Economy

ECONOMY -

We are committed to strengthening our economy
by pursuing growth and reforms that benefit our
Palauan people. We are dedicated to the proper
allocation of resources to meet the basic needs of
OUR PEOPLE. We are dedicated to ensuring
that we are financially responsible in utilizing
revenues to promote sustained prosperity for future generations. We are dedicated to
maximizing returns on our limited resources.

For the Private Sector – OUR PLAN focuses on establishing and enabling
environment for strong and sustainable private sector growth that includes:

Effective Regulatory Framework –

           *     Well-Defined Legal System for Commercial Activities to ensure sound business
                 practices and consumer protection;
           *    Transparent Foreign Investment Regulations that promotes foreign direct
                 investments in targeted areas;
           *     Sound Banking and Financial Market Framework that protects depositors and
                 instills confidence in our financial system;
           *     Equitable Labor Laws that provides for the protection and fair compensation for
                 workers; and
           *     Revenue Structure Reform to establish a more equitable and simplified revenue
                 system that facilitates business growth.

Implementing High-End Tourism Policy (“Quality vs. Quantity”) to maximize the

earnings on our resources with minimal impact on our environment;

Accelerating Land Ownership Resolution to facilitate investments and development

that provides real revenue options for the states and income opportunities for
families;

Targeted Sectors for Development at the State and National levels (‘Foundations

           for Growth’) aimed at developing those areas that have the most potential to
           contribute to higher economic growth opportunities including –

           *     Agriculture/Aquaculture
           *     Financial Services Center (Banking and Insurance)
           *     Fisheries
           *     Trade (Trans-shipment Point)
           *     Oil, Gas and Mineral Resources

Expanded Investment and Improved Maintenance of basic national infrastructure

including roads, power, communications, water, solid waste and sewer systems that
meet economic growth requirements.

For the Government – OUR PLAN focuses on containing the cost of Government
through a ‘balanced budget’ and ensuring Transparency that includes:

Reviewing Government Structure to ensure efficient and responsive delivery of

public services;

Improving Accountability and Productivity of Expenditures by strengthening

reporting requirements;

Periodic publication and assessment of annual fiscal procedures and processes

based on international standards to ensure fiscal responsibility and transparency;

Strengthening Revenue Collection Efforts by focusing available resources on

revenue generating activities;

Expanding Revenue Base through user fees and charges aimed at recovering part

of the costs of providing certain services;

Maintaining and Expanding diplomatic and bilateral relations to promote

international and regional cooperation;

Strengthening the coordination between agencies charged with the task of initiating

and coordinating foreign aid and technical assistance project funded programs;

Working with Governors to complete ongoing capital improvement projects and

secure funding for future development;

Preparation of State Master Development Plans and medium term strategic plans;
National Government support of “One state [village], one product” development

strategy;

Prioritizing development of state visitor attractions;
Facilitating National Development Bank of Palau financing of major state

development projects (Joint ventures, state, etc.)

The National Government assisting the states in:

            *     Financing of studies (feasibility, concept design, etc.)
            *     Identification/background check of potential investment partners
            *     Facilitating training;

Establish an Inter-Agency Group comprised of both public and private membership

to monitor and report on the progress of the Plan of Action;

Establish performance targets for Ministers and mandate the preparation of

performance measures for management to ensure that the government is
responsive to the needs of the People of Palau; and

Implement the provisions of future petroleum legislation on which the World Bank,

           through its technical and funding support, has enabled Palau to retain oil and gas
           industry experts and consultant to develop it’s the legal and regulatory framework
           for enactment by the Olbiil Era Kelulau.