tirupattur and Devakottai Divi
sions) and some part of the Pudukottai Division of Tiruchirappali District.
They trace their origin back to the Chola empire (10th-13th century)
and appear to have been in the banking or moneylending business before
British times.
97
The Nattukottai Chettiar are a Tamil-speaking South Indian caste whose
traditional caste occupation has been banking and moneylending for a con
siderable period of time. Their activities as moneylenders have slowly expan
ded throughout British India during the nineteenth century and have expe
rienced a sudden and phenomenal rise overseas in the 1870s and 80s. While
maintaining their head-offices in the Madras Presidency, Chettiar agents
have set up branch offices in South Africa, Mauritius, Ceylon, Burma,
Malaya, South Vietnam, and Indonesia.
Already at the turn of the century they were known for their wealth,
and contemporary commentators have notes that they are the most go-
ahead of all the trading castes in the South, and that their first and chie-
fest aim is to make as much money as possible (Thurston 1909:250, 253).
There appears to have been very little change in their reputation in this
respect, because also the 1961 census report comments that they are
always keen on their trade, and to make money and to become rich is their
sole aim at all times (Census 1961, Village Survey Monographs No. 14:9).
The Chettiar are Sivaites and most of their temples are dedicated to
Lord Subramaniam, son of Siva. The temples are managed by a committee
whose chairman is to be the God Subramaniam himself, who is at times
affectionately called Chetty Murugan (Weerasooria 1973:155). The
appointment of one of the major deities of the Hindu pantheon as chai
rman of a council of moneylenders certainly testifies to the confidence and
claim to righteousness the Chettiar place into their business activities.
The temple serves as the major bank of the Chettiar who may obtain
credit from the temple funds. Thus the main Chettiar temple in Rangoon
was known as the Chettiar Exchange in the 1930s (Adas 1974b:396).
Repayment of advances are guaranteed by religious sanctions as no moneyl
ender will want to disappoint or cheat the owner of the temple fund, Lord
Subramaniam himself.
It is difficult to pinpoint when Chettiar migration overseas started. In
addition to their banking activities in Southern India they appear to have
been engaged in trade with Ceylon in early British times, but most must
have migrated to Ceylon only with the coffee boom during the nineteenth
century (Evers 1964:75).
The difficulty in evaluating earlier reports lies in the fact that the term
Chetti also means trader and refers to many castes in South India. An
eyewitness report of the 1830s refers, however, explicity to the Nattukott
ai Chettiar in Ceylon who had been dealing in raw cotton. By then the
about 150 firms in Colombo had changed to importing textiles and rice and
exporting coffee (John Capper 1877, cited by Weerasooria 1973:15).
According to some local Chettiar in Singapore, the first members of their
group arrived in Malacca about 1800 and in Penang and Singapore in the
98
1840s. These dates are backed by the fact that the main Chettiar temple
in Singapore was built about 1855 to 1860 (Singapore Guide and Street
Directory, Ministry of Culture, 1972:21). Chettiar must also have become
active in moneylending soon after the Pangkor engagement of 1874 (San-
dhu 1969:118). Data from our own urban landownership study show that
loans advanced by Chettiar moneylenders were entered into the land
registry in the early 1880s, i.e. soon after it was started.
J.R. Andrus (1947:66) mentions that some Chettiar probably migrated
to Burma by the middle of the nineteenth century but confined their acti
vities mainly to Rangoon and other urban centres until about 1880 (Adas
1974a:66). But even in 1910 there were only 350 Chettiar firms in Burma,
by 1930 their number had increased to more than 1650 (Report of the Burma
Provincial Banking Enquiry Committee, 1929-30, Vol.I:204; Adas
1974b:391). Chettiar activities in South Vietnam must have started later,
according to one source, only after 1925.
Though South Africa, Mauritius, Thailand and Indonesia are always
included in the list of countries to which Chettiar extended their business,
nothing definite can be said about their date of migration or their activi
ties in these countries.
From these data it appears that some connections with Southeast Asian
countries must have started in the early 1800s, but the main migration and
expansion of Chettiar activities abroad must have occured after 1870, when
British rule was established in Burma and Malaya. Thus the Encyclopaed
ia of India of 1855 mentions that Nattukottai Chettiar have lately ente
red their commercial transactions to distant countries (677).
It is likely that up to the 1930s Chettiar moneylending activities con
centrated on the export-crop-producing areas or the few commercialized
rice-growing districts. The prevalence of Chettiar in the Straits Settlements
(Singapore, Melaka, Penang) or the larger towns in the Federated Malay
States also indicate the importance of lending to the commercial sector.
Around 1930, the Chettiar moneylending network extended from its cen
tre in South India throughout Southeast Asia. Big trading centres, like Sin
gapore, Penang, Medan or Saigon had larger Chettiar communities, but
also in small provincial towns Chettiar agents were found. Money was trans
ferred freely and members of the big Chettiar families could travel from
kitingi (Chettiar dormitory and business house) to kitingi through colonial
Asia.
Meanwhile the Chettiar network has dwindled, but remnants are still
intact on a smaller scale (Evers and Pavadarayan forthcoming).
Conclusions
The very existence of interregional maritime peddling trade today
99
appears to give credence to van Leur's theory. Some of the features we
could observe today are remarkably similar to those described by van Leur
for early Asian trade up to the seventeenth century. The Tukang Besi islan
ders buy world-market products as well as local items at a major market
place. These goods are then peddled in small quantities over long distan
ces. The maritime peddlers receive their capital from rich villagers, govern
ment officials, or from their families. The proceeds are distributed accor
ding to fixed proportions, and the maritime peddlers part after a trading
expedition. Relations with trading partners, however, are long-lasting and
an enduring trading network has evolved.
But despite these social relations, regulated by custom and long-term
communicative interaction, the impingement of other forces is occasionally
felt. When the traders arrive at a major market place they may have to
contend with prices determined by the world market or by government
exchange regulations. The long established network of moneylending may
be severely curbed by new banking laws. In short, the social organization
of the trading network meets the constraint of the market system, which
in turn is part of a modern world-system. The persistence of local trading
networks over long periods of time, in fact through several world-systems
speaks, however, for their relative autonomy.
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