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Contents 1 Economic Overview 2 Economic Performance 3 Balance of Payments 4 Regional Situation 5 Taxation 6 Economic statistics 7 Employment 8 Trade 9 See also

Revenues of this tiny island have traditionally come from exports of phosphates, but reserves are expected to be exhausted within a few years. Phosphate production has declined since 1989, as demand has fallen in traditional markets and as the marginal cost of extracting the remaining phosphate increases, making it less internationally competitive. While phosphates have given Nauruans one of the highest per capita incomes in the Third World, few other resources exist with most necessities being imported, including fresh water from Australia.

The rehabilitation of mined land and the replacement of income from phosphates are serious long-term problems. In anticipation of the exhaustion of Nauru's phosphate deposits, substantial amounts of phosphate income have been invested in trust funds to help cushion the transition and provide for Nauru's economic future. The government has been borrowing heavily from the trusts to finance fiscal deficits. To cut costs the government has called for a freeze on wages, a reduction of over-staffed public service departments, privatization of numerous government agencies, and closure of some overseas consulates. In recent years Nauru has encouraged the registration of offshore banks and corporations. Tens of billions of dollars have been channeled through their accounts. Few comprehensive statistics on the Nauru economy exist, with estimates of Nauru's per capita GDP varying widely.

In the years after independence in 1968, Nauru possessed the highest GDP per capita in the world due to its rich phosphate deposits. In anticipation of the exhaustion of its phosphate deposits, substantial amounts of the income from phosphates were invested in trust funds aimed to help cushion the transition and provide for Nauru’s economic future. However, because of heavy spending from the trust funds, including some wasteful foreign investment activities, the government is now facing virtual bankruptcy. To cut costs the government has called for a freeze on wages, a reduction of over-staffed public service departments, privatization of numerous government agencies, and closure of some overseas consulates. Economic uncertainty caused by financial mismanagement and corruption, combined with shortages of basic goods, has resulted in some domestic unrest. In 2004 Nauru was faced with chaos amid political strife and the collapse of the island’s telecommunications system. Moreover, the deterioration of housing and hospitals has continued.

Few comprehensive statistics on the Nauru economy exist, with estimates of Nauru's GDP varying widely. According to the U.S. State Department, Nauru’s GDP volume was US$1 million in 2004. Nauru receives about US$20 million foreign aid a year from Australia. [1]

Phosphate is Nauru’s only product for export. In 2004 income from phosphate export was US$640,000, with Australia, New Zealand and Japan serving as the country's major export markets.

Nauru needs to import almost all basic and capital goods, including food, water, fuel, and manufactured goods, with Australia and New Zealand as its major import sources. In 2004 Nauru’s imports totaled about US$19.8 million. [2]

Currently, Nauru is heavily dependent on Australia as its major source of financial support and major trade partner. In 2001 Nauru signed an agreement with Australia to accommodate asylum seekers (mostly from Iraq and Afghanistan) on the island, in return for millions of dollars in aid. Australia has also sent financial experts to Nauru to help the tiny nation overcome its economic problems. However, serious questions remain about the long-term viability of Nauru’s economy, with uncertainties about the rehabilitation of mined land and the replacement of income from phosphates. [3]

There is no tax on income in Nauru. The only existing tax is the Airport Departure tax. [4]

• GDP: purchasing power parity - US$60 million (2001 est.)
• GDP per capita: purchasing power parity - US$5,000 (2001 est.)
• Inflation rate (consumer prices): -3.6% (1993)
• Budget: revenues: US$23.4 million; expenditures: US$64.8 million (1995/96)
• External debt: US$33.3 million
• Economic aid - receives around US$2.25 million from Australia (1996/97 est.)
• Currency: Australian dollar

The fiscal year runs from July 1 to June 30.

• Labour force are mainly employed in mining phosphates, public administration by the NPC, education and transport
• Unemployment rate is close to 90% [5].
• Main industries are phosphate mining, offshore banking, coconut products
• Electricity production (fossil fuels) and consumption are around 30 GWh (2000)
• Agriculture is not a major employer, coconuts are the main produce

• Exports - valued at US$25.3 million (1991), mainly phosphates, main partners are New Zealand, Australia, South Korea, US (2000)
• Imports - valued at US$21.1 million (1991), mainly food, fuel, manufactures, building materials, machinery, main partners are Australia, USA, UK, Indonesia, India (2000)

• Nauru
• NPC

v • d • e Topics in Nauru
History	Nauruan Tribal War
Geography	Districts | Cities | Canals
Politics	Constitution | Political parties | Parliament | Elections
Economy	Transport | Communications | Demographics | Companies | Nauru Phosphate Corporation
Culture	Indigenous religion | Languages: Nauruan, Creole, Gilbertese | Sport | Music | Cuisine
Other	Holidays | Operation Weasel | Phosphate rock island