Koror—Every year on the first of October, the U.S. government marks the beginning of a new fiscal year, and so does the Palau government. But what appears to be a lost detail, yet historically significant, event marks the difference for Palau. Oct. 1 is celebrated as the day that Palau gained its full sovereignty coinciding with the start of the U.S. federal budget cycle.
Notably, it is the day that reminds the country that its funding as a freely associated state with the United States becomes available for its annual disbursements.
In late August 2020, a letter hand-delivered to then-U.S. Secretary of Defense Mark Esper marked a pivotal point for Pala, a moment whose impact will resonate for years, one that bore the strain of the uncertain times under the Covid-19 pandemic.
“We invite you to come and build dual-use facilities,” then-President Tommy E. Remengesau Jr. said, wasting no time in getting his request directly into Esper’s hand. This marked a shift in Palau's stance on the Compact of Free Association, which grants the United States the right to operate military bases in Palau and make decisions related to its external security.
The request for dual-use facilities suggests that Palau is now more open to the idea of a U.S. military presence within its borders. Dual-use facilities can be used for both civilian and military purposes. Critics argue that this move betrays the original aspirations of the Palauan people and is a slippery slope toward the United States using this facility for military purposes, making Palau a more appealing target.
Has Palau thrown in the towel and given up on its ideals?
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Throughout its nearly 30 years of independence, Palau had never been a prime target for U.S. adversaries. However, that letter transformed Palau from a non-target to a prime target, and with its new status has taken on grave significance and implications.
It’s a common belief that under COFA, military presence is only expected in times of war or imminent threat and not during peacetime. The recent developments, including the multimillion-dollar construction of the tactical multi-mission over-the-horizon radar system, live patriot missile tests, reactivating WWII airstrips, shiprider agreement and military exercises have shifted the paradigm, potentially exposing Palau to foreign aggressors.
Inviting the U.S. military to come and build dual-use facilities may be seen as a desperate response to the global pandemic, which has devastated Palau’s tourism, the nation’s major economic driver. However, it also illustrates Palau’s struggle to balance its sovereignty with the desire to live in peace without the looming threat of war, especially considering the country's firsthand experience of the Pacific Theater during World War II.
The compact has had a mixed impact on the country, which is situated close to some of Asia’s largest metropolitan areas. Despite a recovery from three years of economic contraction, Palau’s economy remains heavily reliant on U.S. financial assistance and tourism. The COFA is a double-edged sword: the U.S. edge of the sword appears to be sharper and shinier than Palau’s edge, resulting in significant population loss as many Palauans seek better opportunities in the U.S. mainland and its territories.
“A significant challenge has been the outmigration. Since 1994, nearly half of Palau's population has left. This brain drain has not only reduced local capacity but also hindered growth,” Palau President Surangel Whipps Jr. said during his address to world leaders at the 78th Session of the UN General Assembly last month.
The outmigration trend continues, with young Palauans including recent high school graduates, pursuing careers in the U.S. Armed Forces. As more people leave the island to settle elsewhere, families sell their homes and relocate to the U.S. mainland.
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This exodus has had a profound impact on Palauan culture and traditions. Fluency in Palauan language is declining, traditional arts and crafts are fading, and American entertainment and products dominate. It has accelerated the erosion of traditional Palauan values like self-reliance and community spirit.
Palau has also been guilty of inward focus, fixating on its overreliance on the 30 years of COFA with its financial assistance and other services and benefits without paying enough attention to the world around it. This has led to missed opportunities to develop a coherent national development plan to address some of the country’s most pressing challenges, such as outmigration, housing crisis, climate change, and attracting more foreign investments. For example, Palau was once upon a time, a baseball powerhouse, but such was true back then. The country is left with its past glory to brag about.
However, over the past 30 years, Palau has undergone substantial transformation. The country has made significant strides in economic development, education and healthcare. Yet, it still grapples with challenges like poverty, climate change and the threat of foreign military intervention.
As Palau enters its fourth decade of independence, it must find a delicate balance between its romantic vision of sovereignty and the need for forward-looking pragmatism.
Ongerung Kambes Kesolei is a reporter, photographer and editor for Tia Belau, and co-founder of Pacific Note. Send feedback to okkesolei@gmail.com
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