The Lesson of Nauru

The Republic of Nauru is the world’s smallest republic. It has a population of just under 10,000 and lies in the Pacific Ocean, one degree south of the equator and 190 miles from its nearest neighbour, Banaba island (part of Kiribati).

A German colony and then administered jointly by Australia, New Zealand and the UK, Nauru was a major source of phosphate owing to enormous deposits of guano (bird poo) deposited over thousands of years. This was strip-mined for most of the twentieth century and has now run out.

Nauru became a republic in 1968 and owing to the phosphate, it briefly had the highest GDP per head in the world, and the islanders bought fancy cars to drive on their 30km of roads (1km more than Gibraltar). Drunk driving became a leading cause of death, and they also became the most obese people in the world (61%, however the top ten are all Pacific Ocean island states).

On becoming a republic, the island decided to invest its phosphate revenues for the future but they were very badly advised and the investments went sour. It then allowed itself to become a centre for money laundering with 400 phantom banks – Russian gangsters apparently laundered over $70 billion through Nauru.

Now this island that was mainly fertiliser is infertile, 90% uninhabitable, with enormous financial debts that have forced it to allow itself to become an Australian detention centre for refugees (currently there are no detainees). In addition, sea levels have been rising 5mm per annum since 1993.

Well, as a colony they would have had little choice in what happened, and then as a young republic, they may have been naïve to think that the phosphate would last. And they have also clearly been manipulated. The point is that there was little thought to the risks to the republic’s livelihood and you can’t just keep on extracting a finite resource on an infinite basis.

Risk management is about understanding risks and acting to manage them to the benefit of the entity/organisation. That understanding has to go into the detail and it has to go beyond a short-term horizon, otherwise the very existence of an organisation or of a nation or nations is threatened.

Data Sources: CIA World Factbook, Jacaranda Atlas of the Pacific Islands, Wikipedia, “This Changes Everything” – Naomi Klein

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close