However porous national borders may have become, the prediction that globalisation will dissolve the concept of nation-states is proving false.

Parallel to the decolonisation process that is all but exhausted in Africa and the Asia Pacific, and the dismantlement of European communist states since 1989, support for the principle of peoplehood has also grown stronger. The idea that all peoples, including minority peoples who do not have their own states, have a right to self-determination is an irrepressible imperative in world affairs. The relationship between nation-states and peoples is the source of many of the world's abrasions and conflicts.

Cultural diversity and the right to cultural continuity have become recognised by global opinion as important principles for a just world order. One expression of this movement is the UN Declaration on the Rights of Indigenous Peoples, which will be put to a final vote in the UN's General Assembly before the end of the year.

Most of the world's governments are expected to support the declaration. There is also considerable public support for the right to self-determination. For example, 77 per cent of Australians support independence or autonomy for West Papua (see The Australian, April19, 2006).

International opinion judges regimes of sovereign states according to how well they respect the collective rights of ethnic groups. However, it is usually difficult for foreigners to judge what is the correct understanding of the cultural and ethno-political situation in another country.

Many factors have contributed to shaping the world's ethnic geography: common descent, language, culture or religion, shared political history and acts of voluntary association have all influenced people's sense of identity. It is difficult for outsiders to judge which of these factors are most important in particular cases.

French writer Ernest Renan (1823-92) famously rejected the notion that more or less objective criteria such as language define a nation.

His definition of a nation was based on shared history and willingness to share the future, rather than ethnographic criteria.

Renan's caution towards the end of the 19th century -- the century of nationalism -- was a sensible moderation of the ethnographic notion of peoplehood. Taken to its extreme, the romantic, ethnic notion of peoplehood would lead to destructive fragmentation and irredentism. However, it must also be acknowledged that there is considerable tension between our current system of sovereign states and the legitimate aspirations of minority peoples. How does the world reconcile peoples and nations?

There are three possibilities for dealing with the ongoing difficulties inthe tensions between nation-states and peoples:

* To allow further fragmentation through independence.

* To ignore the status of peoples and insist on the unitary nation-state.

* To recognise the status of peoples and to secure reconciliation within the nation-state on the foundations of freedom, democracy and development.

Activist movements in favour of the independence of territories such as Tibet have considerable international support. However, I do not think that we will see the creation of more independent states. The dangers to international stability are too great. Separatism and further fragmentation is not a solution.

Internal divisions within a sovereign state are almost invariably exploited by other states to further their interests. Sovereign states resist the formation of new states because in the present era such precedents would be highly destabilising. It is in Australia's interests that all states are confident that other powers respect their territorial integrity.

On the other hand, ignoring the legitimate aspirations of non-sovereign peoples and insisting on the unitary nation-state is not sustainable. Suppression of justified demands for recognition is the source of unabating strife within nation-states that have not worked out their relationship with and between distinct peoples who live within their borders. Moreover, oppression of populations such as the indigenous peoples of West Papua is real and cannot be ignored.

The answer lies in coexistence and the reconciliation of the rights of peoples with the preservation of the existing sovereign states.

Nobel prize-winning economist Amartya Sen has made a valuable contribution to the development of a theory for the peaceful resolution of so-called ethnic conflicts. Sen notes that one of the worst tendencies in contemporary thinking is our impoverished conception of identity. We labour under the reductionist idea that each individual has one all-important identity. Sen calls this fallacy "the illusion of singular identity".

Following Sen, I have argued that the problem with the concept of multiculturalism is that it does not dispel the notion that each individual has one absolutely dominant identity. Multiculturalism is in constant danger of developing into plural monoculturalism, and arguably this is evident in some Western countries today.

I have suggested that a better term for coexistence within nation states than multiculturalism is layered identities. The advantage with layered identities is that it makes clear that there need not be any conflict between citizenship of a nation-state and the cultural and religious convictions and affiliations of minority groups in that state.

Australia is facing two issues that have their origins in questions about identity and peoplehood: domestic reconciliation and Australia's relationship with countries that are sensitive about external interference.

There is too little recognition that Australian reconciliation is an issue about the rights of national minorities.

The Australian debate has changed from recognising the right of Australia's indigenous peoples to recognition of their distinct identity (as well as the identities they share with other Australians), to viewing reconciliation as exclusively an issue of overcoming socio-economic disadvantage.

It would be in Australia's interests to reach national settlements with its indigenous minorities so that the relationship between the nation and its indigenous peoples is reconciled.

Australia's best contribution to places such as West Papua and throughout the Indonesian archipelago is leadership by example in the policy area of constructive resolution of peoplehood issues within the existing sovereign states.

Noel Pearson is director of the Cape York Institute for Policy and Leadership.