Nauru

THE REPUBLIC OF NAURU is the smallest independent republic in the world. Formerly administered by Australia as a United Nations Trust Territory of the Pacific Islands, Nauru became independent in 1968. Over time a multinational consortium virtually destroyed the ecology of Nauru through phosphate mining. As a result, much of the island is now a wasteland. Although Nauru has a per capita annual income of $5,000, 90 percent of the people on the island are unemployed. The 10 percent who are employed are engaged in public administration, phosphate mining, education, and transportation.

Nauru is dependent on the $2.5 million Australian that will be received annually until 2013 in response to a judgment by the International Court of Justice for damage done to the island through phosphate mining. Additionally New Zealand and the United Kingdom settled by offering one time payments of $12 million each.

When officials realized that incomes from phosphate mining were diminishing, they placed phosphate income into trust funds. Subsequent borrowing from those trusts, however, forced the government into virtual bankruptcy. As a result, wages are frozen, government staffs have been downsized, public agencies have been privatized, and overseas consulates have closed. All public sectors, including housing, hospitals, and schools, have been affected by the shortage of funds. Nauru is placing hopes for economic recovery on attracting offshore banks and corporations to the island.

No poverty rate is available for Nauru, and there are no indications that absolute poverty exists. The United Nations Human Development Report does not rank Nauru as it lacks data. Since the Nauruan government has traditionally employed 95 percent of the labor [Page 758]force, downsizing has created an environment in which incomes are diminished or totally absent. With a population that possesses few job opportunities, limited skills, and low levels of education, the result has been a 90 percent unemployment rate. Fortunately Nauruans have a strong social net made up of closely knit families and a supportive culture.

Human Development Index Rank: Not included.

Human Poverty Index Rank: Not included.