Interview with Palau's President

by Ian Williams

From the Pacific Islands Monthly (Fiji), February, 1995

In the middle of December, the Pacific's ranks at the UN gained a new recruit with the 185th member state, the Republic of Palau. The raising of the country's flag outside UN headquarters in New York marked a new beginning for the country and the end of a 50-year saga of three- cornered relations among the UN, the US, and the Pacific which began when US marines stormed ashore in 1944 and the UN was established in 1945. In fact, Palau President Kuniwo Nakamura referred to his country's independence as a "symbolic end to World War II".

Palau, the 10th South Pacific Forum nation to join the United Nations, has had the most involved relationship of almost any nation with the world organisation. It is the very last UN trusteeship territory and so one would expect the Trusteeship Council to be wrapped up. But anything Palau touched seems tied up in procedural wrangles. The council will be mothballed, not abolished, because, as one French diplomat warned, to close it down would require an alteration to the UN Charter which could have "dangerous consequences". By this he meant other countries might ask questions about the other World War II relic in the UN Charter the permanent Security Council seats still held by former great powers like Britain and France.

One other wrangle has been avoided. As President Nakamura explains in his interview with PIM, the long-lasting court case between a consortium of banks and Palau has been settled satisfactorily. The banks sued over a dubious loan made 10 years ago, which, with interest, would have crippled the newly independent state with a debt of somewhere in the region of a $100 million. The case had been bouncing between the State and Federal courts in New York for the past 10 years until the President intervened in 1993.

But, of course, the mother of all procedural wrangles has been the series of referendums over amending the Palauan constitution's anti- nuclear provisions to suit US objections. In 1983, the US delegate told the UN nuclear weapons were "necessary if the United States is to meet its responsibilities for the defence of Palau". This highly dubious claim was, however, backed by the indisputable fact that US money was indeed indispensable for the survival of the fledgling republic, which, after 40 years off Trusteeship, had almost no other resources or income.

Successive Palauan governments tried to get their hands on the funds that would be available under the Compact of Free Association with the US, but Washington was adamant the non-nuclear provisions had to go first. Vote after vote failed to raise the 75 percent majority needed to overturn the constitution until last year when the clause specifying the 75-percent was amended by referendum to allow a simple majority.

After Spanish, German, Japanese, and American rule, one of the most colonised territories in the world now seems set for a prosperous independent future. The Compact assures a once off payment of $190 million, and then annual payments of $18 million for 14 years, which per capita for the estimated 15,000 inhabitants must make it the most heavily aided country in the world.

However, such largess could breed dependency, and President Nakamura's government has to develop the indigenous resources to bridge the gap when the Compact funds run out. Agriculture, fisheries, textiles and tourism are the major possibilities, but the latter especially has potential to cause dissent. Many islands have suffered as much as benefited from tourism, and it will need tight control if Palau's fragile environment is to be preserved. As he told the UN General Assembly, despite its size, possibly the smallest member, "we are large in things that count: a strong cultural heritage; a commitment to human rights and a democratic government; resources - both human and marine - which we are particularly proud of; and most of all, the support and friendship of our brothers and sisters in the international family of nations."

Every press release and speech about the accession of Palau to the UN seemed to give a different population figure. President Nakamura is equally vague, hazarding that "if you include everyone, inside and outside of Palau, I'd say about 40,000. About half in Palau and half outside, even in New York".

Will there soon be a permanent mission in New York to add to the expatriate population there? 'We haven't decided yet. To begin with, our UN affairs will be handled by our Washington office, and I haven't named anyone for that yet."

It looks as though Palau would have been crippled at birth with huge debts from the Ipseco power station scandal. How did he get that millstone off his neck?

"Well, we had no ability to pay that kind of money," President Nakamura confessed, "so as soon as I took over office, I told them I wanted to resolve it. I immediately contacted the banks and asked for a renegotiation of the loan, which as you know, we defaulted on some time ago. They agreed to meet us, so I went to London in June 1993, along with other leaders of Palau, and we were able to strike a deal to reduce the debt to $20 million, interest-free, to be paid within five year with the first installment of $2.5 million to paid on or before January 9, 1995. The fin agreement was signed in June. Since the principal was $32 million, this was a good deal. We have already secured the money and we will be remitting the money, $22.5 million, to Morgan Grenfell of London. It is interest-free so we want to wait until then to pay. But the problem has been resolved. We are very glad to get this out of the way before we begin a new chapter of our history."

Asked about the difficulty of settling, the President said," They too realised that they had to meet us half way. We had very frank discussions - about our ability to pay for example. I told them that I cannot settle on something that we cannot deliver."

Apart from the debt, the other obstacle for Palauan independence has been the non-nuclear provisions of the constitution. What is their present status? "The nuclear provisions are suspended for the duration of the Compact, for 50 years, and will be revived, reactivated afterwards. Of course, the Compact can be terminated any time."

Has the referendum finally settled the issue?" Well we got 68 percent in the last one, which was also on a very high turnout about 80 percent. In 1992, we had a referendum to lower the test to a simple majority and last year we had the referendum to suspend the constitution. In fact, we have turnouts in votes. In the last presidential elections we had over 90 percent turnout.'

So is there any more litigation pending on it? "Not as of today," he chuckled indulgently.

Some other countries have complained that Micronesia and the Marshalls vote with the US on issues like the Middle East when the rest of the world opposes it. Will Palau have an independent foreign policy? President Nakamura chuckled knowingly, and cautioned, "You know, the US is a very influential country, and given our historical relationship with the US, I think we'll continue to have a good relationship and we will co-ordinate with them. I think we will very closely with the United States."

He added that of course, Palau will be joining the South Pacific Forum soon: "We will be a member - an active member - and of course of the AOSIS. There are a lot of regional issues to be addressed".

In his speech to the General Assembly he referred to rebuilding infrastructure. Apart from tourism, what is there to develop? "Next to tourism, our biggest asset is our exclusive economic zone, the offshore fisheries, long-liners from Japan and China and the US with whom we have a regional agreement."

"We also have a plan for small-scale industries including garments. But it's highly labour intensive and we'd have to import labour so we are looking very carefully at it' There have been fears the rush for tourist dollars would destroy the very environmental assets that attract tourists. Could he reassure people about that?

"We are very aware that our environment is very sensitive and very important for our economic development. It's the only thing that we have really. It's something that we want to share with the rest of the world, but we do have to be careful. Tourism has been growing at an annual rate of between 18 to 20 percent for the past three years. It is very small compared with, say, Guam but we want to concentrate on quality tourism. We don't want mass tourism, we want tourists with lots of money to spend who won't affect our environment."

Whatever the country does with its economy, for the foreseeable future it is going to be one of the largest per capita recipients of aid in the world. Was the President worried Palauans would be highly dependent? "That's one area that we have to continue to educate our people in. You have to think differently before you can act differently. For 50 years we have been provided with practically everything by the United States. We need to change the attitude, especially for our young people."

The biggest asset is, he says, the people, "You know, I'm amazed by the strength of our cultural values. I think our values are still strong and will continue to be so."

How did he account for the resilience of that culture in the face of successive waves of colonial cultures? "That's a very interesting question. I think it has to be, to some extent, because of traditional control over the land and over a lot of even daily functions in our society. For instance, if a man builds his house, all his relatives will contribute to buy it. We call it ocheraol. It means, literally, "something to be purchased". It's not practised anywhere in Micronesia except Palau. And we have good houses in Palau generally, very very good, even for unemployed people."

With all the bitterness of the Compact wrangling, how do Palauans look at the UN trusteeship system and the US administration? "We consider ourselves fortunate to have been put under the UN Trusteeship system and under the US as an administering authority. One of the best things that happened was the introduction of democracy, which is alive and working in Palau, and fortunately meshes perfectly with our traditional values and system of society.

In general I can say that although it took a lot longer than the UN originally anticipated, - after all we were the last trust territory in the world - the achievements that we have accomplished together are generally acceptable and have brought us to where we are now.

We have a solid foundation - small government, small country. We can sail our ship along with the other bigger ships on this ocean knowing that everything will be OK. Fortunately, we have the Compact relationship with the US and I believe that they will continue to give us the type of help they have been giving us for the past 50 years."