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 Explanatory Booklet

Actions for Palau's Future

2009-2014

The Medium Term Development Strategy 

This Booklet and the Medium Term Development Strategy – Actions for Palau‟s Future – were prepared by the Government of Palau with the assistance of the Facility for Economic and Infrastructure Management and the support of the Asian Development Bank

CONTENTS 

                                                                                       Page 

1 The Medium Term Development Strategy 5 

1.1 Role and Context of the Medium Term Development Strategy 5 

1.2 Link to the National Master Development Plan – Palau 2020 5 

1.3 Role of This Explanatory Booklet 6 

2 Overall Goal, Strategic Priorities and Overarching Strategies 7 

2.1 Overall Goal 7 

2.2 Strategic Priorities 7 

2.3 Overarching Strategies 8 

2.4 Policy and Project Priorities 8 

2.5 Expected Outcomes 9 

3 Economic Policies and Institutions 10 

3.1 Approach and Issues 10 

3.2 Goal, Strategies and Actions 11 

3.3 Expected Outcomes 14 

4 Reform of Government and Public Enterprises 15 

4.1 Approach and Issues 15 

4.2 Goal, Strategies and Actions – Overarching Action Plan for the Public Sector 15 

4.3 Goal, Strategies and Actions – Action Plan for Reform of Public Enterprises 16 

4.4 Expected Outcomes 17 

5 Environment 18 

5.1 Approach and Issues 18 

5.2 Goal, Strategies and Actions 18 

5.3 Expected Outcomes 21 

6 Tourism 22 

6.1 Approach and Issues 22 

6.2 Goal, Strategies and Actions 22 

6.3 Expected Outcomes 24

7 Aquaculture and Fisheries 25 

7.1 Approach and Issues 25 

7.2 Goal, Strategies and Actions 25 

7.3 Expected Outcomes 27 

8 Agriculture and Forestry 28 

8.1 Approach and Issues 28 

8.2 Goal, Strategies and Actions 28 

8.3 Expected Outcomes 30 

9 Infrastructure 31 

9.1 Approach and Issues 31 

9.2 Goal, Strategies and Actions 31 

9.3 Expected Outcomes 32 

10 Financing Education 33 

10.1 Approach and Issues 33 

10.2 Goal, Strategies and Actions 33 

10.3 Expected Outcomes 34 

11 Financing Health 35 

11.1 Approach and Issue 35 

11.2 Goal, Strategies and Actions 35 

11.3 Expected Outcomes 37 

12 Social Services for Vulnerable People 38 

12.1 Approach and Issues 38 

12.2 Goal, Strategies and Actions 38 

12.3 Expected Outcomes 40 

13 Responding to Community Concerns 41 

13.1 Introduction 41 

13.2 Peoples Concerns About Development Policies 41 

14 Links Between the NMDP and the MTDS 45 

14.1 Introduction 45 

14.2 NMDP Development Strategies and Links to MTDS 45

1 The Medium Term Development Strategy

1.1          Role and Context of the Medium Term Development Strategy 

The overall goal of the MTDS is: A sustained and widespread improvement in general standards of living while preserving cultural and environmental values 

Actions for Palau’s Future sets out the key goals strategies and actionsfor economic development over the period 2009-2014 

The medium term development strategy (MTDS) – described as “Actions for Palau’s Future” – sets out the key strategies and actions to help achieve economic, social, environmental and cultural goals over the 5 year period 2009 to 2014.  

The MTDS establishes meaningful priorities and recommends credible policies and practical actions to address those priorities. It has been designed to be flexible in addressing changing priorities as they emerge. 

The goals, strategies and actions that have been developed have built on existing plans that have involved extensive consultations with many stakeholders.  This includes the consultations in formulating the 2020 National Master Development Plan in 1996, the Japan International

Cooperation Agency 2000 Economic Development Report, the NationalState Leadership Symposium in 2006, the Compact Review Commission National Economic Symposium in 2007, the Governors Economic Symposium in April 2008, a Public Forum on the Medium Term 

Development Strategy in June 2008 and a Public forum on Public Enterprise Reform in October 2008. In addition, consultation was undertaken with many affected stakeholders in key areas.  

It is also important to recognize that the MTDS is essentially about developing and implementing policy actions to gain the maximum benefits from the resources that are available to Palau.  It is not about preparing a 

“wish list” of projects or additional funding beyond historical levels to support economic development.  Indeed many of the recommendations in the MTDS are about “doing more with less”.  

                1.2          Link to the National Master Development Plan – Palau 2020 

Palau has a comprehensive National Master Development Plan (NMDP) − known as “Palau 2020” − that was finalized in April 1996, following two years 

^{Actions for Palau’s}                        of consultation and analysis.  It was formally approved by the Olbiil Era 

Future has been 

_{designed to build on} Kelulau in that year.   The NMDP is very comprehensive covering virtually all and prioritize the sectors, institutions and policies in Palau that were relevant at the time.  strategies in Palau Since then there have been numerous other plans and policies that have ²⁰²⁰been formulated but nothing as comprehensive as the NMDP.   

However, an important limitation of the NMDP, from a practical perspective, is that it provides limited guidance on priorities to reach Palau’s long term goals. Given these characteristics, very few sectors in government make effective use of the NMDP.   

The Medium Term Development Strategy 

Overall Goal, Strategic Priorities and Overarching Strategies

2OverallGoal,     Strategic     Priorities      and Overarching Strategies 

                2.1          Overall Goal 

The overall goal of the The overall goal of sustainable national development is defined in the MTDS is: A sustained Medium Term Development Strategy (MTDS) as: and widespread improvement in 

general standards of  A sustained and widespread improvement in general standards of living living while preserving while preserving cultural and environmental values for the people of Palau.  cultural and 

environmental values                 

                2.2          Strategic Priorities 

The strategic priorities in the MTDS can be thought of as key strengths, constraints and issues that need to be recognized or addressed in formulating an effective medium term development strategy. 

The following strategic priorities have been identified to be an essential part of an effective medium term development framework: 

• Preserving key values and advantages which are: 
  • The environment. Essential strategic    §         Cultural values. priorities are:

^{preserving key values} and advantages; §Political stability. achieving consensus for change and §Public security and civil order. addressing binding constraints§Effective relationships with development partners. 

• Achieving consensus for change through: 
  • Transparency and opportunities for consultation. 
• Addressing binding constraints to economic development which are: 
  • The expectation that someone else should pay for a wide array of government services, reflected in a „lack of willingness to pay, work productively and support effective policies‟. 
  • Conflicts of interest that make it difficult to gain acceptance for and to implement effective governance arrangements and policies for the benefit of the community as a whole. 

Overall Goal, Strategic Priorities and Overarching Strategies

                2.3         Overarching Strategies 

There are three overarching (or thematic) strategies that cut across sectors and issues and that encapsulate a wide range of more specific strategies and actions, as follows: The overarching or 

thematic strategies are: §Paying the „right price‟ (cost recovery and well defined, targeted, paying the right price; transparent subsidies). ensuring conservation and cost reduction and §Reducing costs and ensuring conservation. generating income opportunities 

                                                        §   Generating income opportunities. 

Key aspects of the supporting strategies and actions are set out in the rest of this booklet and in more detail in the separate comprehensive report on “Actions for Our Future”.  

                2.4         Policy and Project Priorities 

Success in implementing the MTDS requires there to be meaningful policy and project priorities 

Success in implementing “Actions for Palau’s Future” requires there to be meaningful policy and project priorities. Lessons from many other countries, in their efforts to improve economic and social conditions, emphasize the need to have focus and commitment on a few key policy and institutional reforms. This means that it is important not to spread scarce management and leadership resources too thinly and it is important to make sure that priorities are well resourced in terms of budget allocations and managerial capacity.  

Actions for Palau‟s Future contains Action Plans for all sectors and the major policies and institutions of government. The Action Plans are generally consistent with the existing NMDP and can be implemented by the responsible managers irrespective of the high level priorities that are established by government but subject to the resources that they have available. However, to ensure meaningful focus and effective commitment there is a need to identify the key policy and project priorities that will be emphasized over the medium term.  

Overall Goal, Strategic Priorities and Overarching Strategies

The Priority Policy Actions that have been identified as reflected in the details of Actions for Palau‟s Future are as follows: 

          3     Economic Policies and Institutions 

          3.1          Approach and Issues 

The work undertaken in formulating strategies and actions for improving The Action Plan for  Economic Policies and Institutions takes into account Palau’s economic Economic Policies and performance since independence and its aspirations for self-sufficiency. 

Institutions builds on 

previous and recent Various proposals for policy and institutional changes have been developed consultations and are that build on previous and recent consultations.   designed to improve 

the economy of Palau The proposals have the potential to improve the economic environment of Palau if embraced by the community, supported by the legislature and effectively implemented by the government.   Improvements in the economic environment are important for encouraging investment and economic activity 

The proposals in the 

Action Plan have the which in turn means better and more jobs and widespread improvements in potential to lead to living standards. widespread

improvements in living It is important to realize that the policies presented are tools that can be standards.  used but that as a nation, Palau needs to commit to its goals and priorities and then utilize such tools.  This will require further consultation and communication to gain understanding and acceptance of proposed policies as well as guidance in setting priorities for both policies and development objectives.  The key issues for economic policies and institutions are: 

Key issues to be addressed are: fiscal 

sustainability; access         i.         fiscal sustainability; 

to land; labor market ii. access and fair compensation for the use of land; distortions; a 

restrictive foreign iii. the labor market needs to function well from a business perspective investment regime; while preserving cultural and environmental values; financial system 

stability; gaps in the iv. the foreign investment regime is too restrictive and open to abuse;  commercial legal v. a well functioning and stable financial system is needed; framework; and 

national-statevi. gaps in the commercial legal framework need to be addressed;  relationships vii. there is a need for more effective cooperation with respect to National and State relationships to support economic development. 

The Action Plan Goal for economic policies and institutions and details of key strategies and priority actions to achieve the Goal over the next five years are set out below. 

          3.2          Goal, Strategies and Actions 

The Goal is to establish an enabling environmentfor private sector development  

The medium term fiscal strategy is to focus on being more 

self reliant  

Land use plans and zoning laws and fair compensation for land are critical for sustainable economic development

Key actions in the labor market include limiting the number of foreign workers through a uniform foreign worker fee and strengthening vocational skills of 

Palauans  

The Goal for Economic Policies and Institutions is: 

To establish an enabling environment to support sustained and widespread private sector development. 

1.     Fiscal Sustainability 

Strategy: The strategy is to focus on being more self reliant with respect to financing government expenditure.  

Actions:  

• Undertake comprehensive, effective and fair tax reform. 
• Reduce the level of current government expenditure significantly. 
• Improve the efficiency of government. 

2.     Land Market 

Strategy: Improve access to land for economic development while preserving environmental and social values. 

Actions:  

• Put in place and enforce suitable land use plans and zoning laws. 
• Support a community awareness program for people to understand the value of their land and how to realize its potential. 

3.     Labor Market 

Strategy: Ensure a well-functioning labor market while preserving cultural and social values. 

Actions:  

• Monitor and manage the number of foreign workers through the use of a uniform foreign worker fee set at an appropriate level. 
• Strengthen vocational skills of Palauans. 
• Remove restrictions on foreign workers other than the overall limit on numbers.

The strategy for investment is to liberalize the foreign investment regime and implement appropriate complementary policies 

 The strategy for the financial sector is to work towards ensuring a stable and efficient financial sector

4.     Foreign Investment 

Strategy: Liberalize the Foreign Investment Regime and put in place complementary policies to address concerns about foreign domination or illegal activity. 

Actions:  

• Liberalize the foreign investment regime as much as possible, including no reserve list of businesses. 
• Improve the capacity and powers to investigate and prohibit money laundering activities. 
• Limit the total number of foreigners and their skill mix, compatible with economic benefits and socio-cultural concerns through uniform foreign worker fees. 
• Ensure transparent, fair, secure and speedy leasing and effective tax arrangements so that foreign investment provides appropriate benefits to Palau. 
• Continue to emphasize education to ensure Palauans have the capacity to be involved in successful business activities.  
• Continue to support business advisory services provided by the Small Business Development Center. 
• Put in place legislation to establish specific presumptions for determining if a business enterprise is effectively set up us as a “front business” and penalties based on civil liability. 

5.     Financial Sector 

Strategy: Work towards ensuring a stable and efficient financial sector. 

Actions:  

• Continue to use the US dollar as the currency. 
• Ensure the Financial Institutions Commission continues to have appropriate powers and sufficient resources. 
• Take meaningful steps to ensure the Civil Service Pension Plan and Social Security Fund are fully funded over the longer term. 

A number of              gaps in the commercial law framework need to be addressed to facilitate business in the interests of the community 

There is a need for  more effective cooperation and coordination between the national and state governments 

Planning,  monitoring, evaluation and implementation will be improved by integrating plans and assessments into the annual budget 

6.     Commercial Law 

Strategy: Ensure appropriate commercial laws. 

Actions:  

• Put in place legislation and supporting administrative capacity so that there are clearer property rights for collateral for loans. 
• Put in place bankruptcy legislation to facilitate the closure of unsuccessful businesses.  
• Establish a low cost procedure for commercial arbitration. 

1. National and State Cooperation 

Strategy: Address key National-State economic development issues.  

Actions:  

• Fund adequate environmental, engineering and land survey expertise to assist with complying with EQPB requirements. 
• Modify the role, responsibilities and requirements of the Environmental Quality Protection Board (EQPB) to simplify and streamline requirements for development purposes. 
• Modify the role of Bureau of Arts and Culture to simplify and streamline requirements for development purposes. 
• Establish a regular formal forum to facilitate National-State cooperation on key policies that affect States and the Nation. 

1. Planning, Monitoring, Evaluation, and Implementation 

Strategy: Improve planning, monitoring, evaluation and implementation by integrating plans into the annual budget in a transparent manner. 

Actions:  

• Implement an effective monitoring and evaluation system that is transparently integrated into the annual budget process. 
• Modify current institutional arrangements and legislation to ensure that conflicts of interest are effectively addressed. 
• Establish a facility to provide independent, transparent evaluations and advice to the executive, legislative and public interest groups, with evaluations to be made available to the public. 

3.3           Expected Outcomes 

Reform of Government and Public Enterprises 

          4     Reform of Government and Public Enterprises 

          4.1          Approach and Issues 

The government and public enterprises dominate the economy and generally the role and functions of government and public enterprises need There is a need to to be reviewed and reforms implemented to improve performance. 

improve the 

performance of There are two key areas of government services that need to be part of the governmentin Medium Term Development Strategy. The first relates to improving thegeneral and the performance of government in general.  The second relates to improving the 

performance of 

public enterprisesperformance of public utilities and other public services that have a business aspect (often referred to as public enterprises).   

Further detailed work is needed on the first of these aspects, as proposed in the following section on the Overarching Action Plan for the Public Sector.   

In relation to the second aspect, extensive consultation has been undertaken in the formulation of a comprehensive Action Plan, including a public forum on four major public enterprises in October 2008.  The key strategies and actions for reform of public enterprises are set out in a summary Action Plan below.  More details for the reforms of Public Enterprises are provided in the separate paper: “Corporatization and Privatization of Public Utilities and Other Public Services; as well as a number of separate Working Papers on key public enterprises and government business functions available from the Facility for Economic and Infrastructure Management at the Ministry of Finance.  

          4.2          Goal, Strategies and Actions – Overarching Action Plan for the Public Sector 

The Goal for Reform of Government and Public Enterprises is:  To lower 

^{The overarching} the cost and improve the performance of government, government business strategies are to_{lower the cost and} services and public enterprises. 

improve the 

performance of core Strategy for Government Functions: Lower the cost and improve the government performance of core government functions and pursue 

opportunities for reform of Actions: 

government 

business activities _Review the role, functions and activities of government departments ^{and public} and implement recommendations for the „right size‟ of government ^enterprises and for streamlining employment and procurement requirements.  

Reform of Government and Public Enterprises

Strategy for Public Enterprises: Pursue opportunities for reform of government business activities and public utilities.   

Reform of Government and Public Enterprises

          4.4          Expected Outcomes 

             5     Environment 

             5.1          Approach and Issues 

Preserving          Palau has a unique and diverse environment with great potential for tourism environmental development. Preserving environmental values while also enabling values while also      development to occur is a major challenge for Palau.   enabling development to occur is a major The key issues facing the environment and natural resources sector are: challenge for 

Palau                               i.            the lack of an overarching policy framework; ii.               an outdated, inappropriate and cumbersome regulatory framework; 

Key issues to be                iii.         over-lapping and conflicting mandates and functions;  

addressed are: the           iv.              insufficient funding leading to difficulties in undertaking evaluation, ^{need for an}         review, monitoring, compliance, and enforcement activities; and overarching policy 

framework, a v. ongoing tensions between state and national governments as to land cumbersome and resource ownership and management and EQPB requirements.  regulatory framework;  

conflicting mandates, The Environmental Management Action Plan identifies the goal for the insufficient funding environment and details key strategies and priority actions to achieve that ^{and national-state} goal over the next five years.  It has been formulated following an extensive relationships consultation process with major stakeholders. 

              5.2         Goal, Strategies and Actions 

The Goal for Environmental and Natural Resource Management is:  To protect, conserve and manage the environment and natural resources of Palau, for present and future generations of Palauans, while providing for sustainable social, cultural and economic development. 1. Legislation 

Legislation and 

regulations will be                 Strategy: Update, streamline and improve legislation and regulations 

streamlined and improved 

Actions 

• Review and where appropriate amend the EQPA and Regulations. 
• Simplify procedures for permit applications and environmental assessments. 
• Support states in establishing zoning regulations and building codes. 

An overarching and consistent policy framework will be put in place 

The environmental management 

structure will be  simplified and strengthened  

State capacity problems will be addressed

2.                Environmental Management Framework 

Strategy: Develop and strengthen the environmental management framework. 

Actions: 

• Complete the national policy and regulatory framework, clarify policies for each of the key sectors, and ensure integration of environmental management across all sectors. 
• Implement land use management plans and zoning laws. 
• Establish a plan for environmental response linked to the Disaster Management Plan.  

      3.           Environmental Management Structure 

Strategy: Clarify, simplify and strengthen the national environmental management structure. 

Actions: 

• Clearly define roles and responsibilities of the different environmental functions within the Ministry of Natural Resources, Environment and Tourism, to avoid overlap. 
• Review and revise the role, objectives, functions, governance, regulatory requirements and procedures of the EQPB to simplify and streamline requirements.  
• Ensure appropriate staffing for key government agencies. 

      4.           State-level Resource Management  

Strategy: Improve state capacity for environmental management and facilitate better communication between national and state governments.  

Actions: 

• Clearly define the role of, and support states in environmental management taking account of the capacity of each state. 
• Fund adequate environmental compliance, engineering and land expertise as a shared resource for the states. 
• Encourage states to work together with respect to transboundry resources such as with the Babeldaob Watershed Alliance. 
• Establish a regular formal forum for national and state governments for resource management and other policy issues.  

a  § Allow EQPB to charge for water testing, inspections and other functions and retain the revenue. 

          6     Tourism 

          6.1          Approach and Issues 

The Tourism Action Plan in Actions for Our Future has been formulated by a cooperative and consultative approach led by the joint efforts of the Palau Visitors Authority, Belau Tourism Association and the Chamber of 

Commerce. These three organizations have formed a co-ordination group Tourism has known as the “Tri-Org” and a Tourism Action Plan Committee. great potential 

but is        Within Palau it is widely acknowledged that tourism offers great potential to vulnerable support sustainable economic growth and provide opportunities for employment for Palauans.  However, the industry is vulnerable.  

The key issues facing the tourism sector include: 

         Issues include         

i.         the need for careful environmental management of natural resources; preserving the 

ii. a general industry trend to a lower quality product, associated with a rise environment, in budget group packages;  ensuring a high quality product 

iii. predominance of charter flights rather than regular scheduled services; offering and ensuring    

iv.              a rise in adverse social and cultural impacts including prostitution;  Palauan            

v.               lack of infrastructure for cruise ships and visiting private vessels; and involvement 

vi.         difficulties in attracting and retaining Palauans in the industry. 

The Tourism Action Plan identifies the goal for tourism and details key strategies and priority actions to achieve that goal over the next five years.  

          6.2          Goal, Strategies and Actions 

The Goal for Tourismis:  To upgrade the image of Palau as a tourist The goal for destination and position Palau as the island of choice for environmentally ^{tourism is to} upgrade the conscious visitors.  This will involve ensuring quality visitor experiences and _{image of Palau} high financial and other benefits to Palau on a sustainable basis. as a quality 

destination for        1.         Enabling Environment  environmentally 

^conscious visitors  Strategy: clarify organizational roles; align the agendas of government agencies to tourism‟s goals; and create partnerships for solving key issues. 

      Creating an                 Actions:  

enabling 

environmentwill §The Tri-Org will continue to ensure awareness and coordination involve clarifying amongst key decision makers and relevant organizations.   organizational roles, and 

developing§Partnerships will be created in key areas relevant to achieving the relevant policies Goal for Tourism development. in a partnership 

      approach                      2. Markets and Marketing  

Strategy: refocus the national tourism product and properly fund destination The focus of 

      marketing will              marketing. 

be on reestablishing   Actions:  

Palau’s quality 

      position as a                           §   Re-establish Palau‟s quality position for diving. 

World Class dive site

• Reform taxes paid by tourists to fund marketing of Palau and incorporate the exit fee in the price of air tickets. 
• Target marketing activities to encourage low volume, high spending visitors.  

3. Access and Transport  Air service Strategy: amend bilateral air service agreement to improve air access. agreements will 

be reviewed to encourage        Actions:  

regular 

scheduled §Review air service agreements with a view to encouraging flightsadditional carriers and increasing scheduled flights. 

                                      4.     Products and Attractions  

The product Strategy: improve existing products and develop new attractions to match base will be improved       rebranding.

consistent with the goal of        Actions:  

achieving 

higher quality § Prepare a thematic tourism development plan for Babeldaob in cooperation with the Governors Association. 

• Develop a training program to assist States to foster “ecotourism, Palauan-style”. 
• Advocate enhancing the tourist appeal of Malakal, Koror, Ngerkebesang and Airai. 
• Address constraints to tourist cruise visits. 
• Pool market information and develop appropriate strategies.  

                                      5.     Accommodation  

Quality 

7     Aquaculture and Fisheries 

7.1         Approach and Issues 

Aquaculture and fisheries have great potentialbut concerted efforts need to be made with respect to finalization of  policy and legislative 

frameworks and improved implementation and enforcement 

7.2 

The goal is to 

The marine resources of Palau are an extremely important asset for the nation. The marine resources of Palau can provide sustainable long term economic development opportunities. However, to ensure success, compliance with national and state regulations must be achieved.  

The main problems in the marine resources sector in Palau relate to: 

1. completion and adoption of various policies and legislation that are well advanced; 
2. effective enforcement of legislation and regulations; 
3. development and implementation of a nation-wide quarantine plan; 
4. confirmation and implementation of offshore fisheries policy, with emphasis on ensuring that the offshore sector optimizes its contribution to the economy of Palau; 
5. the overstretched capacity of the Bureau of Marine Resources (BMR) and 

its role in commercial activities; 

1. the need to privatize the giant clam program operated by the Palau 

Mariculture Demonstration Center under the BMR; and  vii.            ensuring the environmental sustainability of inshore fisheries.  

The Aquaculture and Fisheries Action Plan has been formulated following an extensive consultation process with stakeholders and with the close involvement of staff from the Bureau of Marine Resources.  The key elements of the Action Plan are set out below. 

Goal, Strategies and Actions   

The Goal for Aquaculture and Fisheriesis: To achieve sustainable economic development and management of the marine and coastal 

Key actions include the finalization of a number of plans and supporting legislation and improved enforcement 

The capacity of the BMR and research and extension services will be strengthened  

The BMR will refocus its role from undertaking commercial activities to increasing sustainable income opportunities for the private sector 

State) based on sustainable development principles.  

• Complete and implement the “National Aquaculture Strategy and Development Plan”.  
• Finalize and implement the development policies and issues in the Tuna Fisheries Management Plan. 
• Improve and enforce existing fishing regulations to effectively address widespread non-compliance (offshore and inshore) including the use of appropriate penalties. 
• Evaluate shark finning and by-catch regulations.
• Undertake tax and fishing licence reforms to improve returns to Palau from offshore fishing. 

2.     Institutional Development 

Strategy: Develop and improve the management capacity of the BMR and extension and information services. 

        Actions: 

• Strengthen the capacity of BMR to collect, analyze and manage fisheries data. 
• Develop and improve fisheries and aquaculture extension services and information.  

3.     Increase Production and Sustainable Income Opportunities  

Strategy:  Refocus the BMR on increasing sustainable income opportunities for the private sector. 

Actions 

• Focus on research and extension to ensure development and diversification. 
• Privatize commercially viable aquaculture commodities. 
• Develop and diversify programs for both inshore ( e.g. bone fish ) and offshore (marlin, sailfish, etc. ) fishing. 
• Encourage inshore fishermen to shift livelihood from inshore fishing to gain employment in the tourism sector. 

 7.3           Expected Outcomes 

The expected outcomes are: development of marine resource income opportunities in a sustainable manner, including improved returns from offshore fishing and tourism   

8      Agriculture and Forestry 

8.1           Approach and Issues 

The Agriculture and Forestry Action Plan has been formulated following a consultation process with stakeholders in the agriculture sector and with the close involvement of staff from the Bureau of Agriculture. 

Within Palau, agriculture has become neglected as a government policy 

 Agriculture has 

great potential    priority and the country is now highly reliant on imported food. There is great but has been   potential for agriculture in Palau but a range of issues need to be addressed  neglected       to encourage the production of local produce.   These issues are addressed in the strategies and priority actions set out below.  

There needs to be both government commitment and community effort in order for agriculture to realize its full potential. Palauans also need to understand that they need to be managers of their natural resources and their production potential.  This extends to effective management of foreign workers in developing agriculture. Proposals for better managing foreign workers are set out in other parts of Actions for Our Future. 

8.2           Goal, Strategies and Actions 

The goal is to  diversify and significantly increase the level of agricultural  production 

The construction of a central market is the centerpiece of the agriculture strategy

Sustainable land use plans and practices are important for improving and maintaining agricultural potential  

The Goal for Agriculture is:  To Diversify and significantly increase the level of agricultural production and develop productive forests.  

1.     Market Access and Linkages 

Strategy: Improve outlets for agricultural produce.

Actions:  

• Construct a central market in Koror or Airai State. 
• Collaborative research and coordination of market chain participants.  

2.     Soil Quality and Land Management 

Strategy: Develop sustainable land management practices Actions:  

• Develop sustainable land use plans and practices. 
• Pass Act of Congress to establish land use practices. 

§ 

                              6.    Bureau of Agriculture Capacity 

9

9.1 

The agenda for infrastructure is potentially vast 

The core agenda identifies six high priority programs and six high priority projects 

9.2 

The highest priority program is to improve maintenance and supervision 

Infrastructure

Infrastructure 

Approach and Issues 

The issues for the infrastructure sector are wide ranging and the agenda is potentially vast.  An extensive consultation and evaluation process was undertaken to establish priorities in the infrastructure sector. The consultation process and details for the infrastructure sector are set out in a  separate action plan paper for infrastructure that is available on request from the Facility for Economic and Infrastructure Management in the Ministry of Finance.  

Set out below is an outline of the core agenda for infrastructure that specifies six high priority programs and six high priority projects.  

Goal, Strategies and Actions 

The Goal for Infrastructure is to: Provide, protect and maintain infrastructure on an efficient and equitable basis to improve access, standards, reliability and value-for-money. 

The high priority programs are: 

1. Maintenance and supervision. 

1. Applying building codes and land use zoning.  
2. Appropriate pricing, reorganisation and regulation of services.  
3. Appraising investment and maintenance choices. 
4. Setting a tourism strategy identifying implications for infrastructure. vi.          Setting a strategy for management of environment and resources. 

The high priority projects are: 

         The highest priority        i.           Sewerage solutions for Koror and south Babeldaob. 

project is sewerage  solutions for Koror ii. Water system conservation, upgrading and cost recovery. and South 

         Babeldaob                    

1. Public buildings and facilities – conservation, best uses, and schools, especially the strategy for Babeldaob. 

1. Waste reduction, management and future landfill preparation for 

Aimeliik.  

Infrastructure

v. Electricity: conservation, adequate PPUC revenues, and adequate capacity in generation, transmission and distribution. 

The Infrastructure 

Action Plan for 2009-

13 will cost around $150m for capital and maintenance   

The expected outcomes are improved 

land use   

Financing Education

                   10       Financing Education 

                   10.1       Approach and Issues 

The focus for the education sector, in Actions for Palau’s Future, is in _The focus in Actions implementing the best  approach to financing education policies and for Palau‟s Future is strategies.on financing the 

^{visionand goals for} The education system in Palau relies heavily on US federal grants which are ^{education in the} context of budgetary subject to ongoing review. If US funding for education were to be pressures and the discontinued, the fiscal strategy for the sector would require across the goal of self board reduction of 12.5% in existing expenditures, over a five-year period. sufficiency But at the same time, new programs have been suggested that need prioritization and funding so that the financing challenge of education is very demanding.  

The key issues for a sustainable financing plan for education are: 

1. establishing clear priorities between and within sub-sectors; 
2. implementing both cost saving and revenue generating measures in a realistic time frame; 
3. implementing a communications strategy that involve stakeholders in the planning and monitoring to ensure their support. 

The Action Plan for Financing Education Strategies has been formulated following an extensive consultation process with stakeholders and the close involvement of staff from the Ministry of Education.  

10.2                     Goal, Strategies and Actions Education is an essential component of national development. The proposed 

The goal for 

_{financing education} sector-wide Vision in the Education Master Plan for 2006-2016is: Our is to ensure access students will be successful in Palauan society and the World.     to quality educational 

^{opportunities from} The Goal for Financing Education is: To provide Palauan students with ^presecondary level^{-school to post-}access to quality educational opportunities from preschool  through to post- secondary level.  

Financing Education

The strategies and main actions for financing education on a sustainable    basis are: 

Financing Health

                  11        Financing Health  

                   11.1       Approach and Issue 

The Health sector already has in place a well defined vision and set of goals. 

The health sector For the Health sector the focus in Actions for Our Future is on strategies and has a well defined actions to finance these goals. The Action Plan for Financing Health has vision and set of 

goals in place.  The been developed with the close and effective cooperation of the Ministry of focus in Actions for Health. Its key elements are set out below along with a high level Palau‟s Future is on presentation of the goals and strategies for the Health Sector as a whole.  financing the vision

and goals in the In order to move Palau toward its stated goal of self-sufficiency and to context of budgetary 

pressures and the balance the government budget, work undertaken in formulating the medium goal of self term development strategy estimates that macro-economic fiscal (i.e. 

sufficiency government budget) adjustments valued at up to 25 percent of FY 07 government expenditures may become necessary over the life of the Medium Term Development Strategy (2009-2013). For the Ministry of Health this means adjustments to its budget valued at $1.6m. In addition there is a need to ensure financing for existing shortfalls of $1.2m and capital equipment costs of $0.5 m, implying a need to cover a total financing shortfall of $3.3m. Strategies and actions have been developed in the Action Plan for Financing Health to address this expected shortfall.  

                   11.2       Goal, Strategies and Actions 

The goal for financing health for the medium term is to implement a combination of 

strategies that address an expected shortfall in funding of  

$3.3 m 

Health is an essential component of national development. The vision for financially sustainable health services builds on the Vision already articulated by the Ministry of Health and is described as follows: Healthy Palau in a healthful environment at a cost affordable to government and people. 

The Goal for Financing Health is: By 2013, to implement a combination of strategies that will achieve fiscal adjustment equivalent to $3.3 million.

Fiscal adjustment means the need to achieve a combination of higher revenues and reduced expenditures in the context of expected availability of government funding and the objective of being self-reliant with respect to financing expenditures that are of a current rather than capital nature.  

Financing Education

                                         1.    Sustainability 

Financing Education

                                         5.    Efficiency 

Managerial and operational efficiency  will be improved 

Social Services for Vulnerable People

12Social Services for Vulnerable People 

             12.1       Approach and Issues 

Consultations with service providers and the broader community confirm that several populations have been identified as having special needs due to 

Several groups their social or physical characteristics. These are: (a) persons with 

of people have 

been identified disabilities and other special health care needs; (b) adolescents; (c) women as having and children who are victims of abuse or (in the case of children, neglect); special needs (d) certain other categories of women who are under stress; and (e) certain categories of elderly.  

The Action Plan for Social Services for Vulnerable People report urges the need for attention on this matter.  The goal, strategies, actions and expected outcomes for this Action Plan are set out below. 

             12.2       Goal, Strategies and Actions 

The proposed visionfor vulnerable people is “life with dignity”. This vision is 

The proposed supported by three goals: vision for vulnerable §To ensure the basic needs of all residents are met.  people is “life

with dignity”                                             To reduce vulnerability by preserving and strengthening safety 

• nets.  
• To provide compassionate, timely assistance to people falling through the “safety nets”. 

                                         1.    Strategy to Help Vulnerable People 

Strategy: Develop, implement, and monitor a policy strategy for vulnerable A policy people that addresses the needs of all vulnerable groups. strategy for vulnerable             Actions:  

people will be developed and §Identify a policy focal point for poverty analysis and monitoring. implemented 

• Formalize poverty guidelines.  
• Develop an explicit policy strategy for vulnerable people with engagement from the community. 
• Monitor the situation of poverty and hardship. 

Social Services for Vulnerable People 2. Universal Access to Basic Public Services 

improved educational and private sector development outcomes

Social Services for Vulnerable People

                                         5.    Services for Vulnerable people in Economic Hardship 

13 Responding to Community Concerns 

13.1        Introduction 

It is vital to understand and respond effectively to community concerns when formulating and implementing economic, social, cultural and environmental policies. This section presents responses to the main concerns that have arisen in the course of preparing the medium term development strategy.  The responses are based on the recommended policies and actions in the medium term development strategy.  

13.2        Peoples Concerns About Development Policies