Kuala Lampur, Dec. 4 -- The decision by Singapore to establish consulates in Sabah and Sarawak is far more consequential than it appears. It represents a deeper shift in Malaysia's evolving federal compact and Asean's changing economic geography.

For decades, sensitivities stemming from the Malaysia-Singapore split in 1965 shaped public expectations. Any increased engagement by Singapore in Malaysia's territories would once have been viewed with suspicion.

But Malaysia today is more confident in its federal institutions and its strategic footing. Under Prime Minister Anwar Ibrahim, the country no longer defines itself through defensiveness. It defines itself through capacity.

Allowing deeper diplomatic engagement in Sabah and Sarawak r...