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Palau has made significant progress compared to other island countries in the Pacific region and has already achieved several targets specified by the Millennium Development Goals (MDGs). However, wealth and development are unevenly spread throughout the country. Nevertheless, with an estimated per capita GDP of US$ 7,600 in 2006 the people of Palau enjoy comparatively high standards of living. Health, education and other public utilities are well developed and mostly provided freely by the government. Besides vast fishery resources, tourism is the main contributor to Palau's economic growth. Given tourism's major economic role, sustained economic development of the island is dependent on environmental integrity, which is increasingly endangered. Therefore, large-scale economic development could be potentially incompatible with Palau's fragile ecosystems.
The Country Strategy Paper for Palau (2008-2013) presents the strategic framework for EC co-operation with Palau under the 10th EDF. EC assistance will focus on the water and energy sector, in particular the identification of new and renewable energy sources. Renewable energy contributes to diversifying the resource base of Palau's economy, to improving the security of energy supplies and to reducing expenditures. EC support will contribute to the supply and the installation of household renewable energy systems, in particular in rural, outer island areas. Non-state actors (NSAs) will be encouraged to participate in the implementation of the programme.
The multi-annual indicative programme for Palau under the 10th EDF allocates €2.9 million to address these priorities.
The Country Strategy Paper for Palau (2002-2007) under the 9th EDF also adopted renewable as principal sector for co-operation activities. Implementation of a five-country Renewable Energy Programme (REP5), of which Palau is part, started in January 2006. In Palau, the programme will focus on providing solar power to feed directly into the grid.
The new Palau Renewable Energy Programme started in 2007 with the aim to improve NSA ability to provide cost effective and reliable renewable energy solutions and to promote energy efficiencies within rural and outer island communities of Palau.
For further details on projects and programmes in Palau funded from the European Development Fund (EDF) and the general budget of the EU, please visit the project's section of the website of the Delegation of the European Union for the Pacific on Fiji Island, responsible for Palau.
Other sources of information
The Directorate-General for Development is responsible for drawing up the co-operation strategy with Palau.
More information on EU relations with Palau is available on the pages of the Delegation of the European Union for the Pacific on Fiji Island, which is also responsible for co-operation activities in Palau.
Information on trade relations in the ACP region can be found on the website of the Directorate-General for Trade.