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Economics and business at Palau

Business is underdeveloped. Gross domestic product (GDP) per capita was estimated at $ 7500 (2003), which is among the highest in Micronesia. However, Palau has a chronic budget deficit and is dependent on foreign aid. US financial support is secured through an association agreement that provided a grant of $ 700 million in the period 1994-2008. According to COUNTRYAAH, the largest growth industry is tourism, which since the turn of the millennium has responded to approx. 10% of GDP and an equal share of employment. In 2004, the country received approx. 63,000 visitors, mainly from Japan and Taiwan. The tourists come first and foremost to dive; The waters around Rock Island, near Koror, have one of the best-preserved marine ecosystems in the South Pacific.

Business of Palau

Agriculture and fishing are mainly run at self-storage level. The most important agricultural products are coconuts, tapioca, bananas and sweet potatoes. Fishing licenses are sold to foreign trawlers, but widespread illegal fishing due to poor surveillance is a problem.

Palau has a considerable financial sector that caters to foreigners. The island state has on several occasions been accused of allowing money laundering through poorly regulated banks. The legislation has been sharpened several times following threats of EU and US sanctions.

Transport and Communications

Koror has a bridge connection with Babeldaob and the neighboring islands of Arakabesang and Malakal. There are deep water ports in Malakal. 2003 opened a new international airport at Babeldaob, built with Japanese assistance. There are local airports at Peleliu and Angaur.

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