Nathanael Sumaktoyo – Indonesian President Prabowo Subianto surprised many on 11 June 2025 when he mentioned in a speech at the Indo Defence Expo & Forum that according to a study purportedly published a few weeks earlier, "the Netherlands took resources from Indonesia valued at US$31 trillion in today's terms during their colonisation of our country". He explained that this was equivalent to almost 18 times Indonesia's current GDP of around US$1.5 trillion.
The number of US$31 trillion reverberated in Indonesian social media. By contrast, in The Netherlands only the Jakarta correspondent of De Volkskrant reported it, adding that the origin of the number puzzled historians of Indonesia.
It is unclear why Prabowo mentioned this number. It appears he intended to justify Indonesia's additional military expenditure to safeguard Indonesian sovereignty and prevent his country from ever being colonised again. It is also unclear what study the president referred to. An extensive online search yielded no trace of a publication that accounted for the extraordinary amount of US$31 trillion The Netherlands may have taken from Indonesia.
If there is such a study, it would be a significant intervention in an ongoing international discussion among scholars of international law, history, and international relations about the need for former colonising countries to pay retribution for the colonial past. This discussion was partly informed by the 2012 book Why Nations Fail, by the winners of the 2024 Nobel Prize in economics, Daren Acemoglu and James Robinson. They argued that "extractive institutions" related to slavery and colonialism had lasting and debilitating consequences for many countries' later economic development.
In 2017 an article in Third World Quarterly by the political economist Bruce Gilley, "The Case for Colonialism", also prompted considerable discussion about the demerits of colonial rule. Contributing to the discussion too was a 2017 study by Indian historian Utsa Patnaik concluding that British colonisation of India between 1765 and 1938 had benefited the United Kingdom by US$45 trillion.
All this energised opinion that European states should pay reparations to the countries they had colonised in the past – though this debate was largely grounded in ethical objections to past practices of slavery and colonialism, rather than about how to quantify the damage caused by such institutions in order to establish the size of retribution to be paid.
During 2025 this debate was stepped up several notches. In February, the African Union Heads of State meeting set "Justice for Africa and People of African Descent through Reparations' as its annual theme. This echoed earlier calls for reparations articulated by Caribbean members of the Caricom Reparations Commission. A submission to the UN General Assembly in September from the UN High Commissioner for Human Rights reiterated the call for "reparatory justice for legacies of enslavement ... colonialism and successive racially discriminatory policies and systems", calling for "adequate, effective and prompt reparation".
Recent statements from international organisations such as Human Rights Watch and Amnesty International support the call for reparations for colonialism and slavery. The UN Special Advisor on Africa is organising an "Africa 2025" conference in December with a key session "on reparations, broadening the lens beyond compensation to embrace a vision of structural justice".
What about Indonesia?
Although this flurry of debate in 2025 is focused on Africa, earlier publications on India indicate that it may just as well apply to parts of Asia subjected to slavery and colonialism in the past. But unlike India, Indonesia hardly featured in this debate. As far as there was public discussion about Indonesia's colonial past during those years in Indonesia and/or The Netherlands it related to Indonesia's independence war (1945-1949), especially regarding what was considered to have been "extreme violence" (extreem geweld) on the part of Dutch armed forces during this conflict. It informed the Dutch King's apologies delivered during a visit to Indonesia in March 2020 – not for the entire colonial past, but for the "extreme violence".
The Netherlands offered apologies and paid compensation to family members of victims of extreme violence in West Java and South Sulawesi. It also financed an extensive study project that in 2022 published multiple volumes on the Dutch involvement in Indonesia's war of independence 1945-1949 and the use of extreme violence.
Even in that context, there were no attempts to link the Dutch apologies to the broader issue of the effects of Indonesia's colonial past on Indonesia's development prospects. That was possibly because the evidence for the broader negative effects of colonial rule on Indonesia's economy may be difficult to muster.
For example, a study by economists Melissa Dell and Benjamin Olken in 2020 used the methodology developed by Acemoglu and Robinson to examine the lasting consequences of the "extractive institution" of the Cultivation System in Java. From 1820 to 1870, the colonial government required the farming population of Java to contribute labour and land for the cultivation of export crops, particularly sugar, as a tax in kind. Dell and Olken found that villages that were in the 1850s were involved in sugar cane production are in the 2010s "more industrialized, have better infrastructure, are more educated, and are richer than nearby counterfactual locations" – in other words, the Cultivation System did not have lasting detrimental consequences for Java.
Nevertheless, President Prabowo mentioned that The Netherlands extracted US$31 trillion from Indonesia during the colonial years. Where did this number come from? How was it approximated? And will it be the basis for an Indonesian claim for reparations payments from The Netherlands?
'Colonial drain'
Identifying the cumulative effects or costs of colonisation on colonised countries is a long-discussed issue. It is captured by the term "colonial drain", first articulated by Indian scholar and Member of the British parliament Dadabhai Naoroji in 1901. He argued that British rule in India had led to a transfer of wealth to Great Britain to the detriment of economic development in British India.
Studies sought to quantify this "colonial drain" from India, although an unambiguous definition of the term remained elusive. Analysing the evidence, prominent Indian economic historian Kirti Chaudhuri in 1968 found the "drain" argument "by no means true". His colleague Tirthankar Roy in 2022 concluded that Patnaik's 2017 estimate of "colonial drain" of US$45 trillion was based on "dreadfully bad economics". Despite the lack of conclusive evidence, the term is still widely used in explanations of India's economic underdevelopment.
By contrast, the "colonial drain" phrase was hardly used in past studies of the relations between The Netherlands and colonial Indonesia. Indonesia-born economist Arnold Berkhuysen first explored its relevance in his 1948 PhD thesis at the University of Leiden. Using a balance of payments perspective, he established that funds flowing from colonial Indonesia were mostly payments related to Dutch investments in Indonesia. He argued that those investments would not have taken place without the overseas payments of interest and dividends.
The University of Groningen Professor of Development Economics Angus Maddison in 1989 used the commodity trade surplus of India and of Indonesia as a proxy for the "colonial drain". He identified an annual average "drain" of 0.7% of Indonesia Net Domestic Product (NDP) during 1698-1700, rising to 10.6% during 1921-1938, compared to an annual average of 1.5% of India's NDP during 1868-1938.
In 1993, while I was a PhD student of Maddison's, I used more detailed balance of payments data to argue that Indonesia since independence in the 1940s also had a commodity trade surplus, because it continued to be a net importer of services. Particularly, the services of foreign loans and foreign investments required overseas remittances of interest and dividends, while Asian and European expatriate employees working in Indonesia remitted their savings. After reducing the commodity trade surplus with these factor payments, he estimated an annual average "drain" of 2.5% of Gross Domestic Product (GDP) during 1823-1938 and 2.4% during 1949-1990.
Figure 1: GDP per capita in colonial Indonesia with and without "colonial drain", 1823-1941 (see original document)
In 2010, University of Utrecht Professor of Economic History, Jan Luiten van Zanden analysed the impact of "colonial drain" on the economy of Indonesia's main island of Java during the 19th century. The Cultivation System led to significant annual net transfers of funds from Java to The Netherlands. Van Zanden assumed that Java's net transfers to the Netherlands during 1820-1879 were a minimum estimate of "drain", while the commodity trade surplus during 1822-1880 was a maximum estimate. He found that on average during 1820-1880 Java's GDP was "drained" by a minimum of 4 and a maximum of 7% per year, on average 5.5%.
US$31 trillion?
Van Zanden's 2010 article is readily available online and may have been used in the publication to which President Prabowo referred on 11 June 2025. Maybe this publication applied the annual average of 5.5% of GDP during 1820-1880 to all years of Dutch colonial rule. Many in Indonesia believe that to have been 350 years, but maybe it only started in 1619 when the Dutch East India Company established itself in Jakarta. And maybe it ended in 1942 when Japan occupied Indonesia. These 322 years multiplied by an annual 5.5% results in an estimated accumulation of "colonial drain" equivalent to 1,771% of Indonesia's GDP.
Rounded up, this is the same as the 18 times of Indonesia's GDP that Prabowo's figure implies. Except that Indonesia's GDP in 2024 was US$1.36 trillion, not the US$1.5 trillion the president mentioned. Maybe Prabowo expects higher economic growth during 2025. However, even with an implausible 10% growth during 2025 to reach a GDP of US$1,500 billion, 18 times that amount adds up to US$27 trillion, not to US$31 trillion – maybe a miscalculation in the publication to which the President referred.
Source: https://www.newmandala.org/colonial-rekening-what-does-the-netherlands-owe-indonesia