American Thought Leaders - How Palau Resists Beijing’s Pressure Campaign in the Pacific | Kambes Kesolei

Episode Date: September 19, 2026

I recently traveled to the Pacific island nation of Palau, home to one of the deadliest battlefields of World War II. And geography still matters: Today, it’s a security flashpoint for the United States and its closest Pacific allies.Palau is one of 12 countries in the world that maintain formal diplomatic relations with Taiwan. Because of this and its strategic position, Palau faces continual and mounting pressure from Beijing.Veteran Palauan journalist and Compass Point Institute founder Kambes Kesolei says that China wants “to appear like the good guys.” Indeed, he continues, “they just want to weaken your spirit.”In this episode, he breaks down Palau’s unique history and relationship with the United States—and what’s at stake as Beijing expands its ambitions in the region.Why doesn’t Palau just give in?“Palauans are very loyal people,” Kesolei said. “They—like the allies they have chosen—value democracy, human rights, and freedom of religion.”Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.

Palau is in the middle of this geopolitical rivalry between the United States and China because of Palau's diplomatic recognition of Taiwan. I recently traveled to the Pacific Island nation of Palau, home to one of the deadliest battlefields of World War II. And geography still matters. Today, it's a security flashpoint for the U.S. and its closest Pacific allies. We think about the conventional war. military aircraft, naval vessels.

But there are other forms of warfare. Earlier this year, the U.S. Treasury Department, Office of Foreign Assets Control, they sanctioned Chinese nationals who were investing multimillion dollar projects in Palau. And some of these names are involved in criminal activities. You're talking about Prince Group? The Prince Group.

Yeah, yeah. In this episode, we sit there. down with Cambus Kessolei, founder and president of the Compass Point Institute. He breaks down Palau's unique history and relationship with the United States and what's at stake as Beijing expands its ambitions in the region. This is American Thought Leaders and I'm Janja Kelek. Cambus Kesoulete, such a pleasure to have you on American Thought Leaders. Thank you for having me.

So we're here in Palau, one of the three countries that is an the compacts of free association with America. We have big powers interested in Palau. It's stark geopolitics. We've been seeing this in the context of the Pacific Islands Forum leadership meeting. Tell me, what is the most important thing from your perspective that we need to know about Palau and Palauans? When you talk about geopolitics, Palau is in there. in there. Why? Because Palau has a close relationship with the United States of America and also recognized Taiwan diplomatically. And this geopolitical rivalry is between these two major economic and military powers trying to gain influence. And there's China and there's America on both

And Palau is in the middle because of its recognition of Taiwan diplomatically. And I think that's very important to know because Palau is an island country. It's about 1808 square miles with a population of less than 20,000 people. So it's not big. But it has made international news because it's now a site for military radar installations, high alt-a-end. installations, high altitude military radar installations. And Palau, when you look at it, it's in the US defense posture. It's the second island chain, it's at the southern end of the second island chain.

So that is why Palau is very important in the geopolitics because of its recognition of Taiwan, which China does not like. And because it fits well with the United States defensive positions. as is identified or as is part of the Compact Office Association which Palau public approved so many years ago and it's still in effect today. So you mentioned this radar array that's being built by the United States in the north. I'm recalling that one of these properties that was leased, I think, for 99 years by Prince group, this group that was designated by the U.S. Treasury Department not too long ago, had a

property immediately abutting this radar installation. It's concerning because, you know, here's the United States with a compact agreement for Palau. And so that Tukmore sites is there because of this agreement that was negotiated and approved approved by the Palawan public. On the other side of the street is that property you mentioned, which we know that they'll probably be doing that to monitor whatever, what is there, what is happening, what is the United States, what are they doing here, what military installations will be placed there.

So they're trying to counter each other. I've also looked into some other areas. So some of the hotels here. And I think there's a hotel development in one of the islands here. So I heard that they had this hotel development, over 100 rooms, resort. They had a device that monitored. communications and this developer is a Chinese developer so it raised or it it raises suspicions and then confirms what you seem to have heard that the Chinese are here for other reasons then just building hotels and trying to their foreign direct investment might be coming in with other elements other than pure

business or economic reasons. Yeah. And that Takmore sites in the north is yes it's really and that the latest that I heard is that that property that the Chinese has list on opposite they've started clearing the property maybe for agricultural purposes or something yeah so but the fact that some of these US military installations there's always Chinese list land next to it now just gives you this sort of feeling that maybe there's there's a battle within Palau that is happening right now as we are

speaking, Palau is hosting the 55th Pacific Island Forum leaders meeting. I think there were like five or six head of state that did not come to Palau. Is it something that because of Palau's recognition of Taiwan, that China has to work hard to forbid its friends not to attend, to kind of delegitimize Palau's role in hosting this Those are the things that comes to our head. I can tell you, I had an exclusive interview with the president who said that this envoy to the Pacific Islands from communist China basically told him that it's not acceptable to have Taiwan be part of the events, which needs to be excluded.

Of course, obviously he rejected this because Taiwan is here. But then again, after Taiwan attended the opening ceremony, you know, as this partner, not as a participant, but as an observer partner, that same envoy reiterated that there will be consequences. The president said that the envoy told them there would be retaliation, basically. So yes, those are very strong statements. And it is exactly that those kind of statement from the big countries like China that doesn't help. Like we have to be, the islands have to be allowed to be, their sovereignty has to be respected.

Meaning that let them be allowed to make their own decisions, what they want. Just sit down and listen what they want to say to you and help them if you can. If not then let them decide on their own. Let the Pacific island countries decide what they want to talk about, come up with their own decisions. So that is a very unfortunate statement from China. The Palawan people have decided that, yes, there's a one China policy, but we share the same values with Taiwan. We share the same history. We were also part of the World War II, like the Japan administration came to this island, military.

So those are very important to us. They will threaten, face the consequences, but Palau is strong. I think we are strong. We are very strong because we also have our own history. So let's look a bit at the history. I've been learning about the history of Palau and how these compacts of pre-association came to be ratified. It was a difficult process, right?

Right. And I mean, in fact, your family and historically I've learned was actually not so interested in seeing them ratified. Can you give me a picture of that history, right? And maybe go even further. How is it that it came to be that these compacts became an opportunity for Palauans in the first place? So during the 60s and the 70s, there was a movement in the Pacific region. Many islands were searching for their political status because for a long time we were under major powers, colonial powers.

Palau has been under Spanish, German, Japanese and then the United States. And so there was a movement in the Pacific Islands trying to search for their political status, independence movement. And Palau was one of those. So the idea of compact was it was adopted by what the New Zealand had with Cook Islands. Palau faced the choice for their self-determination, whether they want to be like the Commonwealth of the Northern Marianas, they want to be the Commonwealth of the United States, or they want to be a fully independent country. But the compact of free association kind of like the serve as an in-between where the United States will give us the economic aid in return for military rights and then allows Palawan to much. to migrate to United States visa-free to live and work and go to school, get their education

comeback. So that was like a good deal. But when they started to negotiate for the Compact of Free Association, around the same time, Palawan are also deciding on their own political status. So the movement was to draft a constitution. So it was drafting the constitution that the idea of a nuclear-free constitution came out. At that time, also the Pacific, the environmental movement in the Pacific, anti-nuclear movement was there.

And during that time, during the drafting of the Palau Constitution, the United States government warned Palau that this may not fly with how the negotiations of the company, of the Free Association is going to be. Because for this compact, which gives the United States the right to come in militarily, and when they come in, they come in with nuclear-powered military vessels, naval. So already Parlians are thinking about prohibiting nuclear, any form of nuclear substance in their territory, so which will not fly well with the United States, with the spirit of the United States, with the spirit of the compact.

And just if I may jump in very briefly, but this is in the context, and maybe incorrect me if I'm wrong, of there being these massive nuclear tests in places like the Marshall Islands and so forth, and people were watching this. And, you know, there was fallout, literal fallout from this, right?

Yeah, and it was also during that time. So for the Marchears, it was in the 50s, most of the atomic bomb testing were done. But at that time, the French were still conducting nuclear tests in Mororua at all, in the South Pacific. So they were actively still doing that. So when the United States expressed to Palau

that this nuclear free constitution may not mess well with the compact, the Palawan people just went ahead and approved the constitution with that nuclear-free provisions. And when I say nuclear-free, if any nuclear power is allowed into the country, then the people has to approve that by 75% of the vote, three-quarters of the world. And so that was like an insurmountable number

that the public has to go to bring down, to allow any nuclear forms of nuclear into the country. country. It was a turbulent times during the 1980s because there were at that time the Palawan community split for those who are in support and those who are opposed. And so the, um, they went through seven plebiscides, public referendum trying to overcome that 75 percent to approve the compact of free association and because the the Compacto Free Association has would allow the United States to come in with the military power vessels so it was during that time that the community split it was the tension was high

there were firebombings killings during that time and it was only after the seventh then they decided to change the approach because during those seven plebiscites The compact easily won majority of the voters. So there was support right there. What it did not master, but it did not master that 75% requirement from the Constitution. So there was a referendum to lower the requirement. And it succeeded. So when it succeeded, it was easier for the public to then approve the Compact of the Association

with a simple majority. Many people that will be watching this aren't as familiar with Palau as I've become really only recently. And so this is a country with an official number of 18,000 people, you know, smaller than many small towns in the United States or Canada.

It's almost hard to imagine that you could have sovereignty, right? And do you really have sovereignty? sovereignty with this type of compact and, you know, these big powers so interested in imposing themselves. Yeah, that is a very good question. We are at this point, Palau doesn't, even though we are an independent country with a seat in the United Nations, among the hundred, over hundred, ninety countries with a city. But we are not fully independent in a sense that we need to survive.

economic survival is important. We have, as a small country, we look to the United States with our relationship with the United States, and then Japan are our foreign partners and diplomatic allies to help us in our national development. For example, our road system. The compact gave us around $150 million to put up a circumferential road around the Big Island of Palau. And then from that circumferential road, then there are connecting roads to the villages on the coast coast. We are independent in a sense that we can, we elect our own leaders, presidents and congress. and they make our own loss.

But the real independence, to be economically independent, is not there. We have a budget of about $165 million proposed budget for the fiscal year 2027. But that's $167 million, including these compact funding and other sources of revenues. But most of the funding is grant assistance from the United States. For example, when Palawan goes to university, they go to the United States. We have our own scholarship office that provides scholarship to our students, our children, our children who goes to the United States. Many Palawan who get scholarship to Taiwan, the Ministry of Foreign Affairs Award. So we have every year, Palawan students graduate from universities in Taiwan, Australia, and Japan.

So in terms of educational development, we still rely on our foreign partners to help fund our children to get higher education outside. healthcare as well. So the United States government also provide a lot of assistance. And Japan and Taiwan as well are our diplomatic allies, help with our foreign, our healthcare system. With either sending experts, specialists to come to the island to help check the locals for their illness, to help, for example, like during the

the COVID. The U.S. CDC sent experts to come to Palau to help explain what is COVID, the virus. Taiwan provided us with a mask and the other medical equipment that would help as we trying to fight the COVID. You know, as is a small country, remote island country, we, most of the the sources of our energy comes from diesel fuel. So we are very susceptible for any price increase or any conflict worldwide. And so we are paying a huge amount of money just for fuel. And that fuel, when it comes in for diesel fuel, it raises electricity prices, which raises everything on the island.

It's not only that, but 70% of the world fertilizers comes through the Strait of Hormuz, and we know what's going on in the Strait of Hormuz. As an island country with a poor soil quality, we need to condition our soils to be able to plant crops to fit ourselves. So everything is linked. So as a small island country, your independence also depend on the, you need to be ready to handle those unplanned events that happens all around the world. That is one of the main, of the core issues that this Pacific Island Forum leaders meeting is looking at, trying to address, because we share the same challenges.

For example, just a matter of transport getting you from island to island. You have to fly. We need reliable transportation because our economy is fueled by three. fueled by tourism dollars. Around 50% of our GDP is being funded by tourism. So we need that constant and regular connection

to fuel our economy. So these are also the very issue that touches on not only Palawan, the rest of the Pacific Island countries. I want to talk a little bit about this tourism because I was at this press conference recently where

the Taiwanese foreign minister was responding to this mainland China envoy to the Pacific Islands, basically saying Taiwan has no business being at this PIF event. And he was saying, well, we're actually open to having everybody there. And one of the ways that he said were responding is we're promoting tourism in Palau. So tourism, because it's such a, obviously, like you said, it's half of your economy. That's astonishing.

It can also be used as a weapon and has been. So let's talk about that a little bit. So, yeah, there was, and even our president has mentioned it in many of his remarks, that China is weaponizing tourism. In 2015 or 2016, that was the biggest year for tourism in Palau,

fueled by visitors from the mainland China. In the span of a few years, we hit over 160,000 tourists and driven by largely by the Chinese tourist market. And it was during that time that the Palau government also started to be conscious like, okay, this is just mass tourism. One of the issues was that this spike in Chinese tourism coming to Palau displaced the traditional big spending tourism from Japan coming to Palau. So there's less money coming to Palau's economy. We just have these huge numbers going up. Before COVID hit, COVID really devastated the world's tourism economy.

The number just dipped because that's when there was this statement that was made because China wanted Palau to ditch Taiwan and establish diplomatic ties with China. But Palau did not. Palau continued to value its relationship, diplomatic relationship with Taiwan. And so as a punishment, the Chinese government then told the big tourism agency, tourism booking agency to stop selling tour packages to And most tourism coming from China are tour packets tourism, not individual travelers. And so that it really affected the numbers coming to Palau.

And then it dived down to, you know, imagine like many tens of thousands of tourism just dive down. And then at that time, then COVID hits. And then every tourism, whether Chinese or any tourism, whether Chinese or anybody just stop coming. And then Taiwan, in 2022, and that is, Taiwan has helped Palau in developing its tourism. So when the world was still scared of traveling, Taiwan and the Palau government decided to establish this bubble tour tourism. So between Palau and Taiwan trying to restart our

tourism economy during the COVID. It did not, there were visitors coming to Palau but not as much as we want, but it demonstrated the closeness of Palau and Taiwan with Taiwan willing to help Palau, seeing that its economy has been devastated by tourism, that they are willing to help. On the other side, there was also a complaint by the local boat operators because there are types of businesses that are reserved for Palawan citizens and one of them is a boat operator to take divers and snorkelers out to the reef so some boat operators because the the tourism number was just

going up so they went to the bank loaned thousands of dollars bought boats and new engines and then suddenly there were no tourists coming and so they are stuck without any customers to generate income to pay the loans

so that is also became a big issue and then the Chinese businesses they come in they run hotel operations or tour operators but then they hire their own boat drivers taking away what should be an income to the palawan companies the palawan

boat operators so those were the fear that you know they will eventually take over this entire industry displacing the palawan who are depending this income should belong to the palawan it should not be should be guarded for the palawan should not be an open we cannot compete with a well-resourced company or rich people from China coming in. It's a pretty, it's a very kind of unique situation, right, that you have that, that you face. I'm just, you know, kind of imagining what this looks like for you. I know that you're fostering entrepreneurship. That's part of you, you wear many hats, right?

You have, I think, Palau's first think tank, you're worked with that, you're a journalist for decades. I think you're still part of an umbrella group or maybe leading it, event non-profits in the area. And also, but entrepreneurship, right? This is something that's central to your thinking. Yeah. That's why it's very important that our policymakers has to really look and protect industries for the Palawan. So when you talk about Palauas business environment, it's tourism-based industry. industry. That's where most of the money comes in. But then also most of the money are generated through rental properties. I think that's where most of the wealth are.

But as far as... A commercial or residential? Commercial and residential. Okay. Yeah, yeah, yeah. That's where you, if you want to build the wealth, those are the vehicle to go. But if you want to do it. for example if you develop if you're a photographer or a videographer you have to partner with outside you just don't have the enough enough uh the economic cannot sustain your profession or your livelihood you have to be outside so there's always that part that palau will continue to bring in others to come in there's a foreign direct investment and

Palau is doing for those. But then, you know, two or three months ago, no, no, no, earlier this year, the U.S. Treasury Department, Office of Foreign Asset Control, they sanctioned Chinese nationals who were investing multimillion dollar projects in Palau. And some of these are names

are involved in criminal activities. You're talking about Prince group. The Prince Group. Yeah, yeah. And, you know, if they come in and establish themselves on the island, they have these huge financial resources. And with already a criminal element coming in, I mean, just imagine. We have no way of knowing who these people are, what are they, what criminal activities are they involved in. So that help from the U.S. Treasury Department is a great help for Palau because we don't have the ability to check on this criminal enterprise, criminal people.

But the United States, that was a great help to us because, you know, if not they would have entrenched themselves and then it could create, they can start influencing policy decisions and then, you know, make Palau, you know, like, I don't know, wild wild west or rather. That is something that we have to continue to keep card on. And so our independence is also can be strengthened and depend on how much security we can provide. It's not only to limit or to stop the outside criminal influence from infiltrating into our country, infiltrating into our economy. Balau has had experience of Chinese nationals coming in or Chinese operators coming in, leasing a whole, a big building

and then bring in laptops and computer equipment and then bring in Chinese nationals to come in and they do online gaming. So they've busted some operations here on the island. So there's a continued to experience this thing. And that is a challenge for Palau, especially when Palau is in the middle of this geopolitical rivalry between the United States and China. Because of Palau's diplomatic recognition of Taiwan. So there's a, everything is kind of like being looked at.

through that prison like okay maybe it's these Chinese elements coming in is is their way of trying to gain influence or trying to as their way of weakening us as a country to to worth of criminal infiltration to the island even the methamphetamine some methamphetamine recently in recent cases or the people who were caught bringing them in were originated from a flight originating in Hong Kong coming in. And these are Chinese nationals as well. So there's, we don't know whether it's their, this irregular warfare, the cognitive warfare

that they are conducting, which we don't know anything because when we talk about the geopolitical rivalry, we think about the conventional warfare, military aircrafts, naval vessels, but there are other forms of warfare that are being conducted in our island. And I think that is also very important that the people, the leadership should know about, should be aware of. Apparently tourism warfare, right? From what you're, from what you've been saying. Right.

There's a distrust among the people. It's not true. That is the biggest threat from all of this. So you mean you feel the biggest threat to Palau is this, the division sowed among the population. Is that what you mean? Yes, that's what I mean. And then it emanates from economy, the economy,

and then people start making money. and, you know, they're competing for their livelihood, they're competing for whatever dollars is out there in the economy. The use of social media so pervasive in our community, misinformation, this information can be out there, generated by this competition that can be influenced by outsiders. There is showing discord, distrust among the people. And I'm saying this thing about cognitive warfare.

That can do that. Now that's the topic we've covered a lot on this show, all sorts of players, but of course communist China being a major, a major one, but not only. The Chinese Communist Party likes to frame the situation, not just in Palau, but in many of these 18 island nations, as this is a U.S. versus China thing. How do you respond to that? But I don't think it's – that's accurate. Yes, it might be – that's how the Chinese. Chinese wants to frame it because it's also part of their messaging.

They want to appear like the good guys. They bring this Belt and Road initiative down to the Pacific, to help with infrastructure development and other assistance, you know, health, education, trying to convince the Pacific Islands that, hey, this is, it's the U.S. versus China. You know, there was an article that I read. about the Chinese also wants to make it appear that fighting or China is futile exercise for the Pacific Atlantic Republic. They just want to weaken your spirit.

How much you go out and you blah blah blah say what? But it doesn't matter. It does not affect them a bit. So I think it's a consistent way for them to continue to have this message across to the countries and to the people of that countries. You mean the Chinese Communist Party's messaging is that it's just inevitable. It might as well give in. Yes, it's inevitable. You know, how much do you bark or you stamp your feet.

it's a lost cost. Why don't you just give in? That's what they are trying to do. And this framing, I think, is consistent with that. That analysis. Why doesn't Palau give in? We, well, I guess Palau people are very loyal people. So we have,

We have a history, a shared history with many of the countries, our shared democratic values. We value the human rights. We value your right to enjoy or to practice your own religion. You know, we value your rights to be able to engage directly with your leaders. with your leaders, you know, review the government documents, say, you please. Those are things that we value the most.

And then we have friends and allies that we have chose, that we share those values with them. So I think that is us and that's how we operate. It's, we have the, we have the way. that we have that worldview. Many Palawan are Christian. And so what's the role of faith in your identity as a country?

We have, we are a very we are a Christian nation. If you go to the preamble of our Constitution, it may, it mentioned at the very last sentence of the preamble, it says that we move forward

with the caillans of Almighty God. And that just shows that Palau is a Christian nation and we with everything that we have

is because we were blessed with the island and our reefs which generate so much income to our country and it's our pride enjoy as Parahuans to help the country that we have.

So tell me a little bit about your think tank, the Compass Point Institute. So the think tank was established this past January. And I had this idea for a long time that to establish a think tank. But what really brought it to four was during the past 2024 presidential election for Palau. and I was just so disappointed with how the election was conducted, especially from the voters. Because many of the issues, important issues or information was, they, the analysis was so emotional, emotionally driven. attached to the both presidential camps.

So when that happened, there was no, people were not trusting each other. People were not, there was distrust among the voters, there was distrust between the people and their leaders. So that really came in this idea that, okay, perhaps what was needed was a neutral party, a third party that can just come in and lay out all the facts and let the people decide. That's how the Compass Point Institute came to be. So we are still at its very initial setup. But we are focusing more on culture and history as the first project. I'm planning to a big chunk of our history is not a big chunk of our history.

is not being taught in school and that's mainly because there are no prepared materials. For example, the events in the 60s, 70s and 80s and 90s are not there. And those are very important part of our history that shows how Palau the journey, starting from after the war to when Palau starts searching for its political self-determine self-determination, what are we going to be to the compact plebiscites, to that turbulent 80s, to the 90s after we gained our political independence from the United States. Those are very important. It's not easy, but I'm willing just to start the project to put those into some form of written materials that can be taught in

schools and for the Palawan people to read and learn more about their history. That's what I want to do. It's interesting that you say the idea came from this, the challenges in the 2024 election, presidential election, because I understand that you facilitated one of the presidential debates and I was told that you did it very well to the point where it wasn't clear to people if you were a feeling. people if you were favoring one or the other candidate. And that's what I aim to do because in Palau, we are very close people connected by families,

clans and organizations. So maintaining neutral, being neutral, is valued because once you show you, yourself to be part of a candidate, it just discredit you. And then once the election is done, you're labeled as such. So it's very hard for you to regain that neutrality. And so I take my role very seriously. And the CPI, that will be our goal to to bring truth, just lay out the facts.

Let the people decide. As long as we provide the true information. And then if you use the information, the true information to debate among yourself, fine. Well, Camas Casole, it's such a pleasure to have had you on. Thank you so much for having me in the program. Thank you all for joining me and Canvass Kesselay on this episode of American Thought Leaders, I'm your host, Janja Kelek.