Republic of Palau
Area: 458 sq. km. (about 190 sq. mi.) in eight
main islands plus more than 250 islets.
Cities: Capital--Koror (pop. 13,303).
Terrain: Varies from mountainous main island to
smaller, reef-rimmed coral islands.
Nationality: Noun and adjective--Palauan.
Population: 20,891. Age structure--35.4%
under 18, 6.6% over 65.
Growth rate: 2.1%.
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),
Health: Life expectancy--male 68 yrs.;
female 76 yrs. Infant mortality rate--16.7/1,000.
Work force: Government--29%;
tourism--18%; other services--28%;
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.
elected by popular vote. Judicial--Supreme
Court, National Court, Court of Common Pleas,
and the Land Court.
GDP per capita: $5,678.
National income (GDP + foreign assistance): $143
National income per capita: $7,475.
GDP composition by sector: Public administration
27%, trade 20%, construction 8%,
hotels/restaurants 10%, transport and
Industry: Types--Government, tourism.
Trade: Exports ($34.9 million,
2003)--fish, handicrafts. Export markets--U.S.,
Japan, Taiwan. Imports ($97
million)--fuel, food and beverages, manufactured
goods. Import sources--U.S. and Guam
(54%), Japan, Singapore, Taiwan, Korea.
External debt: $32.7 million (2005).
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 constitution calls for a new
capital to be established on the bigger but less
developed island of Babeldaob--the
second-largest island in Micronesia after Guam.
Construction of that capital in the State of
Melekeok began in 2002, with an expected move of
the national government in late 2006 following
the spring/summer 2006 completion of U.S.-funded
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 the districts of Palau and the Marshall
Islands declined to participate. Palau instead
approved a new constitution and became the
Republic of Palau in 1981, 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.
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
The Council of Chiefs is an advisory body to
the president containing the highest traditional
chiefs from each of the 16 states. The Council
is consulted on matters concerning traditional
laws and customs.
The judicial system consists of the Supreme
Court, National Court, the Court of Common
Pleas, and the Land Court. The Supreme Court has
trial and appellate divisions and is presided
over by the Chief Justice.
On November 2, 2004, President Remengesau was
reelected President and Camsek Chin was elected
Vice President. Several newcomers to the
political scene were elected to the Senate and
Principal Government Officials
Head of State and Government--President Tommy E.
Vice President--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
2006 (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).
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
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.
Palau's per capita GDP of $5,678 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 grew by 3.3% and
3.1% in 2000 and 2001 respectively.
Tourism is Palau's main industry. Activity
focuses on scuba diving and snorkeling in the
islands' rich marine environment, including the
Floating Garden Islands to the west of Koror and
the Rock Islands to the south. The number of
visitors--85% of whom come from Taiwan, Japan,
and the U.S.--reached 90,000 in 2004, more than
quadruple the level of a decade earlier. Tourism
earned $67 million in foreign exchange for Palau
in 1996, accounting for roughly half of GDP.
Arrivals from Asian countries dropped in 1998
and 1999 due to the regional economic downturn
but rebounded throughout the first half of the
2000s. CBS’s airing of “Survivor: Palau” in
2004-5 raised the country’s international
profile substantially, and in 2005 a new Japan
Airlines-affiliated luxury hotel opened for
business. Palauan tourism and environmental
authorities would like to transition the
industry to cater to low-volume, high-dollar
The service sector dominates the Palauan
economy, contributing more than 80% of GDP and
employing three-quarters of the work force. The
government alone employs nearly 29% of workers.
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. U.S. grants
in 2003 totaled $11 million.
Construction is the most important industrial
activity, contributing over 8% of GDP. Several
large infrastructure projects, including the
rebuilding of the bridge connecting Koror and
Babeldaob Islands after its collapse in 1996 and
the construction of a highway around the rim of
Babeldaob, has boosted activity.
Agriculture is mainly on a subsistence level,
the principal crops being coconuts, root crops,
and bananas. Fishing is a potential source of
revenue, but the islands' tuna output dropped by
over one-third during the 1990s.
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.
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. Palau was admitted to the United
Nations on December 15, 1994, and has since
joined several other international
Principal U.S. Officials
Charge d'Affaires--Deborah L. Kingsland
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.