<P> During the colonial era , the region was contested among European colonial powers , notably British and Dutch . From the 17th to early 19th century , various states , ports and cities in the region were held as Dutch colonies or British possessions . The current borders between Indonesia and Malaysia were basically inherited from those established by the colonial powers through their treaties . The Anglo - Dutch Treaty of 1814 and 1824 significantly shaped the territories of Indonesia , Malaysia , Singapore , and India . These treaties officially divided the archipelago into two : Malaya , which was ruled by the United Kingdom , and the Dutch East Indies , which was ruled by the Netherlands . The successor states of Malaya and the Dutch East Indies are Malaysia and Indonesia , respectively . The line that separated the spheres of influence between the British and the Dutch ultimately became the border between Indonesia and Malaysia . </P>
what caused the malay world to be divided into two countries now known as malaysia and indonesia
The Anglo - Dutch Treaty of 1814 and 1824