US to slash aid payments to Palau

US to slash aid payments to Palau

The Pacific island nation of Palau is the largest recipient of aid per capita from the United States.

It has received more than $852m dollars in US financial assistance over the last 15 years.

But Washington is planning to cut back direct assistance by $5m a year and residents fear the impact of any reduction.

As Al Jazeera's Divya Gopalan reports, the cutback threatens to lower per capita income on the island by nearly one-quarter, and leave Palau's government struggling to build a viable economy