Nauru scrambles as Australia closes island's detention center
The tiny Pacific island is losing a key source of income.
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After independence from the joint rule of Britain, Australia, and New Zealand in 1968, Nauru earned billions of dollars from exporting phosphate, used in fertilizer. For nearly two decades, Nauruans went on a spending spree, chartering planes to shop in Hawaii, Guam, and Singapore.Skip to next paragraph
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Sitting beneath the shade of a tree overlooking the sea, Manoa Tongamalo, who is about to lose his job as a detention center guard, says: "People would go into a shop, buy a few sweets with a $50 (Australian) note, and not take the change. They'd use money as toilet paper. They never thought of the future or of investing the money."
On the opposite side of the island, Doneke Kepae was whiling away the afternoon with friends. "We bought what we wanted, we gambled, we flew to Australia, Guam, Fiji," he says. "Once there was no money left, we just waited for the next royalty check."
Bankrupt by 2000 and forced to sell its extensive portfolio of overseas property, Nauru is now determined to regroup.
An old guard of politicians was voted out in 2004 and replaced by young Australian-educated technocrats. Phosphate mining, neglected for years, has resumed, with the government claiming there are enough reserves to last another 30 years.
"It's a second chance for us," says foreign minister Kieren Keke. "But we can't base our whole future on phosphate. We need to diversify and to build a trust fund as a nest egg for when the phosphate has gone."
The coral pinnacles that scar the interior will eventually be flattened and landscaped for housing, a reservoir, and cemeteries.
There are plans to set up a tuna cannery and to establish the island as a pit stop for Chinese and Japanese tuna trawlers.
"If we make the right investments, and with ongoing reforms, I think Nauru can be sustainable," says President Stephen in his office overlooking the island's airstrip, its link with the outside world. "A lot of bad decisions were made in the past. We don't ever want to go through that again."