In the late colonial period (1870-1942), the Outer Islands of Indonesia formed a dynamic area. The economic development of these islands outside Java is analysed in this book by focusing on the enormous increase in trade after 1900. The Outer Islands are described individually and as a group, paying special attention to regional differences. The core of the study is to examine the effects of trade – foreign and domestic – on economic development. Although the economic policy of the colonial government played a role in the gradual formation of a national economy, it did little to advance the relatively backward regions of the Outer Islands. As one of the largest and most tumultuous economies in Southeast Asia, Indonesia nowadays attracts a lot of international attention. This book will serve the study of the diverse and dynamic economic history of late colonial Indonesia, which profoundly influenced post-war events and the formation of a national state. Jeroen Touwen (1964) studied at Leiden University, where he received his PhD in 1997. He is a lecturer at Leiden University and specializes in economic and social history.