From a typology of ethno-religious variation in small island spaces, this paper establishes the link between human development level, identity and otherness to assess the risks of fragmentation and balkanization of spaces and insular societies. For multicultural societies, identity and otherness can coexist if social peace is established. Otherwise, multiculturalism presents some limits. For centuries Native societies rooted predominant unit identity is not necessarily a guarantee of harmonious human development and the balkanization becomes possible. These societies are generally among the least well developed in small island states. However, if the unit is established in the founding myth of the nation it can prosper, however, the risk of otherness phagocytosed by the omnipotence of national identity. Lastly, in island societies that combine, in a face to face, two dominant communities, one from an old native, the other from Europe or India, the nation is the missing link, the mixing is absent or hidden, identities mutually exclusive or at least ignore each other. The level of tolerance of others is very fragile, otherness is suffering from tightness and imbalance of political identities, economic and social taking place between the two groups.