Skip to Content

A brief history of Penang

A brief history of Penang

Penang’s location on the northwest coast of Malaysia, at the intersection of numerous cultures, countries, and trade routes, has always shaped its history. From a small island integral to regional trade, a strategic European possession to be fought over, to its recent history as a post-independence Malaysian success story, Penang’s fortunes have constantly changed throughout the years.

Disclaimer: This post contains affiliate links. Should you click to purchase, it is at no additional cost to you, but we receive a small commission.

Early days

Until the 18th century, Penang Island was a part of the Sultanate of Kedah and led a relatively peaceful existence with occasional visits from Portuguese, Chinese and British expeditions who were interested by its natural surroundings, strategic location and natural harbour.

Life continued at this pace until simmering tensions between the Sultan and the kingdoms of Siam and Burma threatened to boil over into conflict in the 1770’s. The Sultan was in need of military support and, around the same time, the British East India Company (BEIC) had engaged a British explorer by the name of Francis Light to travel to the Malay Peninsula to make the first tentative steps in establishing trade with the region.

Enter the British

Spotting an opportunity, Light offered military assistance to the Sultan against his foes and once the situation was contained and order restored to the region, the grateful Sultan offered Penang Island to Light as a reward. Surveying the island, with its calm harbour, enviable location at the junction of emerging trade routes, Light realised Penang would serve as an ideal settlement for the British East India Company.

After some persuasion, his superiors in London agreed and, on the 17th July 1786, Light sailed into Penang harbour and took possession on behalf of the BEIC in the name of King George III (the place he landed is where you’ll find Fort Cornwallis). For a one-off cash payment and promise of British military support, the company had a foothold in Southeast Asia.

The island, which they’d named Prince of Wales Island, and its capital (George Town) were the first British settlements in the region and would eventually allow other expeditions to strike new deals nearby. Soon afterwards, a strip of land on the mainland was acquired and used to further facilitate the trade, access and security of Penang Island. This strip of land now forms the rest of the state of Penang and is where you’ll find Butterworth and the mainline railway station.

Boom times

In a stroke of capitalist genius, Penang was afforded free-port status by the BEIC and traders were able to take advantage of its tax and duty-free status. The resulting explosion of trade in Penang, where thousands of traders relocated from rival Dutch ports in the area, cemented Penang’s status as the premier trading port in the region, whilst simultaneously driving the Dutch ports into relative poverty.

In the early part of the 19th century, the British recognised the increasing significance of Penang by granting it a Royal Charter which conveyed upon the island its own police force and supreme court. Around the same time period, the spice trade was continuing to grow around Penang and the island became the leading centre for the trade, catapulting it into the upper-tier of British overseas possessions. Other settlements emerged on the island and the number of immigrants increased, notably people of Chinese heritage. The fascinating mix of cultures and people we know Penang for nowadays was beginning to form.

The base Penang had given the BEIC in the region contributed to the establishment and growth of Malacca and Singapore. Recognising their combined strength, the BEIC formed the Straits Settlements in 1826 and it seemed logical that Penang was designated the capital, although this only remained the case for six years as Singapore itself grew in importance.

Penang continued to flourish throughout the 19th century with the advance of tin-mining and Suez Canal playing in its favour. The other Straits Settlements grew alongside it and, in 1867, they were placed under the direct rule of the Colonial Office in London, elevating the entity even further up the colonial food chain with all the benefits it entailed. The railway line was built from Butterworth, further connecting Penang to the ever-growing trade routes. Life wasn’t always plain sailing, the Penang Riots around this time, linked to clan tensions amongst the Chinese communities, caused widespread unrest and a reminder that harmony wasn’t always a given.

Darker days

The good times couldn’t last for ever and the events of World War II would have a direct and long-lasting effect on Penang. In 1941, after heavy Japanese bombardment, the supposedly invincible island of Penang was lost as the British withdrew, taking Europeans with them but leaving the local population to the brutal advancing Japanese army. The next four years were the darkest period for the people of Penang. The aura of British support and invincibility was lost, never to return, even after the end of the war and the surrender of the Japanese. Global orders had changed after the end of the war, the Straits Settlements ended, and Penang suddenly needed to find its own place in the newly formed Federation of Malaya.

In the following years, despite a bright start when George Town became the first city in the new country and retained its free-port status, the emergence of Kuala Lumpur and its own nearby port slowly eroded Penang’s status in Malaya and the rest of the world. The removal of the free-port status in 1969 felt like the end of an era which had lasted almost two hundred years.

Towards the future

A revival started in the 1970’s with the introduction of the Free Industrial Zone, helping to tempt many multinational companies to the island with its attractive tax and duty status, taking a leaf out of the city’s forefathers book. The old trading and commercial spirit was coming back to Penang and it continued to grow, despite the almost impossible challenge of competing with Kuala Lumpur which was emerging as a truly global mega-city.

Towards the turn of the century, manufacturing and services continued to help Penang grow but a growing realisation that the historic city of George Town, for so long undervalued and under supported, was a unique tourist and historic attraction led to the UNESCO designation in 2008.

In recent years, the city has continued to flourish as a centre for manufacturing and, increasingly, at the forefront of the digital revolution. It looks like Penang will continue to evolve, looking for new ways to grow and flourish, just like it did centuries before, when this small island found itself at the centre of the trading world.

Want to learn more about Penang’s history?

If you want to delve in deeper into Penang’s rich history, here are some suggested worthwhile reads:

Sale
Penang: 500 Early Postcards
  • Sing, Cheah Jin (Author)
  • English (Publication Language)
  • 288 Pages – 02/19/2013 (Publication Date) – Edition Didier Millet Sdn. Bhd. (Publisher)
Penang’s History, My Story
  • Amazon Kindle Edition
  • Datuk Seri Wong Chun Wai (Author)
  • English (Publication Language)
  • 500 Pages – 05/13/2015 (Publication Date) – Star Publications (Malaysia) Berhad (Publisher)
The Penang Adventure: A History of the Pearl of the Orient
  • Raymond Flower (Author)
  • English (Publication Language)
  • 232 Pages – 02/28/2011 (Publication Date) – Marshall Cavendish International (Asia) Pte Ltd…
Guide to Colonial George Town, Penang: A Tour Around…
  • Sampson, Sean (Author)
  • English (Publication Language)
  • 209 Pages – 10/01/2023 (Publication Date) – Island Trader Media (Publisher)

Alternatively, how about checking out these historical fiction books set in Penang.

The Gift of Rain book cover