Nauru Travel Tips

Geography of Nauru
Nauru is a small phosphate rock island in the South Pacific Ocean, south of the Marshall Islands. The island is a raised atoll, with a surrounding reef exposed at low tide. Most of the population live on the narrow coastal belt. A central plateau, covering approximately four-fifths of the land area, rises 70 metres above sea level.There are limited natural fresh water resources. Roof storage tanks collect rainwater, but islanders are mostly dependent on a single, aging desalination plant.Intensive phosphate mining during the past 90 years - mainly by a UK, Australia, and New Zealand consortium - has left the central 90% of Nauru a wasteland and threatens limited remaining land resources.Nauru's climate is extremely humid year-round because of its proximity to the Equator.

History of Nauru
Nauru was first settled by Polynesian and Melanesian settlers. The first European to arrive was Captain John Fearn in 1798, but Nauru continued as an independent island society, reigned by a king (the most widely known being King Auweyida), until it was annexed by Germany in 1888 to German New Guinea. Mining of its extensive phosphate reserves began early in the 20th century.Following World War I, Nauru became a League of Nations Mandate territory in 1920, administered by Australia.
In 1947, a trusteeship was approved by the United Nations. Nauru achieved independence in 1968. The founding president was Hammer DeRoburt. Nauru is a special member of the Commonwealth and joined the United Nations as a member state in 1999.In 2001, a ship carrying refugees from various countries (including Afghanistan) and seeking to dock in Australia was diverted to Nauru as part of the Pacific Solution. The refugees were housed in a detention center in Nauru. As of 2005, all women and children have been granted asylum in Australia. Only 32 men remain.

Politics of Nauru
The 18-member Parliament is elected every three years. The Parliament elects a president from amongst its members, who appoints a Cabinet of five to six people. The President is both the head of state and head of government. There is a loose multiparty system; the two main parties are the Democratic Party and Nauru Party (informal).Between 1999 and 2003, a series of no-confidence votes and elections resulted in two people, René Harris and Bernard Dowiyogo, leading the country for alternating periods.
Dowiyogo died in office on March 10, 2003 in Washington, DC after heart surgery. Ludwig Scotty was elected President on May 29, 2003; however, in August 2003 there was another no confidence vote. Harris regained support and was re-elected president.On October 1, 2004, Scotty declared a state of emergency and dissolved parliament after it failed to pass a national budget.On June 1, 2005 Nauru severed diplomatic ties with the People's Republic of China and re-established links with Taiwan (Republic of China), which had existed for 22 years prior to 2003.

Political Overview
The world's smallest independent republic, Nauru is an island republic of approximately 12,000 people in the Western Pacific Ocean some 1,200 miles the north east of Papua New Guinea and one of the smallest states in the world. Nauru's constitution, adopted in 1968, established it as a republic with a parliamentary system of government. The president is head of state as well as head of government and is elected by the Parliament from among its members every three years or more frequently, in the event of a successful Parliamentary vote of no-confidence. The President, as Prime Minister appoints four or five members of Parliament to form the cabinet. Cabinet ministers, including the President, take charge of the various government departments and are collectively responsible to Parliament
.The unicameral Parliament consists of eighteen members, who are elected every three years by resident Nauru citizens over the age of twenty. There are no formal parties. The Parliament chooses a speaker and a deputy speaker, as well as the President, from among its members. Nauru is divided into fourteen districts, which are grouped into eight electoral constituencies. Two representatives are elected in each constituency except Ubenide, which is composed of four of the smaller districts and has four representatives in ParliamentIn JUly 2002, His Excellency Rene Harris was appointed President after the former President Ludwig Scotty, MP was deposed in a vote of no-confidence by the House.

Economic Overview

INTRODUCTION
Nauru is one of only two single island nations in the South Pacific. It is located just 41 kilometers south of the equator and has a land area of 21 km², although its Exclusive Economic Zone (EEZ) covers 310,000 km². The Nauruan government comprises 18 elected members headed by a president who is both Head of State and de facto Prime Minister.

SOCIO-ECONOMIC ENVIRONMENT
The literacy rate in Nauru has improved since the 1980s (90 percent) with around 95 percent of the population able tread and write. Life expectancy has also improved by 2 years to 58 years. The 1998estimates of the population recorded was around 11,500, an annual average population growth of 2.4 percent. Nauru’s rich phosphate deposits have been the main backbone of the economy, having made it one of the wealthiest nation in the Pacific with a per capita GDP of US$4,640 in the late 1980s. Over the years however, the depletion of this resource has seen the GDP precipitate of Nauru decline to an estimated US$3,450. This has become a concern as the economy has a very narrow base with phosphate being the main revenue earner for the country.

RECENT ECONOMIC ACTIVITY
Nauru’s economic performance remains weak though there were signs of an economic boost in late 2001 due to external financial support. The agreement, in the second half of 2001, to house and process over1,000 asylum-seekers transferred from. Australian waters in return for goods, services and financial payment from Australia provided a short term boost to economic activity. These payments will both enhance government delivery of services, and provide an injection of demand into the economy that will help support economic activity in 2002, and for as long as the detainees remain. The underlying weak economic performance is attributed to declining phosphate reserves and years of poor fiscal management. Nauru is dominated by the public sector – power, water, telephone, post, banking and air transport services.The major economic challenge that the country faces is the declining production in the phosphate mining industry and the impact on government revenues, and national export earnings. The Nauru Phosphate Royalties Trust (NPRT) was created to provide an alternate income for Nauru as phosphate mining declined. NPRT’s  financial difficulties are a major blow to the future economic prospects of Nauru. There are other problems associated with the poor performance of the industry, such as the directive by Government for the Nauru Phosphate Corporation (NPC) to pay dividends to Government after every export shipment rather than on annual basis as was the previous practice. This has created liquidity problems in NPC, restricting capital expansion and hindering the cross subsidization of its other operations in particular water and electricity. Liquidity problems have also forced NPC to forgo savings in these operations available through bulk purchases. At times there has been a need to ration water and power. The country has also had to come to terms with a weakening financial system. There have been problems associated with the Bank of Nauru, and the mortgage of the Nauru Phosphate Royalties Trust assets.

ISSUES
The government faced serious financial constraints in 2001. This was partly due to the suspension of phosphate exports in the second half of the year caused by the blockade of a processing plant by landowners demanding additional compensation for the land. By early 2002, government payrolls and payments to several creditors were delayed. The Government continued to rely heavily on the Bank of Nauru to help fund its budget deficits and to make royalty payments. The Australian dollar is the medium of exchange on the island. Inflation was high at 4 percent in 2001 mainly due to lagged effect of oil price rises and transportation costs. If no drastic policy measures are put in place, the current prevailing state could lead to major problems such as the inability to service debt. The budget deficit in 2000 was around A$10 million or around 18 percent of GDP. The government debt increased again in 2000, following the increase in 1999. The level of external government debt in 2000 is estimated at around A$280 million and debt servicing at around 13 percent of exports of goods and services. For fiscal year 2002, a deficit of A$40 million-A$50 million is budgeted, but it is unclear how this will be funded. The Government, realizing the economic challenge it has on hand, has embarked on a fiscal and financial reform program which, will also focus on banking sector reform, the tax regime and the management of the NPRT. The reform program attempts to reverse the periods of high fiscal deficits experienced in the 1990s and to create a conducive economic environment for the private sector to thrive. There is a small private sector, which consists largely of trade stores, an offshore banking sector (although this is facing problems due to the FATF listing), and some fishing operations. Despite the above, the very real risk of a crisis over the medium term exists if there is a substantial shortage of public funds, which would further impair the provision of basic public services and the import of essential goods. This would have a significant adverse effect on efforts to reduce poverty.

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