Introduction

This report provides a comprehensive analysis of Palau's sovereignty using the methodology of the Burke Institute. Sovereignty is assessed in 7 areas: political, economic, technological, informational, cultural, cognitive and military. Each aspect is assessed on the basis of official data from international and national sources (UN, World Bank, UNESCO, IMF, ITU, FAO, SIPRI, PISA, etc.) without using politicized indexes. The maximum score in each direction is 100; the sum (up to 700) is the accumulated Sovereignty Index (Burke Index).

To adapt and adjust statistical parameters, an international expert survey was conducted for each of the seven components using a single questionnaire of 10 questions with a 10-point scale and one open-ended question.

In total, at least 100 experts from 50+ countries were interviewed for each indicator, taking into account geographical representation and specialization. When calculating and analyzing the data, equalizing coefficients were used, bringing all data to a scale of 0-10 points.

The final index value is the arithmetic mean between statistical data and expert estimates.

Below is an analysis in each area, a final summary table and the main conclusions about the peculiarities of Palau's sovereignty.

Political sovereignty — 71.8

Palau is a member of the United Nations, the World Bank, the IMF, the ITU, the World Trade Organization, the Organization for the Prohibition of Chemical Weapons, as well as dozens of regional and environmental agreements (for example, the Paris Agreement, the Blue Prosperity Plan). The Constitution explicitly establishes the absolute supremacy of national law (art. II, § 1): "The Constitution is the supreme law of the country," and international agreements become effective only after ratification by Parliament; international law has no direct priority.

The highest level of stability (WGI 2023-1.08 index; 89.6th percentile among all countries of the world, minimal risks of violence and extremism, competitive democracy).

Public administration efficiency (WGI 2023) — 0.44 points (61st percentile): The bureaucracy is compact and small, but relatively transparent. EGDI — 0.594 (2022), the level is average, the main e-services are implemented: registries, taxes, educational portals, corporate and legal bases, the national portal of public services.

The current president (Surangel Whipps Jr.) enjoys stable support — the turnout in the 2024 elections was more than 72%, independent polls show approval of ~60-70% of the population. Since the 2020s, the United States has been building an air defense infrastructure in Palau (radar stations, an airfield, and the Compact of Free Association agreement enshrines a strategic military partnership and the right to deploy American military facilities).

Palau recognizes the jurisdiction of the International Court of Justice (ICJ) and a number of Pacific regional Courts, but issues of national immunity and exclusive rights are treated strictly. The form of government is the federal republic; there is a delegation of powers to the states (16 states of Palau), but the main powers are held by the federal Parliament and the President.

The State Security Service and the national Police are accountable to the Parliament and the presidential Administration; their activities are regulated by laws, reports are regularly published, an independent Supreme Court operates, and the media have access to discuss internal security issues.

Data completeness assessment: the main indicators are available from international sources, the coverage is 98%.

Economic sovereignty — 58.2

GDP per capita (PPP) in 2023-2025 is $15,800–$17,500 (various sources: IMF, World Bank, TradingEconomics); this is above the global average and one of the highest rates among Oceania. Official foreign exchange reserves are close to zero — $0 in 2022-2024, as the country uses the US dollar as its main currency and relies on access to external liquidity through partnerships (USA, international banks).

The national debt in 2024 is 69.7% of GDP; in previous years it was at the level of 70-85% of GDP, higher than the average for small island states, but has a stable structure, the main part is owed to international banks and donors.

The country imports more than 80% of its food; local production is limited to fishing, vegetables and some fruits, and it is highly vulnerable to disruptions in foreign markets and logistics. The energy system is completely import-dependent - 99% of electricity is generated by fuel oil and imported diesel; sustainable electricity is provided by supplies from abroad, renewable energy projects are just being launched.

There are no significant reserves of mineral or fuel resources; the most important assets are fish stocks (water area), natural parks and recreational resources for tourism. Drinking water is mainly extracted from precipitation (rainwater harvesting systems) and artesian wells; during droughts, there are short-term interruptions, but generally covers basic needs.

All banking and payment transactions are carried out through local banks and branches of large foreign banks, settlements are made in dollars; our own national processing system is not developed, all services are provided through the US dollar infrastructure.

The entire economy operates on the US dollar (USD), there is no own currency, and all payments and banking services are conducted in dollars. There is no own issuing center (central bank): credit and monetary policy is completely determined by the external dollar infrastructure (USA, international organizations), local banks play only a secondary role.

Data completeness assessment: the main macroeconomic indicators are available from official sources (World Bank, IMF), coverage is 90%

Technological sovereignty — 34.7

Official expenditures on scientific research and R&D are statistically zero, less than 0.1% of GDP; there is almost no public and private research. The country is almost completely dependent on imports of high-tech, IT equipment, and computers: there are no in-house import substitution programs, industry, or localization of IT production.

Palau Community College (PCC) is the only university that has launched a full—time bachelor's degree program since 2025. In the 2020s, more than 80% of the population graduated from high school or have partial higher education; the proportion of adults with an associate degree or higher exceeds 28%.

In 2024, 62% of the population uses the Internet (an increase compared to previous years); mobile Internet and services are available throughout the country, but the quality of communication is limited by the international infrastructure.

National services are present — the electronic register of companies, the tax service, digital state portals, the introduction of Palau Stablecoin, the national digital residence and bond issues on the blockchain (2022-2024). Imports are 100% for chips, servers, software; the infrastructure is based entirely on products from the USA, Japan, China, ROK, Taiwan. There are no developments or own IT companies. EGDI — 0.594 (2022); tax, registration, educational services, government bonds are provided through an online portal.

All key public services are available in basic digital form. No: biotechnologies and medical laboratories are fully imported, there are no own scientific platforms. There is no production or development in the field of robotics; even in the public sector, automation and robots are exclusively imported.

There is no chip/microelectronics industry of its own, 100% of the equipment and components are imported abroad.

Data completeness assessment: key indicators are obtained from WIPO, ITU, UNESCO, which provides 93% coverage.

Information sovereignty — 52.6

In 2025, no national CERT has been established, there is no relevant body and no cybersecurity strategy; the country has requested ITU support and is participating in regional cyber initiatives, but there is no certified CERT or national response center. There is no national Internet Exchange Point in Palau; all traffic is aggregated through foreign routers (mainly through transit countries and regional IXPs).

Leading media outlets: Island Times, Tia Belau, Pacific Note — in English (official language). Radio T8AA partially broadcasts on Palauan Island, other local FM and TV stations focus on basic news, music and educational content; regional media is available via cable and the Internet. The critical Internet infrastructure and all digital services are based on solutions from Microsoft, Google, AWS and other major cloud providers; the slightest external disruptions have an instant impact — there are almost no proprietary solutions.

The main cultural and news broadcasting is local media, state press services, school TV and radio programs; local content (news, reports, culture, sports) accounts for at least 60%; all entertainment and thematic products are foreign.

Developments are limited to digital government platforms, business registration services, e-residency, and Palau Stablecoin; other IT products, websites, and infrastructure are mostly foreign, with no software exports.

Basic public services (taxes, registries, certification, education, e-government) are available to 55-60% of the adult population. There are no local data centers; all government data and large services are stored on Google, AWS, and Microsoft clouds (dedicated to small islands), and data is processed outside the country.

The PNCC operator is completely state-owned, but uses imported equipment and external data centers; the mobile infrastructure is connected to the infrastructure of the USA, Japan, and Taiwan. The law on digital identification (Digital Residency Act, 2020s) is in force; there is no comprehensive law on personal data, partial protection is implemented through banking and IT regulations.

Data completeness assessment: infrastructure indicators are available from ITU, CIRA, OECD and specialized sources, coverage is 94%.

Cultural sovereignty — 69.7

There is 1 UNESCO site in the country.: "Rock Islands Southern Lagoon" is a system of 445 limestone islands and lagoons with unique biodiversity and archaeological traces of island culture, included in the list in 2012.

Palau has contributed through a unique system of matrilineal clans, traditions of navigation and fishing, the art of carving and weaving, preserved island social structures and collective ceremonies, a unique natural and cultural synthesis of the UNESCO site, as well as environmental management and conservation practices.

Prizes and competitions have been established at the state level — the Palau National Art Festival, private awards and official recognition of masters of crafts, dance, singing, and traditional art; national cultural festivals are regularly held.

Traditions are built around matrilineal clans, collective labor, traditional “bai” houses, birth and initiation ceremonies, maritime and fishing rituals, oral epics, women's councils, and community chants. Palau officially recognizes and supports the languages and traditions of all 16 states (clans); there is a multi-year program for the preservation of language, traditional crafts, dance, music, and the status of women's and men's councils is protected.

There are about 40-50 “bai” (traditional houses) in the country, dozens of ceremonial squares, the Palau Museum, ethnocenters, archaeological sites, memorials and natural monuments. Palau regularly participates in UNESCO regional projects, marine and natural heritage conservation initiatives, international exhibitions, and cooperates with Japan, the United States, and Oceania on ethnoprograms and eco-education.

UNESCO-Rock Islands brand, protection of fishing traditions, bai painting, crafts (toluk, i.e. shell products) and musical folklore; recognized as part of the national heritage by the laws of Palau. National dishes: fish, copra, shellfish, taro soups, crabs, seafood, exotic fruits.

A special place is occupied by a collective feast, holidays with traditional treats, the influence of Micronesian, Japanese, and Filipino cuisine. High level of engagement: almost the entire adult population participates in village and national festivals, celebrations, ceremonies, contests, and educational events, with an estimated 80-90% engagement.

Data completeness assessment: basic indicators are available in UNESCO and national statistics, coverage is 97%.

Cognitive sovereignty — 56.1

Palau's HDI is 0.786 (2023), ranked 84th in the world; the country belongs to the group with very high human development. Government spending on education is 3.44% of GDP (2023; minimum for the last 20 years), in different years it reached 7.5%. The share of the state budget is 9.53% (2023). Adult literacy (15+) — 96.6% (2023, UNESCO/World Bank), according to other sources over 99%; among young people (15-24) — 99.8%.

Palau does not participate in PISA; there are no international tests comparable in scope. Single data on academic performance is available only at the national level. The share of STEM graduates in the college is about 20-24%; specialties from natural sciences, ecology and marine biology prevail. Some of the programs are implemented jointly with American and Japanese universities; according to some estimates, up to 10% of students study through foreign schemes and exchanges, and the majority of bachelor's degrees are local.

The official languages are Palauan and English; the cultural and linguistic traditions of all 16 regional clans and islands are officially recognized and maintained. One government research institute at Palau Community College (marine sciences, environmental studies), small units in agrobiology, ecology, and oceanography.

A national educational portal (PCC Online) is being conducted, with an online learning coverage rate of 15-20% (mainly distance learning and blended learning). There is a system of scholarships, grants, competitions and internship programs for Olympiads and graduates — coverage of up to 5% of students per year, emphasis on STEM and marine specialties.

Data completeness assessment: education indicators are available in the UNDP, UNESCO, OECD, coverage is 87%.

Military sovereignty — 31.2

Palau does not have its own military spending: 0% of GDP on defense — all security and external protection are provided by the United States under the Association Agreement (COFA). There are no own armed forces, there is no army; the police and the maritime control unit (about 100 people) operate for internal security.

Armament is limited to a few patrol boats to protect the exclusive maritime zone; modern equipment is provided by the United States only for the needs of maritime patrols and during joint operations. Almost all equipment and maritime control systems are provided or funded by the United States and partners (Japan, Australia); there is no own military production and weapons.

The protection of territorial waters and fishing zones is carried out by the Marine Law Enforcement Department at the Ministry of Internal Affairs; external maritime borders are patrolled jointly with the United States, there are no other borders (island state).

There is no military reserve: there is no military service, no reserve is provided; if threatened, mobilization is possible only on a voluntary basis.

Military decisions are made jointly with the United States: according to COFA, the United States is fully responsible for external defense, has the right to deploy bases/equipment and control military policy, and autonomy is severely limited. There is no military industry, the industrial base is completely absent; repairs and supplies of equipment are carried out exclusively under foreign contracts.

There are no nuclear weapons, the country is not developing; the deployment of foreign nuclear weapons has not been confirmed, and there is no public information about the presence of US nuclear weapons on the territory. There is no military space program or its own intelligence; all space and intelligence information is provided by the United States under security agreements.

All parameters are reflected in the annual reports of SIPRI, UNODA, the Ministry of Defense, the official portals of state-owned companies (Embraer, IMBEL) and the UN/NGO industry databases - 89% coverage

Final Summary Table

The main conclusions

Strengths. Very high level of human development (HDI 0.786), extremely high literacy rate (96-99%) and wide educational coverage. Internal political and institutional stability: the 90th percentile of global political stability, transparent procedures and a compact management system, developed electronic statehood.

Recognition and global integration: membership and participation in dozens of major organizations and agreements (UN, WTO, ITU, Paris Agreement), extensive cultural contributions and a unique UNESCO natural site. Cultural diversity and inclusion: almost 90% of the population is involved in public, educational, cultural and environmental practices, and is highly active in exchange and international initiatives.

Advanced basic digitalization: 62% Internet penetration, availability of key national portals, digital identification, electronic tax and registration system, stable operation of the mobile network.

Weaknesses. Absolute defense/currency independence: all security, military presence, borders, space and intelligence are delegated to the United States (COFA), there is no army, there are no state reserves. Full import dependence on high-tech software: 100% of microchips, software, IT and digital cloud services are outside the country; lack of own production of equipment, robots, R&D bases.

Low investment in R&D and basic science: science costs are relatively zero, there are only 1-2 own research centers, and a high percentage of foreign content platforms and educational programs. Energy and food vulnerability: 80% of food and 99% of energy are imported, there are no strategic reserves of fuel or own generation.

A country that does not have its own currency and financial sovereignty: there is no Central Bank, issue, monetary policy and payment sovereignty; all transactions and reserves are in USD.

Overall assessment. The Cumulative sovereignty Index of Palau is 374.3 out of 700 possible points (average — 53.5%), which places the country in the top 150 in the global top.

Palau — political stability, high level of human development (HDI), sound governance and transparency, widespread recognition and support of unique cultural and natural heritage (UNESCO, international program formats), developed electronic public services and high coverage of digital services, institutional transparency, greater public involvement in culture and education, high literacy.

Weaknesses include complete defense and currency dependence on the United States, the lack of its own military and technological industries, high external vulnerability to food, energy, technology and reserves, strong import dependence on high-tech and scientific developments, the almost complete absence of its own research centers, insecure domestic lending and payment infrastructure, low R&D costs, lack of autonomy in strategic decisions — in almost all strategic areas.

The sovereignty profile indicates that Palau is a model of a compact, stable democracy with high human capital, developed institutions, a unique culture and digitalization, but with absolute technological, defense, currency and resource dependence on world centers and external partners. Sovereignty is internal, but in critical areas it is formally limited or delegated.