Palau President Seeks Increased U.S. Investment Amid China's Influence

The Facts -

Palau's Push for Enhanced U.S. Investment Amid China's Growing Influence

As Palau navigates the geopolitical waters of the Pacific, President Surangel Whipps, Jr. advocates for increased U.S. investment to counterbalance China's expanding economic foothold. This was a central theme during his discussions at the Pacific Agenda Summit held at the East-West Center.

The summit, which gathered Pacific Island leaders with U.S. officials and business executives, focused on "Investment, Security, and Shared Prosperity." Key agreements included a U.S. Trade and Development Agency-backed feasibility study for a new hospital in Palau, spearheaded by Architects Hawaii Limited.

Palau's current healthcare infrastructure, described by Whipps as having "salty concrete" and sustained by shoring jacks, highlights the urgent need for a resilient medical facility. Such improvements are vital for the veterans of the Freely Associated States (FAS)—comprising the Federated States of Micronesia, the Republic of the Marshall Islands, and Palau—who often serve in the U.S. military but are deterred from returning due to inadequate medical care. Whipps emphasized, “We serve at some of the highest rates of any state or any country, and we want those veterans to return home.”

The long-standing "Compact of Free Association" (COFA) with the U.S. promises care for these veterans, but Whipps believes that better healthcare facilities would also cultivate local expertise and boost the economy. He noted, “We keep them home, and then it builds local capacity.”

While the U.S. remains Palau’s principal partner in sectors like education, healthcare, and infrastructure, Chinese private sector investments, notably in hotels, are on the rise. Whipps remarked on the imbalance, stating, “To me, they’re reaping all the profits that really the investment that the United States and the United States taxpayer put in, they’re not reaping the benefits.”

U.S. Deputy Secretary of State Christopher Landau underscored the necessity of bolstering infrastructure and attracting American investors to the Pacific, aiming for both security and economic progression.

Tourism emerged as a potential economic driver for Palau, given its strategic location near major Asian cities. Whipps described the region as “the Caribbean of Asia,” emphasizing the need for sustainable tourism that respects cultural and environmental values.

United Airlines has already initiated direct flights from Tokyo to Palau, a development attributed to discussions Whipps had in Washington. The U.S. is also contributing to Palau’s airport master plan and upgrading its port for military and commercial purposes. A deeper port could pave the way for U.S. cruise lines to explore routes through Palau and nearby territories.

Palau is renowned for its environmental efforts, deeply rooted in traditional practices like the "bul," which impose temporary restrictions on resource use to allow ecosystems to recover. Whipps highlighted a 1956 preserve in the Rock Islands and a 2015 law closing 80% of Palau's exclusive economic zone to fishing as milestones in conservation.

Amid challenges posed by unauthorized Chinese research vessels and the renaming of undersea features, Palau is set to host the Pacific Island Forum under the theme “B.E.L.A.U.”—an acronym for “Building Economies: Life. Action. Unity.” Priorities for Whipps’ chairmanship include transitioning to renewable energy and fostering resilience against climatic changes.

Highlighting both security and economic opportunities, Whipps concluded, “We can have cruise ships, or we can build AI centers or whatever other opportunities that are out there, and that’s what we talk (about) when we talk about shared prosperity.”

---
Read More USA Works News