From riches to rags

The wealthy people of Nauru face a future of poverty because most of their only natural resource, phosphates, has been exploited ruthlessly by Australia.

Last Updated: Saturday 04 July 2015

WHAT HAPPENS when a tiny nation's only tradeable natural resource runs out? It gets a ravaged environment, some compensation and a bleak future.

This is exactly what happened to the Pacific island-state of Nauru, whose only natural resource, phosphate, was mined by Australia. After a 30-year battle, Australian Prime Minister Paul Keating recently agreed to pay $73 million as compensation for the environmental damage caused by the mining.

The phosphate resources of the 21-sq-km island, situated halfway between Australia and Hawaii, were exploited by Australia when Nauru was put under its trusteeship by the League of Nations after World War I. Nauru was turned into a vast quarry.

Australia had earlier rejected the finding of an independent inquiry commission set up by the Nauruan government in 1987 that it had violated international law by not restoring Nauru's environment. Even a ruling by the International Court of Justice (ICJ) in 1989, in Nauru's favour, did not have much effect. Nauru then sought leave of the ICJ to lodge a $818.5-million claim against Australia.

Though Nauruan president Bernard Dowiyogo called the compensation by Australia a generous settlement, it is not enough to brighten the prospects of the Nauruans. Royalties from the mining gave Nauru's 10,000 people an average per capita annual income of $20,000. But now, with most of the mineral mined and four-fifths of the island rendered uninhabitable, the islanders are left with a ravaged environment and an investment trust of only $1 billion. The trust has not been managed very well. An investment of $2 million in a London musical that flopped is one instance of Nauru frittering away its money, believe most islanders.

Nothing can grow on a large part of the island because no measures were taken to counter the damage caused to the landscape. The staple diet of the people now is imported tinned food. Living on imports was possible because of phosphate mining royalties, but even that money is now dwindling.

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