An Overview on Labuan, Malaysia

Labuan has a long and interesting history associated with it. It is known as the Pearl of Borneo and consists of six small and one large island in the Eastern part of Malaysia. It is best known for the various world-class resorts and the International Offshore Financial Centre. The island is endowed with tranquil sandy beaches and has everything from broadband connectivity to five star hotels. Coal mining was the sole activity that was carried out in Labuan in its early days. Today, there are a wide range of opportunities like tourism industry and financial industry. Other good opportunities include banking and education.

History behind the name

The name of the island came from the word Labohan, which is a term used in Brunei. Labuan was under the rule of many different empires and all of them had left some pieces of history behind. The island was once under the rule of the British and there were no permanent residents here at that point of time. There were just a few huts scattered in the numerous beaches and they were mostly used by fishermen for getting some rest.

Emergence of Labuan port

The port of Labuan was declared open to everybody in the year 1848 and slowly people started coming and living in the island. Naval officers also selected the port as an anchorage site. It was considered as a prime commercial area and the best for shipping.

Why it didn’t flourish

Labuan was mostly covered with marshy grounds and thick forests. Malaria was one of the most common diseases and many of the inhabitants died because of it. The island was quite a failure as a colony and mostly disappointed its various rulers. The first governor of Labuan was Rajah James Brooke and handled all the administrative matters with the help of many other government officers. The governor mostly stayed away from the island and chose to travel to places like Sulu, Brunei, Siam and Singapore. Trade did not manage to flourish at the island even after the port was declared as an open one and the founders regretted their decision of naming it as Labuan, which means anchorage. The total amount of revenue collected from the island was lower than the expenditure and that lowered the value of Labuan as a trading port.

Coal Mining

Between 1847 and 1911, several companies started working on the coal reserves in the island. The first company to settle there for work was the Eastern Archipelago Company. Along with trading in coal, he also obtained licenses for selling and importing foreign liquor. The first railway tracks of the island were built during this period for connecting Port Victoria to Coal Point. Labor was a major problem in the island and it was hard to find workers for coal mining. The few workers recruited by the mining companies often went on strikes and created riots. Most of the workers were from India and Brunei and they left Labuan as soon as their contract period ended. The main reasons behind them running away from the island were the high prevalence of Malaria and lack of basic facilities.


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