Eco-consciousness and Development in Palau

Until the early part of this century, a thorough knowledge of their world was essential to the well-being of the people of the islands now known as Palau. Largely isolated, the Palauans would surely have faced starvation if they had irreversibly upset the natural balance of their environment. Ecoconsciousness was intrinsic to their everyday life and cultural perspectives.

With the arrival of various colonizers, Palau was propelled, virtually overnight, from a subsistence economy to one that involved trading internationally and exposure to previously unknown goods. The presence of foreign governments and the emergence of a trade-based economy eroded traditional conservation practices, leaving an ethical vacuum as the people struggled to adjust to new guiding principles. The next decades were marked by overharvesting of marine and land resources and overall degradation of the environment through pollution and modern development activities.

Today, although degradation continues at an ever-increasing pace, there is hope as many are witnessing firsthand the costs of such behavior. Despite the overwhelming impact of foreign lifestyles, the core of many traditional beliefs, values, and practices has survived. Palauans are still closely tied to the land and the sea. Nevertheless, the changes that have occurred in the last century require traditions that once met the needs of the community to undergo further modification in order to adjust to the modern lifestyle that Palauans are adopting.

New Challenges

Since the Republic of Palau gained independence in 1994, the overriding concern of the national government has been to develop a self-sustaining economy before the year 2009, when funding under the Compact of Free Association, which established independence, comes to an end. The government is responding to the high levels of subsidy afforded to its operations and programs under the United States administration and during the first fifteen years of the compact. Palau will receive about $500 million, mostly front-loaded, under the terms of this fifty-year agreement--a tremendous sum that will go a long way toward establishing a firm economic base. Palauans have become accustomed to a relatively high standard of living, and if a healthy economy is not established by the unofficial deadline of 2009, the country may face economic and political crisis.

At the time of independence, Palau's economy was already centered around tourism, although still in a fledgling stage. The 100-room luxury Palau Pacific Resort and 22 other hotels of varying quality were already established. Visitors were guided through the thriving reefs surrounding the Rock Islands by a relatively high number of tour agencies, which sometimes competed viciously for their share of the pie. Today about 34 hotels and a proportional increase in the number of licensed and unlicensed tour agencies are struggling to win a share of the market. In 1994, only a few other large-scale companies were in operation. Two were commercial fisheries, three were department stores, and a number of agricultural concerns provided the market with a widening variety of fresh eggs and vegetables. In addition, numerous smaller companies supplied the commodities, materials, and services to keep this small economy growing.

A high proportion of these firms, especially in the area of tourism, have been funded by foreign interests. All capital-intensive enterprises are the result of foreign investment, with the exception of two locally owned businesses that started small and developed into large operations. This situation is causing much concern because, despite high visibility within the community, the contribution of the foreign enterprises to the local economy is small relative to the revenues they collect. The common perception is that foreign companies take advantage of their long experience and Palau's lax legal regime to repatriate the bulk of their profits to their home countries. Nevertheless, the current administration has pinpointed tourism as the most viable industry for Palau and is encouraging its rapid development. Although most people agree that small-scale but lucrative "high-end" tourism is more desirable and more sustainable than mass tourism, the present...