Palau is a small island developing state in the North Pacific. Its tourism industry accounts for about 40% of gross domestic product, while assistance under its Compact of Free Association with the United States provides more than $120 million in grant funding through to 2024. The coronavirus disease (COVID-19) pandemic and associated travel restrictions severely threaten Palau’s tourism-based economy - emphasizing the need for prudent financial management and deeper private sector involvement as the country pursues more inclusive and sustainable growth. ADB will concentrate its assistance to Palau on improving public sector performance and promoting private sector development.
