By Jayvee Vallejera
Palau President Surangel Whipps Jr. has boldly declared that the state of the republic “is strong and getting stronger” and that Palau is headed “in the right direction.”
Speaking before lawmakers, ranking officials, dignitaries, and the diplomatic corps in the Senate chamber of the Olbiil Era Kelulau (OEK), Whipps highlighted the 30th anniversary this year of the republic’s independence and how far Palau has come since then.
“There will be much celebration but it is also a time of reflection on our journey and the vision that guides us,” he said in his fourth State of the Republic Address on April 25.
He also urged OEK leaders to pass bills that will increase Palau’s minimum wage, as well as a raft of other bills that, among others, would amend the country’s tax system and reduce the burden on small businesses.
In assuring that Palau is on the course, Whipps cited an Asian Development Bank report that shows economic growth for Palau at 6.8% in 2024, going up to 8% in 2025, driven by significant growth in tourism, a strong and growing construction industry, more road projects, and collaborating with the U.S. military on other projects and working to address the country’s housing shortage.
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In enumerating his administration’s accomplishments, Whipps said all these come against the COVID-19 backdrop and its debilitating effect on Palau’s economy, yet they still managed to stay true to the vision of “A Kot A Rechad er Belau,” which aims to ensure that Palauans are first in their own homeland.
Toward that end, Whipps said that Palau, with the help of friends from Australia, Taiwan, the United States, and Japan, has made tremendous improvements in its overall healthcare services, including shoring up capabilities at the Belau National Hospital.
He also highlighted the government’s efforts to invest in Palau’s children, such as creating a breakfast program for schoolchildren, doubling the budget for school supplies and textbooks, installing air conditioning in schools, and building new gyms across Palau.
In fulfillment of the vision to make sure that Palauans are first in their own homeland, Whipps said Palau’s Ministry of Education and Ministry of Human Resources, Culture, Tourism, and Development are working with private entities to promote training for students to help them acquire new experiences or certifications. These training initiatives, he said, are intended to build local capacity and equip many of Palau’s children with skills that are currently held by foreigners.
“These experiences and certifications can help educate and provide certification for Palauans who want to participate in the tourism industry,” he said.
He said the ministry is working to promote tour operations certifications among Palauans and helping to promote programs that immerse visitors in the local culture.
“These initiatives offer unique experiences that appeal to many of today’s adventure-seeking travelers,” he said.
Protecting livelihoods is not just about jobs, Whipps said. “It includes our ability to provide for ourselves,” he added.
He said great progress has been made toward the goal of putting Palau on a path to becoming a food-secure nation. He said the efforts of the Ministry of Agriculture, Fisheries and the Environment have led to increased food production, new markets for farmers, raising farming capacity, and protection of Palau’s marine resources.
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Palau, already well known as a world champion of the environment, further builds on this with the creation of the Blue Prosperity Plan. Whipps said this encompasses sustainable fisheries, restorative aquaculture, high-value ecotourism, and innovative business models.“These elements aim to strike a balance between economic benefits and the preservation of Palau’s ecological resources,” he said.
In line with this, Whipps said progress is being made in what he calls the Marine Spatial Planning process to achieve a goal in which 50 percent of Palau’s exclusive economic zone is conserved and 50 percent is available for fishing.
“This approach aims to balance the development of a sustainable domestic fishery with the conservation goals of the Palau National Marine Sanctuary,” he said.
That includes aligning Palau’s tourism industry with the goals of the Marine Spatial Planning process to enhance its economic benefits while protecting Palau’s resources.
Whipps takes pride in Palau becoming the first nation to ratify the High Seas Treaty this year. In particular, he is proud of Palau’s participation in the “Unlocking Blue Pacific Prosperity” initiative, a Pacific-wide coalition launched in December 2023 that aims to protect, restore, and rejuvenate the region's ecosystem. Whipps said this initiative is a testament to the power of collective action, shared responsibility, and shared vision.
“It demonstrates the global community’s commitment to sustainable ocean management and the prosperity of Pacific nations,” he said.
He also plugged the country’s efforts to bolster safety, security, and law enforcement, such as a recent agreement with the U.S. Coast Guard to boost the fight against illegal fishing and other illicit activities.
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Also, he said, Palau became the 196th member of the international police organization. That means Palau’s law enforcement can share and receive policing information from around the world across a range of crime areas. '
That’s in addition to bolstering the fight against the importation of drugs.
Whipps also boasted that Palau is no longer on the Tier 2 watch list for human trafficking, thanks in large part to the work of Palau’s anti-human trafficking working group.
In terms of building a sustainable economy for Palau, Whipps cited several accomplishments but concedes that much work needs to be done after the Covid-19 pandemic to build up Palau’s tourism industry, which is its main economic driver.
He said United Airlines has resumed regular flights to Palau, while China Airlines flights have also been restored. The country also welcomed its first flight from Narita, Japan, since the onset of Covid-19, and more flights are expected. He said, Palau welcomed charter flights from Cambodia Airways and Batik Airline this year.
He said Palau is also working to diversify its tourism market and that includes building partnerships. He cited as an example Australia’s Pacific Flights Program, where Nauru Airlines connects Micronesia and Australia, and Air Niugini’s efforts and marketing in Australia that are laying the groundwork to realize further opportunities on tourism and trade.
“Palau and Australia are in discussions about ongoing connectivity and tourism efforts to build on this foundation,” he said.
That’s in addition to Palau leveraging its close relationship with the U.S. military to promote more visits and the conduct of exercises—both of which not only sustain the economy, but also result in humanitarian assistance such as free healthcare, Whipps said.
He also cited his administration's implementation of a comprehensive tax reform, tax reductions, and tax refunds. Other benefits that he said the country recently implemented were a Palauan child subsidy, subsidy for some businesses, an increase in the disability fund, and an annual $480 grant to anyone not earning an income.
Whipps attributed two raises for national government employees to the tax reform the government implemented. “All these policies were put in place to ensure that no one is left behind,” he added.
That’s not to say everything is perfect, Whipps said, adding that the private sector is the only category that’s been overlooked, To redress this, Whipps urged OEK leaders to pass minimum wage bills that are currently pending.
“The increase in our national minimum wage will help our families keep up with the inflated cost of living while also giving them spending power that subsidies fail to provide,” he said.
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Besides diversifying Palau’s tourism industry, Whipps said the country is also looking to technology for new opportunities.
As expected Whipps mentioned the newly signed Compact Review Agreement that Palau negotiated with the United States in 2023. In brief, he mentioned that the economic package amounts to $889 million through fiscal year 2043 that is 215% of the amount negotiated in 2020. This fiscal year and for the next five years, Palau will receive $10 million, he said. Chiefly, the funding covers health, education, public safety and justice, climate change and the environment, and auditing.
The infusion of funds, however, is being stymied due to a supplemental budget bill that remains stuck in the OEK. Whipps called on legislative leaders to pass the supplemental budget in order to help Palau’s children, its elderly, the disabled, and those who need it most, among other intended beneficiaries.
This was on top of other legislations that Whipps proposed in his speech, including ones that would create an economic framework for insurance and bankruptcy.
“In international surveys, Palau currently ranks very low in terms of ‘ease of doing business.’ Solving this problem won’t be an easy, overnight process, but will require hard work and a series of projects,” he said.
This was Whipps’ last State of the Republic Address in his first term in office. He is running for re-election this November.
