Palau

The North Pacific’s Republic of Palau (Palau) is one of the smallest countries by land size in the world. It consists of approximately 340 islands with a total area of 466 square kilometres.

Palau is an independent nation in Free Association with the United States, which first came into force in 1994. New Zealand and Palau commenced diplomatic relations the same year. Palau is responsible for its own domestic and foreign policy affairs, while the US retains obligations for defence and security.

New Zealand’s relationship with Palau is based on common interests in Pacific issues such as climate change, oceans and regional security. We are both members of the Pacific Islands Forum (PIF) and the Council of Regional Organisations of the Pacific (CROP) agencies such as the Secretariat of the Pacific Regional Environment Programme (SPREP).

Development cooperation and sustainability

Palau’s waters are some of the most biodiverse in the world and this is one of the world’s most ambitious ocean conservation initiatives. Eighty percent of Palau’s Exclusive Economic Zone (EEZ) is reserved for traditional and domestic fishing activities for its own market. All extractive commercial activities in this area, such as fishing and mining, are banned.

New Zealand provides bilateral development cooperation funding to Palau as part of our North Pacific development programme. The programme is focused on economic resilience, fisheries and oceans management, climate change, tertiary scholarships, and child and maternal health. For example, we partner with Palau on biodiverse marine spatial planning assistance and climate resilience of rural communities and marine ecosystems.

Some of this work is delivered through the North Pacific Development Fund. The Fund invests primarily in activities that support income and job generation, training, disaster management and community development.

The latest information on our development cooperation activities, including activity details and descriptions, start and end dates, geographic and sectoral focus, expenditure figures, is available at DevData(external link).

People and culture

The Manaaki New Zealand Scholarships Programme(external link) provides tertiary and short-term training scholarships to Palau scholars.

Trade and investment

Given the distance between Palau and New Zealand, and there being no direct shipping links, two-way trade between New Zealand and Palau is modest. The latest information about New Zealand's trade profile with Palau is available on the New Zealand Trade Dashboard(external link).

Being situated comparatively close to Asia compared to the rest of the Pacific, tourism makes up Palau’s main source of domestic revenue, contributing almost half of its GDP. US Compact of Free Association funding makes up the other largest source of revenue.