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Economic Overview

Republic of Nauru Fact Sheet
Prepared by Dr. Vince Sinning

A Short Term Future for Phosphate Exports

Revenues for Nauru come from exports of phosphates, but mining is slowing as reserves run down and is expected to cease within a few years.  Nauru is hoping to extend the life of phosphate reserves by mining secondary deposits but the economic viability of this is uncertain.  As few other resources exist, the country imports all its necessities.  The rehabilitation of mined land and the replacement of income from phosphates are serious long-term problems for Nauru. 

Profits from phosphate mining fell because of the stronger US dollar, as the impact of changes in the exchange rate on the cost of inputs was greater than the impact on reserves. With phosphate mining becoming less economic, the government attempted to develop other industries including offshore fishing, financial services, and tourism.  There are substantial fish resources in the water surrounding Nauru, but only a minimal commercial fishery base.  Revenue from fishing agreement license fees has increased substantially in recent years.

In anticipation of the exhaustion of Nauru's phosphate deposits, a proportion of revenue from phosphate sales had been invested in long-term trust funds to provide for Nauru's economic future. As a result of poor investment decisions, fiscal deficit problems and borrowings against capital, the unencumbered value of those assets has now declined.  There are few comprehensive statistics on the Nauru economy; estimates of Nauru's per capita GDP vary but an estimate of US$2 900 in 1998 was made by the ADB, an 80 per cent decrease from levels enjoyed in the 70s and 80s.

Local infrastructure developments

Nauru has no natural port but has deep-water anchorages served by a cantilever system for loading phosphate and by lighters for discharging and loading other cargo. These port facilities have been supplemented by the construction of a small boat harbour in Anibare Bay with funding from the Japanese Fisheries Department.  President Dowiyogo officially opened the boat harbour in September 2000.

Air Nauru's single Boeing 737-400 services Tarawa, Nadi, Brisbane and Melbourne.  The airline also operates a charter service between Sydney and Norfolk Island.

© Copyright 2003 | Developed By Dr. Vince Sinning, Council on Diplomacy | All Rights Reserved