Republic of Palau


CAPITAL : Koror, Koror Island

FLAG : The flag, adopted 1 January 1981, is light blue, with a yellow disc set slightly off center toward the hoist.

ANTHEM : Belau er Kid.

MONETARY UNIT : The US dollar is the official medium of exchange.

WEIGHTS AND MEASURES : British units are used, as modified by US usage.

HOLIDAYS : New Year's Day, 1 January; Youth Day, 15 March; Senior Citizens Day, 5 May; Constitution Day, 9 July; Labor Day, 1st Monday in September; United Nations Day, 24 October; Thanksgiving Day, 4th Thursday in November; Christmas, 25 December.

TIME : 8 PM = noon GMT.


Palauans are a composite of Polynesian, Malayan, and Melanesian races. At last estimate, the largest non-Palauan ethnic groups included Filipinos (9.8%), other Micronesians (1.8%), Chinese (1.3%), and people of European descent (0.8%).


No political parties currently exist in Palau.


Each of Palau's 16 states has a government headed by a governor, who is popularly elected, in most cases, for a four-year term. The members of the state legislatures are popularly elected for a four-year term, although in a few states, the term of office is limited to two years. The states are empowered to make their own laws, which must not be in conflict with the national constitution or any existing laws.


The United States is responsible for defense. Palau has no armed forces and does not have US armed forces within its borders except for a small contingent of US Navy Seabees who undertake civil action projects.


Palau is a member of the UN and participates in the World Bank, FAO, ICAO, IMF, UNCTAD, UNESCO and WHO. Palau is a full member of the SPC and of ESCAP.


Agricultural production belongs almost entirely to the nonmonetary, or subsistence, sector. Most households outside Koror are fully or partially engaged in subsistence agriculture. Staple subsistence crops include taros, cassavas, sweet potatoes, bananas, and papayas. Commercial produce is marketed mainly in Koror, consisting mostly of copra and coconut oil, vegetables, and a wide variety of tropical fruits.


Livestock is limited to pigs, chickens, ducks, cattle, and goats. Pigs and chickens are raised by most households. Several small commercial egg-producing operations supply eggs to the Koror market. The Livestock Branch of the Division of Agriculture maintains breeding herds of pigs, cattle, and goats.


Manufacturing plays a limited role in the economy. A copra-processing plant is located in Malakal. Concrete blocks are manufactured, utilizing imported cement, and there is a small-scale sawmill industry.


Palau's Micronesian Mariculture Demonstration Center, established in 1973, promotes the cultivation of commercially valuable and ecologically threatened marine species. The center attracts visiting marine scientists; its giant clam hatchery was the first and remains the largest of its kind.


Domestic trade is centered in Koror. Private-sector activities in tourism, restaurants and hotels, small workshops, banking, wholesale and retail outlets, transportation, and freight handling are located in Koror and, to a limited extent, the adjacent state of Airai. Most of the work force is employed in services related to tourism. The country relies heavily on imports for basic goods.


Standardized balance-of-payments accounts have not yet been prepared by the government. The chronic trade deficit is largely offset by US grant assistance.

The US Central Intelligence Agency (CIA) reports that in 1999 the purchasing power parity of Palau's exports was $11 million while imports totaled $126 million resulting in a trade deficit of $115 million.


In 1993, there were five commercial banks. Two are branches of foreign banks, the Bank of Hawaii and the Bank of Guam; the other, a local bank which started in 1985, is the Bank of Palau.


Social security and pension fund contributions are made by the government on behalf of its employees.


The US Central Intelligence Agency (CIA) estimates that in 1997 Palau's central government took in revenues of approximately $52.9 million and had expenditures of $59.9 million, including capital expenditures of $17.1 million. Overall, the government registered a deficit of approximately $7 million. Total external debt is estimated to exceed $100 million.


Graduated income taxes are levied on wages and salaries. Business gross revenue tax is imposed at a flat rate minus employees' remuneration. There is also a profits tax on financial institutions.


There are no import duties on raw materials if they are processed for sale outside Palau. There is also an import duty rebate offered by Palau as an investment incentive.


There is a Foreign Investment Board for processing applications from foreign investors; the Division of International Trade of the Bureau of Foreign Affairs is responsible for establishing contacts with foreign companies to promote Palau's trade interests.


There is a small public library in Koror, with a collection comprising about 17,000 books. The Belau National Museum, established in 1973, is also located in Koror.


The clan system forms the basic unit of social organization. Youth, women's, and community development organizations provide economic self-help, community involvement and leadership training, skills training, and sports and recreation. The Lion's Club has programs in the country.


Lazarus E. Salii (1937–1988) became the third president of Palau in September 1985.


Palau has no territories or colonies.


Hijikata, Hisakatsu. Society and Life in Palau. Tokyo: Sasakawa Peace Foundation, 1993.

Leibowitz, Arnold H. Embattled Island: Palau's Struggle for Independence. Westport, Conn.: Praeger, 1996.

Parmentier, Richard J. The Sacred Remains: Myth, History, and Polity in Belau. Chicago: University of Chicago Press, 1987.

Roff, Sue Rabbitt. Overreaching in Paradise: United States Policy in Palau Since 1945. Juneau, Alaska: Denali Press, 1991.

Trust Territory of the Pacific Islands, 1986, 39th Annual Report to the United Nations. Washington, D.C.: Department of State, 1986.

User Contributions:

Briefly, Palau is essentially its own country, but entered into an agreement with the U.S. (basically provides defense for Palau in exchange for land usage) in 1994 after in chose not to join the Federated States of Micronesia.
This was helpful, although it could have something about poverty and such more.

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