Formed of around 340 coral and volcanic islands, Palau is known as the diver’s paradise with its abundance of underwater gems and military relics making for fascinating viewing
erched above Indonesia and 550 kilometres to the west of the Philippines, Palau is an extraordinary nation.
Made up of 340 coral and volcanic islands on the Kyushu-Palau Ridge, the archipelago offers some of the most breathtaking underwater sights one is likely to see.
From unspoiled coral and pristine beaches to Second World War relics (on land and under the sea) and off‐ road jungle treks, Palau more than makes up for what is a tiny area of land. Around 18,000 inhabitants live on these islands, the main population centres being found in Babelthuap (Babeldaob), Koror, Malakal, Arakabesan, and Peleliu.
Despite their remoteness, the islands have a long settlement history. It is believed that they were first inhabited around 2,000 to 3,000 years ago by Malays from Indonesia, Melanesians from New Guinea, Philippine natives, and some Polynesians from outlying
Polynesian islands in Micronesia.
Since the Second World War, the government has been the major employer here, although many rural areas operate on a subsistence economy. The USA continues to provide financial support to the nation, its official currency still being the US dollar.
Tourism has provided a recent economic boost, a shift which has helped see Palau generate one of the highest per capita incomes in the region.
PA L AU’S E C ONOMY H A S been a story of growth since the turn of the millennium, the country passing landmark legislation to introduce a minimum wage in 1998.
The law does not apply to foreign workers, who make up a significant proportion of the labour force, in particular those coming from the Philippines and Taiwan.
Major exports include tuna and clothing, while further government income is generated by licensing permits to foreign fishing vessels. In the rural regions, common activities include the gathering and cultivating of taro, sweet potato and cassava.
Tourism has grown considerably over the past few decades and is a vital economic contributor to Palau’s economy.
According to the International
Monetary Fund, 2017/2018 saw tourism receipts of $114.2 million, a figure forecast to rise to $137.7 million by 2019/2020. World Bank figures estimate that Palau saw 123,000 tourist arrivals in 2017.
The country has embarked on a five‐year Responsible Tourism Policy Framework, an initiative supported by the country’s Tommy Remengesau. Writing in the framework document published in 2017, he said: “Tourism continues to provide for more than half of our economy, with the industry contributing 51 percent of our GDP.
“Growing our tourism industry responsibly is essential to Palau’s economic vitality. A stronger, more diversified industry will provide Palau with improved infrastructure, career opportunities for our youth, and a higher standard of living.”