U.S. Department of State
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, 
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, 
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 
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 
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, 


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 
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 

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. 
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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