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Palau is a small, poor nation consisting of 8 main and more than 250 smaller islands in the Caroline chain, which lies roughly 500 miles southeast of the Philippines. Sighted by Portuguese and Spanish explorers in the sixteenth century, the Carolines eventually came under Spanish control and, by the mid-nineteenth century, began attracting growing numbers of missionaries and coconut traders.
After its defeat in the Spanish-American War, Spain sold most of the Caroline Islands to Germany in 1899. Japan seized the islands in 1914 and ruled them from 1920 under a League of Nations mandate. U.S. and Japanese forces fought bloody battles for control of the Carolines during World War II. The islands became part of the U.S. Trust Territory for the Pacific after the war.
Palau declined to join the Federated States of Micronesia, which was formed in 1979 by four other Caroline Island districts of the U.S. Trust Territory and later became an independent state. Instead, it approved its own constitution and became self-governing in 1981. Palau achieved full independence in 1994 under an accord with the United States in which Washington agreed to provide $442 million in aid over 15 years. Under the accord, known as the Compact of Free Association, the United States also agreed to maintain responsibility for Palau's defense and has the right to set up military bases.
Palau's politics have stabilized since the 1980s, when its first president, Haruo Remelik, was assassinated early in his second term and another president, Lazarus Salii, was found dead in his office of an apparent suicide.
The current president, Tommy E. Remengesau, Jr., took office after winning the November 2000 elections. The Remengesau Administration tightened bank laws in 2001 after Palau was accused by the United States and some European countries of being a money laundering haven. Palau and four other nations joined the International Whaling Commission in 2002, a move that could help push the 47-member body from its present conservationist agenda towards a pro-whaling stance.
Citizens of Palau can change their government through elections and enjoy most basic rights. Executive powers are vested in a president, who is directly elected for a four-year term. The Senate has 9 members, each of whom represents the entire country, while the House of Representatives has 16 members, one each from Palau's 16 states. All legislators are directly elected for four-year terms. The Council of Chiefs, consisting of the highest traditional chiefs from each of the 16 states, advises the president on traditional laws and customs. Palau has had political parties in the past, although none currently exist.
Palau's judiciary is independent, according to the U.S. State Department's global human rights report for 2001, released in March 2002. Religious freedom is respected in this mainly Christian society.
Women have traditionally enjoyed high social status in Palau because inheritance of property and traditional rank is through female bloodlines. Women today hold several key traditional leadership posts. Palau's vice president, moreover, is a woman, Sandra Peratozzi. On the whole, however, women hold relatively few senior positions in government and politics. Domestic violence is common, according to the U.S. State Department report, and is often fueled by alcohol and illegal drug abuse.
Palau has no trade unions, although the government does not prevent workers from organizing. The economy is heavily dependent on U.S. aid, and the government employs nearly half of the workforce.
Palau's many foreign workers face some discrimination in housing, education, employment, and access to social services, according to the U.S. State Department report. They are at times targeted in violent and petty crimes, the report added, and allege that officials do not vigorously investigate or prosecute crimes against them.
Foreign workers also face abuse from their employers. Anecdotal reports suggest that employers at times physically abuse foreign workers and pressure them into remaining in jobs by making verbal threats or withholding the workers' passports and return tickets, the U.S. State Department report said. Palauan employers at times also renege on contract terms, withhold pay or benefits, and make foreign laborers work extra hours for no pay, the report added. While officials have taken action in cases brought to their attention, many foreign workers are reluctant to seek assistance for fear of losing their jobs. Foreigners make up nearly 30 percent of Palau's population and 73 percent of the paid workforce, according to the May 2000 census.