How the Once Wealthy Nauru Turned Insolvent Within a Decade -Ahmad Ullah
Nauru is a small island in the middle of the Pacific Ocean. With just 21 square kilometres, it is the 3rd smallest country in the world. Its population is also limited to only 11 thousand. Currently, Nauru does not have any cultivable land, nor do the people have a secured life. In just two decades, Nauru has gone from being the world’s second-richest country to a tenant state. Nauru, once called Kuwait in the Pacific Ocean, is now in the hands of another state. How did this huge decline come across? Let’s find out.
In the middle of the Pacific Ocean, Nauru was home to a variety of seabirds for millions of years. Their wastes accumulated for years and turned into high-quality phosphate mounds, which later became a ‘gold mine’ for Nauru. The phosphate found in Nauru was one of the best in the world. Think about it; a country has almost no arable land. But there is the best material for cultivation.
In 1906, the Germans first discovered this phosphate mine in Nauru. They started extracting phosphate from here under the name of ‘Pacific Phosphate Company’. This situation continued till the First World War. After the defeat of the Germans in World War I, phosphate extraction continued under the name of ‘British Phosphate Commission’.
After Nauru gained independence in 1966, the situation changed completely. You may be wondering, from now on, they will be conscious of preserving their wealth. But instead, they bought the ‘British Phosphate Commission’ and started phosphate extraction in full swing. By selling it to the western world, the state bank of Nauru quickly piled up huge sums of money.
In 1975, 25 billion dollars was deposited in the state bank of Nauru! It is rare for a state to own such a huge amount of money within half a decade after independence. At that time, Nauru had a population of around 6,000. The per capita income of the people of Nauru was so high that Kuwait was the only rich country in front of them. Nauru was then called the Kuwait of the Pacific. Because, as the oil state of Kuwait, Nauru continued to earn money easily.
With this huge amount of money in Nauru, the next few generations could be fed and clothed comfortably. But it was very important for them to spend this money for the development of the country like Advanced medical care, higher education, quality housing. But the Nauru authorities had a different plan. They built expensive houses, luxury hotels and golf courts. The Nauru authorities were squandering money in such a way that it would never end.
They built an airport to import food from the West. They focused more on importing food than producing it in their own country. This luxury of theirs was not going to end. They formed a ‘Nauru Trust’ to look after everything together. But if there is a virus in the antidote, corruption, mismanagement & unrealistic planning are obvious to occur. Nauru was not an exceptional.
Snitching state money, its government officials started living luxurious lives abroad & continued to smuggle large sums of money to Australia, London & Fuji.
But their phosphate resources will run out one day. So has happened. Since Nauru had no state income other than phosphate exports and the state coffers were almost empty, the Nauruan government was then forced to reach out to other states & run the state by the borrowings.
Think how Nauru got out of the world’s second-richest country in such a short time. The story does not end here. Since money borrowed from another state must be returned, that’s why they required to find alternative ways to earn money. A finance expert in Nauru suggested a concert with the London-based band Unit ‘Four Plus Two’. The expenses of running Nauru will come up from their various events in London. How unbalanced a state to leave their future to a concert! After just two weeks, Unit Four Plus’s show closed forever and imposed a burden of 7 million debt on Nauru!
It was impossible for Nauru to bear this huge burden. The organizations that spent for concerts confiscated all of Nauru’s assets. The future of the whole nation was thus confiscated too.
Nauru now has 21 square kilometres of land, where crops cannot be grown anywhere. Excessive digging has polluted all the surrounding water. And there are 6,000 people, all of whom are trapped in a prison. Where the people are burden for the government, let alone meeting their basic needs!
The tragic phase of Nauru did not stop there. Day by day, Nauru was moving towards acute misery. In 2001, the Australian government established a refugee camp in Nauru. Those who fled to Australia or were deported by the government for a serious crime would be addressed in Nauru. For this reason, the Australian government paid a certain amount of money to Nauru every month. But the environment in Nauru was so bad that they had to fight regularly to get drinking water. Life was there quite unsafe.
The refugee centre was finally closed in 2006 in the face of massive outrages. Although the centre was reopened in 2014 with some improvements, the situation is the same as before. In 2016, an Iranian committed suicide by setting himself on fire when he knew that he would have to spend ten years in a refugee centre in Nauru. How miserable the situation was!
Looking at present-day Nauru, it can be seen that there is 80 per cent land but uncongenial to cultivate. People are suffering from poverty and various diseases. In Nauru, about 40 per cent of the population has type 2 diabetes. Kidney failure and heart disease are very common there. At the same time, 90 per cent of Nauru’s citizens are unemployed.
The current miserable state of Nauru, once the owner of huge fortunes, reminds us that there is a need for (1) skilled statesmanship, (2) protecting nature & wealth and (3) Just governance devoid of corruption.