Win or lose by how we choose

The other day I came across a startling article about the world’s smallest island nation called Nauru which is only eight-square miles in area. It is estimated to have a population of 12,000 people. The article discussed how Nauru, only a few years ago, had the highest per capita income in the world but today is literally bankrupt. How could this happen?

As I read the article I recalled that the tall office building in Susupe where the 360 Restaurant is located was formerly owned by the government of Nauru. Then I recalled that one of the largest hotels in Guam was also owned and operated by that government. That hotel has been sold off.

I also learned that the huge Nauru Twin Towers Condominium in Honolulu was also owned by them. That too is sold. Melbourne, Australia, had a towering building called Nauru House. That has been sold also. The Mercure Hotel in Sydney’s Railway Square is gone. The Royal Randwick Shopping Center and the Downtowner Hotel along with the Savoy Plaza have also been sold off. The Nauru government also was forced to sell off its five airplanes. Nauru lost all of its investments and became bankrupt in a few years.

Nauru was a trust territory under the control of Australia after the Second World War. But it was granted self-government in 1966 and full independence Jan. 31,1968. In 1990/91, Nauru had assets estimated at $1.3 billion but today that amount has been reduced to an estimated $300 million. In the ’70s and ’80s, it had the world’s highest per capita income. All this huge loss was caused by poor investment decisions and other bad management by the government.

In plain words, the small island nation of Nauru once dubbed “Pleasant Island” by its first white visitor in 1798, is now virtually bankrupt.

“Nauru was once a tropical paradise, a rainforest hung with fruits and flowers, vines and orchids. Now thanks to human avarice, greed, and short-sightedness is mostly a wasteland.” This is a direct quote from the finance Minister Kinza Clodumar in the early 1990s. What happened?

Phosphate mining gave Nauru a high per capita income, but now the island after strip-mining is about 80 percent uninhabitable. Foreign laborers were imported to do the mining and other work. The local people were flush with money from royalties gotten from the sale of the phosphate. They didn’t want to work. During this heavy mining period little thought was given to what would happen once the phosphate was gone. No attempt was made to rebuild the land after the strip mining of phosphate. They didn’t plan for the future

Nauruans literally grew fat on their earnings. People imported tons of Western foods disregarding any health concerns. As a result they have become the most obese people in the world with 90 percent of its people overweight. It also has the world’s highest level of type 2 diabetes with more that 40 percent of its citizens afflicted as a result of lack of exercise and improper diet habits. Many of the people are suffering from renal failure and heart disease. The life expectancy for males is 58 years and for females is 65.

The size of its budget deficit for the last few years is unknown. Basically all the wealth it generated was squandered in a number of disastrous investments. Today 95 percent of its people work for the government. The government is used as a welfare state. Unemployment for the remaining people is over 90 percent. The people have learned no skills and are not well educated. In their period of prosperity the average citizen was worth about $500,000. Today the average annual per capita income is $2,038 or about $169 per month!

The country has no reliable commercial banking service. It is plagued by frequent fuel, power, and water shortages while the cost of living has increased drastically. One of the ventures the island of Nauru tried was to act as a detention center for detainees who were trying to enter Australia illegally. This venture caused many problems between the two countries.

However, these detainees taught the Nauruans that by working hard and a little ingenuity, it is possible to grow food despite water shortages on the very limited availability of arable land. The asylum seekers have miraculously grown oranges, pineapples and vegetables. As result many of the people have now turned to subsistence farming and fishing.

For a period of time Nauru had about 400 shell banks which were used for money laundering. In 1998, some $70 billion dollars was deposited by Russians seeking to hide their money as their economy collapsed. Nauru became the center of the world for money laundering. Finally, it was put on the blacklist by the U.S. Treasury and by other countries putting an end to this activity.

In desperation it then began to sell passports for $15,000 to $35,000 each. This too was put a stop. Then Nauru opened a detention center for processed asylum seekers that had tried to enter Australia illegally. Today it is playing games with Taiwan and Mainland China by selling off its fishing rights and trying to see how much money it can borrow from each to survive.

Australia was the closest ally of Nauru helping it to market its phosphate, lending money, and by other assistance. It helped Nauru build its fortune, but today that relationship is quite strained between the two countries. Here is a quote from a news columnist that sums up Australia’s feelings and concerns:

“The failure of an entire country raises profound questions for Australia. As it became poorer, Nauru sought to sell off its sovereignty—its fishing rights, satellite rights, passports and banking licenses. It was even bought off by Australia as a jail for refugees.
Can Australia now provide the ultimate bail out? Can we allow the Nauruans free passage to this country, overturning our immigration policy and, ironically, opening a door that was closed to those in its detention center?”

By now you probably are wondering why I am writing about a tiny country called Nauru and what does it have to do with us and the CNMI. The events that caused the small country of Nauru to become bankrupt are obvious. But we should read closely what the Nauruans did to their country and to themselves through greed and lack of planning. Perhaps we can find a lesson for ourselves. Have we mined—out our “phosphate?” What plans do we have to rebuild our economy? How are we planning our future?

Have we considered what would happen if our relationship with the United States were to become ruptured? I hate to think what would happen to us if Washington were to reconsider its relationship with us. This thought has been on my mind for a long time. The Nauruans thought the party would never end.

One of the tragedies of life is that many times we fail to appreciate a relationship until we lose it. Try as hard as we will to regain it, the relationship is never quite the same. Let us think about what we are doing in this drastic time of change. Do we want confrontation or cooperation? Our future depends on the choice we make. In life we win or lose by how we choose.