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Singapore is a symbol of global prosperity, a city-state that dominates world trade with the highest standards of living, being one of the fastest industrializing and economically developing nations in South-East Asia. The modern origins of Singapore can be traced to an acquisition initiated in 1819 and concluded in 1824, when the British purchased the island from the Sultanate of Johor for what would now be considered a trivial amount for such a territory. Long before European colonization, the island had previously hosted the Kingdom of Singapura, or the lion city, while its earlier name, Temasek (possibly Sea Town), later became the name of the country’s sovereign wealth fund. This transaction established the groundwork for Singapore’s prosperity, transforming it from an obscure island into a vital economic centre.

The confrontation in the Indies

In the early 19^th century, the region served as an important hub for Asian and European trade, situated in the Strait of Malacca, one of the world’s most frequented maritime routes, which connects the Indian Ocean to the Pacific Ocean. As a result, Singapore held a critical strategic position in South-east Asia, serving as an essential gateway for trade and entrepot between Europe, Asia, and notably, between the British Empire and its colonies in Indian subcontinent.

The British Empire was eager to safeguard its commercial interests, especially in the opium trade, a particularly valued good in its dealings with China, and to stop Dutch growth in the area, as the control of this route had great strategic and financial implications.

In light of this, Sir Stamford Raffles, a British East India Company (EIC) representative, traveled to Penang, Malaysia, in January 1819 to look for a suitable site for a trade post in the Straits of Malacca. Arriving by chance in Singapore, Raffles found the island to be a place of considerable strategic potential, the area being only under Dutch surveillance but not under its sovereignty.

The island was inhabited by a small number of Chinese, Aborigines and Malays led by the Temenggong, Abdul Rahman, subordinate of the Dutch-influenced Sultan of Riau-Johor Abdul Rahman (of the same name). Given this relationship, the Sultan refused to allow the establishment of a British trading settlement in Singapore and because the Temenggong realized the financial benefits of a British administration in Singapore and wanted out of the Sultan’s influence, the latter made a deal with Raffles and appointed his brother, Hussein Shah, as the new Sultan to validate the EIC’s acquisition of the land.

Consequently, on February 6, 1819, Raffles signed an agreement with the Temenggong and Hussein, in which the EIC recognized Hussein as Sultan of Johor, with the title of Lord of the Straits, avoiding to call him Sultan of Singapore, and granted him 5.000 Spanish dollars a year (130,000 USD today) and to the Temenggong 3,000 Spanish dollars a year (78,000 USD today) in exchange for the right to establish a trading colony in Singapore.

This move was a direct affront to Dutch authority, which considered Singapore part of its territory, creating discontent among the Dutch, who, although able to remove the British by military force, took no action and chose to avoid direct conflict because of ambiguous messages from British officials and the prospect of wider territorial negotiations.

The British establishment in Singapore was rapidly solidified by the support of British merchants in Calcutta and further legitimized by the British Foreign Office, despite initial opposition in London.

One the road to greatness

In the years that followed, Singapore’s administration encountered a variety of administrative problems and leadership changes. In 1823, following Raffles’ retirement, Dr. John Crawfurd assumed control and implemented pragmatic policies, abandoning many of Raffles’ idealistic reforms while continuing to promote free trade and town planning. The Malay gentry’s influence was reduced by Crawfurd, who provided them with financial compensation and restricted their political authority, which contributed to the administrative consolidation of the colony.

In March 1824, the Anglo-Dutch Treaty officially recognized Singapore as a British territory, marking the end of Dutch influence in the Malay Peninsula and the beginning of British dominance in Singapore.

Subsequently, in August 1824, the British being dissatisfied with the uncertain title on which the original 1819 agreement was based, not being a direct cession of territory but merely a permission for British settlement, signed the 1824 Treaty of Friendship and Alliance with Sultan Hussein Shah and Temenggong of Johor Abdul Rahman in which they were relinquishing full sovereignty and ownership of the island to the British in exchange for 33.200 Spanish dollars (approximately 1,12 million USD today) and a monthly life dividend of 1.300 Spanish dollars, the Sultan was granted land, while Temenggong received 26.800 Spanish dollars (approximately 910.000 USD today) and a monthly dividend of 700 Spanish dollars.

In conclusion, the amount paid by the EIC for the formal acquisition of Singapore in 1824 was 60,000 Spanish dollars, equivalent to around 2.027 million USD today. At a current rate of approximately 16,000 USD (21,744 SGD) per square meter, 2.027 million USD would allow for the purchase of only 126.68 square meters today. In contrast, acquiring Singapore today, which spans approximately 728 square kilometers, would necessitate an expenditure of almost 11.648 trillion dollars. While the acquisition was groundbreaking for its era, the sum spent by the British in 1824 appears trivial when compared with Singapore’s current economic worth.

During the decolonization period of the Malay peninsula, Singapore with its Chinese majority and led by Lee Kuan Yew, was expelled by the nascent Malaysian Federation in what appeared to be a blow to the territory. Instead, it became one of the greatest Asian tigers and embarked on a rapid industrialization drive that saw the creation of one of the most prosperous and advanced states in the world, far outstripping Malaysia or Indonesia. Singapore today has gone from textile to pharmaceuticals and innovation and is a scientific and financial powerhouse, despite its small territory size.

Photo source: PxHere.com.

References

Properstar (n.d.) ‘Singapore: housing price and price/m²’. Available at: https://www.properstar.sg/singapore/house-price.

Heng, D. (2022) Seven Hundred Years: A History of Singapore. Available at: https://www.academia.edu/68156511/Seven_Hundred_Years_A_History_of_Singapore?source=swp_share.

Ho, R., et al. (2024) ‘Singapore | Facts, Geography, History, and Points of Interest’, Encyclopedia Britannica, 22 December. Available at: https://www.britannica.com/place/Singapore/History.

Kwanjit, C. (2024) ‘The History of Singapore’. Academia.edu, November. Available at: https://www.academia.edu/79709094/THE_HISTORY_OF_SINGAPORE?source=swp_share.

Mundi, J. (n.d.) Treaty of Friendship and Alliance between the Honourable East India Company, and the Sultan and the Temenggong of Johore (1824). Available at: https://jusmundi.com/en/document/treaty/en-treaty-of-friendship-and-alliance-between-the-honourable-east-india-company-and-the-sultan-and-the-temenggong-of-johore-1824-the-crawfurd-treaty-1824-monday-2nd-august-1824.

National Library Board Singapore (n.d.) 1819 Singapore Treaty. Available at: https://www.nlb.gov.sg/main/article-detail?cmsuuid=92bb56f0-e821-40d1-bd8c-cf8fa7e7f172#:~:text=On%206%20February%201819%2C%20Stamford,a%20trading%20post%20in%20Singapore.

National Library Board Singapore (n.d.) 1824 Treaty of Friendship and Alliance. Available at: https://www.nlb.gov.sg/main/article-detail?cmsuuid=9590a69f-b3c8-4208-92bb-11ff74934af6#:~:text=Under%20the%20terms%20of%20the,aside%20for%20them%20in%20Singapore.