That's an oversimplified way of putting it. To slightly flesh out the argument:
- People tend to believe that democracy is both necessary and sufficient for democracy.
- Clearly democracy is not inherently just and legitimate: actual democracies contain and indeed rely upon many anti-democratic elements (e.g. independent, unelected judiciaries)
- However, the combination of democracy and a belief in democracy's legitimacy allows us to achieve certain benefits, in particular relating to the stability of political institutions and the peacefulness of political transitions.
Although Raz did not draw out the political implications explicitly, he hinted at some and there are others which I think one can reasonably read into the argument:
- Monarchy is not necessarily contrary to the values of democracy. (One might even argue that constitutional monarchies tend to be more stable than presidential democracies, although you might have trouble establishing the direction of causation there).
- What I believe he was getting at: it doesn't really matter if supra-national institutions such as the EU and the UN aren't really very democratic. Most of the benefits of democracy are to be achieved at the national level, and in any case what we fundamentally want out of political institutions is not that they are democratic (though this may well be desirable) but that they work.