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Ethnic groups

The Dutch colonialists formed a privileged upper social class of soldiers, administrators, managers, teachers and pioneers. They lived together with the natives, but at the top of a rigid social and racial caste system. The Dutch East Indies had two legal classes of citizens; European and indigenous. A third class, Foreign Easterners, was added in 1920.

In 1901 the Dutch adopted what they called the Ethical Policy, under which the colonial government had a duty to further the welfare of the Indonesian people in health and education. Other new measures under the policy included irrigation programs, transmigration, communications, flood mitigation, industrialisation and protection of native industry. Industrialisation did not significantly affect the majority of Indonesians, and Indonesia remained an agricultural colony; by 1930, there were 17 cities with populations over 50,000 and their combined populations numbered 1.87 million of the colony's 60 million.