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Palau, like other small island nations in the Pacific, Caribbean, and Indian Oceans, faces big developmental issues. As a nation small in land mass, Palau has small domestic markets that inhibit competition, preclude economies of scale, and make it difficult to produce anything – goods or services – at internationally competitive prices. Even though Palau’s ocean area exceeds its land mass by 1000?fold, this too is small in comparison to the oceans of neighboring island countries thus under? mining Palau’s competitive edge even among the islands in the lucrative world tuna trade. Located at the western?most end of the Micronesian archipel? ago, Palau is remote from even its near neighbors and even more remote from the world’s economic centers. Getting to Palau whether by sea, air, or telecommunications is often difficult and always expensive. Palau also has a small population, made even smaller by out?migration. A small population makes it difficult to train and retain the skilled work? force needed for nation building. As an independent nation in a turbulent world, Palau is also vulnerable to climate change, sea level rise, natural disasters, rising oil prices, and external disruptions in transport and trade.