Country Profiles

Republic of Palau


After three decades as part of the UN Trust Territory of the Pacific under US administration, this westernmost cluster of the Caroline Islands opted for independence in 1978 rather than join the Federated States of Micronesia. A Compact of Free Association with the US was approved in 1986 but not ratified until 1993. It entered into force the following year when the islands gained independence.



Official Languages           

Palauan, English


United States Dollar (USD)


Oceania, group of islands in the North Pacific Ocean, southeast of the Philippines


Total: 459 Sq km Land: 459 sq km Water: 0 sq km


Tropical; hot and humid; wet season May to November

Natural resources

Forests, minerals (especially gold), marine products, deep-seabed minerals

Land use

Agricultural land: 10.8%arable land 2.2%; permanent crops 4.3%; permanent pasture 4.3%forest: 87.6%other: 1.6% (2011 est.



The economy consists of tourism and other services such as trade, subsistence agriculture, and fishing. Government is a major employer of the work force relying on financial assistance from the US under the Compact of Free Association (Compact) with the US. The Compact took effect, after the end of the UN trusteeship on 1 October 1994. The US provided Palau with roughly $700 million in aid for the first 15 years following commencement of the Compact in 1994 in return for unrestricted access to its land and waterways for strategic purposes. Business and leisure tourist arrivals numbered over 125,000 in fiscal year 2014, a 13.4% increase over the previous year. The population enjoys a per capita income roughly double that of the Philippines and much of Micronesia. Long-run prospects for tourism have been bolstered by the expansion of air travel in the Pacific, the rising prosperity of industrial East Asia, and the willingness of foreigners to finance infrastructure development. Proximity to Guam, the region's major destination for tourists from East Asia, and a regionally competitive tourist infrastructure enhance Palau's advantage as a destination.

Agriculture Products

Coconuts, copra, cassava (manioc, tapioca), sweet potatoes; fish


Tourism, craft items (from shell, wood, pearls), construction, garment making

Exports Commodities

Shellfish, tuna, copra, garments

Imports Commodities

Machinery and equipment, fuels, metals; foodstuffs

Useful Links

Government of Republic of Palau

Palau Chamber of commerce