Once one of the wealthiest nations per capita, this picturesque island in Micronesia owes its prosperity to an unexpected discovery.
Nauru, a Pacific Ocean country, is famous for its breathtaking coral reefs, white-sand beaches, and swaying palm trees, but its history is marred by foreign exploitation.
In the early 1900s, a British company discovered an abundance of phosphate on the island, which became a crucial resource for fertilizers. Mining began in 1907, with the British, Australian, and New Zealand governments profiting from the resource throughout much of the 20th century.
After gaining independence in 1968, Nauru took control of its phosphate mines, sparking an economic boom.
A 1982 report from The New York Times highlighted that the island nation’s per capita income exceeded that of any oil-rich Arab nation, and it was described as the smallest and wealthiest independent democracy in the world.
The island’s newfound wealth was evident when the police chief bought a Lamborghini, even though he couldn’t fit into the driver’s seat. Other luxury supercars, including Ferraris, were also imported.
Although few Nauruans had substantial personal wealth at the time, The New York Times described the state as “close to being the ultimate welfare state” due to its wealth.
The government offered all essential services for free, including schooling, medical and dental care, bus transportation, and even the government newspaper.
If treatment wasn’t available at the local hospitals, residents were flown 2,500 miles to Australia at the government’s expense. Higher education fees at Australian universities were also fully covered.
It seems that some benefited more directly from Nauru’s phosphate wealth, with evidence of lavish purchases still visible today. In a 2024 video, YouTuber Ruhi Çenet described the “frenzy of consumption” at the height of the island’s wealth.
During his visit, he came across various abandoned luxury cars, including Cadillacs, Jeeps, and Land Rovers, now rusted and serving as reminders of the island’s former prosperity.
Ruhi also spoke to a local who confirmed the story of a police officer who bought a Lamborghini, only to realize he couldn’t fit inside.
A local recalled her grandmother leaving the bank with a pillowcase full of cash during Nauru’s peak of wealth. Meanwhile, the phosphate, which had been mined for decades by foreign powers, was steadily depleting by the 1990s.
Facing economic challenges, Nauru resorted to controversial measures, including becoming an offshore tax haven and selling passports, though these strategies were eventually abandoned.
The resumption of phosphate mining in 2005 was hailed as a much-needed boost to the economy, marking a positive shift in Nauru’s financial outlook.
However, it was Nauru’s agreement to host Australia-bound asylum seekers at the Nauru Regional Processing Centre, in exchange for Australian aid, that significantly improved its finances.
According to DevPolicyBlog, the centre became a “major source of revenue,” and the island also benefitted from the lucrative fishing industry within its waters, leading to a stronger economic position. Despite this, Nauru remains vulnerable to future economic shocks due to its dependence on these industries.
One major issue the island faces today is the health of its population.
Diabetes.co.uk reports that over 70% of Nauruans are classified as obese, with researchers suggesting this may be linked to the economic decline that limited access to nutritious food. Smoking rates are also alarmingly high, with MacroTrends estimating a 48.5% smoking rate in 2020.