Palau
A Defining Moment
An Interview with Palau's President Remengesau
The Republic of Palau is a developing Pacific island country like many others, walking the tightrope of economic development in a remote, fragile market while balancing cultural and environmental preservation. Palau is also a place with no shortage of island politics. Today, the small country is poised at a defining moment. A U.S.-funded, 53-mile road is expected to be completed in about two years, opening up Babeldaob—the second largest island in Micronesia—to big development for a country with a population of less than 20,000. In the words of Palau’s President Tommy Remengesau, Jr., “We cannot sit still. We are constantly at a crossroads. People are going to make their choices, to go left or to go right, because that is the essence of development. We want to preserve our culture, our traditions, our environment—all of this is what makes us uniquely Palauan.” Remengesau recently talked with Pacific Magazine about his vision for his country, the pitfalls that he wants to avoid and what he believes needs to be done to steer the country safely through the coming changes.
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Pacific Magazine: What have you done to prepare the country for the completion of the 53-mile road around Babeldaob, a project described as the gateway to greater economic development in Palau?
President Tommy Remengesau: The best way to prepare for development is you’ve got to have a plan. This plan must be able to be incorporated into our zoning laws and that is one of the first things we are doing. We have contracted a firm and appropriated money for them to do a state development plan for all the states in Babeldaob. It has been a slow process. They have yet to submit the plan for our review, but hopefully it will be an implementable plan, not just a philosophical plan. It will be something by which we will have a mechanism to gauge our progress under a timetable and requirements that must be met. In any case, Babeldaob will undergo change. We know that there are going to be changes, there are going to be sacrifices.
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PM: What is your vision for Palau? Is it going to be made in the image of Guam, a version of Hawaii, or something all together its own?
TR: First of all, we hope Palau will grow to be uniquely Palau. Palau is an important destination these days because of the uniqueness that it provides, as opposed to going to someplace like Hawaii. If we lose that uniqueness, then we will just be another destination and people will not have a special reason to come to Palau. So I think the challenge to the people of Palau is how do we grow while at the same time preserving our natural beauty. How do we develop while preserving and protecting our natural resources? The sustainable path, that is the challenge for Palau.
PM: What then should be Palau’s brand of tourism? What is your target number for visitors per year?
TR: You have to diversify your products. Right now, Palau is very well-known internationally for its diving, but hopefully, we can also develop our sports fishing products and our eco-tourism once Babeldaob opens up with all the waterfalls and landscapes. We can definitely develop kayaking and snorkeling as well as becoming a honeymooner’s destination. We will have to be diversified in order for Palau to reach its potential. There have been numerous studies done to indicate X number of tourists in order not to saturate the environment. I believe the maximum target that we all believe is 500,000 in the next 25 years.
PM: High-end tourist versus low-end, where do you stand?
TR: There is no question we are for quality, not quantity. High-end is what Palau should stand for because after all Palau has high-end products. But it is a chicken and the egg situation. We have to have the high-end facilities, high-end services. The coming developments are expected to be high-end. The hotels that are being constructed right now are high-end, like the five-star hotel at Malakal, and Joe Morita’s project for Ngerur. That’s $800 to $1,500 per night. If you have the right customers, you may have less people, but you might have more revenue.
PM: Along the way to that vision, what are the key areas where Palau succeeds or fails? How do you avoid the pitfalls?
TR: Key areas will definitely be the infrastructure, the capability and capacity of Palau to host this development. This is what we have learned mostly from what went wrong with Hawaii, Guam and Saipan. You have to have the necessary infrastructure in place before you have too many developments on the island. That also ties in with our environmental policies. We are going to fail if we do not have the right environmental polices in place, because as soon as we destroy what are the main attractions for tourists coming here in the first place, really we do not have any reason for people to come.
PM: How do you pay for that new infrastructure?
TR: We are hoping that development, anticipated development will provide the necessary revenue to fund many of these things. For example, we have to stress more in the area of government-private partnerships. The government cannot be tasked to fund all of these projects. There has to be a partnership in this kind of thing and really that is the way to go in today’s world, to have more public and private partnerships in the development.
PM: Can Palau’s rampant land disputes and lawsuits short-circuit plans to develop?
TR: I must honestly say in some ways it has been a blessing in disguise that we have not really resolved the land ownership issue. For one thing people still have land because people would have already sold their land. We still need a master plan and we need zoning plans for all the land still to be developed. Until those are in place, it is a good thing we do not have this land free for development. But in the final phase, development must be based on the availability of land and in that case the government has to promote the resolution of land disputes in a timely way. We are trying all kinds of initiatives, believe me. One initiative right now seems to be having an impact is mediation.
PM: We talk about environmental preservation, but how do you balance that with the need to draw investors?
TR: You have to be very honest and transparent. In this case, I have already asked our Congress to reform our foreign investment act. Basically, what the reforms need to accomplish is setting the criteria that defines those industries that we would welcome to Palau. For the green light category, these are allowable for a Palauan and foreigner alike. And for the orange category these are allowable, but there are certain conditions, mainly environmental considerations. And for the red light category, don’t even waste your time because it is a no-no for Palau. I think if we made that very clear for foreign developers and domestic developers, you are not only being fair and transparent, it also sends a clear message on how you want the future of Palau to be.
