Koror, Palau — Koror State has demonstrated resilience and made significant strides in recovery since the COVID-19 pandemic, according to Governor Eyos Rudimch, who addressed state leaders in a recent report on government progress.
Rudimch credited collaboration between Koror’s leadership and its citizens for the state’s improved outlook.
“Being resilient—how do we bounce back? Bouncing back from difficult times has made us stronger today,” he said. “Everything we have been working on with the legislature is an example of resilience.”
Upon taking office in the wake of the pandemic, Rudimch faced steep challenges. In 2022, with tourism revenue virtually gone, Koror State operated with just $10 million in reserves and $4 million in its operating accounts. Meanwhile, the government’s operating costs exceeded revenue, including $7 million in salaries, $2 million of which was overtime expenses.
To address the fiscal shortfall, the administration launched a “Stabilization & Strategic Planning” effort. This included cost-cutting measures such as implementing a biometric timekeeping system to curb overtime spending and securing technical financial assistance to pursue a loan through the Asian Development Bank (ADB), facilitated by the national government.
In 2023, the administration moved into what Rudimch termed “Innovation & Revitalization” strategies. These included revitalizing public parks, launching sustainability initiatives, pursuing investment opportunities, and developing the Public Financial Management Reform Plan—a key requirement for accessing the ADB’s policy-based loan.
As a result of these efforts, Rudimch reported that tourism permit revenues rose by 30% in 2024, and state block grants increased from $1 million to $2.5 million. The government also earned $300,000 from its 2023 investment portfolio.
Koror also prioritized infrastructure and worker benefits. Community infrastructure projects were launched across state hamlets. The minimum wage was raised from $3.50 to $5 per hour, with additional increases for higher-earning employees.
Looking ahead to 2025, Rudimch announced new employee benefits, including a 401(k)-style retirement plan and maternity and paternity leave. A major digital transformation initiative is also underway, aimed at allowing online permit processing and digital payments for public services.
Despite the gains, challenges remain. The state must pass the Public Financial Reform legislation to unlock the second tranche—$5 million—of the ADB loan.
Rudimch also highlighted unresolved issues with the national government regarding authority over the Malakal port and a boundary dispute with Airai State over the Uchelbeluu reef, claimed by both jurisdictions.
Now in the fourth year of his term, Rudimch reflected on taking office after Koror lost nearly 60% of its revenue from rock island tourism fees due to the pandemic. The next Koror State general election is scheduled for November 2025.