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Nauru

Nauru, the smallest independent republic in the world, has one of the highest GDP/capita amongst independent Pacific states. But this prosperity has come at a price. After decades of phosphate mining, 90% of the island now needs rehabilitating.

Facts and Figures

Total Land Area: Number of Islands: Capital: Population: Languages: Political Status: Head of State: Head of Government: Currency: GDP/capita (A$): 21.2 km2 1 Yaren administrative centre 11,000 Nauruan (a Micronesian language) and English Republic Derog Gioura Derog Gioura Australian dollar 22,400

Government

Nauru has adopted a republican system based on a national parliament of 18 members elected by popular vote for a three year term.

Voting is compulsory for all Nauruans over the age of 20. After each election, the parliament votes on a president who also plays the role of Head of Government. The President then appoints a cabinet of four or five ministers from within the parliament.

Resources

While some fruit and vegetables are grown around Nauru's coastal fringes and near the Buada lagoon, agriculture is limited because of a lack of usable land and the reliance of people on imported foodstuffs. Phosphate mining is still the main economic resource despite the cost of extracting the last remaining deposits (the life expectancy of the industry is estimated at five or ten years). Nauru is still on the OECD blacklist of money-laundering countries.

Nauru exports most of its phospate to Australia, New Zealand, Japan and South Korea.

In anticipation of the end of the mining operations, the Nauruan Government has invested part of its revenue in long-term trust funds. But the level of these funds has declined in recent years due to bad investment decisions and borrowings from successive governments to fund fiscal deficits.

The 1993 Compact of Settlement ended Nauru's litigation against Australia over rehabilitation of land mined by Australian companies before independence. Under the conditions of the settlement, Nauru has obtained a cash payment of $A57 million and will receive $A2.5 million annually for 20 years. This money is to be used on development projects.

Nauru has accepted in 2001 the request from Australia to host asylum seekers to be processed there (the so-called "Pacific solution"). The setting up and the maintenance of the detention facilities on Nauru have been entirely funded by Australia which has also provided $A10 million worth of infrastructure support to the Nauru government.

Due to the dire financial difficulties experienced by Nauru, Australia has provided Nauru an extra $A7 million emergency aid in May 2002.

History

Nauru is one of the three 'rock phosphate' islands of the Pacific, the others being Banaba (Kiribati) and Makatea (French Polynesia). Nauru has been inhabited for centuries by people originating from other Micronesian islands like Chuuk, the Marshalls or Kiribati. The islanders were divided into clans.

The first European to spot the island was the British Captain John Fearn of the British ship "Hunter", who named it Pleasant Island in 1798.

The island was incorporated into Germany's Marshall Island protectorate in 1888. Phosphate was discovered on the island around 1900 and by 1906 mining operations had begun under an agreement signed by the Sydney-based Pacific Phosphate Company and the German government.

In November 1914, following the declaration of war, Australia sent a force to Nauru to take possession of the island. In 1919, after Germany's defeat, the island was placed under the joint administration of Great Britain, Australia and New Zealand. Those three countries formed the British Phosphate Commission, in order to share the revenues from phosphate mining. The Nauruans whose land was forcibly taken over were initially paid one half-penny per ton of phosphate. This figure rose to 8 shillings per ton in 1939. By 1965 the price paid to the Nauruan landowners was only 37 cents per ton.

Nauru was invaded by Japanese forces in August 1942. In 1943, the Japanese built an airstrip on the island and deported 1200 Nauruans to the island of Chuuk (formerly known as Truk, now part of the Federated States of Micronesia).

At the end of World War II, Nauru was made a United Nations Trust Territory under Australian Administration. It became independent on January 31, 1968 and took control of its phosphate industry in 1970.

Main Issues

• rehabilitation of the island

• high incidence of diabetes (due to the consumption of large amounts of processed, imported food)

• catastrophic financial situation

• alleged money laundering activities

Links

:: Charting the Pacific - Links Database (Nauru Section)