Nauru: Economy

Having once boasted the second-highest per capita GDP in the world thanks to its fabled phosphate mines, Nauru is today destitute. With the seeming depletion of readily accessible phosphate reserves in 2000, mining on a large-scale commercial basis ended. The decline of mining saw a dramatic economic contraction, compounded by past government corruption and disastrous mismanagement of trust funds that had been expected to provide post-mining revenue streams for Nauru's citizens. Since 2000, Nauru has relied largely on payments for fishing rights within its exclusive economic zone, earnings from hosting two Australian refugee processing camps, and massive injections of grants and development funding, principally from Australia, New Zealand, Japan, China, and more recently Taiwan. The government-owned mining company, the Republic of Nauru Phosphate Company, or RONPhos, has resumed mining and exporting phosphate and has reportedly made a small profit.

Nauru has a nominal per capita GDP of $5,551. The resumption of mining promises a limited respite as the country seeks to find a sustainable economic future. The private sector is very small and employs fewer than 300. Nauru imports well over 90% of its foodstuffs and other basic goods, but sea and air transport has become problematic. In December 2005, the national airline's remaining airplane was repossessed for non-payment, leaving Nauru dependent on chartered flights. In September 2006, with financing help from Taiwan, a replacement aircraft re-established scheduled commercial flights to Nauru and around the region under the new name of Our Airline. The provision of electricity and water, both dependent on expensive imported fuel, is limited and sporadic. With the help of the Pacific Islands Forum and numerous development partner nations, Nauru completed in 2009 a major, multi-year strategic national development program to enable it recover from a crisis of failing finances and insurmountable debts. The program has also helped Nauru develop a sustainable economic framework for the country.

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