Rethinking Neomercantilism in the Federated Malay States, 1896-1925: Balance of Trade, Global Slump and Protection

Abstract

This article reinterprets colonial trade in the Federated Malay States (FMS) through the lens of neomercantilism, covering the period from the establishment of the FMS government in 1896 to the postwar trade slump. Neo-mercantilist policies allowed the British government to directly oversee export activities, keeping tin and rubber under colonial control and serving the interests of British investors and businesses. These policies also strengthened the fiscal capacity of the FMS by generating revenue from exports. The study challenges the conventional view that colonial administrations in Malaya avoided economic intervention. It shows, through administrative records, that surplus accumulation
policies functioned as a clear form of colonial exploitation. Numerical data and archival sources provide evidence for this claim, including the proceedings of the Federal Council, the CO717 files that document the link between London and the FMS, and annual departmental reports. The findings reveal that dependence on an export economy based on rubber and tin shaped the FMS balance of trade, particularly during periods of price fluctuation. However, neomercantilist measures to regulate output proved effective in stabilising markets. Rising prices generated substantial surpluses until 1925, highlighting the extent to which the colonial government relied on rubber and tin as its main sources of wealth.