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Democracy creates a sense of freedom and power for every citizen, and there will be ethnic divisions and disunity not matter what if the government and education system is not solid. It takes education and leadership to create unity and a functioning multi-cultural society. The type of government really has no cause for people to divide themselves and create conflict. People can come together in a democracy as citizens of their nation and vote for the leader they think will be the best to support them, that in my opinion can definitley create a sense of unity if done right. Democracy is not just adopted, it has to be adapted and carefully organized or it can be a complete disaster.
I cannot say for sure in the case of Indonesia, but this is certainly possible.
When you have a democracy, political parties can form on ethnic lines. Then the different ethnic groups will compete with each other for power and may come to hate each other more. You can argue that this is happening in Iraq right now.
If you have a dictatorship, for example, the ethnic groups will not be as likely to compete for power because the dictator has all the power and there is not any formal way for the ethnic groups to compete.
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