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Economic Cooperation

◆Japan's Development Assistance Policies for the Republic of Palau

1. The Significance of Assistance to Palau

　The small island countries in the Pacific including Palau face developmental difficulties, such as the scattered locations, limited domestic market, and the remoteness from the international market.

　Palau imports most of its living supplies from overseas and has no significant industry besides tourism. Hence majority of the workers are employed in the public sector, which has become a huge financial burden for the Government

　As Palau sets its axis of economic development in tourism development utilising the abundant natural environment, the harmonisation of environmental protection and development is a key issue. However, environmental issues such as the management of increasing waste, deterioration of public hygiene, and destruction of the coral reef ecosystem due to climate change and other reasons are arising.

　Moreover, delay in infrastructure development, mainly in electricity generation areas, is hindering the development of industries such as tourism and the promotion of foreign investment for economic development. Another serious issue is the lack of personnel due to limited education opportunities (especially secondary and tertiary education) and “brain-drain” of the educated to the neighbouring developed countries. Overcoming these vulnerabilities is inevitable for the social and economic development of this country.Moreover, the era influenced Palauan culture. Modern Palauan language has many Japanese-derived words, such as “Daijobu”, “Okyaku”, “Denki”, and “Senkyo”. Several local cuisines like Sashimi, Nitsuke, and Oshiruko also originate from Japanese cuisine.

　Palau has strong historical ties with Japan as Japan had administered the region before WWII and is also a neighbouring country connected by the Kyuusyuu-Palau Ridge. Also, Japan and Palau have strong relationship in fisheries, as Palau has fishing agreements with Japan and Japanese fishing vessels operate in the EEZ of Palau. Furthermore, since Palau became independent in October 1994, Palau has always supported Japan in the international arena and has built a strong bilateral relationship. Therefore, it is important for Japan to assist Palau continuously to support the independent and sustainable development of the nation as well as to strengthen the bilateral relationship.

2. Fundamental Policies of Assistance (Overall Target): Achievement of sustainable economic development with consideration to the environment and improvement of the people’s living standard

　Japan will support Palau in accordance with Palau’s National Development Master Plan and the assistance policies decided in the Pacific Islands Leaders Meeting (PALM) which is held every three years since 1997, mainly in the fields of environmental protection and countermeasures against climate change. Japan will also support infrastructure development to enhance the reinforcement of sustainable economic growth and improvement of basic social services.

3. Focused Areas (Concrete Targets)

(1)Environment / Climate Change

　For the improvement of the surrounding environment and pubic hygiene through appropriate solid waste management and conservation of coral reef ecosystem, Japan will focus on assistance for environmental protection. Additionally, to overcome vulnerability against influence of climate change and natural disasters, Japan will also support on fields of countermeasures against climate change.

(2) Overcoming Vulnerability

　In order to achieve sustainable economic growth, Japan will focus on supporting the establishment of infrastructure, mainly the electric power generation equipment to realise stable provision of electricity in the country. Besides, activation of the private sector such as tourism, improvement of basic learning skills especially in science and mathematics, enhancement of medical health level through eradication of Filaria by 2020 and training of personnel will also be supported.

4. Others

Japan will seek effective and efficient implementation of assistance by actively exchanging opinions with other major donors such as U.S. and Australia to avoid duplication and create synergy with their projects.

Project Planning for Palau