Biology of Business

Makassar

TL;DR

Eastern Indonesia's gateway port since the 16th-century Gowa Sultanate: the spice trade's essential middleman, now one of three national hub ports with a new 2M-TEU terminal, its network position outlasted the Dutch VOC and the end of the spice monopoly.

City in South Sulawesi

By Alex Denne

Before Europeans knew that Indonesia's spice islands existed, Makassar was already taking its cut. By the 16th century, the Gowa Sultanate had turned this South Sulawesi port into one of Southeast Asia's most prosperous cities—a hub-and-spoke network where cloves, nutmeg, and pearls from the Moluccas funneled through a single exchange before reaching Chinese, Indian, and European buyers. When the Portuguese arrived, they found not a primitive coast but a functioning commodities market.

The Dutch destroyed this independence precisely because it worked too well. Until Makassar fell to the VOC between 1667 and 1669, spice smuggling through the city was one of the main ways the English East India Company obtained cloves—undermining the Dutch monopoly. The Makassar Wars ended Gowa's sovereignty, but the city's traders adapted rather than disappeared. Bugis and Makassarese seafarers scattered across Southeast Asia, founding trading settlements from Singapore to Borneo to the northern coast of Australia. From the mid-18th century until 1907, up to a thousand trepang fishermen sailed annually from Makassar to Arnhem Land—a 1,600-km voyage by prau, supplying one-third of China's sea cucumber demand. Their Pinisi boatbuilding tradition is inscribed as UNESCO Intangible Cultural Heritage.

Modern Makassar—known as Ujung Pandang from 1971 to 1999—is eastern Indonesia's largest city and one of only three national hub ports, alongside Jakarta's Tanjung Priok and Surabaya's Tanjung Perak. The Makassar New Port, inaugurated in 2024 with a design capacity of 2 million TEU, is positioned as eastern Indonesia's export gateway—an attempt to cut logistics costs by routing commodities directly to global markets rather than transshipping through Java. The spice trade is long gone, but the geographic logic that made Makassar a gateway between the Moluccas and the world still holds: eastern Indonesia's commodities still funnel through Sulawesi.

The biological parallel is hub-and-spoke distribution operating across centuries. The Moluccas and eastern Indonesian islands produce resources; Makassar aggregates and re-exports them. The Dutch tried to eliminate the middleman; the middleman outlasted the Dutch. Makassar's competitive advantage was never the spices themselves but the network position—the same advantage that makes logistics hubs like Singapore resilient even as the commodities they trade change completely.

Key Facts

1.4M
Population

Related Mechanisms for Makassar