Palau
Bureau of East Asian and Pacific
Affairs
June
2007
Background Note:
Palau
Palau flag is light blue with a large yellow disk - representing the
moon - shifted slightly to the hoist
side.
PROFILE
OFFICIAL
NAME:
Republic of
Palau
Geography
Area: 458 sq. km. (about 190 sq. mi.) in eight main islands plus more
than 250
islets.
Cities: Capital--Melekeok (pop.
391).
Terrain: Varies from mountainous main island to smaller, reef-rimmed
coral
islands.
Climate:
Tropical.
People
Nationality: Noun and
adjective--Palauan.
Population: 19,907 (non-Palauan population, 5,469). Age structure:
less than 15 years old, 5,152; 16-64 years old, 13,619; more than 65
years old, 1,136. Population growth rate:
1.3%.
Ethnic groups: Palauans are Micronesian with Malayan and Melanesian
elements. Religion: Roman Catholic, Protestant, Modekngei (an
indigenous Palauan
religion).
Languages: English (official in all 16 states),
Palauan.
Education:
Literacy--92%.
Health: Life expectancy--male 68 yrs.; female 76 yrs. Infant
mortality
rate--16.2/1,000.
Work force: Public sector--56%; private
sector--44%.
Government
Type: Constitutional republic in free association with United
States. Independence (from
U.S.-administered UN trusteeship): October 1,
1994. Constitution: January 1,
1981.
Branches: Executive--president (head of state and government),
vice president,
cabinet. Legislative--bicameral parliament elected by
popular vote. Judicial--Supreme Court,
National Court, Court of Common Pleas, and the Land
Court.
Economy
GDP (2006, provisional figure): $157.7
million.
GDP per capita:
$7,921.
National income (GDP + foreign assistance): $195.4
million.
National income per capita:
$9,817.
GDP composition by sector: Public administration 23%, trade 20%,
construction 15%, hotels and restaurants 11%, transportation and
communications 9%, fisheries 2%,
agriculture 1%, manufacturing and mining
1%.
Industry: Types--government, trade, construction,
tourism.
Trade: Exports ($5.9 million, 2004)--fish, handicrafts. Export
markets--U.S., Japan and Taiwan. Imports ($107.3 million)--fuel, food
and beverages, manufactured
goods. Import sources--U.S. (Guam), Japan, Singapore, Taiwan,
and
Korea.
External debt (2006): $38
million.
Currency: U.S.
dollar.
GEOGRAPHY AND
PEOPLE
The Republic of Palau consists of eight principal islands and more
than 250 smaller ones lying roughly 500 miles southeast of the
Philippines. The islands of Palau
constitute part of the Caroline Islands chain. About 70% of Palauans
live in the capital city of Koror on Koror Island. The
capital, however, relocated in 2006 from
Koror to a newly constructed complex in
Melekeok State on the larger but less developed island of
Babeldaob--the second largest island in all
of Micronesia after
Guam.
HISTORY
Palau was initially settled more than 4,000 years ago, probably by
migrants from what today is Indonesia. British traders became
prominent visitors in the 18th century, followed by
expanding Spanish influence in the
19th century. Following its
defeat in the Spanish-American War, Spain sold Palau and most
of the rest of the Caroline Islands to Germany in 1899.
Control passed to Japan in 1914 and then to
the United States under UN auspices in 1947 as part of
the Trust Territory of the Pacific
Islands.
Four of the Trust Territory districts formed a single federated
Micronesian state in 1979, but this eventually dissolved as the
individual
districts--long culturally distinct--opted for more locally popular
status. Palau approved a new constitution in 1981, subsequently
signing a Compact of Free Association with the United States in 1982.
After eight referenda and an amendment to the Palauan constitution,
the Compact went into effect on
October 1, 1994, marking Palau's emergence from trusteeship to independence.
GOVERNMENT
Palau is a democratic republic with directly elected executive
and
legislative branches. Presidential elections take place every 4 years, at
the same time as the United States' presidential election, to select
the president and the
vice president, who run on separate tickets. The Palau
National Congress (Olbiil era Kelulau) has two houses. The Senate has
nine members elected nationwide. The House of Delegates
has 16 members, one each from Palau's 16 states. All of the
legislators serve 4-year terms. Each state also elects its own
governor and
legislature.
The Council of Chiefs, comprising the highest traditional chiefs from
each of the 16 states, is an advisory body to the president. The
Council is consulted on matters concerning traditional laws and
customs.
The judicial system consists of the Supreme Court--with trial and
appellate divisions--the Court of Common Pleas, and the Land
Court. (Palau's
constitution has a provision for an additional National Court, but
this is not currently
active.)
The current president, Tommy Remengesau, was re-elected for a second
term on November 2, 2004, an election that also brought into office
Vice President Elias Camsek Chin and several political
newcomers to the Senate and the
House.
Principal Government
Officials
Head of State and Government--President Tommy E. Remengesau,
Jr.
Vice President--Elias Camsek
Chin
Ambassador to the U.S.--Hersey
Kyota
Ambassador to the UN--Stuart
Beck
Palau maintains an embassy at 1700 Pennsylvania Avenue, Suite
400,
Washington, DC 20006 (tel: 202-452-6814, fax: 202-452-6281). The Republic of
Palau's Mission to the United Nations is located at 866 United
Nations Plaza, Suite 575, New York, New York 10017 (tel: 212-813-0310,
fax: 212-813-0317).
POLITICAL
CONDITIONS
While calm in recent years, Palau witnessed several instances of
political violence in the 1980s. The republic's first
president, Haruo I. Remeliik, was assassinated in 1985, with the
Minister of State eventually found to be
complicit in the crime. Palau's third president, Lazurus Salii,
committed suicide in September 1988 amidst bribery
allegations. Salii's personal
assistant had been imprisoned several months earlier after being convicted
of firing shots into the home of the Speaker of the House of
Delegates.
Legislation making Palau an "offshore" financial center was passed by
the Senate in 1998. In 2001 Palau passed its first
bank regulation and anti-money laundering
laws.
ECONOMY
Palau's per capita GDP of $7,921 makes it one of the wealthier
Pacific Island states. Nominal GDP increased by an annual average of
nearly 14% from 1983 to 1990, and by an annual rate of over 10% from
1991 to 1997. Growth turned sharply negative
in 1998 and 1999 as a result of the Asian financial crisis, but there
has been a gradual rebound in recent years and the economy grew by
5.4% in
2005.
Tourism (and its attendant infrastructure changes) is Palau's main
industry. Its major draws are its diverse and pristine marine
environment, and its above-water tropical
island beauty. The number of visitors--75% of whom come from Taiwan,
Japan, and the U.S.--exceeded 100,000 in 2006, a 15% increase
from 2005. Continental Airlines, Far Eastern Transport (FAT), and
Asian Spirit have direct flights to
Palau from Guam, Taiwan, and the Philippines.
Japan Airlines runs chartered flights from Tokyo. In 2002--the last
year for which figures are available--tourist spending in Palau was
$66 million. Palauan tourism and
environmental authorities would like to adjust
the industry, simultaneously
decreasing tourist volume and increasing income
while by attracting more high-dollar
tourists.
The service sector dominates the Palauan economy, contributing more
than 50% of GDP and employing more than half of the work force. The
government alone employs nearly 25% of workers and accounts for
23% of the GDP. One of the government's main
responsibilities is administering external assistance.
Under the terms of the Compact of Free Association with the United
States, Palau will receive more than $450 million in
assistance over 15 years and is eligible to participate in more than
40 federal programs. The first grant of $142 million was made in
1994. Further annual payments in lesser amounts will be made through
2009. Total U.S. grant income in 2006 was $23.7 million.
Construction is an important industrial activity, contributing over
15% of GDP. Several large infrastructure projects,
including the Compact Road, relocation
of the new capital, and new hotels, have boosted this sector's
recent contribution to
GDP.
Agriculture is mainly on a subsistence level, the principal crops
being coconuts, taro, and bananas.
Fishing is a potential source of revenue, but the
islands' tuna output dropped by over one-third during the 1990s. Fishing
industry revenues are mostly from license fees from fishing
vessels.
The main economic challenge confronting Palau is to ensure the
long-term viability of its economy by
reducing its reliance on foreign assistance. The Compact of Free
Association created a trust fund to provide perennial budget support
when U.S. direct assistance ends in 2009. The value of the trust fund
in 2005 was approximately $150
million.
FOREIGN
RELATIONS
Palau gained its independence October 1, 1994 with the entry into
force of the Compact of Free Association with the United
States. Palau was the last Trust Territory of the Pacific
Islands territories to gain its independence. Under the Compact, the
U.S. remains responsible for Palau's defense for 50
years.
Palau is a sovereign nation and conducts its own foreign relations.
Since independence, Palau has established
diplomatic relations with a number of nations,
including many of its Pacific neighbors, and is one of two
dozen nations that have diplomatic relations with
Taiwan. Palau was admitted to the United Nations on December 15, 1994,
and has since joined a number of other international
organizations.
The mailing address for the U.S. Embassy is P.O. Box 6028, Republic
of Palau 96940. Telephone: 680-488-2920/2990. Fax: 680-488-2911.
Email:
USembassyKoror@palaunet.com.
TRAVEL AND BUSINESS
INFORMATION
The U.S. Department of State's Consular Information Program advises
Americans traveling and residing abroad through Consular Information
Sheets, Public Announcements, and Travel Warnings.
Consular Information Sheets exist for all countries and include
information on entry and exit requirements, currency
regulations, health conditions, safety and security, crime,
political disturbances, and
the addresses of the U.S. embassies and consulates abroad. Public
Announcements are issued to disseminate information quickly
about terrorist threats and other relatively
short-term conditions overseas that pose significant
risks to the security of American travelers. Travel Warnings are
issued when the State Department recommends that Americans avoid travel
to a certain country because the situation is dangerous or
unstable.
For the latest security information, Americans living and traveling
abroad should regularly monitor the Department's Bureau
of Consular Affairs Internet web site at http://www.travel.state.gov, where the
current Worldwide Caution, Public Announcements, and Travel Warnings
can be found. Consular Affairs Publications,
which contain information on obtaining passports and planning a safe
trip abroad, are also available at http://www.travel.state.gov.
For additional information on international
travel, see http://www.usa.gov/
Citizen/Topics/Travel/International.shtml.
The Department of State encourages all U.S citizens who traveling or
residing abroad to register via the State Department's travel
registration website or at the nearest U.S. embassy or consulate
abroad. Registration will make your presence and whereabouts known in
case it is necessary to contact you in an emergency and will
enable you to receive up-to-date information on security
conditions.
Emergency information concerning Americans traveling abroad may be
obtained by calling 1-888-407-4747 toll free in the U.S. and
Canada or the regular toll line 1-202-501-4444 for
callers outside the U.S. and
Canada.
The National Passport Information Center (NPIC) is the U.S.
Department of State's single, centralized public
contact center for U.S.
passport
information. Telephone: 1-877-4USA-PPT (1-877-487-2778). Customer
service representatives and operators for TDD/TTY
are available Monday-Friday, 7:00 a.m. to 12:00 midnight,
Eastern Time, excluding federal
holidays.
Travelers can check the latest health information with the U.S.
Centers for Disease Control and Prevention in Atlanta, Georgia.
A hotline at 877-FYI-TRIP (877-394-8747) and a web site at http://www.cdc.gov/travel/index.htm
give the most recent health advisories, immunization recommendations
or requirements, and advice on food and drinking water safety for
regions and countries. A booklet entitled "Health
Information for International Travel"
(HHS
publication number CDC-95-8280) is available from the U.S.
Government Printing Office,
Washington, DC 20402, tel. (202)
512-1800.
Further Electronic
Information
Department of State Web Site. Available on the Internet at
http:// www.state.gov, the Department of State web
site provides timely, global access to
official U.S. foreign policy information, including
Background Notes and daily press briefings
along with the directory of key officers of Foreign Service
posts and more. The Overseas Security Advisory Council (OSAC) provides
security information and regional news that impact U.S. companies
working abroad through its website http://www.osac.gov
Export.gov provides a portal to all export-related assistance and
market information offered by the federal
government and provides trade leads, free export counseling, help
with the export process, and
more.
STAT-USA/Internet, a service of the U.S. Department of Commerce,
provides authoritative economic, business, and
international trade information from the Federal
government. The site includes current and
historical
trade-related releases, international market research, trade
opportunities, and country analysis and provides access to the
National Trade Data Bank.
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Palau
