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.
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.
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.