Joe Cochrane – The scenes from Borneo last week were both horrific and horrifyingly familiar. Gangs of local Dayaks in the Indonesian province of Central Kalimantan hunted down ethnic Madurese with spears and machetes.

Hearts were ripped out of corpses; bodies, even those of children, were decapitated. As many as 500 people, almost all Madurese, may have died.

The true number of victims may ultimately be much higher. Already 21,000 Madurese have been evacuated to East Java, for temporary resettlement on Madura itself, a desiccated, barren island just off the coast. An additional 30,000 sit in fetid refugee camps in Central Kalimantan, waiting to be relocated. Together they account for most of the province's Madurese community-and add to Indonesia 's growing population of internally displaced people, which now stands at more than 1 million, roughly 10 percent of the world's total.

Those floating communities – expelled from their homes in the brush-fire wars that have racked Indonesia since former strongman Suharto stepped down in 1998, trapped in disheveled camps or unfamiliar provinces or even long-forgotten hometowns – may be the country's next time bomb. They contradict the hope that Indonesia can cohere as a pluralist state, with more than 300 ethnic groups spread across 13,000 islands and speaking some 450 languages. And they only confirm the fears of those who think the nation might shatter into dozens of fragile, "independent" states.

The killings in Borneo present perhaps the starkest example of this cycle of violence. In late 1997 mobs of indigenous Dayaks also attacked Madurese settlers, many of whom had lived in Kalimantan for more than 20 years. A thousand were killed and 40,000 evacuated. Resentment between the communities has simmered ever since. Violence has tended to flare at the least excuse: in 1997 riots erupted after a dispute over a bus fare. Police say the latest outburst began on February 18 after two Dayaks, angry at losing their jobs at a local forestry office, paid a mob to attack a Madurese family's house. Madurese retaliated, killing 15 Dayaks, and the town erupted. On February 25, 118 Madurese were slaughtered as they were being evacuated by police. The violence spread 200 kilometers east to the provincial capital, Palangkaraya, where Dayaks looted and torched Madurese homes.

At the same time, the savagery reflects deeper resentments. The Madurese in Kalimantan largely arrived as part of the Suharto-era transmigration program, in which millions of Indonesians were relocated from the crowded central islands to more remote, less populated provinces. The idea was to reduce pressure on the resources of Java, Bali and other islands and develop isolated areas. Suharto didn't worry about the ethnic and religious combinations he was creating; in fact, his officials argued that blending communities would help foster an overarching national identity. And besides, the armed forces and police could quell any unrest by brute force. "In the beginning it all seemed like a wise plan," says one Westerner who was a development officer in Indonesia during the 1980s, when the World Bank put up $5 billion to support Jakarta's transmigration schemes. "But the Suharto government was very highhanded. They just went in and took land and didn't give any compensation to the local people, and then they gave the migrants all the economic deals. It's like what happened to the American Indian."

In Borneo, the program brought in thousands of settlers from Madura, an inhospitable island whose residents have traditionally made their living elsewhere. Their new neighbors were the indigenous Dayaks, already angry at being pushed off their tribal forest lands by big logging companies. "The Dayaks remain the most marginalized of Indonesian ethnic groups," says Dewi Fortuna Anwar, an adviser to former president B. J. Habibie. "They rely on the forest and a traditional way of life. Then you have the Madurese, who are hot-tempered and resort to violence to resolve disputes." The prosperous newcomers tend to think of the Dayaks as stupid and lazy. The powerless Dayaks see the Madurese as greedy and arrogant.

Similarly irrational hatreds have fueled the conflicts that have spawned swarms of refugees across the country. Separatist insurgencies in Aceh and Irian Jaya have displaced more than 70,000 people. A festering religious war between Christians and Muslims in the Moluccas has killed up to 5,000 and driven whole communities from island to island. In West Timor an estimated 120,000 East Timorese still fill camps abandoned by the United Nations after militiamen killed three UN workers last September.

Jakarta does little for most refugees beyond evacuating them when violence erupts. The problem of resettling and reintegrating them is left to the provinces. North and South Sulawesi provinces are taking care of almost half a million refugees from the Moluccas.

In West Kalimantan, an estimated 40,000 Madurese still populate camps in the capital, Pontianak, where diseases like typhus and dysentery are rampant.

In many areas, cast adrift by the government, refugees have returned to their families and original villages. In places like Madura, that puts a dramatic strain on an already overburdened local economy. In other places, like Sulawesi, officials worry that refugees traumatized and angered by ethnic violence will bring their new resentments with them. (Last year Irian Jaya refused to let a shipload of refugees from the Moluccas unload, afraid the holy war might spread.) Those driven out by separatists from Aceh and Irian Jaya are even more determined that the Army should keep those provinces within the Indonesian fold.

Of course, the military is also part of the problem. In the Moluccas, troops have joined the warring sides in their battles; in West Timor, they tolerate the pro-Jakarta militias that destroyed East Timor. Last week at least five battalions of soldiers and police were rushed to Central Kalimantan. They mostly kept out of the mobs' way. One member of the Mobile Brigade, an elite police unit, was asked why he didn't try to stop rioters from burning a nearby house. He replied: "It's not my duty." On February 27 a fire fight broke out between troops and policemen evacuating Madurese from the port at Sampit, allegedly over dividing up the bribes both were charging refugees to get on the boat.

Still, officials insist the cycle of violence can stop. "Don't set too complicated a scenario," Resettlement Minister Erna Witoelar warns. "The refugee situation is different, and the reasons for conflict are different in each and every part of Indonesia." Some outsiders agree. "This has been a very tolerant country and a very tolerant people," says G. Ravi Rajan, resident representative of the UN Development Program. "It would be a stretch to say [the vision] has failed." To judge by the 1 million refugees scattered across the archipelago, though, the word success can hardly apply.