Labuha is not merely an administrative centre but a city with deep historical roots reaching back to the era of the flourishing spice trade in Indonesia. Its history is inextricably linked to the powerful Sultanate of Bacan, whose influence extended across the entire region. While the exact date of the city's founding is lost to the centuries, its emergence as a vital hub began with the rise of the Sultanate—one of the four legendary kingdoms of the Moluccas (Moloku Kie Raha). Labuha historically served as the residence of the Sultans, making it the political heart of the island long before the arrival of Europeans.
The transformation of a small settlement into a significant city was driven by several key factors:
- Geographical Location: The city is situated in a convenient, sheltered bay on Bacan Island, creating ideal conditions for the anchoring of merchant and naval vessels.
- Political Status: As the capital of the Sultanate, Labuha was a centre for decision-making and diplomacy, attracting ambassadors and merchants from neighbouring regions.
- Colonial Presence: The interest of the Portuguese, and later the Dutch, in controlling trade led to the construction of fortifications. The famous Fort Barneveld, erected by the Dutch in the early 17th century near the Sultan's residence, cemented the city's status as a strategic stronghold.
The economy of early Labuha relied not only on the trade of spices (cloves and nutmeg) but also on the export of valuable damar resin and forest resources. This ensured the city's relative prosperity and stability.
The cultural landscape was shaped under the strong influence of Islam, embraced by the ruling dynasty, as well as through constant contact with foreign traders. The city became a meeting place of diverse cultures, where the traditions of the locals intertwined with the customs of Malay seafarers and European colonists.