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Background Information about Nauru

Author: IFAD

Description:

 

Economic Background
Nauru’s estimated GDP was USD 72 million in 2011 which supported about 10,000 people. The per capita GNI was USD 4,792 in 2010, ABD (2012). The pace of economic growth which averaged around 5% since 2000 has recently declined to around 2% in 2010.  Tight fiscal spending together with a high net natural population increase implies that the per capita incomes may not increase significantly - data show that this was only 1.9% in 2011. The decline in the mining sector had created tight economic situation, both in employment and government finance, but its reopening in 2007 is expected to have added some impetus to growth. However, the secondary deposits of phosphate are estimated to last over a 30 year period. The agriculture sector contributes only about 4% of GDP failing to provide enough food for the domestic population. The services sector’s contribution which was close to 45% of GDP in 2009 should be heavily discounted following high import penetration.  There are limited real opportunities for sustaining livelihoods both in urban but more so in the rural areas. Currently, Nauru depends on limited resources and foreign aid and many of the public services continue to deteriorate with Australia trying to maintain the government (and the economy) afloat.  The recent decision by Australia to re-open its illegal migrant detention centre in Nauru may provide a temporary boost to the economy.

Baseline Poverty Analysis
Detailed country reports on Nauru do not exist. Abbott (2007) finds that Nauru’s human poverty index was 16.1 and it regionally ranked 9 (out of 15) in 2006. The MDG report (2012) notes that 25% of population was under the BNPL and that the poorest 10% accounted for 6% of total consumption. The report also states that about 16% of people in 2005 were in food poverty. Anecdotal evidences suggest that there was a fair degree of food poverty in Nauru following the GFC and the closure of mines but since the economic recovery, the situation has improved. Due to the tight fiscal situation, employment declined with employment to population ratio estimated to be about 50% in 2006. This also affected youth and female employment. Various programs are being instituted to address unemployment targeting the youth and women.

Nauru has achieved gender parity in primary and secondary education. According to the 2002 census, there were 42% of women in the non-agricultural sector. Without recent data it is difficult to gauge the trends in women’s economic participation in Nauru. Currently, there are no women in parliament and this situation has prevailed since the late 1990s. Youths would have further slipped into hardship and poverty due to the national crisis prevailed but they account for 20% of Nauru’s population.

Agriculture and Rural Development
Nauru is a single island of 21 square km in land surrounded by a strip of coast some 150-300 meters wide. With the mining problems, income losses (in wages and royalties) have reduced the high standard of living in Nauru. Food security remains a major concern especially with costly imports, limited capacity for local substitution, constrained fiscal situation and high levels of foreign and domestic debt. Some diversification has been established in agriculture and fisheries but due to mining, crops and livestock have virtually disappeared. Water and arable land have become scarce and consequently there is currently no formal commercial agriculture and very few food crops. Limited varieties of trees and vegetables are grown on a small subsistence scale, but over 90% of the country’s food items are imported. Food and live animals accounted for just over 10% of all imports which stood at USD 32 million in 2011. Large scale commercial logging is non-existent. The Government is trying to improve agriculture productivity through its “grow green” program. Coastal and inshore fisheries are still important for food and exports. The offshore fishery is an important income earner with access fees representing about 20% of Government revenue during 2006-2008, IFAD (2012). Total exports account for about USD 70m in 2011, ADB (2012). Developments in recreational fishing and aquaculture have been sluggish.  



Language:  English (United Kingdom)
Development Themes: Agriculture Food Security & Nutrition
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