In an world where there were no benefits from co-operation, I doubt we would have ever progressed beyond tribal units.
But the reality is that these days, economic benefits come from scale. Dividing a single country into multiple ethnic components merely all but guarantees global irrelevancy. An interesting read on the experience of the unification of Germany:
Prior to the Industrial Revolution, political fragmentation was only modestly restrictive; most of the Continent relied on agriculture, not industry. But the development of high-productivity manufacturing required large amounts of unevenly distributed mineral resources and free access to large amounts of consumers, conditions that put the various fragmented German mini-states at a serious disadvantage.
My observation is that national ethnic isolation is the end point of a destructive feedback loop where inequality, poverty, and power imbalances lead to increased hatred, racism, and demonization of the ‘other’.
Conversely, establishing an environment of trust and mutual benefit can foster further mutual reliance and trust. It’s definitely not impossible to imagine, given that we went from WWII to the EU in less than 50 years.