Palau & the Compact of Free Association with the United States

The Compact of Free Association between the United States and the Republic of Palau, which entered into force in 1994, provided for several types of assistance aimed at promoting Palau’s self-sufficiency and economic advancement. Included were 15 years of direct assistance to the Palau government; contributions to a trust fund meant to provide Palau $15 million each year from 2010 through 2044; construction of a road system, known as the Compact Road and federal services such as postal, weather and aviation. U.S. agencies also provided discretionary federal programs related to health, education and infrastructure. This book explores the provisions for economic assistance to Palau, its impact on the trust fund’s likelihood of sustaining scheduled payments through 2044 and the projected role of U.S. assistance in Palau government revenues.