Palau (also known as Belau) is located in the western extremities of the Pacific Ocean. It consists of the Palau group of islands, in the western Caroline Islands, and four remote islands to the sw. Palau is isolated from larger land masses, with Papua New Guinea/Irian Jaya (Indonesia) 660 km (410 mi) to the s, the Philippines 885 km (550 mi) to the w, and Japan 3,042 km (1,890 mi) to the n. Yap Island in the Federated States of Micronesia lies 579 km (360 mi) to the ne. The country consists of more than 200 islands, with a total land area of 458 sq km (177 sq mi). Babelthuap is the largest island, with an area of 397 sq km (153.2 sq mi); Koror Island, containing the capital, has an area of 18 sq km (7.1 sq mi). The islands of Peleliu and Angaur are about 50 km (30 mi) s of Koror. Sonsorol and Hatohobei, the two smallest island states, lie 560–640 km (350–400 mi) sw of Koror. Kayangel is a coral atoll 45 km (28 mi) n of Babelthuap.
The population of Palau in 2015 was estimated by the United Nations (UN) at 21,291, which placed it at number 190 in population among the 193 nations of the world. The projected population for the year 2025 was 23,000. The population density was 46 per sq km (118 per sq mi).
Palau is a multi-party democratic republic. The President of Palau is both head of state and head of government. Executive power is exercised by the government, while legislative power is vested in both the government and the Palau National Congress. The judiciary is independent of the executive and the legislature. Palau adopted a constitution in 1981.
Infrastructure and Economy
Palau’s economy consists primarily of tourism, subsistence agriculture and fishing. Tourist activity focuses on scuba diving and snorkeling in the islands’ rich marine environment, including its barrier reefs’ walls and World War II wrecks. The government is the largest employer, relying heavily on U.S. financial assistance. Business and tourist arrivals numbered some 50,000 in fiscal year 2000–2001.
The population enjoys a per capita income twice that of Micronesia as a whole. Long-term prospects for the key tourist sector have been greatly bolstered by the expansion of air travel in the Pacific, the rising prosperity of leading East Asian countries and the willingness of foreigners to finance infrastructure development.
The official languages of Palau are Palauan and English, except for two states (Sonsorol and Hatohobei) where the local language, Sonsorolese and Tobian, respectively, along with Palauan, is official. Japanese is spoken by some older Palauans and is an official language in the State of Angaur.
The US Dollar is the official medium of exchange.
There are no foreign exchange controls in Palau.