Republic of Palau

Key facts

Geography/Demographics

Official Name - Republic of Palau
Land Area - More than 300 islands - 487 sq kms
Population - 22,000 (2007 Asian Development Bank estimate)
Capital City - Melekeok
Religion - Christian (Catholics, Seventh-Day Adventists, Jehovah's Witnesses, the Assembly of God, the Liebenzell Mission, and Latter-Day Saints), Modekngei religion (one-third of the population observes this religion which is indigenous to Palau).
Language - English and Palauan are official in all states except Sonsoral (Sonsoralese and English are official), Tobi (Tobi and English are official), and Angaur (Angaur, Japanese and English are official).
Currency - US Dollar

Political

Political system - Palau has a political framework similar to both the United States federal and state governments. The President, who is both Head of Government and Head of State, is elected by the people for a four-year term and may serve as President no more than twice. The national legislature, Olbiil Era Kelulau (OEK - The Meeting Place of Whispers), is bicameral, with a House of Delegates from each of the 16 states and a 14 member Senate.

National Government - Palau has a constitutional government in free association with the United States. The Compact of Free Association entered into force on 1 October 1994.  Under the state constitutions, each of the 16 states has a governor. Some governors are elected while others are chosen on the basis of their traditional status. There is also a 16-member Council of Chiefs which advises the president on matters of custom and traditional law. There are two High Chiefs, the Ibedul, based on Koror and the Reklai, based on Melekeok.

Last Election - November 2008
Next Election - November 2012

Head of State - President Johnson Toribiong
Head of Government - President Johnson Toribiong

Economic

GDP - US$164.29 million (2007)
GDP per capita - US$8,133 (2007)
Real GDP growth - -1% (2008)

Exports - $13.4 million (2005 ABD)
Main Exports - Fish

Imports - $105 million (2005 ABD)
Main Imports - Machinery, Transport, Mineral Fuels, Foodstuffs and live animals

Current Account Balance - US$9.8 million (2007)
Inflation - 4.4% (2006 ABD)
Gross external debt - US$22.9million (2007)

New Zealand Trade

NZ Exports (FOB) - NZ$641,000 (July 2009)
Main Exports - Wood, dairy

NZ Imports (CIF) - Zero (July 2009)
Main Imports - None

Overview

Palau, situated east of the Philippines and north-east of Indonesia, consists of more than 300 islands stretching over 650km, but only nine are inhabited. Palau is an independent republic in free association with the United States of America. It achieved internal self-governance in 1981 and independence in 1994.

History

Archaeological evidence indicates that Palau was inhabited as early as 1000 BC and it is generally believed that the first inhabitants came from Eastern Indonesia. Spanish and Portuguese navigators first sighted Palau in the sixteenth century. Spain and Germany vied for possession of the Caroline Islands, including Palau, until Spain transferred these territories to Germany in 1899.

During World War I Palau was occupied by the Japanese and became the administrative centre of Japan's Micronesian territories. It was used as a Japanese military base during World War II.

Following the conclusion of that war, Palau (also called Belau) was administered by the United States as part of the United Nations Trust Territory of the Pacific Islands. Palau became independent in free association with the United States on 1 October 1994.

Independence was only achieved after more than fifteen years of debate over aspects of the 1979 Palau Constitution, which sought to establish mechanisms for the protection of Palau's culture and environment, including restricting land ownership to Palauans, limiting the use of Palau for the benefit of a foreign nation and banning nuclear and toxic materials. Finally in 1993 Palauans voted to suspend the anti-nuclear provisions of the Constitution. This enabled Palau to ratify the Compact it had signed in 1982 and paved the way for independence. Under the fifty-year Compact, the United States retains responsibility for Palau's defence and security and provides substantial funding. Palau became the sixteenth, westernmost and newest member of the Forum at the Madang meeting in September 1995. Palau hosted the Forum in October 1999. A Constitutional Convention will be held in 2005 to deliberate whether any revisions to the Constitution are necessary.

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Political Situation

The debate over the Constitution and Compact had a significant impact on domestic politics. Haruo Remeliik, President from 1980 to 1985, who had been involved in the introduction of the nuclear-free constitution and was also supportive of the Compact with the United States, was assassinated in 1985. The Minister of State was eventually found to be complicit in the crime. His successor, Lazarus Salii, who was prominent in the negotiations with the United States over the Compact, died in an apparent suicide in 1988 amid allegations of mismanagement and corruption.

Palau has a 30 seat bicameral national congress (Olbiil Era Kelulea - meeting place of whispers), made up of the House of Delegates with 16 members (one from each state), and the House of Senators, representing geographical districts. With no formal political parties in Palau, strong factional alliances dominate Senators' allegiances within the Senate. The Senate controls the national budget, and has the power to confirm appointments.

The issue of Palau's relationship with the United States, and especially the continuation of the present levels of compact funding are important issues for the government. Other issues of importance include the environment and fisheries.

Traditional systems of government in Palau have tended to be kept separate from and outside the modern, US style political system. Nevertheless, the clans and traditional systems remain strong. There is a strong matrilineal tradition in Palau and women remain powerful in family life, particularly through their influence in land matters. A sixteen-member Council of Chiefs advises the President on matters of custom and traditional law. There are two principal High Chiefs, the Ibedul, based on Koror and the Reklai, based on Melekeok. Significantly, the traditional chiefs in each state, with the backing of their female relatives, still have firm control over the land.

 

Economic Situation

The people of Palau enjoy comparatively high living standards, with a per capita income twice that of the Philippines and most of Micronesia.

• Palau’s main revenue earner is tourism, with the majority of visitors coming from Japan and Taiwan, and significant numbers from Korea and the United States.  The impact of the Global Economic Crisis (GEC) on source countries led to a 10.1% fall in tourist arrivals and a 1% GDP contraction in 2008.
• Under the Compact of Free Association with the United States, Palau receives direct financial assistance equivalent to twenty percent of its GDP. This funding is divided between ongoing budget support and infrastructure development. Large additional sums were paid at the beginning of the Compact's initial 15-year funding period to set up a long-term investment fund. The fund was hard-hit by the 2008 global economic crisis which saw its value drop by approximately 28%.

Palau has a rich fishery resource which is critical to domestic food supply. Locally based tuna shipping companies export sashimi grade tuna, mainly to Japan. The licensing of vessels from United States, Japan, Taiwan and the PRC is still a significant source of foreign exchange.

 

 

Foreign Relations

Significant bilateral partners include: US, Japan, Taiwan, Australia, New Zealand, Korea, Great Britain, Thailand, Philippines, Germany, Spain and Italy. Palau's ties with Asia, particularly Japan, are expanding rapidly. In January 2000 Palau formally recognised Taiwan, guaranteeing the latter's increasing contribution to investment and tourism in Palau. The US, Philippines and Japan maintain embassies in Palau.

Palau joined the United Nations soon after independence and the Pacific Islands Forum in 1995, hosting the 1999 Forum. It is also a member of the Forum Fisheries Agency and the Pacific Community (SPC). Palau belongs to the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD), and the Food and Agriculture Organisation of the United Nations (FAO).

 

Bilateral relationship

New Zealand's links with Palau are based on shared membership of the Pacific Islands Forum and common interests in issues affecting the region including regional security, sustainable fisheries management, climate change and regional trade.

With no direct shipping links, trade between New Zealand and Palau is minimal. There are opportunities for New Zealand companies, however, particularly in the construction sector and the export of building materials, food and beverages.

New Zealand Official Development Assistance (NZAID)

New Zealand Official Development Assistance to Palau is covered under NZAID's regional thematic programmes in the areas of education, health, environment, good governance and emergency preparedness and disaster management.

 

Visits

Ministerial Visits to Palau

• Prime Minister Jenny Shipley headed a delegation from New Zealand to Palau for the 1999 South Pacific Forum.
• Associate Minister for Foreign Affairs, Sir Robin Gray, attended Palau's Independence Day celebrations in 1994.

 

Representation

• New Zealand High Commission Kiribati is accredited to Palau

 

Travel advice

The Safe Travel website provides a travel advisory for travellers to Republic of Palau [external link].

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