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Penang gets its name from the Malay word pinang, the areca plant, which grew on the island in abundance. The nut of the tree, commonly called betel, was chewed habitually throughout the East (and in some parts still is). In the 15th century, it was a quiet place populated by small Malay communities, attracting the interest of some southern Indian betel merchants. By the time Francis Light, an agent for the British East India Company, arrived in 1786, the island was already on the maps of European, Indian, and Chinese traders. Light landed on the northeast part of the island, where he began a settlement after an agreement with the sultan of Kedah, on the mainland. He called the town Georgetown, after George III. One story claims that to gain the help of the locals for clearing the site, he shot a cannonload of coins into the jungle.

Georgetown became Britain's principal post in Malaya, attracting Europeans, Arabs, northern and southern Indians, southern Chinese, and Malays from the mainland and Sumatra to trade and settle. But it was never extremely profitable for England, especially when, in 1819, Sir Stamford Raffles founded a new trading post in Singapore. Penang couldn't keep up with the new port's success.

In 1826, Penang, along with Melaka and Singapore, formed a unit called the Straits Settlements, over which Penang was voted the seat of government by a narrow margin. Finally, in 1832, Singapore stole its thunder when authority shifted there. In the late 1800s, Penang got a break. Tin mines and rubber plantations on mainland Malaya were booming, and with the opening of the railway between KL and Butterworth (the town on the mainland just opposite the island), Penang once again thrived. Singapore firms scrambled to open offices in Butterworth.

The Great Depression hit Penang hard. So did the Japanese Occupation from 1941 to 1945, when the island was badly bombed. But since Malaysia's independence in 1957, Penang has had relatively good financial success.

Today the state of Penang is made up of the island and a small strip of land on the Malaysian mainland. Georgetown is the seat of government for the state. Penang Island is 285 sq. km (111 sq. miles) and has a population of a little more than one million. The population is mostly Chinese (59%), followed by Malays (32%) and Indians (7%).

Georgetown reminds me of the way Singapore looked before massive government redevelopment and restoration projects "sanitized" the old neighborhoods. Georgetown's narrow streets are still lined with shophouses that bustle with activity. Historic churches, temples, and mosques mingle with the city's newer architecture. The town's preserved buildings and its broad and harmonious mix of cultures earned it UNESCO World Heritage Site status in 2007, a title it shares with Melaka.

West of Georgetown, along Penang's northern shore, you'll find a number of popular resorts, sprawling complexes along strips of sandy beaches. Unfortunately, because Penang is located in the Straits of Malacca, the waters are not the idyllic crystal-clear azure you hope for in a tropical vacation. Yes, you've got sun, sand, and seasports, but no snorkeling or scuba. In my opinion, if you really want it all, enjoy the waters and sea life while you stay at one of the luxury resorts on Langkawi to the north (covered later in this chapter), and hop on a ferry to Georgetown for a day trip of sightseeing. There are short flights between the two islands as well.