Palau (Belau) is the westernmost Pacific island state, just north of the Equator, consisting of a group of high islands where most of the population live, and largely depopulated outlying coral atolls. It is prone to cyclones.
After more than a decade of often acrimonious constitutional debate and many referenda, Palau finally implemented a Compact of Free Association with the USA in October 1994 and was the last UN trust territory to achieve independence. There was considerable friction over support for and opposition to a nuclear-free constitution, a factionalism and polarity which also reflected traditional divisions in Palauan society. Palau has developed strong links with Taiwan.
Main languages: Palauan, Filipino, English
Main religions: Christianity (mainly Roman Catholicism)
Outer islanders, from the southern atolls, speak distinct languages and form something of a minority in the Palauan state. By 2000, the mainly Filipino foreign workforce had grown to around 5,000 and it has since stabilised at about 15 per cent of the total population.
Government is more complex than anywhere else in the world with a dual national legislature, aSenate and a House of Delegates – the Obiil Era Kelulau (OEK) and sixteen state legislatures. Corruption has been a frequent component of governance. From the 1980s there was a substantial growth in Filipino migration, and, to a lesser extent, of the Japanese and Korean populations. Most found employment in the private sector, including fishing, tourism and construction. There has been some resentment at the increase in Asian population numbers despite considerable Palauan unwillingness to work in other than government employment. The economy is heavily dependent on US aid, though tourism is very important. Money laundering is an issue.