"Perhaps I should clarify this. I was not actually advocating a mechanism which breaks Indonesia into many smaller nations. The thinking over the last 40 years or so is that more nations = more possible threats, and more wars with each other (India and Pakistan are perhaps a good example)."
Less nations means less time wrangling trade agreements and quibbles over dumping and so on. There is a definite non military benefit to less nations, or nations which unilaterally have trade policies, that of which is the gains from freer trade.
But, does less enemies mean that the chance of war is lower? The bigger they are, the harder they fall so they don't wish to expose themselves? Why would smaller, economically weaker nations wish to wage war more so than more powerful and populated states?