What Happened When a Tiny Nation Got Filthy Rich Overnight


This Island, here, is a giant pile of . No…no… I don’t mean to offend anyone, I’m rather
stating the fact. Moreover, this island nation was considered
the wealthiest nation on earth only a few decades ago…. by 2017, it has become one
of the poorest countries, where no one wants to live, not even refugees. The story of how this place went from rags
to riches and back to rags again, is not only interesting but give some important lessons
too. With only 21 square kilometers of land area
– somewhat the size of LA international airport, Nauru is the smallest state in South Pacific
and third smallest state in the world after Vatican City and Monaco. It’s a home to some 11,000 people but long
before humans discovered the island, local bird species used this island as their restroom
and excreted their poop here for millions of years. The bird droppings, also called guano, eventually
formed rich phosphate deposits that covered most of the Island area. For those who don’t know, Phosphates are the
key ingredient in agricultural fertilizers and its limited deposits are mined all around
the world. So, basically, Nauru was sitting on top of
excrement gold and Germans were the first to find out. They started mining in this resource in 1906
under the name of “Pacific Phosphate Company”. Following the world war 1, mining continued
under the “British Phosphate Commission” when Nauru fell in the hands of Britain, Australia,
and New Zealand. Things remained more or less the same until
world war 2 and this is where the things started to change. Nauru got independence in 1968, bought the
“British Phosphate Commission” and instead of fixing the damage done, it went on a full-on
crazy mining streak under the locally owned “Nauru Phosphate Corporation”. The people of Nauru mined A LOT, so much so
that Nauru became one of the richest countries in mere a decade. The extent of rapacious mining can be understood
by this dystopian looking hellscape of jagged limestone pinnacle up to 15 meters high that
formed when the phosphate was carved out of the ground. To load phosphate on ships for export, Nauru
built these gigantic iron structures on its shores which now lie useless. In 1975, the country earned the equivalent
of $2.5 billion for a population of mere 7000 – more than enough to keep them satisfied
for generations to come. Per capita income of Nauru reached second
highest in the world, only after the oil-heaven Kuwait. So what did Nauruans do with so much money? Did they made some long-term investments that
would allow them to sustain their future lives on this tiny, barren and desolate Island after
resources are gone? NOPE. They had better ideas. With their newfound wealth, people in Nauru
bought cars and houses; the country built a hotel, a golf course and founded an airline
so it could import Western food. The government of Nauru created a Nauru trust
to reinvest the spare wealth but mismanagement, corruption, and ignorance resulted in bad
investments in vanity projects around the globe – Nauru house in Melbourne, Nauru tower
in Hawaii, Pacific Star hotel in Guam, Pacific house in Washington, The grand pacific hotel
in Fiji, 3 Chesham Street in London to name a few. Officials were spending money on luxury trips
in the name of managing the real-estate portfolio. At some point, Nauru got the nickname of “Kuwait
of the Pacific” because of how citizens and government officials flaunted money as if
it was endless. Time took a turn, Island’s phosphate resources
depleted but countries expenditure remained the same, Nauru started borrowing money from
other countries. One of the advisers convinced the president
to invest in a London based musical pop band named Unit 4+2. The show closed only a few weeks after its
debut costing Nauruans more than 7 million dollars in today’s money. With no source of income to pay off its debts,
international creditors seized Nauru’s entire real estate portfolio together with its sole
aircraft of Air Nauru. Nauru trust went bankrupt, virtually bankrupting
entire nation. All Nauru was left with was overexploited
barren lands where nothing could be grown, polluted shores where no aquatic animal would
come and a population of some 7,000 people to feed. The story doesn’t end here. It just gets a bit crazier. As a desperate attempt to generate income,
Nauru published ads on the internet offering anyone with $20,000 the opportunity to open
a bank on the island. Russian mafia saw an opportunity to seize
and used Nauru’s liberal banking policies to launder over $70 billion from the former
Soviet Union. At one point, Nauru used its position as a
member of the United Nations to recognize independent countries like Kosovo and Abkhazia
allegedly for money. Russia was reported to give Nauru US$50 million
in humanitarian aid for this act. Nauru Government, however, claimed that these
two things were not linked. In 2001, Nauru became a refugee detention
center when the Australian government agreed to pay Nauru for temporarily housing refugees
that were reaching Australia for Asylum. Hundreds of men, women, and children were
sent to these offshore processing centers where, it was later reported that conditions
were wretched, akin to torture and refugees were treated like criminals. Some compared the conditions in these camps
to those at Guantanamo Bay. The Nauru camp shut down in 2008 and reopened
again in 2012 with minor additions but the conditions did not improve. This time the Australian and Nauruan governments
tried to keep things secret by limiting access to the Island and punishing those who would
speak about the conditions inside the camps. An Iranian refugee, in 2016, lit himself on
fire after he learned that he would be expected to live on the island for the next ten years. Talking about today’s Nauru, 70% of the Island
is now uninhabitable. In absence of farming, people are forced to
consume only low-quality imported food in cans which have greatly contributed to the
decline of the health of the island. On the BMI index, Nauruans are the most overweight
people in the world with 97 percent of men and 93 percent of women being overweight or
obese. Nauru has the world’s highest level of type
2 diabetes, with more than 40 percent of the population affected. Kidney and heart-related diseases are common
on the island. 90% of Nauruans are unemployed living on government
support, the school system has almost collapsed and detention centers are still operating. It demonstrates how unsustainable exploitation
of resources out of greed can put us in situations we may never come out of.

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