Country Name: Palau (Republic of Palau)

Capital: Ngerulmud

Government Type: presidential republic in free association with the US

Background: Humans arrived in the Palauan archipelago around 1000 B.C. from Southeast Asia and developed a complex, highly organized matrilineal society where high-ranking women picked the chiefs. The islands were the westernmost part of the widely scattered Pacific islands north of New Guinea that Spanish explorers named the Caroline Islands in the 17th century. There were several failed attempts by Spanish Jesuit missionaries to visit the islands in the early 1700s. Spain gained some influence in the islands and administered it from the Philippines but sold Palau to Germany in 1899 after it lost the Philippines in the Spanish-American War.

Japan seized Palau in 1914, was granted a League of Nations mandate to administer the islands in 1920, and made Koror the capital of its South Seas Mandate in 1922. By the outbreak of World War II, there were four times as many Japanese living in Koror as Palauans. In 1944, the US invasion of the island of Peleliu in 1944 was one of the bloodiest island fights of the Pacific War. Following the war, Palau became part of the US-administered Trust Territory of the Pacific Islands.

Palau voted against joining the Federated States of Micronesia in 1978 and adopted its own constitution in 1981, which stated that Palau was a nuclear-free country. In 1982, Palau signed a Compact of Free Association (COFA) with the US, which granted Palau financial assistance and access to many US domestic programs in exchange for exclusive US military access and defense responsibilities. However, many Palauans saw the COFA as incompatible with the Palauan Constitution because of the US military’s nuclear arsenal, and seven referenda failed to achieve ratification. Following a constitutional amendment and eighth referendum in 1993, the COFA was ratified and entered into force in 1994 when the islands gained their independence. Its funding was renewed in 2010.

Palau has been on the frontlines of combatting climate change and protecting marine resources. In 2011, Palau banned commercial shark fishing and created the world’s first shark sanctuary. In 2017, Palau began stamping the Palau Pledge into passports, reminding visitors to act in ecologically and culturally responsible ways. In 2020, Palau banned coral reef-toxic sunscreens and expanded its fishing prohibition to include 80% of its exclusive economic zone.

Region: Oceania

Population: 21,779 (2023 est.)

Ethnic Groups: Palauan (Micronesian with Malayan and Melanesian admixtures) 70.6%, Carolinian 1.2%, Asian 26.5%, other 1.7% (2020 est.)

Languages: Palauan (official on most islands) 65.2%, other Micronesian 1.9%, English (official) 19.1%, Filipino 9.9%, Chinese 1.2%, other 2.8% (2015 est.)

Religions: Roman Catholic 46.9%, Protestant 30.9% (Evangelical 24.6%, Seventh Day Adventist 5%, other Protestant 1.4%), Modekngei 5.1% (indigenous to Palau), Muslim 4.9%, other 12.3% (2020 est.)

Economic Overview: high-income Pacific island economy; environmentally fragile; subsistence agriculture and fishing industries; US aid reliance; rebounding post-pandemic tourism industry and services sector; very high living standard and low unemployment

Currency: United States Dollar (USD)

Reserves of Foreign Exchange & Gold: $580.9 million (31 December 2015 est.)

Real GDP (Purchasing Power Parity): $254.367 million (2021 est.) note: data in 2017 dollars

Real GDP Growth Rate: -13.72% (2021 est.) note: annual GDP % growth based on constant local currency

Real GDP per Capita: $14,100 (2021 est.) note: data in 2017 dollars

Exports: 

• $24.48 million (2022 est.) note: balance of payments - exports of goods and services in current dollars

• Comparison Ranking: 215

Export Commodities: computers, scrap vessels, recreational boats, scrap iron, fish, scrap copper, scrap aluminum (2021)

Export Partners: Japan 34%, Taiwan 16%, Turkey 16%, Italy 12%, United States 9% (2021)

Imports: 

• $216.681 million (2022 est.) note: balance of payments - imports of goods and services in current dollars

• Comparison Ranking: 211

Import Commodities: refined petroleum, boat propellers, iron structures, cars, floating docks, broadcasting equipment, prefabricated buildings (2021)

Import Partners: China 34%, United States 21%, South Korea 12%, Japan 8%, Taiwan 6% (2021)

Natural Resources: forests, minerals (especially gold), marine products, deep-seabed minerals

Agricultural Products: coconuts, cassava (manioc, tapioca), sweet potatoes; fish, pigs, chickens, eggs, bananas, papaya, breadfruit, calamansi, soursop, Polynesian chestnuts, Polynesian almonds, mangoes, taro, guava, beans, cucumbers, squash/pumpkins (various), eggplant, green onions, kangkong (watercress), cabbages (various), radishes, betel nuts, melons, peppers, noni, okra

Industries: tourism, fishing, subsistence agriculture

Industrial Production Growth Rate: 

• 1.42% (2021 est.) note: annual % change in industrial value added based on constant local currency

• Comparison Ranking: 138

Labor Force: 11,610 (2016)

Unemployment Rate: 1.7% (2015 est.)

Natural Hazards: typhoons (June to December)

Geography:

• Total: 459 sq km

• Land: 459 sq km

• Water: 0 sq km

(Country Summary, The World Factbook, CIA.gov)

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