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The new rise of Nauru: can the

island bounce back from its
mining boom and bust?
July 15, 2016 6.03am AEST
Does Nauru now face a sunnier outlook? Saleem H. Ali, Author
provided

The new rise of Nauru: can the

island bounce back from its
mining boom and bust?
July 15, 2016 6.03am AEST
Saleem H. Ali

Author

1. Saleem H. Ali

Chair in Sustainable Resource Development, The University of

Queensland

Disclosure statement

Professor Saleem H. Ali receives funding from from a wide variety of

public and private organizations. However, this article's content has
no conflict of interest with any of the funding sources that support
his research.

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When most Australians hear of Nauru they tend to think of

immigration detention, or perhaps of the environmentally ruinous
legacy of the island nation’s ill-fated phosphate mining boom.

Nauru’s troubled history has seen it fall from being one of the
world’s richest nations, on a per capita basis, to a society plagued
by financial mismanagement and corruption. Yet despite its tragic
back story, this tiny country of just over 10,000 citizens may well be
poised for a comeback.

During a recent visit to research possible sustainable development

pathways, I became cautiously optimistic about the country’s
trajectory. On July 9, Nauru held an election which delivered some
old and new faces to its 19-member parliament, including re-elected
president Baron Waqa and leading Nauruan entrepreneur Sean
Oppenheimer. They now face the task of leading their battered
nation’s recovery.

Environmental cleanup
Nauru’s unique geography has created threats and opportunities.
Living on a raised coral atoll with a fairly high plateau, the island’s
population is less vulnerable than those who live on low-lying coral
atolls.
It is on this high plateau, known locally as “Topside”, where much of
Nauru’s phosphate deposits formed, interspersed between calcium
carbonate pinnacles.

Now, almost all of the available phosphate has been mined for use
in fertiliser. The residual pinnacles have left a jagged landscape
that cannot be used for agriculture or forestry.

A jagged legacy. US Department of Energy/Wikimedia Commons

Recovering from the mining boom and bust has been a slow
process. In 1993, Nauru settled a landmark international legal case,
in which Australia agreed to pay reparations for colonial-era
mismanagement of the island’s assets. This provided substantial
funds for environmental restoration through the Nauru
Rehabilitation Corporation (NRC).

When the regional asylum processing centre on Nauru was

reopened in 2012, it was suggested that immigration detainees
might even help with the nearby Topside restoration work. This may
currently seem implausible, but could be considered as a livelihood
option for some who may be interested in ecological restoration
skills development.

However, the only land that has thus far been rehabilitated is in an
area known as “Pit 6”. Ironically, this is being developed as a local
Nauruan correctional facility, with the prisoners possibly to assist
with reclamation work. Thus far the NRC has not managed to
achieve its reclamation objectives anywhere else.

New ideas
Despite the slow progress so far, some innovative ideas are now
taking root, which could potentially offer economic and
development boosts as well as helping to rehabilitate the
environment.

One option is to mine the leftover limestone pinnacles, which

contain several potentially useful minerals such as dolomite. The
United Nations Development Program has championed these so-
called “neglected development minerals” as a way of helping Pacific
nations (and others) out of poverty.

Although these materials can be sourced more cheaply in China and

elsewhere, Nauru could conceivably be branded as a “boutique”
producer of tiles from these stones, potentially attracting
consumers who are willing to pay an “origin premium” – much like
Carrara marble or Vermont slate.

Sustainable growth
Ultimately, Nauru’s population is constrained by the island’s small
size – just 21 square km. But there is still room to grow, as well as
economic and environmental opportunities, particularly where
essentials such as energy and water are concerned.

Nauru has just one brackish lake, called Buada Lagoon, and an
underground lake called Moqua Well. But it has plenty of sunshine,
which is being tapped for solar-powered water purification systems
to deliver drinkable water.
The United Arab Emirates has also supported a pilot project to
develop a solar farm on Topside. This could help wean Nauru from
its reliance on diesel as a source of energy.

However, far greater investment from donors and the private sector
would be required to scale up these efforts. This, in turn, could help
other sectors to develop, including a modest boutique tourism
sector related to the island’s location as an airline transit hub for
the central Pacific.

A derelict phosphate plant. More sustainable industries are needed

next time around. d-online/Flickr.com/Wikimedia Commons, CC BY

Financial future
Of course, much of this depends on the international financial
community maintaining its faith in Nauru after years of financial
mismanagement. On this question, the signs are still mixed.

In April, Nauru was admitted to the International Monetary Fund – a

mark of international confidence in its finances and a move that will
ensure rigorous economic oversight. But within days of that
decision Westpac severed its ties with the country, reportedly amid
concerns over financial irregularity that it had been investigating
over the preceding months.

In contrast, Bendigo Bank returned to Nauru in 2015 after a 15-year

absence of any banking provisions in the country. The bank has
registered more than 5,000 accounts since then.

Public finances are also being given some positive assurance

through the recent establishment of an Intergenerational Trust Fund
for the country. Seed funding has been provided by the Asian
Development Bank, Australia and Taiwan. This fund has far more
stringent safeguards and independent auditing requirements, in
contrast to earlier sovereign wealth funds that became notorious for
their mismanagement.

A critical next step will be to ensure that, this time around, unlike
the previous boom, the country’s revenues from its relationship with
Australia, and from its natural capital, are converted into lasting
economic capital.

As the country gets ready to review its National Sustainable

Development Strategy in 2017, these efforts will garner further
attention. While there is no room to be sanguine about the
development challenges facing Nauru, there is certainly ample
reason for hope.

Nauruans are amazingly resilient people who have survived several

brushes with oblivion during their history. Every year on October 26,
Nauru celebrates Angam Day, which commemorates the two
occasions on which the population has bounced back from near-
extinction to reach 1,500, which is considered to be the threshold
for their long-term survival.

With careful environmental and economic planning, Nauru has the

potential to celebrate many more Angam Days to come.