Penang (pop. 1,561,383), also called Pulau Pinang, is a small state on the west coast of Peninsular Malaysia. It consists of the island of Penang and a strip of land on the mainland known as Province Wellesley or Seberang Perai. The strait between the island and the mainland part of the state varies in width from 2 to 7 1/2 miles (3 to 12 kilometers). The state capital is George Town. The state of Penang covers a total area of 405 square miles (1,048 square kilometers). 
About 45 percent of the population of Penang are Chinese, 45 percent are Malay, and about 10 percent are Indian. The high proportion of Chinese is due to immigration from the middle of the 1800’s. Many Chinese immigrants were heading for the tin-mining states of Perak and Selangor, but a large number stayed in, or returned to, Penang to work on the docks and wharves. There was also an important and wealthy Chinese merchant community. The principal Chinese dialect in Penang is Hokkien. There are also large Cantonese, Teochieu, and Hainanese groups.
Penang has more different ethnic groups of people than any other state in Malaysia. Each group has its own customs, traditions, festivals, and religions. There are a large number and variety of places of worship, including mosques, temples, and churches. The ethnic differences can also be seen in food and in styles of traditional dress, as well as in language.
Economy.
In the rural areas of Province Wellesley, agriculture is an important source of employment. The main crop, rubber, is grown on smallholdings and plantations. Other crops include coconuts, palm oil, and rice.
The state has factories on both the island and the mainland. Among the major industrial plants are canning and packaging factories, food processing plants, and metal works. High technology factories in the state produce such goods as electronic components, electrical appliances, and textiles and clothing.
Tourism is an important industry in Penang, and has created a great deal of employment. Penang Island is a major destination for both local vacationers and international travelers. A rapid growth in the number of luxury hotels on the island, and the expansion of recreation and sports facilities, have created many jobs.
Land.
Penang Island is shaped like a rectangle. It is about 15 miles (24 kilometers) from north to south, and 9 miles (14 kilometers) from east to west. Toward the northeast corner of the island is a wedge-shaped cape that projects into the strait between the island and the mainland. The state capital, George Town, is located there. Most of the island’s landscape is hilly. Tropical forests cover large parts of Penang Island.
Province Wellesley forms a small part of the western coastal plain that extends the full length of Peninsular Malaysia. Only Bukit Mertajam, rising steeply about 1,772 feet (540 meters), breaks the expanse of the lowland plain.
History.
Originally, the island of Penang was part of the Malay sultanate of Kedah. In 1786, the sultan of Kedah gave up Penang to the British East India Company. In return, he was to receive yearly payments from the British. He also hoped to gain British protection against possible attacks from Siam (now Thailand) or Burma (now Myanmar) to the north. The East India Company therefore gained an important trading post in Southeast Asia with which to challenge Dutch commercial power. The base commanded the northern entrance to the Strait of Malacca. Francis Light, a British trader entrusted with the negotiations with the sultan, took possession of Penang in the name of King George III in August 1786. In 1800, the sultan of Kedah also leased the district of Province Wellesley to the East India Company.
Penang was the first British possession in Malaya. In 1826, the British combined Penang (together with Province Wellesley) with Melaka and Singapore to form a single administrative unit, the Straits Settlements. The administrative capital was originally at Penang, but moved in 1832 to Singapore.
Trade was the foundation of Penang’s prosperity under British rule. Its geographical position gave it command of the trade of the northwest part of the Malay Peninsula, the western seaboard of southern Thailand, and the east coast of Sumatra. Its sheltered harbor, in the passage between the island and the Malay mainland, attracted many vessels, from European clippers and steamships to small native craft.
During the 1800’s, Penang developed into a major international port and commercial center with a multinational population. In the 1860’s, disorder in the Malay states threatened the prosperity of Penang and severely reduced the flow of tin through the port. The British restored order on the mainland in the early 1870’s.
By the close of the 1800’s, Penang had become a largely Malayan port, serving the Malayan interior. The Japanese occupied Penang from 1942 to 1945. It returned to British rule after the Japanese defeat. The Federation of Malaya emerged in 1948, comprising all the states of the peninsula together with Melaka and Penang. On Aug. 31, 1957, the Federation of Malaya became politically independent.
