Pegging Palau’s economic recovery on the recovery of tourism as the way forward, a presentation by USA Graduate School Fiscal Economist Kevin O’Keef at the 2021 Economic Symposium showed an option that is tourism-driven as means to economic recovery in the next 30 years.
“We will talk about options with tourism as a driving sector, knowing full well it is neither enough nor safe to be fully reliant only on that sector. But it does make a huge difference already and it can make a huge difference in the future.”
Palau may be pursuing other options for economic growth said O’Keef and that would be positive for Palau especially if they fall on different cycles as tourism.
In the two scenarios of possible future growth paths that Palau could take, O’Keef said there was a “right choice” and “not right choice” in terms of a path that Palau may choose for itself.
The “right choice” to grow the economy through the tourism sector is driven by policy changes and planning. Palau’s tourism history shows volatility but Palau has demonstrated resiliency and can do so again with good planning.
Based on the “right choice” projection, Palau would experience steady annual growth of 2% or reach about 207,000 visitors by FY 2030. The policies and planning will aim at maximizing returns and reducing the impact of tourism. It would also include investment in infrastructures that match the tourism market that is targeted.
According to economist O’Keef, tourists are expected to return especially after all the measures that Palau has taken to prepare itself including achieving a very high vaccination rate and having an available and ready room capacity. Many key markets are catching up on their vaccination rates such as Korea, Taiwan, and Japan and O’Keef said they will be ready to spend saved earnings.
“We see a fair number of visitors coming in, but as the President says, more flights, more flights, and flights,” expressed O’keef.
A participant at the symposium expressed disappointment saying that nothing that was said was new and that it has been said before.
“Not right choice” is following the current system with no changes,” stated O’Keef.
“When you are facing difficult choices, if you have a hard time making those choices, if you delay those choices, if you fail to make those choices, you really are making a decision. And probably a bad decision by not acting.”