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Background Notes: Palau, May 1996

Released by the Bureau of Public Affairs.


Official Name: Republic of Palau



Area: 458 sq. km (about 190 sq. mi.)
Capital: Koror.
Terrain: About 200 islands varying geologically from the high, mountainous main island of Babelthuap to low coral islands usually fringed by large barrier reef.
Climate: Hot and humid with a rainy season from May to November.


Nationality: Noun and adjective--Palauan(s).
Population: 17,300.
Annual growth rate: 2.95%.
Ethnic groups: Palauan, Japanese, Filipino, Chinese, Korean, American.
Religions: Two-thirds are Christian (Catholics, Seventh-Day Adventists, Jehovah's Witnesses, the Assembly of God, and Latter-Day Saints); other one-third follow Modekngei (an indigenous religion).
Languages: English (an official language in all 16 states) and Palauan both are spoken by most islanders; Sonsorolese, Angaur, Japanese, Tobi.
Education: Literacy--92%.
Health: Infant mortality rate--15/1,000 live births. Life expectancy--men 69 yrs., women 73 yrs.


Type: Constitutional government in free association with the U.S.
Independence: October 1, 1994.
Constitution: Approved by referendum July 9, 1979; entered into effect January 1, 1981.
Branches: Executive--president (chief of state) and vice president. Legislative--elected bicameral legislature and consultative Council of Chiefs. Judicial--independent; Supreme Court, National Court, Court of Common Pleas.
Administrative subdivisions: Sixteen state governments.
Political parties: Palau Nationalist Party (PNP), formed in 1996.
Suffrage: Universal at 18.


GDP (1994; number reflects U.S. spending): $81.8 million
Per capita GDP (1994): $5,000.
Natural resources: Marine resources.
Agriculture: Coconut, copra, cassava, sweet potatoes (subsistence levels).
Industry: Tourism, craft items (shell, wood, pearl), some commercial fishing and limited agriculture.
Trade (1989): Exports--$600,000. Imports--$246,000,000. Major trading partners--U.S., Japan, Taiwan.
Official currency: U.S. dollar.


In 1947, the United States, as the post-World War II occupying power, agreed to administer Palau as part of the U.N.-created Trust Territory of the Pacific Islands (TTPI). In the 1960s, many U.S. federal government programs were extended to the trust territory. In the 1970s, the U.S. undertook a major capital improvement program, upgrading facilities for such things as transportation, water, and sewage.

After many years of talks on a post-trust status for Palau, the U.S. Congress in 1986 approved a Compact of Free Association agreed to by U.S. and Palauan negotiators. While supported by a majority of Palauan voters in each of seven referendums, compact proponents failed to gain the 75% majority required by Palau's constitution to approve issues with possible nuclear implications.

After adoption of a constitutional amendment, Palau's courts ruled that the 68% pro-compact vote in an eighth referendum--held November 9, 1993--was sufficient to approve the compact. On October 1, 1994, following a proclamation by President Clinton, Palau began its independence in free association with the U.S.

Under the compact, the U.S. remains responsible for Palau's defense for 50 years. The U.S. must approve the entry into Palauan territory of any foreign military, may establish military bases there, and is permitted to operate nuclear-capable warships there.

For 15 years, Palau receives financial assistance from the U.S. and is eligible to participate in some 40 federal programs. It is estimated that the value of U.S. financial and program assistance will exceed $500 million during this period.

Principal U.S. Embassy Officials

Charge d'Affaires--Richard Watkins

The address of the U.S. embassy in Koror is P.O. Box 6028, Republic of Palau 96940; tel: 680-488-2920; fax: 680-488-2911.

Historical Highlights

The Republic of Palau comprises more than 200 Pacific Ocean islands, only eight of which are permanently inhabited. It is believed that the original settlers of Palau arrived from Indonesia as early as 2500 BC. The Palauans are a composite of Polynesian, Malayan, and Melanesian lineage. Kinship traditionally was and remains the major determinant of social status. Traditional customs sustain a value system that distinguishes between people on the basis of social status and sex.

In 1783, English explorer Captain Henry Wilson became the first Westerner to visit Palau, beginning nearly 100 years of British trade primacy. Spain's claim to the Caroline Islands, including Palau, was upheld by Pope Leo XIII in 1885. In 1899, Spain sold the Carolines and the Northern Marianas to Germany.

The German period (1899-1914) saw increased economic activity in the form of coconut planting and phosphate mining. The Germans also had success in battling longstanding epidemics of influenza and dysentery that had reduced the population of Palau from 40,000 to 4,000 over the previous 120 years.

Japanese forces invaded Palau in 1914 in accordance with a secret agreement with the British. Koror became the administrative center for all Japanese possessions in Micronesia, and by 1935 the Japanese civilian population in Palau reached almost 26,000. Japan made Palau a closed military zone in 1938. During World War II, fighting between U.S. and Japanese forces took place on the islands of Peleliu, Angaur, and Koror.

From 1947 until independence in 1994, Palau was part of the Trust Territory of the Pacific Islands administered by the U.S. pursuant to an agreement with the United Nations. The Compact of Free Association between Palau and the United States entered into force on October 1, 1994.


Palau's population numbers about 17,000, with an annual growth rate of almost 3%. Most Palauans live in Koror, the capital. The majority of Palauan children attend free public schools. Palau Community College provides the only post-secondary education available in the country.

Government operations dominate Palau's economy, subsidized largely by the U.S. Some 60% of the Palauan work force is employed by the government. It is estimated that 90% of the economy comes from external revenue. In addition to U.S. assistance, other countries--including Japan, Australia, and New Zealand--and international organizations provide aid on a much smaller scale.

The internal portion of Palau's economy consists primarily of subsistence agriculture and fishing. Tourism, growing at a rate of nearly 18% annually, is an increasingly important source of income.


The citizens of Palau live with a relatively new democratic political system combined with a hierarchical traditional culture. On July 9, 1979, a constitution was approved by referendum. After much legal wrangling, it took effect on January 1, 1981. Palau held its first elections in November 1980.

The president and vice president are elected by popular vote every four years. The Council of Chiefs advises the president on issues concerning traditional matters and custom.

The Olbiil Era Kelulau is the elected bicameral legislature and consists of a House of Delegates and a Senate. The House of Delegates has of one member from each of Palau's 16 states. The 14 senators represent districts apportioned according to population.

The judicial branch of government consists of a Supreme Court, National Court, and a lower Court of Common Pleas. All judges have life tenure.

There are 16 state governments within Palau, each with an elected governor and legislature.

While calm in recent years, Palau was troubled by several instances of political violence in the 1980s. President Haruo Remeliik was assassinated in 1985. In 1987, a special assistant to President Salii was convicted of firing shots into the home of the speaker of the House of Delegates, Santos Olikong. President Salii's August 20, 1988 death amid allegations of misuse of government funds was found to be a suicide.

Elections were last held in 1992 and are next scheduled for November 1996. In 1992, Kuniwo Nakamura was elected President and Tommy Remengesau, Jr. was elected Vice President. The Palau Nationalist Party (PNP), formed in 1996, is currently the only political party. Other candidates run independently.

Principal Government Officials

President--Kuniwo Nakamura
Vice President--Tommy Remengesau, Jr.
Minister of State--Andres Uherbelau
Charge d'Affaires in U.S.--David Orrukem

Palau's embassy in the United States is at Suite 407, 2000 L Street NW, Washington, DC 20036; tel: 202-452-6814; fax: 202-452-6281.


Palau is a sovereign nation and conducts its own foreign relations. Since October 1994, Palau has established diplomatic relations with a number of nations, including many of its neighbors in the Pacific. Palau was admitted to the United Nations on December 15, 1994, and has since joined several other international organizations.


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