Palauans (about 70% of the population) are predominantly Micronesian with a mix of Malayan and Melanesian strains. There are minorities of Filipinos, Chinese, and other Asians. Palauan is the official language, but English and other languages are also spoken. Roman Catholicism and Protestantism are the predominant religions.
Tourism, subsistence farming, and fishing and shellfishing are the chief economic activities; commercial fishing was phased out in its waters beginning in 2014. Machinery and equipment, fuels, and foodstuffs are imported. The United States provides considerable financial assistance under the terms of the compact of free association, and is Palau's largest trading partner, followed by Singapore and Japan.
Palau is governed under the constitution of 1981. The president, who is both head of state and head of government, is elected by popular vote for a four-year term and is eligible for a second term. The bicameral Parliament consists of the nine-seat Senate and the 16-seat House of Delegates; all members are popularly elected for four-year terms. Administratively, the islands are divided into 16 states. Defense is the responsibility of the United States.
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