By the time of the opening ceremony, construction had cost $38.5 million - an enormous sum at the time, but this was only the beginning of a two decade long spending party for the islanders.
Nauru House rose up deep inside the former administrator while bearing the name of the republic as a status symbol.
Today, the building is back on Australian hands. It was sold to Queensland Investment Corporation in 2004 to avoid a national bankruptcy. It is now called "80 Collins" - devout of name and heritage.
Nauru House is but a memory of the haydays of Nauru.
The facts
- Nauru has been an independent country for 50 years exactly. Before that, it was ruled by Australia, which took the island from Germany in 1914.
- Nauru is tiny. Only 21 km2 and with a population under 10,000. It is the world's 3rd smallest independent country. Only Monaco and the Vatican City are smaller. Click here to see how Nauru compares to your local area.- Nauru consists of only one island that sits alone in the Pacific Ocean, 300 km from the nearest other piece of land.
- Nauru is rich on phosphate, which is used to produce fertilizer for agriculture. Aussie and Kiwi farmers enjoyed cheap phosphate from Nauru until 1963, when the island was finally given the full market price for their valuable resource.
In fact, it only took the 7,000 Nauruans 7 years after independence to become the 2nd wealthiest population on the planet. The islanders were not slow to turn the wealth into a fairy-tale of massive investment and expenditure.
Nauruans enjoyed luxuries such as free electricity, water, education, health care, and heavily subsidized air fares and housing. Extremely well-payed jobs in government were up for grabs. More than 1,500 people were employed in public services in a country with less than 10,000 inhabitants.
“Years of ‘welfare state’ governance sustained by high phosphate earnings led to a lifestyle of luxury and leisure. There was no need to be educated or to learn vocational skills,” writes Asia Development Bank.
Already in 1962, the UN warned that Nauru's phosphate would one day run out.
Still, wealth was not equally divided. Widespread corruption and private golf trips to the Bahamas was the new normal for top government officials.
Imported sports cars were common. John Connell laconically writes that “reckless car use gave Nauru the highest road mortality statistics in the world—a particular irony for an island with just two roads, and one road junction.”
According to Quadrant, this didn't stop a police chief from buying himself a yellow Lamborghini. "When it arrived, he was too fat to get into it."
At its peak, the Nauru Phosphate Royalty Trust contained $1.5 billion in funds and assets. Investments all over the world were set in place to safeguard the country when the mines would one day empty out.
Spoiler alert: If investing was easy, we’d all be rich. . .
Nauru's dollar diplomacy
Taiwan
2002
Nauru and 17 other countries recognise Taiwan as the legitimate holder of the name ‘China’ (Republic of China).
According to the latest budget Nauru gets $7 million a year from Taiwan. However, Nauru switched sides in 2002, and it is thought to have gotten US $135 million from the manoeuvre.Three years later, Nauru switched back to Taiwan who in turn started sending money again.
Japan
2005
Japan enjoyed Nauru’s support in a vote on commercial fishing of whales which experts say is linked to Japanese aid.
Russia
2008
Nauru recognises the two republics Abkhazia and South Ossetia, who broke away from Georgia in 2008. Only 3 other countries do so.
Nauru reportedly gained $50 million in aid from Russia in 2009.
USA
2017
Most recently, Nauru voted with USA and Israel in the UN on the status of Jerusalem as Israel’s capital. Two weeks prior, Israel bought a sewage treatment plant for Nauru.
To top it up, Donald Trump also threw a party . . .
Stephen Gale, University of Sydney, comments on the phosphate discovery and mining.
The phosphate had not run out completely, but the mining plant needed refurbishment to continue operations. That sort of thing is costly. So, when Nauru Phosphate Corporation had to help out the government with money, mining was stopped almost completely from 2002 until 2006.
Properties and industry shares were sold off down to the last asset in what current President, Baron Waqa, calls an “economic meltdown”.
The meltdown had been spooking around for quite some time, but the Nauruan government had held it at bay with loans and shady business. Loans were taken to pay off other loans and pay public servants in a vicious circle.Take the tour: Click the image below or click here.
The Jenga falls
The crisis was seriously shaking the foundation of the tiny nation. Finally, an outstanding loan from American General Electrical Capital Corporation was the shake that lay Nauru in ruins.
The loan threatened with bankruptcy in April 2004. Only a last minute save by the Indian-based Hiranandani group prevented this from happening.The Asian property group took over Nauru’s debt from GE Capital, but literally this only bought Nauru more time. It still had to come up with $239 million. Eventually the islanders had to sell off most of their remaining buildings and investment assets.
Nauru still didn't have a stable way of earning money, and by mid-2007 public debt had crept up AUD1,005 million. "Unemployment was around 40% and a quarter of the population lived on less than US$1 a day," writes the UN. The future seemed bleak.
