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Nick Squires

Nauru's economy hinges on refugee camp slated to close
Its sole natural resource is almost exhausted, it once squandered a fortune on a West End musical about Leonardo da Vinci and its people are among the least healthy on Earth.
Just when it seemed that nothing else could go wrong for the tiny Micronesian republic of Nauru, Australia's new Labor government is planning to close its biggest money-spinner, a controversial refugee detention centre.
The centre, to which Australia consigned hundreds of unwanted asylum seekers over the past six years, has injected at least A$144 million (HK$987 million) into Nauru's  economy, representing 20 per cent of revenue.
A further A$123 million in aid flowed from Australia in what critics described as 'an unmitigated bribe' to maintain Nauru's support for the detention camp.
Its imminent closure - promised by Prime Minister Kevin Rudd  - has plunged Nauruans into uncertainty about the economic viability of their 21 sq km   island.
Sweltering in the South Pacific just below the equator, it has no social security system and many islanders already struggle to make ends meet.
The government of pint-sized President Marcus Stephen  - a Commonwealth Games gold-medallist in weightlifting - fears  Australia  will leave his country high and dry.
'It will leave us in a big hole financially,' Mr Stephen, 38, said last month.  'I hope they acknowledge that we put our hands up when Australia  needed assistance.'
Canberra last month granted refugee status to a handful of  Myanmese asylum seekers who had been on Nauru for months.
A group of 72 Sri Lankans have also had their asylum applications approved, with a further 11 still awaiting their fate. Once the last refugee leaves, the detention centre will be shut.
One immediate impact will be a loss of jobs. About 100 Nauruans work in the  centre as cooks, guards and administrators, and their salaries support upwards of 1,000 relatives in  extended families.
'Nauru faces major economic problems. It's very unlikely the Rudd government will provide the same level of aid as the Howard government did over the last six years,'  said Nic Maclellan,   the co-author of a recent Oxfam report on Nauru.
Thirty years ago, Nauru rivalled Brunei as the richest country per capita in the Asia-Pacific region, thanks to its rich reserves of phosphate, exported  worldwide to make fertiliser.
The revenue was invested in a trust fund and used to buy property from Fiji to Australia and Britain. But  millions of dollars were squandered through  corruption and hare-brained schemes, such as backing the short-lived da Vinci musical in London in the early 1990s.
'Most of the property portfolio has now gone,'  Mr Maclellan said. 'They sold off the family silver.'
Decades of mining have left much of the island a sun-baked moonscape where nothing will grow.  Many of the island's 10,000 inhabitants idle away their time watching television and eating high-fat snacks and imported tinned food, a diet that has given Nauru one of the highest diabetes rates in the world.
'Nauru is a failed state,' said Kate Gauthier  from the lobby group A Just Australia,  which campaigned for the closure of the detention centre.
'We've made them dependent on Australian aid. There needs to be put in place a long-term programme of development which will create a more sustainable economy.'
Nauruans argue that they were there for Canberra when John Howard's  conservative government  cast around the South Pacific looking for a country willing to host the detention centre for boat people trying to reach Australia.
Now, islanders are appealing to Australia not to abandon them.  They  anxiously wait to see what the  new government has in store for them.
Detention money-spinner
The total amount Australia's  detention centre has injected  into Nauru (in Australian dollars) $144m



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