The first regular contact between Europeans and the peoples of Indonesia began in 1512, when Portuguese traders, led by Francisco Serrão, sought to monopolize the sources of nutmeg, cloves, and cubeb pepper in Maluku. Dutch and British traders followed. In 1602 the Dutch established the Dutch East India Company (VOC) and became the dominant European power. Following bankruptcy, the VOC was formally dissolved in 1800, and the government of the Netherlands established the Dutch East Indies as a nationalized colony.
For most of the colonial period, Dutch control over the archipelago was tenuous outside of coastal strongholds; only in the early 20th century did Dutch dominance extend to what was to become Indonesia's current boundaries. Despite major internal political, social and sectarian divisions during the Indonesian National Revolution, Indonesians, on the whole, found unity in their fight for independence. Japanese occupation during World War II ended Dutch rule, and encouraged the previously suppressed Indonesian independence movement. A later UN report stated that four million people died in Indonesia as a result of famine and forced labor during the Japanese occupation. Two days after the surrender of Japan in August 1945, Sukarno, an influential nationalist leader, declared independence and was appointed president. The Netherlands tried to reestablish their rule, and the resulting conflict ended in December 1949, when in the face of international pressure, the Dutch formally recognized Indonesian independence (with the exception of the Dutch territory of West New Guinea, which was incorporated into Indonesia following the 1962 New York Agreement, and the UN-mandated Act of Free Choice of 1969).