Nauru is an independent republic and a special member of the Commonwealth since 1968. It consists of a single 21 sq km island with a 30 km coastline in the central Pacific, almost on the Equator halfway between Australia and Hawaii. Nauru's EEZ is 431,000 sq. km. With uncertain rainfall and porous soil, cultivation is restricted. Primary production is confined to minor plots of fruit and vegetables. Being extremely small and isolated from major markets, Nauru faces numerous constraints on economic develop ment. Apart from phosphate resources and fish, it has no other natural resources that could provide a significant income. Nauru is facing a very uncertain future with the winding down of phosphate mining and dwindling international reserves.

Population

Estimated population in July 1996 was 10,700, of which 58% were Nauruans, 26% other Pacific Islanders, 8% Chinese and 8% European. The large percentage of other Pacific Islanders consists of contract workers imported to work in the phosphate industry. The population is Christian, two-thirds Protestant. When Japan occupied Nauru in World War II it deported virtually the entire population to Truk in the Carolines to work as labourers. On 31 January 1946 (the date is now Independence Day) about 700 Nauruans were returned to their island; another 500 had died of starvation, disease, etc in captivity, and this appalling episode had a profound affect on the social fabric of postwar Nauru, still noticeable.

The population growth rate is 1.33%, the birth rate 18.03 births/1000 population, the death rate 5.1 deaths/1000 population, infant mortality rate 40.6 deaths/1000 live births and life expectancy at birth is 66.68 years for the total population. Schooling in Nauru is free and compulsory and children commence classes at the age of four. It is estimated that about 10 per cent of children complete secondary schooling and enter apprenticeships.

Government

Between 1919 and 1967, Australia, the United Kingdom and New Zealand had authority over Nauru, first under a League of Nations mandate and later as United Nations trustees. The administering authority was Australia. On January 30 1968, the Territory of Nauru gained independence and the Republic of Nauru was created. The partner governments agreed to hand over control of the phosphate industry from 1970, with Nauru paying $21 million for the capital assets. The republic's head of state is the President, who is also head of government. The president is elected by the 18-member Nauru Parliament, and selects his own cabinet. There are no political parties.

Nauru has no official capital, but government offices and the parliament are in the Yaren District, alongside the international airport. Nauru announced in January 1998 it will apply for full membership of the Commonwealth and for membership of the UN. Full Commonwealth membership will allow Nauru to be represented at Commonwealth Heads of Government Meetings (CHOGM).

The President said in his January 1998 Independence Day address that the government was establishing a fishing industry to generate substantial exports. "Our marine resources," he said, "are the wave of the future." With the help of Japan a new boat harbour would be built on the eastern side of the island with facilities for medium sized fishing vessels.

He said it was imperative that work start immediately on rehabilitating the worked-out phosphate lands. The Nauru Rehabilitation Corporation Act had provided a framework and work would begin on providing housing, health services and sporting facilities "on topside" (the area of the workings). The ultimate object of rehabilitation was the restoration, over a generation, of the total area for productive use, whether public or private. "It is envisaged assistance will be wide-ranging," he said. "It will include a review of budgetary measures and procedures, restructuring the public and private sectors and assistance to statutory bodies, including the Bank of Nauru and the Nauru Phosphate Corporation. In addition the ADB will assess the potential for Air Nauru, tourism and other economic activities that may be feasible once the phosphate is exhausted."

Economy

Nauru's economy is almost completely dependent on phosphate resources. The mining of phosphate has generated high levels of income for Nauruans compared with other Pacific island countries, but there was a drop in demand for Nauru's phosphate from its traditional markets after 1989. This not only affected Nauru's international investments, but materially hurt its borrowing programme. Mining activity is expected to stop in the next decade with the exhaustion of the phosphate and income levels will drop substantially. A proportion of revenue from phosphate sales has been invested in long-term trust funds towards Nauru's future. Nauru also received a lump-sum payment from Australia of $57 million in 1993-94 to settle a legal challenge by Nauru for $107 million compensation to repair the damage done by phosphate mining before independence. Under the Compact of Settlement, Australia is paying an additional $2.5 million annually for 20 years. Dividends from the trusts have declined sharply since 1990 and the government has been borrowing from the trusts to finance fiscal deficits.

The rehabilitation of mined land and the replacement of income from phosphates are the most serious long-term problems. Mining has rendered nearly 80% of the land presently unusable. There are substantial fish resources in the waters surrounding Nauru, and skipjack tuna are reported to be abundant. While there are no commercial fisheries, fishing licences and fines generated revenues of $3.1 million in 1993-94.

Nauru has the essential basic infrastructure in place for a small tourist industry but it is not active in this area.. Air Nauru provides regular flights from Australia and other Pacific locations. Australia is Nauru's major trading partner and the major importer of Nauruan phosphate. Exports to Australia in 1994 amounted to $15 million and imports from Australia totalled $25 million. Nauru's currency is the Australian dollar.