In September 1963 Britain ended colonial rule in Singapore, Sarawak and Sabah (North Borneo) by integrating these ethnically distinct states with independent Malaya to form an expanded federation known as Malaysia. The making of Malaysia was an important watershed in the post-war history of Southeast Asia. It marked the formal end of the British Empire in Southeast Asia: Singapore and the Borneo territories of Sarawak and North Borneo (later renamed Sabah) achieved their political independence through merger with Malaya, having been independent since 1957, to constitute the new state of Malaysia. Brunei decided, just before the signing of the Malaysia Agreement, to stay out of the Federation and eventually became a sovereign state on its own. The transfer of sovereignty of the erstwhile British dependencies to the new Federation of Malaysia marked the successful attainment of British policy in post-war Southeast Asia. The British had been able to relinquish their formal empire in Southeast Asia without a major political fall-out in the region, and de-colonization had taken the wind out of the sails of their critics, among them international opinion against imperialism, domestic detractors who complained of the cost, burden and immorality of empire, indigenous nationalists advocating self-determination, as well as anti-imperialist communists. The outcome was indeed a happy one for Britain; its former empire in Southeast Asia had been replaced by a centrally positioned Commonwealth bastion, linking an extensive British strategic and military belt stretching from Aden to New Zealand.

The making of Malaysia, although a relatively small state compared to Indonesia, Thailand and the Philippines in Southeast Asia, represented federation-formation on quite an ambitious scale for it entailed the attempted integration of four very different and disconnected territorial entities — in terms of historical development, ethnic make-up and stages of political and economic development — into a single unified state. The parts that came together “lacked an integrating, pre-colonial core” and the only common experience that they shared was that they had all been subjected to “various forms of British rule”. Yet, this was not an attempt at building an expanded nation-state. The Malaysia that came into being in 1963 was a political creation whose only rationale was that it served a convergence of political and economic expediency for the departing colonial power, the Malayan leadership and the ruling party of self-governing Singapore.