Srivijaya was a kingdom developed in Sumatra during the 600s and was a leading sea port kingdom. Not only that, Srivijaya was also considered one of the richest kingdoms at that time. Most certainly because of Srivijaya's strategic location, its economy consisted of a lot on maritime trade but not a lot on agriculture. As early as 500 AD, Srivijaya emerged as a flourishing power kingdom and occupied and dominated the coasts of the Straits of Malacca for approximately 640 years! The reasons to this were probably because Srivijaya had the shortest sea route via the Strait of Malacca and that they built on alliances with the Malay coastal population.
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Palembang was the political center and capital of Srivijaya. In addition, Palembang also served as a central for economic redistributions. The crucial explanation of why Srivijaya was able to maintain its economy standards was because of their well-developed relationship with other groups such as the upriver tribesmen and coastel sea nomads. The alliance with the upriver tribesmen permitted a flow of goods from the interior to the ports which provided Srivijaya with both economic and political power.

Srivijaya also created the primary trade route between China and India and the kingdom traded widely with them. In the eyes of the Chinese, Srivijaya was an excellent trade partner because the Chinese was able to keep their goods moving into South China ports and voyaging through the Southeast Asian archipelago. However, some say that Srivijaya's economy prospered because of the fluctuations of the Chinese economy. They also say that when the Chinese ports were flourishing, the Srivijayan ports thrived. And when the Chinese ports were closed, the Srivijayan ports were not able to maintain their standards for political authorities.

Srivijaya was also capable of controlling piracy in its territory and made sure that the Southeast Asian zone on the international commercial route was secured and safe. Recognizing Srivijaya's maritime power, China suggested that a privilege would be awarded to other nations who used the Srivijaya's ports when entering Chinese ports. As time passed, the Srivijayans started charging other nations for more money for using port facilities. This action angered many of the trading nations and at the end Srivijaya was conquered due to submission.

In 1025, Srivijaya's economic control almost came to an abrupt. It was when the Malacca region's port was successfully attacked by the South Indian Chola dynasty and as a result, the Srivijaya's authority over the straits was shattered. Unfortunately, Srivijaya was never able to regain its authority and control after the raid. After the raid, Sirvijaya changed its capital from Palembang to Jambi, central Sumatran port, because of a series of attacks by the Javanese.There, the kingdom was able to function independently

(Diagram above shows the boudaries of Srivijaya)
Source: "Sotheast Asia" Asian History on File. New York 1995. 5.06

Works Cited

"Indonesia - History" World Book 2001. Vol 10. Chicago, 2001. 236.

"Sotheast Asia" Asian History on File. New York 1995. 5.06