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Country profile - Palau
Its tropical waters are home to an abundance of marine life, making Palau a paradise for divers.
The scenery ranges from white sandy beaches to dense jungle. Palau tries to protect its wildlife from hunters and poachers. It favours sustainable tourism.
Palau became independent in 1994, after being part of a United Nations trust territory administered by the US for 47 years.
It relies on financial aid from the US, provided under a Compact of Free Association which gives the US responsibility for Palau's defence and the right to maintain military bases there. Direct aid is set to wind up in 2009.
Tourism is low key, though growing in economic importance. Many visitors come from Taiwan, with which Palau has diplomatic ties. Taiwanese aid boosts the economy. The government is Palau's largest employer.
Monoliths and other relics are reminders of an ancient culture that thrived on the islands, but Palau's recent history has been dominated by outside influences - from Spain, Britain, Germany, Japan and the US. Palau saw some of the region's fiercest fighting in World War II.
Though embracing some Western trappings, many Palauans identify with their traditional culture and its codes and rites.
Politics in Palau sometimes has been lively; the nation's first president was assassinated in 1985.
Additional information Full name: Republic of Palau Population: 20,000 (Secratariat of the Pacific Community estimate, 2006) Capital: Melekeok Area: 508 sq km (196 sq miles) Major languages: Palauan, English Major religions: Christianity, Modekngei (indigenous belief) Monetary unit: 1 US dollar = 100 cents Main exports: Fish, garments
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