January 14th: Exit Fees

When you leave Palau, you’re charged fifty bucks in cash. Ouch. I’ve been whining about it quite a bit if not verbally, at least internally. However, today’s discussions made me feel incredibly better about paying this fee when we depart. In the morning we met with Senator Philip Reklai who spoke about the various ways in which Palau is developing as a nation. The Senator was the first person we’ve met with to clearly break down how the fifty dollar fee is utilized by the government. Twenty dollars of the fee is simply a departure tax. The other thirty is doing some pretty amazing things, referred to as a “green fee” it is divided equally between the Protected Areas Network (PAN) and a sewage and water fund. In the afternoon, King Sam, the Project Manager of the PAN Technical Office expanded on how the PAN puts this fee to work. So why do I feel better about this?

The first reason has to do with the ratio of tourists to permanent residents in Palau. Senator Reklai pointed out to us that something he likes to do now when walking in Koror is to count native Palauans and he feels that they’re becoming increasingly rare. This sat a little funny with me and my first thought was perhaps immigration or mixing of cultures. However, in the past year roughly 108,000 people visited Palau. This translates to roughly 9,000 visitors a month. The most recent Palauan census cites a population of around 17,000. At any given time, tourists on the islands make up more than one third of the people. This places a pretty big demand for infrastructure from people that the country cannot otherwise capture income or property taxes from, making the exit fee an attractive venue for taxing so as not to increase the burden of tourist infrastructure on the locals. In 2011, a record year for tourism, the sewage system of Koror became overburdened and had outflows directly into the ocean. Although these outflows have since been mitigated, the system is over 30 years old and needs an update. Recognizing this, the Palauan government secured a loan of $28.8 million to provide public toilets and update the Koror sewage system as well as add a second treatment plant in Airai. Fifteen dollars of my exit fee is devoted to the sewage and water services, and it’s a pretty clever way of creating a source of roughly a million dollars annually.

In the afternoon, I gained a second reason to feel way more comfortable about parting with the other part of the green fee. The PAN. Prior to the presentation from King Sam, I understood that my exit fee “funded” the PAN. However, I didn’t really understand how the money actually was working. The PAN is a set of MPAs that are established and nominated by the individual states of Palau that are supported by the national office. The PAN office provides both monetary and technical support in writing management plans. Although the law establishing the PAN went into effect in 2003, the establishment of the green fee as a funding source is the source of the state’s interest. Over the course of this trip I have been privileged to snorkel at some beautiful protected areas which are included in the PAN. Some of the regions are designated as no take, some as no entry. Rules vary from state to state about what is allowable within the boundaries of a particular site. In most cases, the pooled $15 fees creates a very sizable fund. It allows the establishment of both protected areas and jobs within the local communities which support the protected area.

Over the weekend, Ann the leader of the Ebiil society mentioned that development is when you’re making life better than it was the previous day – it’s not always indicated by what kind of roads or buildings you have. The senator reiterated this idea today, when he told us that the idea is to make the “locals happy – happy locals means a happy island.” Knowing that my exit fee helps to fund these programs makes me feel a little happier leaving this island.