Tragic downfall of ‘cursed’ richest nation
When you hear the word "Nauru", most Australians think of little more than refugees and riots.
But not too long ago, the once idyllic nation was actually the world's wealthiest - before its staggering and surprising fortune was squandered, leaving the republic essentially bankrupt.
Phosphate - a valuable substance commonly used in fertiliser - was first discovered on Nauru around 1900, when it was under German rule.
It didn't take long before the resource was "exploited" by the Pacific Phosphate Company and then the British Phosphate Commission after World War 1, when it was administered by Australia, New Zealand and the United Kingdom.
According to the Australian National University's Dr Stewart Firth - an expert in the Pacific region - phosphate was dug up and "spread across fields in Australia and New Zealand" in a "very exploitative arrangement" which barely benefited locals.
Then, in 1968, Nauru - which is just 20.98 km² and located 4000km northeast of Sydney - gained independence, meaning it had control over its resources for the first time.
Dr Firth said what happened next was an "extraordinary" cautionary tale of what can happen when an economy depends on just one resource - and unscrupulous leaders.
The phosphate trade was so lucrative it gave the island nation - which now has a tiny population of just 13,000 people, according to Australia's Department of Foreign Affairs and Trade - the highest GDP per capita in the world.
Dr Firth said for decades, profits were placed into a national trust fund for future use, which was worth around $AU1.5 billion in the 1980s when the population hovered at around 4000.
While locals weren't living "luxurious lives", they did receive thousands of dollars in government handouts each year.
But he said the phosphate fortune was "terribly mismanaged" by the government.
"I can remember the way elections were won in Nauru in the 1980s and 90s - politicians would just say 'we'll give you $X dollars' just because they were Nauruans, and when you give people money (they vote for you)," he told news.com.au.
Dr Firth also recalled an anecdote of how a pilot acquaintance who used to work for Nauru's national airline used to collect his salary.
"He used to go to the president's office in Nauru and he would turn around, open the safe, pull out wads of notes and say, 'I think this is enough'. It's a symbol of the lack of accountability," Dr Firth said.
"In the 1990s they thought they had all this money but it was terribly mismanaged."
Dr Firth also painted a damning picture of years of extravagant and dodgy investments by leaders.
"They invested a lot in real estate - there was a Nauru House in Melbourne that was 52 storeys high and another in Hawaii but in the end it all had to be sold off because the whole thing became insolvent - they were also doing things like investing in a West End play in London that flopped," he explained.
"It's not necessarily because it is a small country in the Pacific, because others (like) Samoa and Tuvalu are relative success stories - it was just terribly bad leadership.
"The next part of the terrible story is that they decided to go into offshore banking in the most shady sense you can imagine - one estimate was $70 billion worth of Russian mafia money was put through Nauru in one year."
Dr Firth said it took an Organisation for Economic Co-operation and Development financial taskforce to finally crack down on Nauru and shut down its "illegal offshore banking", and that in the end, Nauru was essentially "bankrupt".
As the money dried up, so did the Nauruan standard of living - but then, in 2001, a "crisis over refugees" erupted in Australia.
It prompted former Prime Minister John Howard to introduce the Pacific Solution, a government policy of transporting asylum seekers to detention centres on Pacific Islands instead of the Australian mainland.
Dr Firth said "broke" and "desperate" Nauru volunteered to be part of it, and that it had been a "real lifeline" for Nauru ever since, representing almost half of the republic's revenue and improving locals' living standards.
"One thing Australia has done to try and bring a bit of accountability to this disaster together with Nauru is to establish an intergenerational trust fund for the people of the republic of Nauru, and under this the government makes annual contributions … the whole idea is to make the place at least halfway financially feasible by the 2030s," he said.
Dr Firth described Nauru as having the "world's strangest economy" and said while some of the phosphate riches had helped locals, the rest was "siphoned off".
"When you think of all the things the money could have been spent on, it's really pathetic. At one point, they even had to teach people how to grow food again because it had all been lost," he said.
Today most of the phosphate is gone, although some small-scale mining still exists, but the legacy of exploitation still remains.
Nauru has one of the highest rates of obesity and diabetes in the world, for example, after the traditional island lifestyle and diet was abandoned in favour of imported food.
Its wealth has also plummeted, meaning it is now among the poorest countries - and according to the New York Post, some locals believe the gods were so angry by the environmental destruction of Nauru they cursed locals to experience poverty and hardship forevermore.
But if you're thinking of adding Nauru to your holiday bucket list, think again. Dr Firth said it was "very hard" to get into Nauru and that those who were allowed in faced a "gigantic visa fee".
In fact, Aussie visitors to the nation are so rare the Australian government's Smart Traveller website does not include information on Nauru.
And finding more information on the country is notoriously difficult.
News.com.au contacted Australia's Department of Foreign Affairs and Trade to request details on visa requirements and the number of Australian visitors to Nauru, but was told it was a matter for the Nauruan government - which did not respond to a request for comment.
The Department of Home Affairs also directed the inquiry to the Australian Bureau of Statistics, which confirmed just over 5000 Australians had visited Nauru in 2019.
That's just a fraction of the 1.44 million Aussies who travelled to New Zealand in 2018-19, with 1.31 million heading to Indonesia in that period and 1.07 million to the US.
While Nauru has been taking some tentative steps towards economic recovery, Dr Firth said there was a new threat looming.
In 2013 a riot broke out at a Nauruan detention centre which caused $60 million in damages and led to 200 detainees escaping, with several hospitalised with injuries.
In 2015 the government tightened its criminal code and made statements deemed to threaten public order an offence which carried a jail term of up to seven years, which many have described as a crackdown on free speech and freedom of expression.
"Politically, it has shifted towards a much more authoritarian phase in my view," he said, adding that Australia's reliance on the nation for regional processing meant it was far less likely that we would criticise the Nauruan government for any missteps.