Economy of Nauru
|
|
| Contents |
Economic Overview
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.
Economic statistics
- 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.
Employment
- Labour force are mainly employed in mining phosphates, public administration by the NPC, education and transport
- Unemployment rate is close to zero.
- 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
Trade
- 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)