History
Western contact with Palau first took place in l783 when the vessel of explorer, Captain Henry Wilson of England, was shipwrecked near the islands. The British dominated trade with Palau until 1885; however, Spain claimed control of Palau until 1899. In l899, Spain sold Palau, along with the rest of the Caroline and Northern Mariana Islands, to Germany following its defeat in the Spanish-American War.

During the German administration of the island from 1899 to 1914, Germany increased Palau's economic potential by introducing coconut planting and phosphate mining. The Germans also introduced widespread sanitary measures to combat epidemics of influenza and dysentery. Those two diseases caused the population of Palau to fall from 40,000 to 4,000 in approximately 120 years.

Japanese forces occupied Palau in 1914. The League of Nations recognized the Emperor of Japan as the mandatory power in a mandated territory which included the Northern Mariana Islands, the Marshall Islands, Yap, Chuuk, Pohnpei and Kosrae as well as Palau. The Japanese increased efforts in mining, agriculture, and commercial fishing. Palau became a closed military area in 1938. Fighting during World War II took place throughout Palau, principally in Peleliu, Angaur, and Koror.

In 1947, the United Nations created the Trust Territory of the Pacific Islands (TTPI) and named the United States as the TTPI's administering authority. Palau was the last TTPI district. The TTPI originally included six districts, which now comprise four Islands jurisdictions: an insular area in political union with and under the sovereignty of the United States (the Commonwealth of the Northern Mariana Islands) and three freely associated states (the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau).

In the 1960's, President Kennedy introduced the Peace Corps into Micronesia. Many Federal programs, especially those in the fields of health and education, were also extended to the Trust Territory. In the late 1970's, the United States embarked upon an ambitious capital improvement program (CIP) with the goal of building major infrastructure projects (airport, dock, roads, and water, power, and sewer systems) in each of the district centers. Funding of these CIP projects is now complete.

Political Status
On October 1, 1994, the Compact of Free Association between the United States and Palau entered into force. Having been signed in Palau by American and Palauan representatives on January 10, 1986, the Compact is the core of the Compact of Free Association Act (U.S. Public Law 99-658), which was enacted on November 14, 1986.

Under the Compact, the status of free association recognizes Palau as a sovereign state with the capacity to conduct foreign affairs consistent with the terms of the Compact. The Compact places full responsibility for Palau's defense with the United States. The Compact also provides grant funds and Federal program assistance, principally through the Department of the Interior.

Under the Compact, the State Department is responsible for government-to-government relations, while Interior is responsible for the oversight and coordination of U.S. programs and funding assistance.

Government
The Government of Palau has three branches: executive, legislative and judicial. The President and Vice President of Palau are elected by popular vote every four years. The current President, since January 19, 2001, is the Honorable Tommy Remengesau, Jr. and the Vice President is the Honorable Sandra Pierantozzi. (Current Administration)

Palau has a bicameral national legislature the Olbiil Era Kelulau (OEK), which consists of a House of Delegates (l6 elected members, one from each of Palau's states) and a Senate (l4 elected members). Council of Chiefs traditional leaders advises the President on matters concerning traditional law and custom. The Judicial Branch consists of a Supreme Court, National Court, and a lower Court of Common Pleas, members of which are appointed for life. Each of the sixteen states has its own elected state government.

Geography
Palau consists of more than 200 Pacific Ocean islands in the Caroline chain; only eight of the islands are permanently inhabited. The Palau archipelago stretches over l50 miles and has 170 square miles of dry land. The capital of Palau, Koror, lies 3,997 miles west/southwest of Honolulu; 8l3 miles south of Guam; and 530 miles from Manila.

The average temperature is 81.6 degrees Fahrenheit or 27.9 degrees Celsius. The Humidity is 84 percent and the precipitation is 147.25 inches annually. The average annual rainfall is 147.10 inches. February to May are the driest months; the rainy season is June-October.

Population
Based on the 2000 U.S. Census, total population is 19,129.  There are 10,450 males and 8,012 females. Median age of 30.8 is up from 18.8 in 1980.  Annual growth rate is 2.1 percent, down from 2.6 percent in 1995.  Indigenous Palauans make up 13,364 of the 2000 population while foreigners from the Philippines makes up the majority of the remaining 30% or 5,765.   In 1990, total population was 15,122.

Culture
Palauan culture has three major themes including prestige orientation; competition between individuals and clans; and reciprocity and manipulation of gifts, money, good and services. Kinship is the major determinant of social behavior and each individual in Palauan society, from the moment of birth, had a definite rank in the village, clan, and family. This rank is based on family background.

Palauan is the major language and it is spoken without major dialectical differences.

Economy
In Fiscal Year 1999, the total budget is $71 million. The operating budget is $57 million with the remaining $14 million for capital improvement projects. Out of the $71 million budget, $32 million (approximately 45%) comes from Compact Funds.

Tourism and construction are the main private sector industries. Visitor arrivals grew to 58,560 in FY 2002 from 32,846 in l999.    Average wages grew to $7,718 in FY 2001 for about 10,578 workers from $6020 in FY 1990.

In FY 2002, government revenues dropped slightly to 70.1M and expenditures grew to 79.7M.

PALAU GROSS DOMESTIC PRODUCT (GDP)

Communications
Worldwide calls, telex, cable and facsimile, email and internet are available through the semi-autonomous Palau National Communication Corporation. Telephone calls to Palau must be placed through an international direct dial system. All overseas calls from Palau can be dialed directly. COMSAT has an earth station on Koror.

Two government-operated radio station and privately owned radio stations and television station serve the media needs of Palau. There are also two local newspapers, Tia Belau and Palau Horizons, both are bi-weekly publications.

Palau is within the U.S. domestic postal system. In addition, the U.S. Postal Service has classified Palau as falling within zone 8 for priority mail and second- and fourth-class mail.

Transportation
Continental Micronesia serves Palau with daily flights to and from Guam. There are direct flights twice a week, to and from Manila, and the Philippines. There are no commuter airlines.

Education
Most Palauan children attend free public schools. The school system is patterned after the U.S. school system. There are also Catholic, Evangelical, Seventh-Day Adventist Mission Schools and a traditional Modekngei High School. The Palau Community College located in Koror, was founded in l969 as a vocational training center. It is fully accredited by the Western Association of Schools and Colleges.

Health Services
Two private medical clinics and a new public hospital provide general medical and dental care. A decompression chamber is available for diving emergencies.

Land Ownership
Under the laws of Palau, land cannot be owned by any non-Palauan citizens or firms. Sites for business, however, can be leased either from the government or private landowners. Length and terms of lease are negotiable.

Travel Requirements
United States citizens traveling to Palau must have proof of citizenship (a passport or birth certificate). Non-United States citizens must have a valid passport. Travel under 30 days does not require prior-entry permission. Travel over 30 days must be approved prior to entry by the Palau Immigration Officer, Koror, Palau 96940. All visitors should have return or onward tickets and a $20.00 departure tax is levied at time of departure. Immunization is required if arriving from an infected area of smallpox, cholera, and yellow fever.

Pet Quarantine

Contact: Department of Agriculture P.O. Box 460 Koror, Palau 96940 011 (680) 488-2504 or 4955 011 (680) 488-1517 Fax

Emergency Contact

Minister of Justice P.O. Box 790 Koror, Palau 96940 011 (680) 488-3198 011 (680) 488-4567 Fax

Currency
The U.S. dollar is the currency used in Palau.

For More Information
Contact: Palau Visitors Authority Post Office Box 256 Koror, Palau 96940 011 (680) 488-1930 or 2793 011 (680) 488-1453 Fax Email: pva@palaunet.com

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