NAURU

Republic of Nauru

Naoero

CAPITAL: There is no formal capital. The seat of government is in the district of Yaren

FLAG: The flag has a blue background divided horizontally by a narrow gold band, symbolizing the equator. Below the band on the left side is a white 12-pointed star, representing the island's 12 traditional tribes.

ANTHEM: Nauru Ubwema (Nauru, Our Homeland ).

MONETARY UNIT: The Australian dollar (a$) of 100 cents is the legal currency. a$1 = us$0.76336 (or us$1 = a$1.31) as of 2005.

WEIGHTS AND MEASURES: Imperial weights and measures are used.

HOLIDAYS: New Year's Day, 1 January; Independence Day, 31 January; Angam Day, 26 October (a celebration of the day on which the population of Nauru reached the pre-World War II level); Christmas Day, 25 December; and Boxing Day, 26 December.

TIME: 11:30 pm = noon GMT.

Situated in the western Pacific, Nauru is one of the world's smallest independent nations, with an area of 21 sq km (8.1 sq mi), extending 5.6 km (3.5 mi) nne–ssw and 4 km (2.5 mi) ese–wnw. Comparatively, the area occupied by Nauru is about one-tenth the size of Washington, D.C. It lies between two island groups, the Solomons and the Gilberts, 53 km (33 mi) s of the equator and 3,930 km (2,442 mi) nne of Sydney; its nearest neighbor is Banaba (formerly Ocean Island, now part of Kiribati), situated 305 km (190 mi) to the e. Nauru has a coastline of 30 km (18.6 mi). The Yaren district, which holds the seat of the government, is located on the southern coast of the Nauru.

Nauru, one of the largest phosphate-rock islands in the Pacific, is oval-shaped and fringed by a wide coral reef. It has no natural harbor or anchorage. A relatively fertile belt varying in width from 150–300 m (490–980 ft) encircles the island. From this belt a coral cliff rises to a central plateau about 60 m (200 ft) above sea level. Buada Lagoon, a permanent, often brackish lake, covers some 300 acres (1.2 km/0.47 sq mi) in the southeastern end of the plateau. Apart from some brackish ponds and an underground lake, the nation's water supply is provided by rainfall.

Nauru has a dry season, marked by easterly trade winds, and a wet season with westerly monsoons extending from November to February. The average annual rainfall is about 200 cm (79 in), but the amount varies greatly from year to year, and long droughts have been a recurrent problem. Temperatures remain steady, between 24–33°c (75–91°f) the year round, and relative humidity is also constant at about 80%.

The plateau area contains large phosphate deposits that almost completely inhibit any natural growth useful for subsistence or commerce. Large areas of scrub and creeper, with occasional coconut and tamanu trees, grow in this region. On the coastal belt, coconut palms and pandanus (a type of screw pine) thrive. Some hibiscus, frangipani, and other tropical flowers grow, but they do not abound here as on other Pacific islands. Bird life is not plentiful, although noddies, terns, and frigate birds frequent the island. There are no indigenous land animals; however, hogs and poultry were introduced many years ago. Fish life is abundant in the seas encircling Nauru and good catches of tuna and bonito are taken.

Nauru's phosphate mining industry has done significant damage to the land. In 1987, the Nauruan government began to investigate the nation's mining operations with the goal of developing a plan to regenerate the land and replace lost vegetation. Land in the coastal region, however, has not been affected by the development of the country's mining industry. Vegetation in the coastal areas, such as pandanus and coconut palms, is plentiful. Nauru has limited freshwater resources. Its residents collect rainwater in rooftop storage tanks. Periodic droughts pose an additional hazard to the environment. Nauru is also affected by the global warming trend which has caused sea levels to rise, placing low-laying areas at risk from tidal surges and flooding.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 19 animal species, most of which were fish and other marine animals such as albacore tuna, coconut crab, and the tiger shark. The bristle-thighed curlew and Finsch's reed warbler are vulnerable animal species.

The population of Nauru in 2005 was estimated by the United Nations (UN) at 13,000, which placed it at number 191 in population among the 193 nations of the world. In 2005, approximately 2% of the population was over 65 years of age, with another 41% of the population under 15 years of age. According to the UN, the annual population rate of change for 2005–10 was expected to be 1.8%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 17,887. The population density was 590 per sq km (1,529 per sq mi).

Most Nauruans live around the coastal fringes, in their traditional districts. About half the population consists of immigrant contract laborers, technicians, and teachers. Most Chinese, as well as immigrants from Kiribati and Tuvalu, are settled in communities near the phosphate works.

The UN reported that 100% of the population lived in urban areas in 2005. The seat of government is in the district of Yaren, which had a population of 13,000 in that year.

Immigration to Nauru is strictly controlled by the government. Nauruans are free to travel abroad. In 2000 and 2005, the net migration rate was zero migrants per 1,000 population. In 2001 some 1,500 asylum seekers (most from Afghanistan) were processed by Naura at the request of Australia, after that country had turned the asylum seekers away. After spending three years in Nauru, most were transferred to New Zealand, Australia, Sweden, and Norway by 2004. There are more than 50 asylum seekers in Nauru, among them Iraqis, Afghans, Bangladeshis, Iranians, and one Pakistani. The government views the migration levels as satisfactory. There were a total of 5,000 migrants living in Nauru in 2000, which accounted for more than 30% of the total population.

The Nauruan people are the only indigenous ethnic group on the island. They are of mixed Micronesian, Melanesian, and Polynesian origin and resemble the last strain most closely. Nauruans are traditionally divided into 12 clans or tribes in which descent is matrilineal, although kinship and inheritance rules have some patrilineal features. The 12 clans are Eamwit, Eamwidumwit, Deboe, Eoaru, Emea, Eano, Emangum, Ranibok, Eamwidara, Iruwa, Irutsi (extinct), and Iwi (extinct). Admixtures of Caucasian and Negroid lineage in the 19th century and frequent intermarriage with other Pacific islanders have changed the present-day features of Nauruans from those of their forebears.

The Caucasians on the island are almost all Australians and New Zealanders employed in administrative or teaching posts or in the phosphate industry. The Chinese and immigrants from Kiribati and Tuvalu originally came to the island as laborers in the phosphate industry, some being accompanied by their families. Filipino contract workers are also present but are not permitted to bring their families.

According to the latest estimates, about 58% of the population are Nauruan, 26% are other Pacific Islander, 8% Chinese, and 8% European.

Nauruan, which is distinct from all other Pacific tongues, is the official language. However, English is still commonly used in the schools, in government, and in business transactions. Most Nauruans are bilingual but use Nauruan in everyday life.

The Nauruans have accepted Christianity as a primary religion since the end of the 19th century. A 2004 report indicated that about two-thirds of the population were Protestant and one-third were Roman Catholic. Missionary groups include Anglicans, Methodists, Mormons, and Jehovah's Witnesses. Buddhism and Taoism are also represented, particularly among the Chinese community.

The constitution provides for religious freedom, but this right has been restricted by the government. Primarily, the government claims the right to restrict any organizations which it feels poses a threat to public safety, public order, or public morality. Under this assumption, the government has restricted Mormons and Jehovah's Witnesses from proselytizing of native-born citizens, claiming that such actions are likely to break up families. Several officials of the Nauru Protestant Church hold influential positions in the government.

Transport to and from Nauru has traditionally been by ships calling at the island to unload freight and pick up phosphates for delivery to Australia, New Zealand, and other countries. There is no merchant marine, but the public Nauru Pacific Line has a fleet of six ships. In 2004, there was one airport and it had a paved runway. The government-owned Air Nauru flies regular air services to the Pacific islands, Taiwan, the Philippines, Hong Kong, Japan, Australia, and New Zealand. In 1997 it carried 137,000 passengers on scheduled flights.

The road system extended for a total of 30 km (19 mi) in 2002, of which 24 km (15 mi) were paved. Apart from a 5 km (3.1 mi) railway (used to carry phosphates), a school bus service, and fewer than 2,000 registered motor vehicles, there is no local transport.

The original settlers are thought to have been castaways who drifted to Nauru from another Pacific island. The first recorded discovery of Nauru by a Westerner was made by Captain John Fearn of the whaling ship Hunter in November 1798. He named the island Pleasant Island. From the 1830s to the 1880s, the Nauruans had a succession of visitors—runaway convicts, deserters from whaling ships, and other men who can be classed as beachcombers. The beachcombers provided the Nauruans with their first real contact with Western civilization and introduced them to firearms and alcohol. They acted as a buffer between two cultures but were often a bad influence on the Nauruans. Several times beachcombers and Nauruans attempted to cut off and capture visiting ships, so that eventually Nauru came to be avoided as a watering place by ships whaling in the area. The advent of firearms also disturbed the balance of power between the tribes on the island; sporadic tribal warfare culminated in a 10-year civil war from 1878 to 1888 that reduced the native population to less than 1,000.

The British and German imperial governments agreed to the partition of the Western Pacific in 1886. Their purely arbitrary line of demarcation left Nauru in the German sphere of influence quite accidentally. It was not until 1888, on the petition of the beachcombers-turned-traders, that the German government annexed Nauru as a protectorate and disarmed the people. Christian missionaries arrived in 1899 and had a greater impact on the Nauruan culture than did the German administration.

In 1901, Sir Albert Ellis, a New Zealand geologist, discovered that there were large deposits of phosphate on both Nauru and Banaba (then called Ocean Island). Phosphate mining on Nauru began in 1907, after the German government had granted a concession to the British-owned Pacific Phosphate Co. Laborers from the German Caroline Islands were hired because the Nauruans had no interest in working in the mines.

Nauru was occupied by the Australian Expeditionary Force in 1914, and phosphate continued to be shipped all through World War I. In 1919, Nauru was made a League of Nations mandate of the British Empire, and the governments of Australia, New Zealand, and the United Kingdom agreed to administer the island jointly through an administrator to be appointed by Australia. At the same time the three governments obtained the mandate, they jointly purchased the Pacific Phosphate Co.'s rights to Nauruan phosphate for uk£3.5 million and began to work the deposits through a three-man board called the British Phosphate Commissioners (BPC).

The phosphate industry expanded greatly in the years between the wars. Australian and New Zealand farmers enjoyed substantial savings, for Nauru phosphate was sold at a much lower price than phosphate from other countries. As for the Nauruans, with their small royalty of eightpence a ton in 1939, they opted out of the industry completely and turned to their own culture for sustenance.

War came to Nauru in December 1940, when the island was shelled by a roving German raider, and four phosphate ships were sunk. Nauru was flattened by Japanese bombings beginning in December 1941, and all its industrial plant and housing facilities were destroyed. The Japanese occupied the island from August 1942 until the end of the war three years later. They deported 1,200 Nauruans to build an airstrip on Truk, a small atoll about 1,600 km (1,000 mi) northwest of Nauru, and many died there. Australian forces reoccupied Nauru in September 1945, and the surviving Truk Nauruans, who had been reduced in number to only 737, were repatriated in January 1946. Nauru's population thus fell from 1,848 in 1940 to 1,369 in 1946.

The three mandatory governments placed the mandate of Nauru before the UN. On 1 November 1947, the UN approved an agreement by which the island became a trust territory administered jointly by Australia, New Zealand, and the United Kingdom, who were to share the task of developing self-government on the island. The Nauruans had a Council of Chiefs to represent them since 1927, but this body had advisory powers only. Dissatisfied Nauruans made a number of complaints to the administering authority and to the UN Trusteeship Council, with the result that a Nauruan local government council was established by the election of nine council members in December 1951. Since control of the council was exercised by the administrator, however, the Nauruans continued to press for further political power. They asked for positions of importance in the administration and an increase in royalty payments, and expressed concern about the future of the island because the increased rate of phosphate exportation would, it was feared, exhaust the deposits by the end of the century. By constant negotiations, the Nauruans forced the BPC to pay royalties on a rights rather than needs basis, and with the establishment of a world price in 1964, phosphate royalties were raised. The Nauruans achieved control of the industry in 1967 by purchasing the plant and machinery owned by the BPC, and in 1970 they took over the industry completely.

Meanwhile, in 1964, Australia had attempted to resettle the Nauruans on Curtis Island, off the coast of Queensland. The Nauruans, although in principle not averse to resettlement, refused it because of political considerations. They wanted to own their island and to maintain their identity by political independence. Australia would not agree to this, and the plan collapsed. This failure reinforced the Nauruans' desire for political independence. With the support of the Trusteeship Council, they established an elected Legislative Council in 1966. Although Australia wished to maintain control of defense and external affairs, the Nauruans insisted on complete self-determination. Thus, on 31 January 1968, the 22nd anniversary of the return of the Nauruan survivors from Truk, Nauru became the smallest independent republic in the world. Since that time, Nauru has pursued a policy of isolation and nonalignment, although it does have a role in Commonwealth affairs. In October 1982, Queen Elizabeth II visited the island, the first British monarch to do so. Nauru established diplomatic ties with the former Soviet Union in 1988. Nauru filed a claim in 1989 for compensation from Australia at the International Court of Justice for the loss of nearly all its topsoil from phosphate mining during the League of Nations mandate and the UN trusteeship. Australia agreed to pay a$2.5 million for 20 years, and New Zealand and the United Kingdom additionally agreed to pay a settlement of $12 million each in August 1993 to settle the loss of topsoil case. Nauru's government announced plans to rehabilitate the island at the 1994 Small Island States Conference on Sustainable Development. In July 1992 Nauru hosted the 24th South Pacific Forum heads of government meeting, which focused on environmental issues, including opposition to nuclear testing in the area.

Since winning its independence in 1968, Nauru experienced many changes in leadership. Hammer DeRoburt became Nauru's first president and was reelected in 1971 and 1973. He was defeated for reelection after the legislative voting in 1976, at which time Bernard Dowiyogo was chosen to succeed him as president. DeRoburt's supporters forced Dowiyogo's resignation in 1978, and DeRoburt again became president. He was reelected in 1980 and in 1983. In 1986, DeRoburt resigned in protest over opposition to his budget and was replaced by Kennan Adeang; however, DeRoburt's supporters quickly forced Adeang to resign, and DeRoburt was elected again. Because he did not have a clear majority, he called for a new election in 1987 and was reelected decisively.

A vote of no-confidence forced DeRoburt to resign in August 1989. He was replaced by Kenas Aroi, who then resigned in December 1989 for reasons of ill-health. The December 1989 general election resulted in Bernard Dowiyogo's election to the Presidency. He was reelected President for a second three-year term in November 1992, but lost his 1995 bid for reelection to Lagumot Harris. A series of no-confidence votes over the succeeding years brought several changes in what has come to be called a "revolving door" presidency. Dowiyogo was returned to office for the fifth time, following an election in April 2000. On 29 March 2001, he was forced from office in a political crisis over the alleged involvement of a Russian organized crime syndicate in Nauru's financial activities, and replaced by Rene Harris in March 2001.

Rene Harris held the presidency until 8 January 2003, when a no-confidence motion was passed against him. His ouster from office was linked to his support for Australia's "Pacific Solution" to exclude asylum-seeking boat people. He was also accused of corruption and blamed for Nauru's dire financial situation: Nauru had a budget deficit in 2002 of approximately us$40 million, almost half of its GDP. Following the vote of no-confidence, parliament voted numerous times on who would be elected president. Rene Harris was replaced by Dowiyogo, who then died following heart surgery in the United States on 9 March 2003. Derog Gioura was named acting president. General elections were held on 3 May 2003, and Harris was returned to parliament, along with Gioura.

In May 2004, after longstanding political deadlock in the legislature, the opposition elected one of its members as speaker of the house and passed a series of Private Members Bills, including one preventing Nauru's assets from being sold or mortgaged without parliamentary approval. One month later, a vote of no-confidence removed president Rene Harris and his cabinet from office. Ludwig Scotty was elected president. Following a special election in October 2004, he enjoyed a majority in the legislature which enabled his government to pass a budget designed to cut government expenses by reducing public sector salaries.

Nauru became a member of the Commonwealth of Nations in May 1999 and joined the United Nations in September of the same year. Long blacklisted by international financial monitoring organizations and banks for its role as a tax haven and money laundering center, Nauru was removed from the Financial Action Group's blacklist in 2005, following modifications to Nauru's banking laws. In a 2005 appeal before the UN General Assembly, Scotty presented his nation's financial recovery goals, and called for assistance from the world's donor nations.

The constitution of the Republic of Nauru, adopted at the time of independence and subsequently amended, provides that the republic shall have a parliamentary type of government. It contains provisions for the protection of fundamental rights and freedoms—a subject of particular importance because many of the inhabitants are short-term migrants ineligible for citizenship (defined in the constitution as being restricted to those of Nauruan or of Nauruan and Pacific islander parentage). Legislative power is vested in the parliament, composed of 18 members elected for a three-year term by Nauruan citizens who have attained the age of 20 years. Seven of the eight constituencies (representing 10 out of 14 districts) return two members each, and the constituency of Ubenide (representing 4 districts) returns four members. The first woman was elected in 1986.

Executive power is exercised by the president, who also fulfills the residual duties of head of state; he is elected by parliament and is assisted by a cabinet, which he appoints. The next parliamentary elections were to be held no later than May 2006; parliament's next vote for president was scheduled for 2007.

In 2005, the parliament undertook a review of the Nauru's constitution. One goal of the review was to reduce the frequencies of votes of no-confidence and the resulting political instability.

There have been ad hoc political parties since independence in Nauru, but politics is generally based on personal loyalties and occasionally on issue-based coalitions. After DeRoburt's reelection in 1987, Kennan Adeang formed the Democratic Party of Nauru, which aimed to curb the power of the presidency. Eight members of parliament joined the party. As of 2003, the Nauru Party was headed by Bernard Dowiyogo, and the Center Party was headed by former president Kinza Clodumar.

Until 1999, the Nauru Island Council was elected from the same constituencies as parliament and acted as a local government, providing public services. The council was dissolved in 1999; all assets and liabilities became vested in the Government of Nauru.

Besides fulfilling the traditional functions of local government, the Nauru Local Government Council manages the Nauru Corporation, the Nauru Pacific Line, and is responsible for overseas investments.

The constitution provides for a Supreme Court, with a chief justice presiding. Cases are also heard in the district court or family court. There are two other quasi-courts: the Public Service Appeal Board and the Police Appeal Board. The chief justice presides over both as chairman of the panel, with two members for each board.

The Supreme Court, which has original and appellate jurisdiction, is the supreme authority on the interpretation of the constitution. Appeals against decisions of the Supreme Court on certain matters go to the Appellate Court of Nauru, which is comprised of two judges. Cases also may be appealed to the High Court of Australia. Parliament cannot overturn court decisions.

The judiciary is independent of the executive. The constitution guarantees protection of fundamental human rights which in practice are generally respected.

Many cases never reach the formal legal system. Most of the conflicts are resolved by the traditional reconciliation process.

Nauru has no armed forces. Although there is no formal agreement, Australia ensures its defense. There is a police force of 60 officers under civilian control.

Nauru was admitted to the United Nations on 14 September 1999 and participates in ESCAP and several other nonregional specialized agencies, such as the FAO, ICAO, ITU, UNESCO, and the WHO. The nation belongs to the Pacific Island Forum, the South Pacific Commission, the ACP Group, the South Pacific Regional Trade and Economic Cooperation Agreement (Sparteca), the Asian Development Bank, the Alliance of Small Island States (AOSIS), and the South Pacific Applied Geoscience Commission. The country is a special member of the Commonwealth of Nations, taking part in some Commonwealth functions but not represented at heads-of-government conferences.

In environmental cooperation, Nauru is part of the South Pacific Regional Environmental Program, the Basel Convention, the Convention on Biological Diversity, the London Convention, the Kyoto Protocol, the Montréal Protocol, and the UN Conventions on the Law of the Sea, Climate Change, and Desertification.

The economy of Nauru has long been dependent on phosphates. Estimates are that the deposits will be exhausted within a few years. In anticipation of this event, substantial amounts of phosphate income are invested in trust funds to help cushion the transition. By 1987, an estimated $450 million had been set aside to support the country after the phosphates run out. At one point, the value of the Nauru Phosphate Royalties Trusts reached $1 billion, making Nauruans on paper the richest people in the Pacific. However, dividends from the trusts have declined sharply since 1990 and the government has been borrowing from the trusts to finance fiscal deficits. In addition, a 1994 audit of the trust revealed that about $8.5 million had been lost due to bad investments and corruption.

By 1996 deficit spending had caused the country to default on servicing its external debt and was also creating problems in meeting the government payroll. A strict government austerity program reduced government spending 38% in 1998–99. Money has been lost through failed investments in property, aviation and fishing, but the evidence is indirect since there is no public accounting. In 2002, Air Nauru Pacific service was grounded because of arrears on bills to Qantas maintains. The air service is vital for food supply. Telephone service has also been occasionally cut because of unpaid bills.

The government has attempted to use the now-dwindling revenue from phosphates to diversify the island's economy, mainly through overseas investment and the development of a national airline and shipping line. Aside from phosphates, Nauru has few domestic resources, and many food products and virtually all consumer manufactures are imported. The government subsidizes imports so that food and other necessities are available at nominal cost. Nauru's economy is very weak and increasingly dependent on Australia. Offshore financial operations were begun in 1993, but the economy suffered in that year due to a major financial scandal. In 2000, the OECD listed Nauru one of 38 "noncooperative" tax havens. In 2002, it was one of only seven jurisdictions that remained on the list for not taking sufficient corrective action. A temporary infusion of funds was promised through Nauru's agreement with Australia to act as an offshore location for the processing of asylum seekers. For the use of its land, Nauru has been promised up to a$30 million.

There is no recent data to highlight economic trends in the country, but the need to create an alternative economy to phosphate extraction was crucial—Nauru was facing serious problems in the transition period. In 2005, the housing, labor (almost 90% of the working force was unemployed), and hospitals situation deteriorated. Australia had to step in to help the economy stay afloat.

The US Central Intelligence Agency (CIA) reports that in 2005 Nauru's gross domestic product (GDP) was estimated at $60.0 million. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $5,000. The average inflation rate in 1993 was -3.6%.

The workforce is primarily engaged in the state-owned phosphate industry, with public administration, education and transportation providing employment as well. Only about 1% of employment is in the private sector. As of 1992, there were some 3,000 guest workers in Nauru, mostly from Vanuatu or Kiribati. Unemployment is virtually nonexistent. There were no trade unions or labor organizations as of 2002. The right to strike is neither protected nor prohibited. Collective bargaining does not take place.

In 2002, the annual minimum wage in the public sector was us$6,562 for workers over 21 years of age. This provides an adequate standard of living for a family. The workweek for office employees is set at 36 hours, and for manual laborers the standard is 40 hours. The minimum age for employment is 17 years, although some younger children work in the few family-owned small operations. The government enforces health and safety standards in the workplace.

Since the cultivated area is limited to about 200–240 hectares (500–600 acres), there is little commercial agriculture. The main crop is coconuts; in 2005, production amounted to 1,600 tons. Some vegetables are grown, mainly by the Chinese population.

Pigs and chickens roam uncontrolled on the island; hence, there is no organized production. In 2005, there were an estimated 2,800 pigs.

There is as yet no organized fishing industry on Nauru, although the government plans to develop fishing facilities. The Nauru Fishing Corp., formed in 1979, is owned by the Local Government Council. Fish are plentiful and consumption is high, since almost all meat has to be imported from Australia. The total catch in 2003 was 43 tons.

There are no forests on Nauru. All building timber has to be imported.

High-grade phosphate rock was virtually Nauru's only natural resource, its only export commodity and leading industry, and the basis of the Nauruan economy—GDP varied according to the world market price of phosphate. The government-owned Nauru Phosphate Corp. was the country's sole producer of phosphate rock, and the island nation's primary producer, employer, and exporter. Production of phosphate rock in 1998 was 487,000 tons, down from 613,000 in 1994. As of 2005, Nauru's phosphate rock reserves had become depleted. In 1998, Nauru also produced common clays, sand and gravel, and stone.

Phosphate rock was extracted from the surface mine on the central plateau in the island's interior, using mechanical shovels from between the coral pinnacles. Phosphate rock was trucked to a central storage pile and transported to storage hoppers by rail. After being crushed and dried, the rock was placed on conveyor belts to pass to the arm of two cantilevers, each about 60 m long, that projected out over the reef to waiting ships. All phosphate rock was exported—to New Zealand, Australia, the Philippines, and South Korea—and the associated coral was used domestically for road aggregate.

In 1999, the government planned to launch a program to rehabilitate and develop the phosphate lands that have been mined for nearly 100 years, As of 1990, 61 million tons of phosphate had been mined. The plan was agreed to in 1994 with Australia and New Zealand, and the United Kingdom agreed to help Australia pay its us$73 million compensation package to Nauru for environmental damage; the rehabilitation would cost us$210 million over 23 years. Nauru's phosphate mine was the last active mine of three historic phosphate-producing islands of the Pacific. The other two, Makatea (in French Polynesia) and Banaba (formerly known as Ocean Island, in the Gilbert Islands group in the Republic of Kiribati), were depleted, respectively, in 1966 and 1979, making Nauru the sole Pacific Island producer.

Nauru has no proven reserves of oil, natural gas, coal, or refining capacity. All fossil fuel needs are met by imports. In 2002, Nauru's demand for refined oil products and imports averaged 1,010 barrels per day. There were no imports or consumption of natural gas, or coal recorded for 2002.

A diesel oil generator to which nearly all buildings are connected produces electric power. In 2002, total installed electrical power capacity was 10,000 kW. Production that year came to 30 million kWh, of which 100% was from fossil fuels. Consumption of electricity in 2002 was 27.9 million kWh.

The phosphate industry is the only industry on the island. It is under the control of the Nauru Phosphate Corp., a statutory corporation that is responsible to the president of the republic in his capacity as minister for island development and industry. About 75% of the profit from phosphate sales is invested in long-term trust funds that have been established to take care of the Nauruans after phosphate deposits are depleted. By 2002, the primary deposits were largely exhausted and expensive to mine; the mining equipment was poorly maintained and the mining operation overstaffed.

Nauru has little advanced technology, and Nauruans must travel abroad, usually to Australia, for scientific training.

The Nauru Cooperative Society conducts most of the nation's retail trade. The island is completely dependent on imported goods; foodstuffs come mainly from Australia. A majority of the population is employed in the phosphate mining industry, which was the nation's primary export.

Nauru's only export is phosphate rock. The value of exports fluctuates as world phosphate prices rise or decline. Imports consist of pretty much everything, including machinery and construction materials for the phosphate industry, food, fresh water (from Australia), fuel, and other necessities. Virtually all manufactured goods must be imported.

In 2004, exports totaled us$17 million (FOB—Free on Board), while imports grew to us$20 million (CIF—Cost Insurance and Freight). Most of the exports went to South Africa (43.4%), Germany (20.7%), India (11.8%), Japan (7.2%), and Poland (4%). Imports primarily came from Australia (65.6%), Indonesia (5.4%), Germany (5.3%), and the United Kingdom (4.4%).

When the phosphate mines were running at full capacity, Nauru had a strongly favorable balance of trade and investments abroad were substantial. There was no recent data to highlight its balance of payments, but it was likely that the situation was not as favorable as in past years.

The government-owned Bank of Nauru was founded in 1976. The Commonwealth Savings Bank of Australia and the Bank of New South Wales have branches in Nauru. The only commercial bank in the country is the Jefferson Bank and Trust Co. (1980). Most of the income from phosphates is invested in long-term funds overseas.

There is no stock exchange.

The Nauru Insurance Corp., founded in 1974, is the only licensed insurer and reinsurer on the island. It underwrites all classes of insurance, including aviation and marine.

Administrative costs in Nauru are met from the proceeds of phosphate sales, which are in decline as reserves approach exhaustion. In 1993, the governments of Nauru and Australia reached a $73 million out-of-court settlement as restitution for Nauruan lands ruined by Australian phosphate mining. This payment assisted the government (which relies almost entirely on phosphate receipts for revenue) in facilitating economic diversification. The fiscal year extends from 1 July to 30 June.

The US Central Intelligence Agency (CIA) estimated that in fiscal year 1995/96, the most recent year for which statistics were available, Nauru's central government took in revenues of approximately $23.4 million and had expenditures of $64.8 million. Revenues minus expenditures totaled approximately -$41.4 million. Total external debt was $33.3 million.

There is no income or other tax in Nauru, although Parliament has power to impose taxes. In 2000, the OECD listed Nauru as one of 38 "uncooperative tax havens." In 2002, it was one of only seven countries that had not gotten removed from the list by taking some corrective action.

Duties are payable only on imported cigarettes, tobacco, and alcoholic beverages.

Apart from the investment in the phosphate industry, now owned by the government of Nauru, there has been little investment on the island. The government of Nauru has large investments overseas in long-term funds financed from phosphate royalties. Nauru also has invested in commercial property development, notably a 53-story office building in Melbourne, Australia.

Plans were approved in 1985 to build an industrial, commercial, and residential complex in Honolulu and, with the help of Japanese companies, a 19-story, 450-room hotel on Guam. Nauru received us$6.7 million from the Japanese government to build the new Anibare Community Boat Harbor at Yaren, scheduled to open in the spring of 2000. In 2002–03, the government is scheduled to receive up to a$30 million for allowing Australia to use the island as a processing centre for asylum seekers.

Government policy is to exploit the phosphate deposits to the fullest extent for the highest returns. The government has diversified into aviation and shipping and plans to develop fishing and tourism. It acquired the Grand Pacific Hotel on the Fijian Island of Suva and, in 1993, undertook a f$18 million renovation of the facility. In 1993, Australia agreed to provide us$73 million in compensation for pre-independence mining of phosphate to aid in restoring the extensive areas damaged by it.

In December 1998 Nauru won approval for a $5 million loan from the Asian Development Bank to aid in implementing structural reforms, including privatization. A National Economic Summit was held in 1999, but the proceedings were not made public. The true state of the Nauru Phosphate Royalties Trust Fund (NPRTF) is not known, nor are the reasons for its apparent substantial decline. In 2002 and 2003 the economy received a small boost from money paid by Australia for housing asylum seekers. Nauru remains on the OECD's list of uncooperative tax havens.

In 2005, Nauru was facing virtual bankruptcy after spending most of the money saved in the trust funds created to help the economy after the phosphates reserves were exhausted. In response, the government called a freeze on wages, a reduction in the number of public officials, and the closure of several overseas consulates.

Medical, dental, and hospital treatment and education are free. Other benefits—old age and disability pensions, widows' and sickness benefits, and child endowment—are administered by the Local Government Council.

The constitution guarantees women equal rights with men, although traditional social values still discourage many from pursuing careers. In particular, women face great social pressure to marry and raise families because Nauru's population was decimated in World War II due to massive removals by the Japanese. Women's educational and employment opportunities are severely limited by these traditional views on the roles of women, and there have been reports of educational scholarships being suspended for young women contemplating marriage. Domestic abuse is not prevalent, and the government treats reports of violent incidents in a serious manner.

Human rights are generally well respected.

There are two modern hospitals. One hospital serves phosphate industry employees; the other provides free medical treatment for the rest of the population. Patients who need specialized care are flown to Australia. In 2004, there were 149 physicians and 557 nurses per 100,000 people.

Tuberculosis, leprosy, diabetes, and vitamin deficiencies have been the main health problems, partly due to the switch to a Westernized diet. A national foot care education program was launched in 1992 to decrease the number of diabetic amputations. With modern facilities and treatments, many of these diseases have been brought under control. Cardiovascular disease has also been a major cause of illness and death.

Life expectancy as of 2005 was estimated at 62.73 years. The infant mortality rate was an estimated 9.95 per 1,000 live births in that year. The crude birth rate and overall mortality rate were estimated at, respectively, 26.6 and 7.1 per 1,000 people. The immunization rates for children under one year old were as follows: diphtheria, tetanus, and pertussis, 74%; polio, 74%; measles, 74%; and tuberculosis, 93%.

There were no reported cases of polio or AIDS. Tuberculosis is rare.

Ownership of houses built for Nauruans under a housing scheme is vested in the Local Government Council, but some Nauruan homes are privately owned. Nearly all houses have electricity and newer homes have a greater number of amenities.

Attendance at school is compulsory for Nauruan children from 5 to 16 years old. Two types of schools are available, both coeducational: those run by the government and those conducted by the Roman Catholic Church. Education is provided free by the government. Education on Nauru is available up to the intermediate level; higher education overseas, mainly in Australia, is assisted by the government in the form of competitive scholarships. There is also a university extension center affiliated with the University of the South Pacific.

In the early 1990s, Nauru had six preprimary and two primary schools, one secondary school, and a technical school, as well as a mission school. In 1998, there were about 2,000 students enrolled in primary schools and about 1,000 students enrolled in secondary schools. As of 2003, public expenditure on education was estimated 6.9% of total government expenditures. In 1991, the adult literacy rate was estimated at about 30.4%, with 47.4% for men and 14% for women.

The Nauru Bureau of Statistics maintains a small library which serves as a depository site for the Asian Development Bank. Nauru has one small lending library. The Nauru Military Museum contains WWII artifacts and displays donated by Stan Gajda.

Communication with the outside world is maintained by a ground satellite station established in 1975, providing 24-hour telephone, telegraph, and telex services worldwide. A small telephone exchange, handling 2,000 telephones in 1996, provides on-island communication. In 2002, there were 1,900 mainline and 1,500 mobile phones in use throughout the country.

Government-owned Radio Nauru, the only radio station, broadcasts in English and Nauruan. Though there is no local news reporting; the station rebroadcasts new services from Radio Australia and the BBC. As of 1997 there was one television station in operation. In the same year, there were 374 radios in use per 1,000 population. Internet service is available, with about 300 users in 2002.

Most newspapers are imported. There are two regular publications: the private fortnightly newspaper, the Central Star News, and the government Gazette.

The constitution provides for free expression, and the government is said to support this in practice.

The Boy Scouts, Girl Guides, and similar organizations function on the island. The Nauru National Youth Council was established in 1990 to encourage the development of various youth organizations. Sports associations are popular on the island. The Women's Information and News Agency monitors issues relating to women and government.

Nauru has great potential for the development of tourism, and the government is working on expanding the very limited industry. Its sandy beach, snorkeling, deep sea fishing, and scuba diving on the coral reef helps visitors enjoy the tropical climate and sea breezes. Island tours of the mines and the National Museum are also attractions. Popular sports are weightlifting, basketball, and badminton. A valid passport, visa, onward/return ticket, and proof of lodging are required to visit Nauru. Vaccinations are not mandatory, although recommended for typhoid.

The best-known Nauruan is its first president, Hammer DeRoburt (1923–92), who led the Nauruan people to political independence; he was president from 1968 to 1976 and again from 1978 until his death in 1992 (except for a brief period in 1986).

Nauru has no territories or colonies.

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