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THE ECONOMIC WEEKLY

February 16, 1952

North

Borneo

" In British North Borneo there are 350,000 people on an area


one-third the size of Britain, but the Colonial Office will not admit
Indian and Chinese labour for fear of creating ' another Malaya'. And
the Indian Government itself is unwilling to permit indentured emigration, and imposes a ban on emigration to most of the areas that
would welcome immigration"W. Arthur Lewis, A Policy for Colonial Agriculture.
I he re-emergence of C h i n a as a
p r o d u c e r and exporter o f lea w i l l ,
n o d o u b t , a f f e c t Japan's trade i n the
green tea c o n s u m i n g countries. I n
fact, J a p a n has been facing a stiff
c o m p e t i t i o n f r o m C h i n a i n the N o r t h
a n d West A f r i c a n markets
where
C h i n a greens are preferred to the
Japanese because
of t h e i r
lower
p r i c e . Nevertheless, at no t i m e in
the last ten or eleven years, has the
Japanese tea industry been placed
in such a favourable position as it is
today.
T h e prospects o f w o r l d tea p r o d u c t i o n exceeding the d e m a n d i n the
near f u t u r e , if they materialise, are
l i k e l y t o place I n d i a and C e y l o n i n
a p r e d i c a m e n t since, it is believed,
the cost
of p r o d u c t i o n
in these'
countries is on the. increase
and
q u a l i t y i s o n the decline. I f J a p a n
increases her serviceable black tea
m a n u f a c t u r e at a lower cost, as she
has been d o i n g , she
w i l l have a
better m a r k e t , p r o v i d e d her supplies
are regular a n d larger. I n d i a ' s posit i o n as the largest tea e x p o r t e r of
the w o r l d
w i l l not, however,
be
affected to any appreciable extent.
Japanese c o m p e t i t i o n
w i l l n o t be
acute. J a p a n is h a v i n g less t h a n a
t e n t h of India's acreage under tea
a n d her p r o d u c t i o n of tea, even in
t h e peak p e r i o d , was o n l y about a
f o u r t h o f the I n d i a n o u t p u t . F u r t h e r p r o d u c t i o n of black
tea in
J a p a n is n o t likely to reach such a
m a g n i t u d e as to threaten
India's
h o l d i n f o r e i g n markets. N e v e r t h e less, if I n d i a is to m a i n t a i n her h o l d
on a i l her t r a d i t i o n a l markets, she
m u s t offer o n l y good q u a l i t y tea at
a reasonable price.

H E C o l o n y o f N o r t h Borneo,
whose G o v e r n m e n t
requested
the G o v e r n m e n t o f I n d i a recently
to p e r m i t the e m i g r a t i o n of 10,000
I n d i a n families for p e r m a n e n t sett l e m e n t there, is the least k n o w n
a n d least developed of the r e m a i n i n g B r i t i s h territories i n South-East
Asia, viz., M a l a y a , Singapore, Saraw a k , B r u n e i a n d N o r t h Borneo. Before the w a r , the
(Colony was a
British protectorate administered by
a C h a r t e r e d C o m p a n y . It was o n l y
in 1946 t h a t it became
a Crown
C o l o n y a n d the U K assumed d i r e c t
responsibility
for its governance.
L a b o u r , w h i c h f o r m e d a p a r t of the
Straits Settlements before the w a r ,
is n o w i n c o r p o r a t e d in the C o l o n y
o f N o r t h Borneo.
T h e present p o p u l a t i o n of
the
C o l o n y is estimated at 360,000, of
w h i c h less t h a n 20 per cent, i.e.,
about 70,000, are Chinese a n d the
rest mostly native tribes, the most
i m p o r t a n t being
the Dusuns, w h o
are" prosperous agriculturists. T h e n ,
there are the h e a d - h u n t i n g Muruts,
w h o f o l l o w the practice of shifting
c u l t i v a t i o n , a n d the sea-faring Bajaus. T h e Chinese f o r m the largest
alien race and are engaged in c u l t i v a t i o n of small holdings, trade and
commerce, skilled occupations and
g o v e r n m e n t service. T h e rest of the
p o p u l a t i o n consists of the small, b u t
powerful, European community, a
few Indonesians, M a l a y s
and I n dians. T h e c o u n t r y is very t h i n l y
p o p u l a t e d , the highest density being
23 persons to the square m i l e in the
West Coast, where about h a l f the
p o p u l a t i o n lives.
No estimate of the present I n d i a n
p o p u l a t i o n in N o r t h Borneo is a v a i l able. It was less t h a n 1500 at the
census of 1931. T h e Colony's a n n u a l r e p o r t for 1949 m e n t i o n e d t h a t
" a few I n d i a n s , o r i g i n a l l y e m p l o y ed in the constabulary, have f o r m e d
small settlements a n d m a n y of these
have become d a i r y farmers in the
v i c i n i t y of the p r i n c i p a l towns ".
E c o n o m i c Resources
T h e important primary products
o f N o r t h Borneo are rubber, c o p r a ,
m a n i l a h e m p , tobacco, rice, sago
a n d t i m b e r . W i t h the exception o f
rice, the others are e x p o r t e d , r u b b e r
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a n d c o p r a b e i n g the largest revenue


producers. Coffee, tapioca, maize,
groundnuts,
bananas,
.soya bean,
sugar cane a n d various
types of
fruits and vegetables are also g r o w n
for local c o n s u m p t i o n .
O u t o f the t o t a l area o f 1 9 m i l l i o n
acres, the acreage, cleared a n d c u l t i v a t e d is about 1 per cent. T h e
acreage under rice is about 90,000;
u n d e r rubber about 125,000; u n d e r
coconuts about 40,000 a n d
under
sago about 14,000.
T h e t o t a l p r o d u c t i o n o f rice i n
1949-50 season
was 35,000
tons,
w h i c h was sufficient for four-fifths
o f the p o p u l a t i o n . I n the 1950-51
season, however, the y i e l d was o n l y
25,000 tons o w i n g to the late a r r i v a l
of rains.
The. b o o m i n g w o r l d
prices f o r
primary
products has s t i m u l a t e d
p r o d u c t i o n a n d exports of rubber
a n d copra. R u b b e r exports
increased f r o m 19,500 tons in 1949
to 24,000 tons in 1950 a n d a m o u n t ed to a b o u t 21,000 tons in 1951.
E x p o r t s o f copra increased
from
19,000 tons in 1949 to 31,700 tons
in 1950. P r o d u c t i o n of t i m b e r d u r i n g 1950 a m o u n t e d to 6,237,558
cubic feet of w h i c h 3,750,507 c u b i c
feet were e x p o r t e d .
T h e p r i n c i p a l i m p o r t s i n t o the
C o l o n y arc
textiles a n d apparel,
provisions, rice, sugar, c i g a r ' a n d
cigarettes a n d vehicles.
The t o t a l
value of exports increased
from
$M 38 million
i n 1949 t o $ M 9 2
m i l l i o n in 1950, a n d of t o t a l i m p o r t s
from $M 34 million to $M 46 m i l lion.
( $ M 1 = 2 sh. 4 d . = Re. 19-0)T h e prosperity since the K o r e a n
w a r has been d i e to increased revenue f r o m t h e h i g h prices o b t a i n e d
f o r rubber. T h e . total g o v e r n m e n t
revenue increased f r o m $ M 1 1 m i l l i o n i n 1949 t o $ M 1 6 m i l l i o n s i n
1950. O f the latter, $ M 1 1 m i l l i o n
was f r o m customs a n d $ M 1 m i l l i o n f r o m i n t e r n a l revenue ( I n c o m e tax, C o m p a n y tax, licences, e t c . ) .
T h e revenue surplus o f $ M 7 m i l l i o n was utilised for reconstruction
a n d development, i n a d d i t i o n
to
grants-in-aid o f $ M 3.8 m i l l i o n f r o m
the U K G o v e r n m e n t ( m a i n l y w a r
damage c o m p e n s a t i o n ) .

February 16, 1952

THE" ECONOMIC WEEKLY


L o c a l industries i n c l u d e the p r o duction of coconut and groundnut
o i l , m a n u f a c t u r e o f cheroots, salting
and d r y i n g o f fish, t i m b e r
milling
a n d p o t t e r y - m a k i n g . M o s t of these
industries arc s t i l l in the developm e n t stage a n d there
is scope for
considerable expansion a n d
improvement.
T h e natives are p r i n c i p a l l y
engaged i n a g r i c u l t u r e a n d a l t h o u g h
they have s h o w n a n increasing i n terest i n wage-earning e m p l o y m e n t ,
there is still a great scarcity of l a b o u r
i n the C o l o n y . T h e t o t a l n u m b e r
of labourers employed by employers
of 20 or more persons was 19,312
a t the end o f 1950, c o m p a r e d w i t h
20,503 at
the end of 1941.
Of
these 11,713 are
natives,
5,008
Chinese
a n d 1,926 Javanese. I n
a d d i t i o n , 40,000 to 50,000 natives
are engaged i n w o r k mostly o n t h e i r
o w n account a n d about 14,000 persons are e m p l o y e d by small shopkeepers a n d tradesmen
employing
less t h a n 20 persons.
Since there cannot be any largescale d e v e l o p m e n t
in the c o u n t r y
w i t h o u t a greatly increased p o p u l a t i o n . G o v e r n m e n t has taken steps to
encourage i m m i g r a t i o n . I n 1949,
217 Chinese families f r o m Sarawak
entered t o w o r k i n the h e m p a n d
tobacco estates a n d 160 Cocos islanders i m m i g r a t e d for w o r k i n the
h e m p estates.
T w o f u r t h e r hatches
of immigrants
from
the
Cocos
Islands a r r i v e d d u r i n g 1950, m a k i n g
a t o t a l of 505. Dyaks f r o m Saraw a k a n d Chinese artisans a n d semiskilled workers f r o m H o n g k o n g a n d
Singapore have also a r r i v e d in recent
years.
Reconstruction and D e v e l o p m e n t
N o r t h Borneo suffered considerable physical destruction d u r i n g the
Japanese o c c u p a t i o n a n d the, chief
towns were p r a c t i c a l l y razed to the
ground.
R e c o n s t r u c t i o n has . p r o ceeded apace w i t h the help o f w a r
damage compensation payments a n d
grants-in-aid u n d e r the C o l o n i a l D e velopment and Welfare Act, N o r t h
Borneo h a d received $ M 3 m i l l i o n s
as w a r damage compensation
and
$ M 2.7 m i l l i o n a s grants-in-aid u p t o
the e n d o f 1950.
The' C o l o m b o Plan p r o v i d e d f o r
a p r o g r a m m e of
expenditure
of
5 . 2 m i l l i o n d u r i n g 1951-57, o u t o f
w h i c h -4.3 m i l l i o n
would
come
f r o m e x t e r n a l finance, A large p a r t
of the p l a n covers the reconstruct i o n o f b u i l d i n g s , ports a n d harbours,
and railway equipment. T h e Plan
also provides f o r the i m p r o v e m e n t
o f a g r i c u l t u r e , f o r better c o m m u n i cations, a n d f o r some expansion of

social services. F o u r - f i f t h s of the


t o t a l expenditure w i l l be '' domestic
e x p e n d i t u r e ".
I n 1951, the E c o n o m i c Co-operat i o n A d m i n i s t r a t i o n g r a n t e d $ US
952,000 for the c o n s t r u c t i o n of three
new w h a r v e s w h a r f facilities were
badly damaged d u r i n g W o r l d W a r
I I a t V i c t o r i a , o n the island o f
L a b u a n , the focal p o i n t o f c o m m u nications between Singapore, H o n g k o n g , M a n i l a , Indonesia a n d A u s t r a l i a ; at Jesselton, the c a p i t a l a n d
chief o u t l e t for the Colony's r u b b e r
exports; a n d
a t Sandakan,
from
w h i c h t i m b e r a n d c u t c h are shipped.
T h e m a i n economic problems for
N o r t h Borneo are t o increase p r o d u c t i o n of rice to a t t a i n self-sufficiency a n d t h a t of o t h e r crops, such
as h e m p a n d cocoa, to p r o v i d e alternative sources of revenue to rubber.
T h e r e are possibilities o f d a m m i n g
the Padas riiver on the, west coast
and constructing
a huge
hydroelectric works. T h i s scheme
was
estimated t o cost 4 0 m i l l i o n
in
1949 and has not been i n c l u d e d in
the six-year p l a n . T h i s l o n g - t e r m
scheme, i n v o l v i n g heavy c a p i t a l i n vestment a n d considerable i m m i g r a tion of labour, if carried through,
w o u l d p r o v i d e cheap p o w e r
and
make possible, a degree of i n d u s t r i a lisation.
Indian Immigration
S h o u l d the G o v e r n m e n t o f I n d i a
accept the offer of the N o r t h Borneo
Government and permit emigration
o f 10,000 families? T h e G o v e r n m e n t of Borneo is understood
to
have offered complete e q u a l i t y of
status for
the settlers
as B r i t i s h
citizens, l a n d for c u l t i v a t i o n , o p p o r tunities for G o v e r n m e n t
employm e n t a n d free transport
facilities.
There, is n a t u r a l l y some hesitancy
in accepting the offer
because of
the experience- of I n d i a n settlers in
S o u t h A f r i c a and C e y l o n .
There
can be no question of p e r m i t t i n g
unskilled l a b o u r to emigrate for the
purpose of w o r k i n g in estates o w n e d
by foreigners. T h e present u n h a p p y
position o f I n d i a n l a b o u r i n C e y l o n
a n d M a l a y a ( i n c l u d i n g questions o f
citizenship) arises largely f r o m the
fact t h a t they were n o t a l l o w e d small
landholdings, w h i c h they c o u l d o w n
and c u l t i v a t e , in areas
they have
opened up a n d developed.
Selective e m i g r a t i o n of a g r i c u l t u r a l families m a y therefore, be perm i t t e d , i f they are g i v e n c o m p a c t
l a n d h o l d i n g s a n d f i n a n c i a l assistance
t o settle i n t h e c o u n t r y . Artisans
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a n d skilled workers f o r b u i l d i n g c o n s t r u c t i o n a n d r o a d m a k i n g , traders,


shopkeepers, etc., may also be a l l o w ed to go, if they are g i v e n facilities
for
permanent
settlement.
Only
those I n d i a n s w h o are really interested i n settling i n Borneo a n d d o
not i n t e n d c o m i n g back
to I n d i a
after m a k i n g money there should be
selected for e m i g r a t i o n .
If such assisted e m i g r a t i o n is a l l o w e d , the Representative
of the
G o v e r n m e n t o f I n d i a a t Singapore
should be asked to visit the I n d i a n
settlements three or f o u r
times a
year to look after the I n d i a n settlers in the first years of settlement
a n d act as a liaison between the
I n d i a n G o v e r n m e n t a n d the G o v e r n m e n t o f the C o l o n y . I n d i a has v i t a l
stakes i n d e v e l o p i n g contacts w i t h
South-East A s i a a n d the e m i g r a t i o n
o f 50,000 I n d i a n s t o N o r t h Borneo
w o u l d provide an opportunity of
assisting in the
d e v e l o p m e n t of a
b a c k w a r d area.
S. N .