A small breakaway republic in the Caucasus whose independence is not recognised by the international community is using Nauru to represent its interests at the United Nations, according to President of South Ossetia Anatoly Bibilov.

Key points: The US signed a bill to cut off funding for states that recognise the territories

The US signed a bill to cut off funding for states that recognise the territories Former Nauru president Sprent Dabwido denies that Russian aid motivates it

Former Nauru president Sprent Dabwido denies that Russian aid motivates it But observers maintain that the stance must be financially motivated

Nauru is the only Pacific country which recognises South Ossetia and Abkhazia — two areas seized by Russia from Georgia in a brief war in 2008.

Moscow has reportedly given Nauru economic assistance since they decided to recognise the breakaway Georgian republics.

For smaller nations in the Pacific with few resources, it can be tempting to use their sovereignty for sometimes unusual purposes.

Why would Nauru do this?

By recognising South Ossetia and Abkhazia, Nauru is keeping itself at odds with most of the rest of the world — in particular, making itself ineligible to receive aid from the United States.

The US has strongly condemned Russia's military action in South Ossetia. ( Reuters: Gleb Garanich, file )

But despite the international opposition, former Nauru president Sprent Dabwido defended the country's stance to the ABC, saying it was not bought with Russian aid.

"If you fly out to South Ossetia and have a look and talk to the local community and the people there, you see a different side than what you see on the media or the international perspective," he said.

"The actual people there are saying they really need independence, that they don't like to be known as Georgians or Russians, and would like to be known as South Ossetians."

But observers like Dr Malakai Koloamatangi — Pacific Director of New Zealand's Massey University — maintained that Nauru does it for the money.

"They do it for the money, the funding, and the financial assistance that they can get for the recognition," he said.

"It allows them to perhaps have a voice on the international stage, but it's mainly for economic reasons."

Nauru is the only pacific country to recognise the two areas seized by Russia in 2008. ( Wikimedia Commons )

So, has Russia essentially purchased Nauruan recognition of the two parts of Georgia it seized?

Mr Dabwido would not go that far, but he did say the Russians helped Nauru when the broader international community would not.

"This is a bit difficult to answer, because Nauru at that time put out a donor round table and we sat there for two days," he told the ABC.

"Russia was very happy to say, 'We are with your development sustainable strategy and we will contribute to it' — that's when Nauru formed a relationship with Russia."

What are the risks for Nauru?

Last year, the US signed an appropriation bill that would cut off funding for any international organisations directing funds towards states that recognised South Ossetia and Abkhazia.

The parliament building in Nauru. ( en.wikipedia.org, file )

There was concern that this would cut off funding to Nauru through the Asian development bank, but just last week there was a new agreement signed between Nauru and the Asian Development bank over a high-speed internet connection for Nauru.

Unusual uses of Pacific sovereignty Minerva: Millionaire libertarian Michael Oliver erected a flag on a Tongan reef in 1972 and declared it the Republic of Minerva with no taxes. Tonga later sent a patrol and took the reef back. Dominion of Melchitzedek: A "nation" which exists only in cyberspace but which persuaded the Fiji island of Rotuma to recognise it briefly, in exchange for aid which never arrived. International shipping register: In the 1990s Tonga set up an international shipping register on the advice if a Greek businessman. It generated a few hundred thousand dollars, none of which was recovered when the man disappeared. Republic of Mekamui: Bougainville rebel leader Francis Ona set up an area of Bougainville under his control in the 1990s. Conman Noah Musingku used Mekamui as a base to create his own currency printed with pictures of himself and Jesus Christ. Passports for sale: The Marshall Islands, Vanuatu, Samoa, Nauru and Tonga have in the past sold passports to foreigners that do not confer citizenship. Their legality is questionable.

Melbourne-based writer on the Pacific and international affairs Grant Wyeth said she believed Nauru may be benefitting from some international sympathy because of its size and vulnerability.

"To actually cut Nauru off in this way would be … seen as a bit too harsh," Mr Wyeth told the ABC.

"I think there has to be recognition in the international community that this is just the way a state like Nauru has to play the game, unfortunately.

"Especially if, were the detention centre to go, this would devastate Nauru's resources."

But Dr Koloamatangi added this by no means was the first time a Pacific nation had used its sovereign status unusually. Tonga for example, at the height of the Cold War, threatened to allow the former Soviet Union to construct a base in the northern Tongan island of Vava'u.

"There have been these cyber or virtual entities — for example, there was a guy who laid claim to Antarctica, and Rotuma in Fiji subscribed to his virtual republic, you know in exchange for, obviously, money," he said.

But Mr Dabwido was adamant his country was supporting South Ossetia and Abkhazia for broader reasons than just financial ones, and remained defiant about the criticism.

"To be frank I'm very proud of the way Nauru stands. We don't bow down to Russia, we don't bow down to the US, and don't bow down to Australia,' he said.