When everything fails: lessons from Nauru

In the Pacific Ocean, 4500 kilometers northeast of Australia, there is a tiny island nation called Nauru. The population today is at around 12 000 and it is one of the least visited countries in the world. In the 1970s Nauru earned the reputation of being the wealthiest nation of all, measured by GDP per capita. But the tragic chain of events that followed can now serve as a lesson for the rest of the world.

A long way to independence

Let’s start from the beginning. The history of Nauru has been a road paved with tears. In the 1800s European merchants brought alcohol and firearms to the island, leading to a ten year civil war during which one third of the population died. Then the Germans took over and Nauru was made part of Bismarck’s Empire in 1888. 

After the First World War, the UN ordered Nauru to be under the mandate of Britain and Australia. Then came the Second World War. Nauru was occupied by the Japanese and bombed by the US. Japan took over half of the population as slaves to the Chuuk islands and left Nauru close to extinction.  

For the next two decades Nauru was again ruled under Australian mandate, until the year 1968 when the island nation declared its independence. 

Nauru’s wealth

But how did Nauru end up as the richest nation in the world? It’s all thanks to a natural resource called phosphate. 

In the year 1900 an Australian prospector, Albert Ellis, was the first to discover phosphate on the island. In an agreement with the Germans, the British ’’Pacific Phosphate Company’’ began exploiting the reserves in 1906. Phosphate is a key ingredient in fertilizers, which started becoming increasingly used in intensive farming during the 1950s. For decades, all the money gained from Nauru’s natural resource went to the Brits and the Australians. But with the declaration of independence in 1968, Nauru nationalized it’s phosphate mines. And so the fun began. 

The increasing population of the world needed more and more food, which created a huge demand for agriculture fertilizers. Ship after ship of phosphate was transported to Australia and from there onward, and money was flowing to Nauru. There was no need for taxes. Education and health care, everything was free. Phosphate made every single citizen so rich, that by 1970s Nauru had the world’s largest GDP per capita.  If we count the total in euros, Nauru exported 2,2 billion worth of phosphate in less than 35 years.

Turning tables

But what follows when one gets too much money too quickly? Foolishness. Nauruans began importing all kind of electrical equipment and refreshments to the island; fridges, freezers, televisions, sports cars, steaks, cheeses, soft drinks. Building bigger houses and establishing its own airline for a nation with a population of then 7000. Buying sports cars didn’t make much sense either, as the country only has one road with a speed limit of 50 km/h. But everyone needed to have a car, or two or even three. And when people didn’t have to work much anymore, traditional professions like fishing practically vanished. 

Years rolled by as Nauruans were enjoying their life. Until the century changed to 2000s and the nation made an observation. The phosphate had run out. So, not only was Nauru now facing economic devastation after losing their only source of income, the mining had left the island’s nature severely contaminated. Nauruans had been digging the land under their feet. It is estimated that 40% of the marine life has been lost as a result of the pollution.  

80% of the land mass in Nauru is uninhabitable today. Practically the whole center of the island is in ruins after of the phosphate mining. Where there used to be tropical mango, lime and papaya trees, there now is landfill where the wrecks sports cars lie on top of each other. Nauru has become unable to sustain any agricultural crops of their own and is fully dependent on imported and highly processed food that comes in mostly canned. 

During the 80s and 90s, there had already been some talk about the financial state of the island, and the nation had found a brief source of income from becoming a tax haven. Especially the Russian mafia took advantage of this and allegedly laundered several tens of billions in cash through Nauru. 

When all the phosphate then ran out, the State of Nauru declared bankruptcy in 2001. This meant that all of nation’s banks fell and the properties that the state had gathered in previous years had to be sold. Nauru turned to cash economy and unemployment rate at the island rose to 90%, a rate which it still is at today. A new plan was needed, to get the nation back on its feet. 

Nauru and Australia

Australia came to the rescue, but with a hefty cost. 

Around the same time in 2001, a refugee crisis was erupting in Australia and the country had started to adopt strict immigration policies. It was decided that any migrants who came to Australia by boat would not be taken in anymore. However, all these refugees that were turned away, needed to be relocated. And so, Australia made a proposition to start collecting them at Nauru. This decision is known as the ’’Pacific Solution’’ and it ended up becoming Nauru’s economic lifeline

Today, Australian aids form a large part of Nauru’s GDP. By estimate, the refugee deal benefits Nauru with several tens of millions a year. But the fact which Nauru doesn’t want media attention on, is the conditions at the detention camps. Human rights organisations have reported of assaults, sexual harassment and child abuse. Refugees are not allowed to leave the island. Some have even ended up committing suicide. 

Nauruans are annoyed at the negative media attention the country gets. They view the detention camps as a matter of Australian politics which they have little to do with as the camps are largely run by Australians. And as a country with major financial issues, the deal was impossible to turn down. The Australian Labor Party has suggested that the refugees should be moved to Australia, where they originally were headed. But this would then be a another major blow to Nauru’s economy. 

Protesters in Perth, Australia, 2015

Climate change as an added threat

Not only has Nauru faced environmental devastation and economic catastrophe in recent years, the island is now also in the front lines of the climate change.  It is estimated that if the sea level keeps rising with the current speed, before the year 2100, Nauruans themselves will become climate refugees. Less than one meter rise is enough to cover the only habitable part of the island, the one road where every citizen lives. 

While the story of Nauru poses frightful omens for the future of the world, it could just act as a warning example. The rest of us still have a possibility to choose a different path. Just by looking at the historic statistics on increasing global average temperature, average energy consumption or the amount of carbon dioxide in the atmosphere, it becomes evident that the current rate of exploitation of natural resources is in no way a sustainable plan for the future. It is now up to the world not to replicate the mistakes that Nauru has made. At least the former President of Nauru, Baron Waqa has some hope. In 2017 he was asked: Could the story of Nauru be a lesson to the rest of the world? He answered: “Well yes, it was a learning lessons for ourselves too. We didn’t plan for this to happen. So, could the rest of the world learn from this? I sure want to believe that they would.’’ 

 

by Isa Tiilikainen

Photo Credits

Nauru, 2013, casjsa CC BY-NC-ND 2.0

Air Nauru Boeing 737-400;C2-RN10, August 1994, Aero Icarus, CC BY-SA 2.0

The site of secondary mining of phosphate rock in Nauru, 2007, Lorrie Graham /AusAID , CC BY 2.0

Love Makes a Way, 2015, Louise Coghill  , CC BY-SA 2.0 CC BY-SA 2