The Rise Of Australasia

Chapter 855 - 639: The Impact of Expelling Indigenous Peoples

After the work of various departments had been almost completely arranged, Prime Minister Roger finally stepped forward, his expression slightly grave as he disclosed the current government’s most significant challenge.

"Your Majesty, after we extensively expelled the indigenous people of Java and Sumatra, the rubber production in the Southeast Asian Region has faced a huge impact, even showing trends of evolving into a global banana crisis," said Prime Minister Roger.

The Netherlands-controlled Dutch East Indies was one of the most important regions for the production of natural rubber, contributing nearly one-third of the rubber output in Southeast Asia.

Even on a global scale, the rubber production in the Dutch East Indies still accounts for over one-fifth, which is already a remarkably exaggerated number.

After a large-scale expulsion of indigenous people, Java and Sumatra are now lacking labor for rubber production. Surely, it’s impractical to rely on the remaining Dutch and a small portion of indigenous people on these islands to cultivate rubber.

Not to mention whether these people are willing or not, harvesting rubber also requires certain skills. Untrained individuals would only cause chaos.

The rubber crisis in Southeast Asia began during the colonial rebellion in the Dutch East Indies, and to this day, there is no sign of it stopping.

The most critical reasons are, firstly, Australasia is still continuously expelling the indigenous people, leading to a labor shortage in the rubber production on Java Island and Sumatra.

The second reason is that the rubber industries in other regions cannot be rapidly expanded. The loss of rubber production on Java and Sumatra won’t be compensated by other areas in the short term.

Since its inception, the price of rubber has consistently been high, and rubber planting has always been one of the most profitable industries, even now.

Although there had been a rubber crisis before, with the mass development of cars, the price of rubber, widely used in car tires, has risen even higher than before.

According to records regarding rubber prices, around 1880, the price of rubber was about 401 pounds per ton.

As time entered the beginning of the 20th century, the price of rubber also increased to around 459 pounds per ton. Such growth was considered normal.

But after the birth of Australasian cars, as automobiles became popular around the world, the price of rubber used for tires saw a drastic increase.

By 1910, the price of rubber had already risen to over 600 pounds per ton, and in some regions, the price of rubber even broke through 800 pounds per ton.

Next came the World War. Continuous wars greatly reduced the demand for rubber, making the already insufficient rubber production become surplus. Post-1914, rubber prices plummeted, at its lowest reaching less than 250 pounds per ton.

Even after the war, the pace of economic recovery in various countries was sluggish. The production and demand for rubber did not surge, and rubber prices remained stable at around 300 pounds per ton, sometimes even falling below 250 pounds.

Before 1900, most of the rubber was produced in South America, but after 1900, with the extensive cultivation of rubber plantations in Southeast Asia, the combined output even surpassed the records created by South America. This was one of the reasons why rubber prices never rose.

According to the intelligence obtained by Australasia after taking control of the Dutch East Indies, the entire Dutch East India Region (including the areas previously occupied by Australasia and the Kalimantan Sultanate) had a rubber planting area of up to 400,000 hectares, with a total rubber production reaching 280,000 tons.

As long as they comply with Australasian labor laws and genuinely protect the interests of the common people, I believe there will be a large number of people willing to work for them. The precondition is that they need to change."

The Indigenous People cannot continue to stay on Java Island and Sumatra Island. These two islands are part of Arthur’s Colony Native Land planning and naturally cannot leave behind such a risk as Indigenous Peoples.

Although this may affect the rubber plantations on the two islands, most of these plantations are foreign properties anyway, which doesn’t have much impact on Arthur and Australasia.

What’s more, based on the historical trends of rubber prices, the price of rubber will plummet within the next ten years while rubber production continues to increase.

Under such circumstances, naturally, Arthur has no interest in taking over these rubber plantations. Although many industries in Australasia need rubber, with just a few islands in the Dutch East Indies, Australasia could never lack rubber.

As for the complaints from those foreign rubber industry parks, they are completely negligible to Arthur. As long as they comply with the laws of Australasia, they really do not lack human resources at all.

But if their crisis stems from not adhering to the law, then the crisis they face is entirely of their own making, and the Australasian Government has no responsibility, nor any obligation to help them solve it.

"Your Majesty, could this have a negative impact on our reputation? We have just acquired the Dutch East Indies and are so dismissive of those rubber plantations, I fear it might make some Europeans resent us," Prime Minister Roger said hesitantly, voicing his concerns.

"It’s okay," Arthur said with a light laugh, "Minor capital protests have no impact on us, and we do not need the support of such capital at all. What’s more, the current territories of Java Island and Sumatra Island belong to Australasia. Foreign capital does not have any right to criticize our reign.

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If need be, the Royal financial group can also purchase some rubber plantations to maintain domestic rubber production levels.

I don’t believe that the rubber industry cannot operate without these rubber plantations; they can’t determine our domestic production of rubber."

Although rubber is very important for the industrial development of Australasia, these foreign rubber plantation owners cannot influence Australasia.

First of all, their rubber plantations are ultimately on Australasian territory and must operate under Australasian law.

What’s more, neither in terms of assets nor status, they can’t compete with the much larger royal financial group.

Not adhering to the law would lead to a labor shortage; a labor shortage would lead to a dramatic decline in rubber production; a decline in rubber production would result in a loss of profits. This is a vicious cycle and compels them to submit to the Australasian Government.

If there are any who refuse to submit to Australasia, Arthur wouldn’t mind purchasing their enterprises at a low price after they fall into complete loss or even bankruptcy.

For the royal Consortium, purchasing rubber plantations at normal prices or even at a premium does not make sense, especially since the price of rubber is expected to fluctuate and decline for some time.

If they can purchase the plantations at a low price when they go bankrupt, no matter how the price of rubber fluctuates, it would still be a worthwhile transaction in the end.