Ajitansh Kar, Gurugram, 5 June 2023
Nauru, called Pleasant Island by the British, is a small island nation situated in the continent of Oceania. It is a microstate with an area of just over 8 square miles or 21 square kilometres, and a population of around 11000 people. It is the third smallest nation in the world after Vatican City (0.2 sq. km) and Monaco (2 sq. km). It was considered the richest nation of the world with a per capita income of more than $25,000 in the early 70s, which declined to less than $3000 by the start of the second decade of the 21st century.
In the beginning, Nauru’s natural resources were thought to be limited to only coconuts and fish. But in the 1900s, the German prospector, Sir Albert Ellis, found high grade phosphate ores present in the country, which was in high demand across the world due to its use in the fertiliser and cosmetics industry. As time progressed, it was found that more than 80% of the “pleasant Island” was rich in this mineral. Germany had first received the rights to mine this extremely precious resource, as it was the coloniser of the country at that point of time. With the help of The Pacific Phosphate Company, successful exploitation of the mineral started in 1906 and the first shipment for the same was exported in 1907. Germany in the following years had mined and transported more than 80 million metric tons of phosphate from this nation.
When World War 1 occurred, Germany became busy fighting the war while Australian troops captured Nauru and its control was given over to Britain until 1920. During this time, a board called the British Phosphate Commission (BPC) was set up with the aid of Australia, New Zealand, and Great Britain to grant them exclusive mining rights over the microstate.
On August 26 1942, the Japanese troops invaded Nauru and took control of it. This took a toll on the phosphate exports to Australia and New Zealand. The Japanese built forced labour camps and performed mass drownings which resulted in horrors never seen before by the indigenous people of Nauru. By the end of the war, only about 600 native people survived and Australia regained its possession of the country.
Nauru became independent in 1968. By then, the country was destroyed with a third of its natural vegetation in shambles and its economy becoming heavily dependent on phosphate exports for its functioning. The people did not have any skills other than mining giant phosphate rocks and the island was too small for any other industry to be set up and operated. Though the mining activities had made a lot of money in the past, it had left no avenue for other productive activities to be pursued by Nauruans.
In the 80s, it was declared as the wealthiest country in the world based on per capita income and an average person in Nauru was almost twice as rich as a person in the United States. However, in 2 decades, in 2002, Nauru was rated the worst of 170 nations by the WHO based on Average Body Mass Index (BMI). The mining activities also led to poor health among the natives with their daily diet changing from the wholesome coconuts and fish to highly unhealthy imported alternatives. The average life expectancy of a Nauruan is approximately 60 years which is way below the global average of 73 years. The people understood the consequences of eating unhealthy food but due to years of mining, the agriculture industry had almost disappeared with the people having no choice but eat imported food to fulfil their nutritional requirements.
The economic downturn for the nation began when they ran out of their phosphate reserves in 2001 and had no other industry to support their livelihood. The people slowly ran out of money received from the mining activities and unemployment skyrocketed to over 90%. The country tried its hands in other industries such as offshore banking and acquiring nearly 400 licenses from various foreign banks in the 1990s. This effort to save the economy was successful at first with Nauru becoming one of the top choices for the rich to help them with money laundering and tax evasion. But soon, they stopped all banking activities in the nation due to immense international pressure and the USA recognising them as a rogue state. It had also tried to invest in a theatrical play in London as their last hope, but it also turned out to be disastrous leading to large financial losses. The nation’s Central Bank also became bankrupt and all its foreign assets were seized due to its weak economic position.
The story of Nauru highlights the importance of sustainable development, diversification of the economy, and the need to invest in education and infrastructure to avoid over-reliance on finite resources.