Opinion & Commentary
Fortune lost to betrayal
THE older ones among you will remember my first arrival in Nauru in 1963 after I had negotiated for you the world price for phosphate, making you one of the wealthiest communities in the world.
I came to Nauru again in 1968 after five years of helping you to achieve your political ambitions to watch your independence celebrations. Nauru House was my concept for a symbol of your achievements. Your trust funds were to follow the example of Kuwait, which has steadfastly grown wealthier and wealthier by saving and investing its oil revenues wisely.
I watched with increasing dismay, first from the US where I was working for the World Bank and then from Australia, as your vast income was blown away in extravagant expenditures and poor investments. In 1968, I estimated that each Nauruan family was worth $500,000 in trust funds. Between 1968 and 2002, your phosphate earned $3.6 billion. Spent wisely on running the island, saved and invested, each Nauruan family would now be worth at least $4 million. Instead, your community is bankrupt because of gross waste and badly mismanaged investments skimmed by corrupt financiers who promised unrealistically high returns. Your leaders' strategies, including money laundering for corrupt Mafiosos and passport sales, gave some people high incomes but gave your community the reputation of a "rogue" state under the US Patriot Act.
What does the future hold? Can anything be saved for your children and grandchildren?
Tomorrow's election gives you two options: You can again vote for the leaders who have betrayed you not only by wasting all your wealth but by failing to give you decent standards of education and health. These leaders' promises are as empty now as they always were. By continuing their grossly extravagant ways, refusing to pass a budget that points a way to a decent future, they are betraying you again. Or you can vote for those who will pass the budget quickly and, instead of listening to corrupt financiers, will take sensible advice to make a decent life for all Nauruans.
Australia has contributed $20 million in aid and the staff to help you get on your feet. If you reject the budget, you are rejecting that aid. You cannot expect hard-working Australians to pay taxes to maintain a corrupt elite on Nauru while most Nauruans live in poverty and sickness. You will become beggars dependent on grudgingly given aid.
Is there a future for Nauru? "Yes" if Nauruans take these steps:
A budget has to reflect realities. Like any family, Nauru cannot spend more than it earns.
The Constitutional Review Convention has to get to work immediately to transform Nauru into a viable community by stripping down extravagant political and public service structures and abandoning international memberships. The review cannot waste time like a royal commission of the House of Lords as it has been doing but must get expert advice and parliament has to act on it.
Nauru has to find out its exact financial situation. This needs specialised bankruptcy accountants – not public servants – to see where your wealth has gone and if any can be recovered. Whatever funds are left should be distributed to families to re-establish the private property rights that were practised on Nauru in pre-colonial times. Taxes should fund essential public services. The public purse has to cease to be a milch cow.
If Nauru becomes viable, it will be able to consider whether it wants to continue to be an independent, albeit isolated, community, or whether it would like to be associated with a country such as New Zealand, Fiji or Australia, or join other small Pacific islands in a federation. Such a step would relinquish absolute sovereignty but would bring the benefits of citizenship of a prosperous economic unit.
Professor Helen Hughes is a senior fellow at the Centre for Independent Studies.
