Palau Vice President Raynold “Arnold” Oilouch
Palau had misgivings at the time it was charting its future as a sovereign state, uncertain about its ability to stand on its own, but more than two decades later, it proved to have made the right choice, Palau Vice President Raynold “Arnold” Oilouch said.
Twenty-three years since gaining its independence, Palau revels in its growing economy as it braces for its emerging role in regional security.
Prior to the implementation of the Compact of Free Association, Oilouch said Palauans dealt with nagging questions: “Do we know what we are getting ourselves into? Can Palau survive as independent nation?”
The post-trusteeship period gave the answers, he said. “Yes, yes, yes; we can. Well, all the questions have been answered. I came today with the good news to all pessimists. It has been a successful 23 years for our young republic; we are a stronger nation today than when we started 23 years ago,” Oilouch told the Palauan community at the 23rd anniversary celebration of Palau’s independence held Saturday at Governor Joseph Flores/Ypao Beach Park on Guam.
The gathering at the park, now officially named for a former Guam governor and hosted by Palauans living on Guam, was part of the month-long celebration of the day that marked the end of Palau’s status as a trust territory of the United States.
Palau’s Compact of Free Association with the United States went into effect on Oct. 1, 1994, defining the young nation’s new role in the Pacific region and paving the way for its integration into the global economy. With it came the challenge to preserve its environment and national identity.
“Twenty-three years later after our independence was completed, we still have challenges along the way. We have pains, struggles and sacrifices, but as an independent nation, we all enjoy its benefits,” Oilouch told the crowd.
The United States provided Palau with roughly $700 million in aid for the first 15 years following commencement of the Compact to jumpstart its economy. The compact has funded major infrastructure projects including the construction of a road around Babeldoab, and provides for some US federal programs.
In 2009, Palau signed a new compact with the U.S. for $250 million from 2010 to 2024.
With a population of more than 20,000, Palau’s economy relies on tourism, trade, subsistence agriculture and fishing. Government is a major employer of the work force. Due to a limited skilled labor pool, Palau became host to thousands of alien workers.
According to the Asian Development Bank, Palau’s gross domestic product was worth $276 million in 2016. ADB projects a 3.5 percent economic growth in 2018.
The main economic challenge besetting Palau however, is to maintain long-term economic sustainability by reducing its reliance on foreign assistance.
Just the same, Oilouch is confident Palau “is moving in the right direction.
In exchange for federal dollars, the Compact provides the United States unrestricted access to Palau’s ands and waterways for strategic purposes.
Amid the growing tension in the Asia-Pacific, Palau is poised to take on a new role in the region. “Palau is indispensable to our national security and funding the compact is key to our strategic presence in the region,” says the U.S. Defense Department’s 2018 budget request, which appropriates $5.4 million for Palau.
After it was captured by the American forces from Japan following the costly Battle of Peleliu during World War II, Palau was formally passed to the United States under United Nations auspices in 1947 as part of the Trust Territory of the Pacific Islands.
The Trust Territory districts formed the Federated States of Micronesia in 1979, but Palau and the Marshall Islands declined to join the union. Instead, Palau opted for independent status in 1978 and became the Republic of Palau in 1981. In 1986, Palau signed the Compact of Free Association, which was ratified in 1993 after eight referenda, and went into effect the following year.
Guam Senator Wil Castro presents resolution to Palau
“We are very happy that our leaders decided to move away from the rest of Micronesia to be on our own, managing our own affairs. We are very proud of it,” said Lewis Ilek, president of Koro Club of Guam. “I think it was the right thing for us because we have different cultures and identities.”
Like other island economies in the Pacific, Ilek said Palau has to deal with many challenges.
“We have to import materials from other places and the cost of doing that is something of s burden. But that is a burden that we can overcome,” he said. “As an independent nation, Palau will always deal with many challenges. But challenges are good; they also come with opportunities.”
Under the Compact of Free Association, Palauan citizens are allowed unrestricted entry and to work in the United States and its jurisdictions.
There are about 4,000 Palauans living in Guam.
In his remarks before the Palauan community, Oilouch asked Palau citizens living in Guam to “perform your civic and community duties, obey Guam laws and be productive members of the community.”
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Acting Guam Governor Ray Tenorio keynoted the event