Historical Sketch

In the 1520s, Portuguese and Spanish navigators were the first Europeans to arrive at the island of New Guinea, a name created by the Spanish. The Dutch United East India Company (VOC) laid claim to the western part already in 1660, which was renewed by the Dutch government in 1828. No settlements or trading posts had been established at that time. This only began at the end of the 19th century. Nevertheless, in 1884 the island of New Guinea was formally partitioned between three European colonial powers, the Netherlands (west), Great Britain (southeast) and Germany (northeast). During the Pacific War, Japan conquered Netherlands India in March 1942, reaching New Guinea a month later, and held it until the final defeat in August 1945. Immediately afterwards, Indonesia declared independence, which triggered a four and a half years' war of liberation against the Dutch who tried to re-establish colonial rule. In December 1949, Indonesia finally obtained independence except for West New Guinea which remained under colonial administration as Netherlands New Guinea. The Indonesian claim to the territory was turned down by the United Nations General Assembly in December 1957, favoring self-determination. The increasing Indonesian military pressure triggered the handover of the sovereignty to the UN Temporary Executive Authority (UNTEA) in October 1962, which in turn ceded powers to Indonesia eight months later. The integration of West New Guinea (Irian Barat) into Indonesia was formalized by the (rigged) plebiscite of July 1969.

Monetary History Overview

The Dutch colonial administration introduced the New Guinean Guilder as new currency in March 1950. The Netherlands India banknotes were invalidated immediately to prevent inflow from Indonesia. Any cash holdings had to be deposited where they remained frozen with all accounts. In 1953, they were released with a 60% cut. In 1962, the United Nations took over the administration from the Netherlands, and one year later, West New Guinea was incorporated into Indonesia. The integration into the Indonesian currency area was not done immediately. In May 1963, the New Guinean Rupiah replaced the colonial currency at par. In 1967 and 1970, it got devalued twice to roughly adjust to the development of the Indonesian currency. In mid-February 1971, regular Indonesian money got issued, and the New Guinean interim currency was withdrawn until end March 1973, after about ten years of existence.

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