Political Rights: 1
Civil Liberties: 1
Status: Free
Population: 20,000
GNI/Capita: $7,140
Life Expectancy: 69
Religious Groups: Roman Catholic (49 percent), other [including Protestant and indigenous beliefs]
Ethnic Groups: Paluan (70 percent), Asian (28 percent), white (2 percent)
Capital: Koror

Ratings Change
Palau's civil liberties rating improved from 2 to 1 due to a technical reevaluation of the degree of the country's freedom of association.


Palau sought to gain U.S. recognition in 2003 for dual citizenship for Palauans, a large number of whom live and work in the United States.

Palau, consisting of 8 main islands and more than 250 smaller islands that lie about 500 miles southeast of the Philippines, was under U.S. trusteeship administration from the end of World War II until it approved its own constitution and became self-governing in 1981. Full independence was achieved in 1994 under an accord with the United States. This accord, known as the Compact of Free Association, provides Palau with $442 million in aid from Washington over fifteen years with the U.S. shouldering responsibility for Palau's defense. Under this accord, the United States has the right to set up military bases in the island state. The current president, Tommy E. Remengesau, Jr., took office after winning the November 2000 elections.

The country has been plagued by reports of human and drug trafficking, prostitution, and money laundering by criminal groups in recent years. International organizations cited Palau for failing to fully implement anti-money-laundering measures. However, the government cited inadequate resources, rather than a lack of political will, as the reason for failing to meet the target.

In 2003, the government sought to obtain U.S. recognition of dual citizenship for its citizens so that they can maintain voting and land rights in Palau, which is restricted to Palauans, while working and living in the United States. About 25 percent of all Palauans are in the United States, while only about 14,000 reside in Palau. Under the Compact of Free Association, Palauans can live and work in the United States without a visa.

In addition to the question of dual citizenship, two other major issues for the upcoming 2004 general election include whether to change the current bicameral legislature into a unicameral one and whether to elect the president and vice president as a team rather than separately, as is currently the practice. In October, President Remengesau announced that he will push for constitutional amendments to adopt these proposed changes through a public referendum after having waited for two years for parliament to address them.

Former governor Albert Ngirmekur of the state of Ngardmau was sentenced to six months in prison in February on a range of corruption and official misconduct charges.

Political Rights and Civil Liberties

Citizens can freely change their government, and elections are held regularly. A bicameral legislature, the Olbiil Era Kelulau, consists of the 9-member Senate and the 16-member House of Delegates. Legislators are elected to four-year terms by populate vote. The president and vice president are also elected to four-year terms by popular vote; the two are elected separately rather than as a team. Both can serve for only two consecutive terms. President Tommy E. Remengesau, Jr., was elected in the November 2000 general elections, and Senator Sandra S. Pierantozzi became the first woman vice president. The country is organized into 16 states, each headed by a governor.

Freedom of speech and the press is respected. The Internet, though not significantly widespread in use, is easily accessible with no government intervention.

Citizens of Palau enjoy freedom of religion, and there were no reports of restrictions on academic freedom.

Freedom of association is respected, and civic organizations and nongovernmental organizations (NGOs) can operate freely. Several NGOs focus on youth, health, and women's issues. Palau has no trade unions, although there are no laws or government policy against their formation.

The judiciary is independent. Palau has no armed forces. Order is maintained by a 140-person police force, and defense is provided by the United States under the Compact of Free Association agreement. The compact, which will end in 2009, also provides Palau with financial and other assistance in exchange for the right to maintain military bases in the island state until 2034.

The economy is heavily dependent on transfer payments from the United States under the compact agreement, as well as money sent back to the island by its citizens working overseas. Subsistence agriculture and fishing are widely practiced. The government and tourist industry are the main employers.

According to a May 2000 census, foreign workers account for nearly 30 percent of the population and 73 percent of the paid workforce. Reports of discrimination and abuse against certain foreign workers have surfaced in recent years, and the government has instituted strict measures to keep out foreign workers who are not on active employment in the island state. In April, the police arrested 200 Chinese garment workers following a 20-hour confrontation. They were left stranded without return airfare when their employer, a Taiwanese business, closed down. In July, the government announced that it would tighten supervision to prevent marriages of convenience between foreigners and Palauans. Foreigners are said to have used bogus marriages to extend their stay in the island state and to enter the United States. There have been reports of human trafficking from China, the Philippines, and Taiwan, with some seeking employment in Palau and others using it as a conduit to enter the United States.

Women are active in both traditional and modern sectors of the economy, including politics. As a matrilineal society, there is a tradition of high regard for women. A handful of reports of domestic violence against women, most of which are linked to alcohol and drug abuse, are registered by the police each year. Although the problem is not severe compared to other Pacific Island states, civil society groups believe there is underreporting.

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