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March 06, 2007


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Sei ea uchul mak di mesisiich a ngerek el kmo kid ma kemiu el ngara ikrel Belau- don't bother returning! Stay where you're at, be productive there and continue supporting your families back home! We're in a land of thievery that has proved hard to correct! We can only correct it through constant, empty rhetorics and no action!

The legislatures (state and national) are full of so-called leaders who are only leading toward discovering treasures for themselves! Only if you all heard the senators and delegates who spoke during the recently concluded economic symposium!

I even heard on the radio the other day Senator Diaz claiming that he couldn't stand Professor Schnidman lecturing Palauans, especially its leaders, about transparency and etc. If they, our esteemed Senators and Delegates, know so well what to do, why has it taken so many years of inaction?

We're heading toward the Komisteba as a country. I'll leave you with former Delegate/Speaker of the House of Delegates' admonition during the symposium: "I don't understand those who oppose development. You cannot oppose development. Either you want to be like Chuuk or you want to be prosperous like Guam."

Senator Asanuma made a good presentation during the symposium on addressing the "front businesses" issue we're facing here in Palau. While there are merits to his argument, I only wish to pause everyone listening/reading and ask you all to remember that the problem is not the FRONTS- that is a symptom. The real issue is the restrictions that come with our foreign investment law(s). When you have all these kinds of restrictions, granted that we need businesses and taxes/employment, we got to find ways around the existing law to do business!

"When you have all these kinds of restrictions, granted that we need businesses and taxes/employment, we got to find ways around the existing law to do business!" Can you provide examples of how are FIC laws compare to other countries that we want to emulate? Guam, for instance? You almost (almost) make it sound like FRONTs are justified b/c of the FIC laws. If the laws are so strict why are there foreign businesses in Palau now?

And wow - do I have we have to choose between Chuuk and Guam? I wouldn't want Palau to be like Guam - I'm assuming that's the better choice. Is that the goal - I wouldn't want to vote for the politican that said this.

Sembuki: sulang ra comments/a ker el mulsaod.

The current investment regime in Belau is too restrictive. A primary example, foreign investors want security when they come to invest in Palau. The 50-year lease setup is not enough for them, so they come to do business, that provides employment and taxes, with locals/citizens of Belau as the face of their companies. These arrangements, as partly pointed out during the Symposium and during many other occasions, are susceptible to problems of tax evasion and outflows of much needed cash, no to mention the strong preference to hire cheap, foreign labor. We need to re-examine our current investment and labor laws to better address this horde of issues so that we can have long-term, contributive investments that fully enjoys and rewards our local, labor force. Let me just add that a foreign investor wishing to invest in Palau initially has to go through a long, tedious process of getting licensed to do business in Palau. We need to streamline the process that provides for stronger screening of interested companies/investors and a more efficient access to do business in Palau (in terms of obtaining a Foreign Investment Certificate). We don't have to sell ourselves (as people and a country) that short to achieve that, we would be more economically prosperous and content with our environment as the owners of this land and as a country. We cannot continue to sing "we must rise above the existing heavy reliance on donor support" if we are not willing to seek our own monies through maximum but sound utilization of our own resources!

We don't necessarily have to be like Guam, but there are "best practices" in or by Guam that we can adopt as we move forward in attainment of our self-reliance goal. We either do just that or regress into chaos, corruption and poverty as we see in our fellow FSM state-neighbor of Chuuk.

What you need to do as a first step is to stop ripping off non-Palauans who come here to lease property and then, after handing over the money, get screwed, end up in court, etc. What you need is to provide a stable group of government institutions, like a court that will protect foreigners leasing property here from being ripped off and subject to years' long attorneys' fees and lawsuits. What you need is to have Palauans stop acting hostile, belligerant, and mean-spirited towards outsiders. Or end up like the CNMI where nobody from Japan wants to do business anymore. Business from Japan, the U.S., Taiwan, Korea---in all honesty should be told right now to invest in anywhere EXCEPT Palau---where their own so-called high government officials rip off the bank customers, their own relatives, etc. and get away with a slap on the wrist by blaiming the one or two Americans they conspired with to rip off their fellow Palauans, ehtn go begging to Tawain as your so-called leaders kiss the Peoples' Republic of China's dagans.

Ores % NowayBelau,

Opening a door to foreigners investors is like two streets.

First, we Palauans you claimed that we fraud them FI.

Second, Foreign investor comes in and made friends with our national governments high officials. FI are using us as front. Look at Palasia, Royal Palau Resort and many others FI are doing to our young Palauans workers. Hotel misplaced them in order to demote and fired instead giving proper training and good wages, overtime pay, benefits. They next thing we see hotels have hire Taiwanese, filipinos because back home they got ten times less here in Palau. In our home-land soon to be minorties.

We should be careful because when open for FI. The same people Palauans will get their hands on them first. Many of our leaders have lead our young Palauans at Labor and Immigration offices and public safety to be corrupted.

During the Trust Territory government the US government knew that we were not prepared to open the door for foreigner investors. For example,
EtpisonNECO took him over tne years to find investor to build PPR. After him, Sen. Alan Seid lured the Taiwanese to invest on Palasia then, High Chief Ibedul and his investor build PRR in less than 3 years. The big question is How much benefits we got from the FI? Or what benefits do we need? What are they??????? Employment, income/social security taxes, gross receipt taxes, import taxes, patronize our local businesses, what else? Can you add some more???

Verses impact from foreign workers from Phillipines, Taiwan, Chinese, Bangladesh, Nepalese, Haoles, Japanese etx.

Think Kthink Kthink and decide.

Hi Ores,
Thanks for the response. Sometimes I think it's not so much the policies, regs and laws in place that are too restrictive or prone to corruptive practices, but rather the inefficient management and accountability of those things. And we tend to overhaul one law or policy and replace it with another one without carefully looking at the problem comprehensively.

Laws or policies change but the implementers do not. So is it a policy issue or an implementation and accountability issue?

Or sometimes, the implementers are really trying their best to keep up with ambiguous laws or regulations and before they can get a good handle on the existing policies a new one arises (yeah right - you might say - but it could be the case).

I guess what I'm trying to say is (and maybe you have touched on the subject) is that we need to shine a light on the implementation and enforcement/accountability side of things. What good will new Foreign Investor friendly laws be if we don't have the wherewithal to apply them?

Ungil Sils!

What is the Gov't's policy regarding these foreighners? Must we let them run us off our Island? Ada temla chuam chochid?

I invite the "Future" condidates to take on this issue!

We can't dream "China" when these foreighners are eating us alive.


how about know who you are first, then decide what you want. Palau have a vision and we have strategies towards that vision. It's the greed for more(money), that destroys our mission and mislead certain individual. You can't be two things at the same time. take guam for example. It's an island that's trying to be a city. the maintenance of the buildings costs twice as much as the building itself. they can't even pay the school system anymore. i think we're heading in the same direction. it's time to change....


You have broght to the fore an issue that needs wider public participation and input. Foreign Investment is the doorway to our future, and unless it is fixed, with provision of proper, effective and efficient screening regime to support prospective foreign investors interested enough to pass through, we will never resolve the challenge of meeting or national goals for economic development.

And you are absolutely right to point out that, our current Foreign Investment Laws, and the process through which a prospective foreign investor must negotiate to obtain a Foreign Investment Permit, are most cumbersome and pose prominent obstacles to our economic development.

Find a willing investor and bring him to Palau and run him through our FIB process, and watch him frustrate and leave in dispair. Unlike Guam and other jurisdictions under the US, there is lack of certainty when dealing with FIB. Our laws are clear, but the tedious process they subject an FIB/FIAC application through are inherently inefficient and are constant source of uncertainty.

In Guam, a foreign investment application process is clear cut. Once you submit your application to Rev and Tax, GovGuam has X number of days to act on your application. If GovGuam does not act within that X number of days, your application is deemed approved and so you move to the next phase of the permitting process.

With FIB, you never know the status of your application until the board acts. There are even cases where an FIB Board is unable to act on applications because of a lack of quorum, etc. Can you imagine a multi-million dollar investment projects for which implementation is stalled because of the application process? Can you imagine what goes through the mind of that investor if he he cannot get clear indications on the status of his application?

By the way, this was pointed out by Dr. Paul Callaghan, Emeritus Professor of Economics at UOG, during his term as a consultant to Palau.

That is why people go through the 'Front Business' route. It's clear cut, a Palauan becomes the applicant, secures a business licence, and a foreign partner runs and operates the business.

The problem with 'Front Business'is msitated. Their presence in Palau is not a problem. 'Front Business' offer our people choices so, dont' let our businessmen and politicians fool you. Remember, this is free enterprise system.

The problem with 'Front Business' is the handicap on the part of our taxmen to collect what is they feel is rightfully due, thus the loopholes and the shortcomings of our tax regime governing business operation, not the business itself. That, in my view is the problem we're facing with front businesses.

Maybe if our tax laws and regulations are made to require all the 'front business' to use a presribed or designated cash register machines, that can be calibrated by our taxman, and to require copies of receipts by those machines, as they do in Guam, then maybe that will help tax collection.

The other side of this question we, as consumers, should ask ourselves is: who will benefit from the closure of front businesses?

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