The British came to the island in 1798 as the first
Europeans. In 1888, Nauru was annexed by Germany, and in
1914 occupied by Australian forces. In 1919 Nauru became a
joint British, Australian and New Zealand mandate.
From 1942 to 1945 the island was occupied by Japan, from
1947 it was the Australian mandate area. On January 31,
1968, Nauru became an independent republic.
The economy of Nauru has been entirely based on the
extraction of phosphate. In 1993 Australia agreed to pay
Nauru $ 90 million in compensation for the Australian
utilization of phosphate leases 1919-67. New Zealand and the
UK contributed $ 10 million each.
Phosphate production dropped sharply from the early
1990s, and the nation sought to launch itself as a tax haven
for foreign businessmen. See abbreviationfinder for geography, history, society, politics, and economy of Nauru. Thanks to the phosphate rents,
Nauru citizens in the 1970s were able to enjoy an average
income that was among the highest in the world. At the turn
of the millennium, phosphate rents were virtually depleted
and the economy so miserable that the government had no
money to pay government employees.
The situation in the 1990s led to frequent government
crises and a shift in the presidential post; a condition
that continued after the turn of the millennium.
In this bundle, in 2002, Nauru received about 1,000
asylum seekers who had landed in Australia, including 300
Afghans who had been rescued by the Norwegian ship Tampa the
year before. Australia paid financial compensation. The
asylum seekers protested during hunger strikes against
alleged miserable conditions in the detention camp and thus
triggered yet another government crisis in 2003.
The detention camp had been introduced in 2001 as a fence
against illegal immigration: Asylum seekers at sea were
taken up by Australian naval vessels before they could land
in Australia, and were then interned in camps at Nauru and
Papua New Guinea.
However, the operation of a large detention camp has been
an important source of income for Nauru. The newly elected
Australian Labor government under Kevin Rudd put an end to
the so-called Pasific Solution policy and closed the camp in
2008; it reopened in 2012. The Nauru camp houses mostly
1,300 asylum seekers, and employs about 10 percent of the
island's workforce. Hunger strikes and self-harm are
widespread among asylum seekers, and a riot in 2013 led to
extensive damage. 200 asylum seekers fled and the health
center was burned down.
In 1999, Nauru joined the UN. Following strong
international pressure, Nauru agreed in 2003 to discontinue
its "offshore" banking business, which had allegedly been
used by criminal syndicates to extensively launder money. In
recent years, much of the state revenue had come from this
activity, which was condemned by the International
Anti-Money Laundering Organization (FATF).
From April 2004, Nauru was no longer able to pay interest
and loan repayments, and was declared a technical
bankruptcy. Australia assumed the role of interim
administrator and took control of Naurus financial
Ludwig Scotty was elected President for the third time in
October in a year and a half; last time without a counter
candidate. Just before he had dissolved parliament, which
had not been able to adopt a reform budget. The Scotty
government announced in May 2005 that it would restore
diplomatic relations with Taiwan, following a 2003 breach.
This was condemned by China, which claimed that Nauru was
only aiming for "short-term economic benefits". The
connection with Beijing was thus broken.
In 2008, Australia increased its assistance to Nauru to a
total of NOK 150 million. In part, this was a compensation
following the closure of the detention camp. Over the years
Australia had paid over NOK 300 million to keep the camp
operating. In 2008, the Naurus economy was in acute crisis
after the previously valuable phosphate rents were virtually
depleted. Up to around 1990, about 14,000 inhabitants had an
average income that was at the top of the world, but great
value was wasted due to poor investment choices and
Veteran politician Rene Harris died in July 2008, aged
61. He was Naurus president for four terms, the last time
2003-04. He has been criticized for wasting the phosphate
mines revenue and for allowing local banks to be used to
launder money for Russian mafia and other criminal
syndicates. Nauru was long on the International Monetary
Fund's blacklist not to cooperate in the fight against
financial crimes, but was deleted from the list in 2005.
During the 2008 financial crisis, Naurus's remaining
assets in Australia were sold to cover debt obligations
abroad. The island state was again declared bankrupt.
International assistance, mainly from Australia, Taiwan and
New Zealand, kept Naurus' economy afloat.
Former weightlifter Marcus Stephens was elected president
in 2007, having previously been finance minister. Among his
sporting merits were 7 gold and 5 silver in the Commonwealth
Games, as well as silver in the 1999 World Championships in
Athens. His music is often played on the outdoor scene in
Aiue Boulevard, in the country's unofficial capital of Orro,
but is not known outside Nauru.