Sandakan is the second-largest town in the state of Sabah, eastern Malaysia, on the island of Borneo. It is located on the east coast of the island and had a population of 347,334 as of the 2000 census. It is the administrative centre of Sandakan Division and was the former capital of British North Borneo. Sandakan is known as the gateway for ecotourism destinations in Sabah, such as the Sepilok Orang Utan Sanctuary, Turtle Islands Park, Kinabatangan River and Gomantong Caves. It is also infamous for being the site from where the Sandakan Death Marches commenced in 1945.
During the early 1870s, the east coast of Sabah was under control of the Sultan of Sulu, who also ruled what is now the southern Philippines. The first European settlement in the area was founded by William Clarke Cowie, a Scottish gun smuggler from Glasgow, who received permission from the Sultan to establish a small trading base. Cowie called his settlement Sandakan, which in Tausug (Sulu) means "the place that was pawned", but it soon came to be known as "Kampung German" after the large number of Germans who also set up posts there. The settlement was part of the lease Austro-Hungarian consul Baron von Overbeck acquired from the Sultan of Sulu in 1878. After the lease was purchased by von Overbeck's British partner Alfred Dent, Kampong German was accidentally razed to the ground on 15th June 1879. The new British Resident, William B. Pryer, decided not to rebuild the village but to move to Buli Sim Sim on 21st June 1879. He named his new settlement Elopura, which means Beautiful City. A few years later, the name was changed back to Sandakan. The name Elopura still refers to a region of Sandakan.
In 1883, the capital of the British North Borneo Company was moved from Kudat to Sandakan. In the mid-1930s, Sandakan's timber export reached the record figure of 180,000 cubic meters, making it the largest timber-exporting port of tropical wood in the world. At the height of the timber boom, Sandakan boasted that it had the highest concentration of millionaires anywhere on Earth.
The Japanese occupation of Sandakan during World War II began on 19th January 1942 and lasted until a brigade of the Australian 9th Division liberated it on 19th October 1945. The Japanese administration restored the name Elopura for the town. One of the many atrocities of World War II was the Sandakan Death Marches, when Japanese soldiers decided to move about 6,000 prisoners of war in Sandakan 260 km (160 miles) inland to the town of Ranau. The prisoners who did not die en route to Ranau were crammed into unsanitary huts; most of those survivors either died from dysentery or were killed by prison guards. When the war ended, Sandakan was totally destroyed, partly from the Allied bombings and partly by the Japanese. As a result, when North Borneo became a British Crown Colony in 1946, the capital was shifted to Jesselton, now known as Kota Kinabalu.
Sandakan remains Sabah's second most important port, after Kota Kinabalu. The port is important for tobacco, cocoa, coffee, manila hemp and sago exports.
In recent years, more businesses have shifted their operations away from the town centre to the suburbs due to the presence of illegal immigrants in the town centre. In January 2003, the Sandakan Harbour Square, an urban renewal project, was launched in an attempt to revive the town centre as the commercial hub in Sandakan. It will feature a new central market and fish market, a 4-storey shopping mall, and a 800-room, 5-star hotel. It is to be built in three separate phases and is due for completion in 2008.
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