13 August 2017
Merely reading this headline would easily remind anybody that has been following the trend of happenings in Nigeria of Nigeria.
Though such people will not be wrong, but this is not Nigeria we are talking about here, the country here is called Micronesian.
Micronesian island of Nauru is the third smallest nation in the world (only Monaco and Vatican City are smaller).
It has exactly one resource, but it’s a very valuable one: easily-mined phosphates, a chemical found in, yes, millions of years’ worth of bird poop.
It is an important element in many industrial and agricultural products, just sitting around ready to be picked up, all over the island.
From the time it became independent in 1966 until the ‘80s, Nauru strip-mined its phosphates, providing for its population the highest living standard in Micronesia, and generating the highest per-capita income of any nation on the planet.
Of course, eventually all the easy-to-mine phosphates ran out, and the countries they traded with largely left for browner pastures.
Now the island is utterly wrecked, economically and environmentally.
Besides the last vestiges of its once-booming phosphate mining operations, Nauru’s only other major sources of income are money laundering, refugee detention housing for nearby Australia, and straight-up humanitarian aid.
There is 90 per cent unemployment, and of those who have jobs 95 per cent work for the government.
Obesity is a huge issue, as the local population has difficulty processing the sorts of foods their once-extravagant wealth afforded them, and little to no way to pay for any medical care.
Prospects for the island’s future are dim. They would have been better off keeping their poop or diversifying.
Having talked about the nation’s utter refusal to plan for the future by depending solely on exhaustible mineral resources, there is also the need to talk about corruption as it played a huge role in ensuring that a future without the natural resources is doomed for all – not just the looter as is in this case.
So let’s start from poor investment and take it all the way down to corruption.
Micronesian nationalized their mining industry. The resulting trust, the Nauru Phosphate Royalties Trust, invested the mining profits in a number of international real estate holdings to secure a stable income for the island once the phosphates ran out.
However, the administrators of the fund lived wildly and lavishly, forcing the trust to borrow money, which was the opposite of what it should have been doing.
They also made some poor investment decisions on the trust itself, including a Broadway flop about the life of Leonardo Da Vinci.
When the phosphates were no longer economically viable, the fund collapsed, and the real estate holdings were seized to pay the accumulated debt.
I’d still call this “too much trade”, even if it’s “too much trade, but also wild mismanagement and corruption”.
The above could easily be the fate of Nigeria in the next couple of decades if things don’t change. Nigeria is by and large similar to this nation – overdependence on oil, mismanagement of proceeds from oil and outright corruption
As Nigerians, we can all do ourselves a huge favour by sharing this until it gets to our leaders, especially the corrupt ones.