The island state of Palau is located 500 miles east of the Philippines in the Pacific Ocean. Palau is one of the worlds newest and smallest nations. The capital of Palau is Melekeok and it's largest city is Koror. It covers an area of 177 square miles and has a population of 20,842 (as of July 2007.) Paulau's main productions are agriculture and fishing and it's major economy is based around tourism. The major employer in Palau is the government, which moved from Koror to Melekeok in 2006. The tourism industry focuses on water activities like scuba diving and snorkeling.