INAUGURATION OF PALAU'S EIGHTH CONSITUTIONAL GOVERNMENT

UNCLAS KOROR 000011


DEPT FOR EAP/ANP

E.O. 12958: N/A
TAGS: PS PGOV PREL
SUBJECT: INAUGURATION OF PALAU'S EIGHTH CONSITUTIONAL GOVERNMENT

REF: 08 Koror 0193


1. Summary: On January 15 Palau's eighth constitutional
government was inaugurated into office. The ceremonies began
with the installation of the Senate and the House of Delegates
followed by the swearing-in of President Johnson Toribiong and
Vice President Kerai Mariur. The ceremonies took place at the
new National Capitol Complex Building at Melekeok State. This
was the first inauguration was held at the new capitol complex.
End summary.


2. In his inaugural speech President Toribiong thanked the U.S.
Government for the guidance and support through the years which
made it possible for Palau to attain independence. He
acknowledged that the U.S. is Palau's most important bilateral
partner, its major benefactor and its defender, and affirmed his
commitment to enhance Palau's relationship with the U.S.


3. President Toribiong described the evolving fiscal situation
as the major challenge facing his administration - specifically:
government revenues were not sufficient to compensate for the
reduction in Compact related funds. This challenge is made even
larger by the fact that the value of the Compact Trust Fund has
declined by an estimated $50 million (from approximately $175M
to approximately $125M) as a result of the current global
economic recession.


4. As one avenue to address the fiscal problems confronting
Palau, the new president seeks to promote foreign investment and
advised Palauans not to fear foreign investors but to seek
investments that will create jobs and increase tax revenues.
With jobs and tax revenues generated from foreign investments,
Palau would be less dependent on foreign aid and the quality of
life would improve. But Toribiong also stated that his first
and highest priority is the Section 432 Review of the Compact of
Free Association.


5. President Toribiong acknowledged Palau's other donors -
Japan, Taiwan and South Korea - and regional partners - the
Philippines and the other Freely Associated States. He singled
Japan and Taiwan out for particular gratitude owing to the
magnitude and importance of their contributions to Palau's
infrastructure.


6. The U.S. delegation to the inauguration was led by Charge
Mark Bezner and included Rear Admiral William French, Commander,
U.S. Naval Forces Marianas; Tom Bussanich, Office of Insular
Affairs, Department of Interior; and EAP Desk Officer Paul
Neville. Other dignitaries at the inauguration included former
Prime Minister of Japan Yoshiro Mori, President of the Federated
States of Micronesia Immanuel Mori, Taiwan Special Envoy Kuan
Chung, Australian Parliamentary Secretary for the Pacific
Affairs Duncan Kerr and ambassadors from Australia, the Czech
Republic, France, India, and Switzerland. (Interestingly,
former Australian Prime Minister Bob Hawk was also present
during the inauguration, but was here on private business and
kept a low profile.)


7. Comment: Prior to his inauguration, President Toribiong
stated to Charge that he intends to make Palau's relationship
with the U.S. even stronger than it already is. In his
inaugural address, which contained effusive praise for U.S.
influence and assistance, and mingled excerpts from the Palauan
constitution and the Bible with quotes from John F. Kennedy and
Barack Obama, Toribiong publicly signaled his commitment to the
U.S.-Palau relationship.

The inauguration of this President represents the first time the
power of Palau's executive branch has eluded the grasp of the
Nakamura-Remengesau political clique since independence. In
focusing on self-reliance in his inaugural speech, Toribiong,
who has an excellent understanding of the Compact of Free
Association, demonstrated his comprehension of the magnitude of
the challenges his administration is inheriting from his
predecessors.


Post will email the full text of Toribiong's speech to the desk.

BEZNER