With its pristine waters, beaches of white sand, colorful coral reefs and variety of tropical fish, Palau seems an idyllic place, a natural resort separated by vast expanses of the Pacific Ocean from the hustle and bustle, the concrete and the crowding of other capitals. Its slower life style is reflected in its maximum 25 mph speed limit, and the small-town familiarity among its people means that almost everybody knows everybody else.
Yet, this Micronesian island group in the western Pacific seems to be uneasy, a condition made more acute by the so far unsolved assassination of its first elected president, Haruo Remeliik, on June 30.
Alcoholism, drug abuse and mental disorders are on the rise, according to medical statistics, and new diseases prevalent in developed countries, such as heart disease and hypertension, are making inroads.
In addition, Palau's almost total dependence on U.S. aid is starting to wear heavily on aspirations for greater autonomy, but there seems little that a country whose main industries are government and politics can do about it. Palau, in fact, now finds itself unable to make payments on its first foreign debt, a $34 million loan for a British-built power plant.
Some of the problems are typical of aid-dependent states and trust territories in the Pacific, whose thousands of islands and atolls stretch across 10 million square miles of ocean and are inhabited by about 5 million people. In Micronesia -- made up of the Caroline, Marshall and Mariana islands scattered over 3 million square miles with a population of 135,000 -- the problems are compounded by disputes between the island governments and Washington over long-negotiated "compacts of free association" that would end their nearly 40-year status as U.S.-administered United Nations trust territories.
In Koror, the Palauan capital inhabited by about 8,000 of the island group's 12,200 population, the more nationalistic Palauans tend to trace the country's troubles from the arrival of the first Europeans 200 years ago. When English captain Henry Wilson wrecked his ship, the Antelope, on reefs off Ulong Island in 1783, Palau's complex social system and estimated population of 40,000 were thriving.
But successive control by the Spanish and Germans introduced diseases for which Palauans had no immunity, decimating the population. By 1900 the population had fallen to less then 4,000, largely as the result of epidemics of influenza and dysentery.THE EUROPEANS also introduced alcohol but would not share it with the natives. It was not until the start of World War I, when the Japanese took over the islands, that Palauans learned the art of distillation as their new patrons produced homemade sake and brandy. But it took the arrival of the Americans after World War II to spread alcohol consumption beyond a select few.
According to Anthony Polloi, one of eight government doctors here, the U.S. Navy dubbed the potent brew cooked up in its 55-gallon drums "JJ" -- for "jungle juice." It was made at first, he says, with "all sorts of fermentable fruit" grown locally, and later -- a sign of the times -- with sugar imported from California.
Now tastes have changed. Canned Budweiser beer is the brew of preference, with Palauans importing an average of eight 20-foot sea vans of it a month. Consumption is such that beer is the second leading import item, behind gasoline. In 1983, according to government statistics, Palau spent more than twice as much on beer imports ($800,000) as it earned from its total exports ($308,000).
According to Polloi, alcohol accounts for 95 percent of Palau's road accidents, which occur often despite the 25 mph speed limit. He says drinking is also behind most of the fistfights, stabbings and stonings that supply patients to his 50-bed hospital, the only one in Palau. When really angry, Palauans traditionally fight by throwing rocks at each other.
"Alcohol wastes a lot of our energy and finance," Polloi says. "We are still learning to handle freedom. We have too many green dollars. We are overeating and we are overdrinking."
"I think we are an alcoholic nation," says opposition political activist Bena Sakuma.IN ADDITION to American beer, Palauans have taken to U.S.-style democracy in a big way. In fact, political observers here estimate that Palau has more elected officials per capita than any other country.
At the national level, a president and vice president are elected separately by Palau's 8,000 voters. Two candidates for president and seven for vice president campaigned for Wednesday's special election -- called because of Remeliik's assassination. Results of the election are not yet final.
Other elected officials include 34 members of the bicameral congress called the the Olbiil Era Kelulau.
There are 16 state governments, each with its own constitution and some with bicameral legislatures. A few "states" are virtually uninhabited. The Southwest Islands, situated 200 to 400 miles from Koror, account for two states, although their total population is less than 500.
The result is that about half of Palau's salaried workers are government employes, and elective offices are highly prized. The average national congressman's base salary is $13,500 a year, more than four times that of a member of parliament in the Philippines, 600 miles to the west. Even the average Palauan government worker's salary is more than twice as much as a Philippine legislator's.
Government salaries also seem inflated, even by Palau's standards. According to official statistics, the middle 10 percent of government wage earners make $6,637 a year compared with the private sector's mean of $2,931 a year.
"If you ask young people what they want to be," says Polloi, "they want to be lawyers so they can become congressmen and drive cars and have women around them. We have lawyers coming out of our ears."
The government salaries helped give Palau a per capita income of $2,597 in 1983, greater than Taiwan's or South Korea's and nearly 10 times the average for Asia as a whole.
Virtually all of that is thanks to Uncle Sam.
Of Palau's $26 million budget in 1983, U.S. taxpayers provided $23 million, including $16 million for current operating expenses. Most of that amount went to government salaries, statistics show. Spending for infrastructure under the U.S.-funded capital improvement program came to $3.7 million.A COMMON complaint in Palau is that in nearly 40 years of trusteeship, the United States has built less than 12 miles of paved road here. Two major buildings, the legislature and the courthouse, date from the Japanese occupation, and Palau's only hospital -- a dilapidated, tin-roofed affair -- was built in the 1950s.
The sewerage and water systems are inadequate, electricity from a power station constructed by the U.S. military at the end of World War II is unreliable, and higher education is limited to a two-year vocational school.
Supermarkets are stocked almost entirely with imported goods, from Japanese canned fish to American Spam and fruits and vegetables from California.
According to U.S. officials, what was left of Palauan agriculture virtually was wiped out in the 1960s by the advent of food stamps and other food assistance programs.
"All the Great Society programs were made applicable here, and the result was to give Palauans much more money than they ever had before," one American official said.
Other U.S. programs and regulations were applied with equally questionable results. Federal Aviation Administration rules on noise pollution, for example, banned landings of the Boeing 707s flown by Japan Air Lines, cutting out a major source of tourist revenue, officials said.
"We have nothing to be proud of here," said a U.S. official, "but it's been compounded by Palauans not having their act together either."
An example is a $34 million debt that Palau has incurred for the construction -- nearly complete -- of a 16-megawatt power station by Britain's International Power Systems Ltd. Palau has defaulted on its first two payments, which were due earlier this year, and Acting President Alfonso Oiterong says negotiations are under way to reschedule the debt.
"We are very much concerned about our credibility," he says.
Palauan politicians complain that cheaper alternatives were available.
So accustomed is Palau to receiving U.S. grants that actually having to pay for a major project is coming as a big shock. A potentially greater one, U.S. officials say, is Washington's unwillingness to bail out the Palauans.
"The attitude is not only 'no,' but 'hell, no,' " one official says.
However, according to a United Nations representative, if Palau is ever to become independent, its experience with its first foreign debt may prove to be "a blessing in disguise."