THE world’s former richest island per capita has gone bust after its residents splashed out on supercars and corruption ran rife.
The fall from grace suffered by the oval-shaped country of Nauru is a fascinating tale of a tiny kingdom blowing its immense fortune.
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Located in the Pacific Ocean, Nauru’s previously rapidly growing economy was dominated by mining phosphate, which is used in fertiliser.
The industry was owned by the British, Australian and New Zealand governments from 1907 until 1968, before the natives took control.
By the 80s, its booming economy had a “per capita income surpassing that of any oil-rich Arab nation”, according to The New York Times.
It was also described as the smallest and wealthiest democracy in the world.
Decades of mining filled the pockets of families in Nauru, who went on extravagant shopping sprees in Singapore, Fiji and Hawaii.
Decadent residents imported supercars – even though Nauru has only one paved road with a speed limit of just 25mph.
A policeman is known to have purchased a yellow Lamborghini, only to find that he was too fat to fit in the driver’s seat.
YouTube vlogger Ruhi Cenet who visited the island in 2023 spoke to a local who told him his grandmother left the bank with a pillowcase full of cash following the country’s newfound wealth.
The YouTuber also spotted many abandoned luxury cars on the side of the road including Cadillacs, Jeeps and Land Rovers.
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But once the island’s plentiful resources were depleted, so was the country’s wealth.
Massive government spending and luxury lifestyles were not prepared for the collapse of the state’s economy.
The government used to pay for all essential services including schooling, medical care and even the media.
On top of that, if Nauru’s two hospitals were full, sick residents were flown all the way to Australia for free.
Looking to other ways to make cash, Nauru at one point became a tax haven which sold banking licences and passports.
Russian mafia money worth an estimated £55billion went through Nauruan banks in just one year – causing the US treasury to designate the island as a money-laundering state in 2002.
Australia bailed out the country by providing financial aid in return for the tiny island hosting an Australia-bound asylum-seekers centre.
Nauru is also the world’s most obese nation, according the World Obesity Federation.
Diabetes.co.uk pointed out that 70% of its population classified as obese, which could be linked to the country’s limited access to nutritious food and residents’ love for products such as Spam.
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Smoking rates are also alarmingly high – an estimated 48.5% of the country smoked cigarettes in 2020 according to MacroTrends.
The tiny island’s population sits at around 12,000 today, as is made up of 12 main tribes.
Phosphate mining returned in 2005, and exports “gave Nauru’s economy a much needed boost” according to the government’s website.
It added that the new phosphate deposits have an estimated remaining life of 30 years.
But Nauru’s dependence on Australia as a revenue source leaves the country vulnerable to potential economic shocks.
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