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With 2,, inhabitants at the census, Medan remains the largest settlement outside of Java Island. Bordered by the Strait of Malacca, Medan is a busy trading city as the strait is one of the most important shipping lanes in the world.
Medan is the gateway to the western part of Indonesia, accessible via the Port of Belawan and Kuala Namu International Airport, make the city known as the third largest city in Indonesia by economy after Jakarta and Surabaya, this city economy is linked well with Malaysian cities and Singapore by trade, service and natural resource exchanges. Both the seaport and the airport are connected to the city center via toll road and railway.
Medan also became the first city in Indonesia to have an airport supported with train service. The city was founded by Guru Patimpus, a Karonese man who named a swampy land in confluence of Deli River and Babura river as Kampung Medan as the first settlement. Jacob Nienhuys, a Dutch tobacco merchant, pioneered the opening of tobacco plantations in Deli Land. The areas name changed to Medan-Deli when it was established by Dutch tobacco commerce after the formation of the Deli Company.
With the help from the 9th Sultanate Sultan Mamun Al Rasyid Perkasa Alam, and also the well-known Chinese businessmen Tjong Yong Hian and Tjong A Fie, the rapid development of the economy transformed Medan-Deli into a big trading center with the nickname het land dollar, aka the land of the money. The Deli Railway was established for shipping rubber, tea, timber, palm oil, and sugar industries from the city to Belawan, a port town located north of Medan.
Medan was briefly the capital of the State of East Sumatra, which was established in as a result of the Dutch "police actions" against newly-independent Indonesia and later became part of the United States of Indonesia from to Following the establishment of the Republic of Indonesia, Medan became the capital of North Sumatra in mid Medan was dubbed by the Dutch Parijs van Sumatra due to the citys resemblance to Paris.