PALAU ECONOMIC ADVISORY GROUP

Palau Economic Advisory Group

The Economic Advisory Group for Palau will soon convene for its third year of support to Palau, beginning with its third meeting in Palau from September 9-14, 2024. The mandate for the EAG was included in the Compact Section 432 Review Agreement (CRA) that was signed on 3 September 2010. The relevant US Congressional action to authorize and appropriate funding was delayed until FY2018 when the 2010-CRA was fully funded. Palau benefited from stopgap funding during the waiting period, but the convening of the Economic Advisory Group was delayed.

Palau and the US entered into a 2023 Compact Review (one-year early) that culminated in extension and revision of the terms of economic assistance for the twenty-year period from FY2024 through FY2043; however, there will still be a third Compact Review pursuant to the original Compact section 432 at the Compact’s 40th Anniversary (FY2035). The current period of economic assistance will be referred to as the 2023-CRA and was passed through the "Consolidated Appropriations Act, 2024" (H.R. 4366) on March 8, 2024, and signed into law by the President of the United States on March 9, 2024.

The US and Palau governments have agreed to implement the EAG as fully described in the 2023-CRA and specifically in Article 7. The five members will continue their service. They submitted their 2nd Annual report as of May 1, 2024. Excerpts from the 2023-CRA are provided below:

"The Advisory Group on Economic Reform established by the 2010 Compact Review Agreement, as amended, shall continue to exist until otherwise agreed by the Signatory Governments but shall be renamed “The Economic Advisory Group for Palau”. Its purpose shall continue to be to contribute to the economic growth and sustainability of Palau by recommending economic, financial, and fiscal management measures.

Upon entry into force of [the 2023-CRA], the [current] members of The Advisory Group [were] redesignated for a three-year term, after which the Signatory Governments shall designate members in accordance with this paragraph and giving favorable consideration to current members. The Advisory Group shall be composed of five (5) members, two (2) of whom shall be designated by the President of Palau and two (2) of whom shall be designated by the Secretary of the Interior of the United States or their designee, and the fifth of whom shall be chosen by the Secretary of the Interior of the United States or their designee from a list of not fewer than three (3) persons not residents of Palau submitted by the President of Palau…

…The Advisory Group shall meet at least twice per year… and shall make recommendations to the Signatory Governments on these matters and otherwise as it deems advisable by May 1 of each year."

Members look forward to their third visit to Palau to listen and learn and to share their emerging insights widely with leadership and civil society. Given the impressive breadth and depth of the members' combined professional accomplishments, their first annual report, issued in April 2023, and their second annual report, issued on May 1, 2024, have been well-received by the two governments. Their reports have timely served the intended purpose of informing the bi-lateral Palau-United States consultations held in June of 2023 and 2024 in Palau.

As requested by the Palau Government, the U.S. Government through the Department of the Interior’s Office of Insular Affairs, has provided technical assistance funding for a Secretariat to provide administrative and logistics support to the Palau Economic Advisory Group. The Graduate School USA is providing that service through its Economic Monitoring and Analysis Program (EconMAP).