Business Profile
Economy
Until a few years ago, Nauru’s economy depended almost entirely on the extraction and sale of phosphates, over which the Nauru Phosphate Corporation has a monopoly. Much of the revenue was invested in anticipation of the eventual exhaustion of the resource. Now that this has occurred, the Government, in common with a number of other small island states, looked to offshore financial services to sustain the economy. However, the laxity of Nauru’s newly established tax and financial disclosure arrangements attracted much foreign money of allegedly uncertain or dubious origin. From 1997 onwards, the OECD (Organisation for Economic Co-operation and Development, the organisation representing the world’s richest two dozen economies) took the lead in constructing an international regime to crack down on money-laundering. Most of the several dozen countries loosely described as ‘tax havens’ have complied with the new system: Nauru is one of the seven which have refused to do so. Accordingly, in April 2002, it was ‘named and shamed’ and subject to a number of sanctions. There was some hope that a fishing industry could be developed following the completion of a new harbour, but the industry has failed to take off and Nauru accrues more revenue from selling licences to foreign fleets.
Nauru has few other strings to its economic bow and in 2004 was facing chaos amid political strife and the collapse of the island’s telecommunications system. There is some agriculture, exploiting what little fertile land is available. Although the island has a benign climate and attractive features (those remaining after the damage done during the phosphate mining era), the potential of any tourism industry is limited by Nauru’s remoteness and lack of infrastructure. In 2002, Nauru found a novel source of income by accepting asylum seekers (mostly from Iraq and Afghanistan) who had been rejected by Australia. Nauru took 400 of them, and was paid $30 million by Canberra. Australia and New Zealand are the island’s main trading partners, and supply almost all basic and capital goods. There are now serious questions about the long-term viability of Nauru’s economy.
Business
Shirt and smart trousers or skirt will suffice; more formal wear is needed only for very special occasions. English and French are widely spoken. The best time to visit is May to October. Office hours: Mon-Fri 0800-1200 and 1330-1630.
Commercial Information
The following organisation can offer advice: Bank of Nauru, PO Box 289, Civic Centre, Nauru (tel: 444 3238 or 3267; fax: 444 3203).
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