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Official Name - Republic of Nauru (formerly Pleasant Island)
Land Area - 21 sq km - single raised coral atoll
Population - 13,048 (2005 Estimate), population growth rate 1.83% (2005 Estimate)
Capital City - No official capital: Government offices in Yaren District
Religion - Christian (two-thirds Protestant, one-third Roman Catholic)
Official Languages - English and Nauruan (official, a distinct Pacific Island Language) are both official but only English is written. English is widely understood, spoken, and used for most government and commercial purposes
Currency - Australian dollar
EEZ - 320,000 sq km
Political system - The country is ruled by a unicameral parliament of 18 members elected by popular vote for a term of three years. Executive authority is vested in a Cabinet, which consists of the President of the Republic, and ministers appointed by him. The President is elected by the Parliament. There are 14 Administrative Districts: Aiwo, Anabar, Anetan, Anibare, Baiti, Boe, Buada, Denigomodu, Ewa, Ijuw, Meneng, Nbok, Uaboe, Yaren
National government - H.E. Marcus Stephen, MP, gained the presidency in December 2007. The president is both Chief of State and Head of Government
National legislature - Unicameral parliament of 18 members elected by popular vote for a term of three years
Last election - December 2007
Next election - To be advised
Head of State President Hon. Marcus Stephen is Head of State and Head of Government
Main political parties - Nauru does not have a formal party structure although the 2003 election saw the emergence of the Nauru First party led by David Adeang, which stood on an anti-corruption platform
GDP - UA$69.8 million (2003 est, Asian Development Bank)
GDP per capita - A$5,350 (2003 est)
Real GDP growth - 2.5% (2003 est)
Exports - US$640,000 (FOB 2004); Phosphate
Imports - US$19,8 million (CIF 2004); Fuel; food; manufactured products; building materials; machinery from Australia, UK, NZ, and Japan
NZ Exports (FOB) - NZ$52,554 (FOB year ending Dec 2006)
Main Exports - Blood human/animals; machine tools
NZ Imports (CIF) - NZ$57,358 (CIF year ending Dec 2006)
Main Imports - Electronic apparatus
Nauru has gone from being one of the wealthiest countries in the world per capita, to the point where its last remaining assets have now been put into receivership. Political instability is a concern, with more than twenty governments since independence. The latest reform-minded Government has the largest majority of recent times (16-2). This stability provides some hope that the current Government will be able to address effectively Nauru’s serious economic and financial problems.
Little is recorded about Nauru’s history before Captain John Fearn came across it in 1798 on his way to China and named it Pleasant Island. Whalers, blackbirders, and traders followed and by 1870 firearms, alcohol and introduced diseases had drastically reduced the island’s population. Germany established sovereignty over Nauru in 1888 and in 1914 incorporated it into the German Marshall Islands.
Australia took over the island during the First World War and after the war administered it as a British mandated territory. Japan invaded in 1942 and took over 1200 Nauruans as labour to Truk, where nearly half died. The island returned to Australian administration under a United Nations mandate from 1946 to independence in 1968.
There have been more than twenty changes of government since independence and 17 in the last ten years, with changes due mostly to votes of no confidence. Family or clan links play a large part in determining voting on Nauru. Constantly changing allegiances due to the lack of a party system have contributed to political instability and this is exacerbated by the fact that the President is elected by the House rather than directly by the people.
Ludwig Scotty gained the Presidency in June 2004, following a vote of no confidence against then President Rene Harris. He appointed a young, reformist Cabinet and indicated his intention to address the long-term issues facing Nauru. Scotty dissolved Parliament in September 2004 after declaring a state of emergency prompted by a stalemate in Parliament over the Speaker’s suspension of Health Minister Kieren Keke, blocking the Government from presenting its budget before supply ran out.
In the elections that followed in October, Nauru voted overwhelmingly to return the Ludwig Scotty led Reformist group. All nine sitting members of the Reformist group were voted back in, while the voters tossed out seven of the nine members of the opposition, including former President Kinza Clodumar and Speaker of the House, Russell Kun. For the first time ever, the Government has a clear majority of 16-2, signalling a clear mandate from the people to proceed with the reform measures begun by the Reformists. The new parliament elected Ludwig Scotty unopposed as President of the Republic.
The newly reinstalled Government was quick to work on addressing Nauru’s serious financial position. The budget was passed on the first sitting day after the 2004 election. It instituted sweeping changes to public sector wages, raised import duties and redirected the education budget away from paying for scholarships for a handful of elite students to study at exclusive Australian colleges towards basic education.
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Mining of Nauru’s phosphate deposits began in earnest after the First World War under a joint Australian-New Zealand-British venture, the British Phosphate Commission. Control of the BPC was handed to Nauru on independence in 1968 and royalties were invested overseas in preparation for when the phosphate ran out.
Since independence, Nauru’s economy has revolved around phosphate exports. High volumes and prices provided substantial revenue for the government, and in 1975 Nauru had the second highest per capita income in the world after Saudi Arabia. Phosphate production has declined dramatically since the 1980s (from 1.67 million tonnes in 1985/86 to 162,000 tonnes in 2001/02). Recent estimates suggest only a few years supply remaining. Although the mining of Nauru’s remaining phosphate reserves may provide some revenue, this would require significant and costly repairs to infrastructure.
Following the presentation of a Commission of Inquiry’s report on the Rehabilitation of Phosphate Lands to the Government of Nauru in 1988, New Zealand and the United Kingdom each agreed to contribute A$12 million ex gratia towards the Australian out-of-court settlement of Nauru’s claim in the International Court of Justice. Australia agreed to pay A$107 million towards Nauru’s rehabilitation costs, half as a lump sum payment and the remainder in annual instalments over the following twenty years.
The Nauru Phosphate Royalties Trust (NPRT) was set up to invest the profits from the phosphate industry as a source of income for Nauru, but a number of the trust’s investments have been unsuccessful and the funds eroded.
In the late 1980s, Nauru entered an era of budget deficits and the Government borrowed extensively and used trust fund assets as collateral. By 1995, following the collapse of the Bank of Nauru, the country found itself facing a serious financial crisis. Difficulties in servicing interest payments led to further borrowing and indebtedness. Nauru’s overseas investments are now heavily mortgaged and there is little ability to pay for infrastructure and basic services.
The exact extent of Nauru’s debt is still unclear. They have borrowed heavily against their key source of income, the phosphate trust funds, to the point where these are insolvent. There is no ability to pay for infrastructure, basic services or wages, and there is now evidence of real hardship on the island. Some food staples are still available, but many families are heavily dependent on imported Australian rice. Petrol and diesel are in extremely short supply. Air Nauru’s plane has been repossessed, shipping services are fragile, and the Bank of Nauru is broke. It has been claimed that the phosphate deposits have an economic life of five or more years, but mining plant and equipment is now so run down it will require some $10-20 million to repair, raising questions about the overall viability of phosphate operations. Fishing licences issued to China, Taiwan, Japan, and Korea have become an important source of income, earning about $6.5 million per annum but Nauru has no means of policing its EEZ.
In response to its financial situation, Nauru also allowed a range of loosely regulated off-shore banking schemes to be established in the 1990s. Nauru was listed on the OECD’s Financial Action Taskforce’s (FATF) blacklist of nations uncooperative in global money-laundering efforts and also on the tax haven blacklist. The Scotty Government has been successful in having Nauru removed from the FATF list of Non Complying Countries and Territories (NCCT). This should allow Nauru to commence discussions with a commercial bank to establish an operation in Nauru.
At present, Nauru continues to face serious economic and social challenges. There is little local enterprise or initiative, water and electricity supplies are intermittent and are not on a commercial basis, and even the skills required for farming and fishing appear to have been lost. Extremely high rates of diabetes and similar diseases mean that Nauruans’ life expectancy (49 years for men and 56 for women) is one of the shortest in the region.
The environment has also been devastated by phosphate mining and there is no local agriculture or reliable water supply. The rehabilitation of mined land and the replacement of income from phosphates will be important long-term challenges for Nauru.
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The Pacific Regional Assistance for Nauru (PRAN) proposal was developed by the Pacific Islands Forum Secretariat (ForSec) in collaboration with other Pacific regional organisations in response to a decision by the Forum Leaders in Apia to assist Nauru. While the Forum and some of the Pacific agencies have already provided some assistance to Nauru to cater for its more immediate needs, the PRAN proposal extends some of the assistance and tries to do more in a coordinated manner with other partners in the rebuilding process. The proposal confirms that the situation in Nauru has gone well beyond the ability of the Nauru Government to overcome without significant external assistance.
Under the PRAN, Nauru has developed its own National Sustainable Development Strategy (NSDS) with the assistance of the Pacific Islands Forum Secretariat, ADB and AusAID. On 30 November 2005 Nauru hosted its first donor roundtable meeting. Nauru’s draft National Sustainable Development Strategy (NSDS) received favourable endorsement but implementation will remain a challenge.
Australia remains Nauru’s largest bilateral development partner. Under MOU IV signed on 20 September 2005, Australia will provide A$70.5 million over the next four years to Nauru. The focus of Australia’s support is ongoing activities related to law and justice, budgeting and financial management, education, health, power and water services and police development.
Nauru maintains close relations with a number of Pacific Islands Forum countries, including Australia, New Zealand and Fiji. It also has close relations with Japan. Nauru changed its recognition from Taiwan to China in July 2002 and then back again to Taiwan in May 2005. Nauru maintains official overseas representation in Australia (Melbourne), Fiji and at the United Nations in New York.
Until recently Air Nauru’s Boeing 737-400 had scheduled services to Tarawa, Nadi, Brisbane, Melbourne, Honiara and Majuro, and before that to Manila, Guam, Pohnpei. The airline also operated a charter service between Sydney and Norfolk Island. Air Nauru is currently operating a week-by-week reduced schedule of flights using chartered flights.
Nauru maintains no defence forces. Australia undertakes some responsibilities for the defence of the island.
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Nauru is a member of the Pacific Islands Forum, Forum Fisheries Agency, SPREP, SOPAC and USP, the Secretariat of the Pacific Community (SPC), the Asian Development Bank, AsDB, ESCAP, ICAO, Intelsat (nonsignatory user), Interpol, IOC, ITU, OPCW, Sparteca, SPF, UNESCO, UPU, and the WHO. Nauru is also a member of a sub-regional group of Micronesian countries that co-operate on transport and trade links. Nauru became a full member of both the Commonwealth and the United Nations in 1999 and hosted the 2001 Pacific Islands Forum.
New Zealand has a limited bilateral relationship with Nauru based mainly on historical ties such as phosphate exports and contact through regional mechanisms. But Nauru and New Zealand enjoy good relations. Given New Zealand’s political and financial support to PRAN and the implementation of the National Sustainable Development Strategy, it is likely that New Zealand-Nauru relations will expand somewhat in the near future.
Recent years have seen a decline in New Zealand’s phosphate imports from Nauru from a high of $34 million in 1990 to nil in 2005. Exports to Nauru in the year ended December 2006 were worth NZ$52,554. The lack of a direct shipping service between Nauru and New Zealand is a problem.
New Zealand does not have a formal bilateral aid relationship with Nauru, but supports regional agencies to which Nauru belongs, as well as regional thematic programmes in fisheries, environment, health, education, governance, trade and economic development.
The New Zealand Agency for International Development (NZAID) has set aside $NZ 1.5 million for the year 2005/06, to support activities through the Pacific Regional Assistance for Nauru (PRAN) initiative, which is being coordinated by the Pacific Islands Forum Secretariat. New Zealand is supporting the law and justice sector and the provision of basic education, which is a key priority under Nauru's new National Sustainable Development Strategy.
The New Zealand High Commission in Suva, Fiji is accredited to Nauru
Consulate of the Republic of Nauru, Auckland
The Safetravel website provides a travel advisory for travellers to Nauru [external link].
