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Nauru's new reformist government worked in 2005 to save a nearly bankrupt country and introduce reforms to promote political stability and curb official corruption. The country's removal in October from an international blacklist for noncooperation in stopping money laundering is expected to help bring in foreign investment and assistance.
Nauru, located 1,600 miles northeast of New Zealand, was a German protectorate from 1888 until it was seized by Australian troops during World War I. The League of Nations granted a joint mandate to Australia, Britain, and New Zealand to govern the island in 1919. The Japanese occupied Nauru during World War II. In 1947, the United Nations designated Nauru a trust territory under Australia. Nauru gained independence in 1968, became an associate Commonwealth member in 1969, and joined the United Nations in 1999. The threat of rising sea levels for this nation of 10,000 people is sufficiently real that the Australian government has considered offering Australian citizenship to Nauruans.
Phosphate, once plentiful and mined by Australia for use as fertilizer, is almost entirely exhausted, and the mining industry has left behind severe environmental problems. More than 80 percent of this 8-square-mile island republic is uninhabitable. At one time, phosphate mining made Nauru one of the richest countries in the world in per capita income, but financial mismanagement by the government squandered much of this wealth. A trust fund built on phosphate mining royalties is likely to be depleted in a few years. Nauru is highly dependent on foreign aid, and the country is also saddled with a large foreign debt relative to its size.
Recent administrations have tried different ways to generate income-includ-ing passport sales and offshore banking operations-but with varying results. Since 2001, Nauru has served as a refugee-processing and detention center for Australia in exchange for millions of dollars in financial aid; the country provides temporary housing for hundreds of mainly Middle Easterners seeking asylum in Australia. Nauru also obtained U.S. agreement for additional financial aid in exchange for the establishment of an intelligence listening post in the country. The country switches diplomatic recognition between China and Taiwan to secure the most financial aid from the two competitors. Nauru switched recognition from Taiwan to Beijing in July 2002. In May 2005, Nauru again broke ties with China and restored relations with Taiwan.
Intense political rivalry has toppled several governments and brought the government to a virtual standstill. In June 2004, a no-confidence vote ousted President Rene Harris and his cabinet, and parliament chose Ludwig Scotty as his successor. The legislature's deadlock over the budget caused Scotty to dissolve parliament in early October 2004, declare a state of emergency, and call for a new election. The October 23, 2004, vote produced a clear parliamentary majority for Scotty and gave his government a strong mandate for tough reforms to restore the island nation's economic health.
As part of the reform, all public servants must undergo a complete review of employment levels and pay scales. Rents paid to owners of land leased to the government were cut by three-quarters; a new 10 percent import duty was applied to most goods; import tariffs on beer, cigarettes, and luxuries were increased significantly; and almost all government fees and charges were raised. Government investigations also began to trace $1.3 million of missing funds that is part of $7.4 million generated from passport sales, as well as to ascertain the whereabouts of 151 missing passports. The government launched a constitutional review in January 2005 to assess whether amendments are needed to improve political stability, including stricter requirements for the use of no-confidence votes to dismiss governments.
Vassal Gadoengin, speaker of the parliament, died of a heart attack in December 2004. His sudden death raised public concern that political instability might return if the opposition called for another no-confidence vote. However, Gadoengin was replaced by Valdon Dowiyogo, a son of former president Bernard Dowiyogo.
Nauru was placed on an international blacklist for failing to stop money laundering activities. Removal from this list in October 2005 is expected to relax restrictions on the use of funds from donor countries and bolster the financial sector. Nauru has closed some 400 offshore banks that had only virtual operations in the island state.
Citizens of Nauru can change their government democratically. The 18-member unicameral legislature is elected from 14 constituencies by popular vote for three-year terms. Members of parliament choose the president and vice president from among themselves. The president is the head of state and chief executive. Suffrage is universal and compulsory for all citizens 20 years and older.
As an offshore banking center, Nauru has been implicated in international money laundering. The country was also under international pressure, particularly from the United States, to crack down on passport sales when two alleged al-Qaeda operatives were arrested in Malaysia carrying Nauruan passports. In 2003, the government announced that it would close its offshore banking operation, suspend its investor passport program, and update its banking laws and financial sector legislation. Political rivalries, however, have kept the government from moving forward with any of these plans. Nauru was on the international Financial Action Task Force blacklist for money laundering until it was removed in October 2005. Nauru was not ranked by Transparency International in its 2005 Corruption Perceptions Index.
There have been no reports of government monitoring or censorship of the media. The country has no daily news publication, but foreign publications, the majority in English, are freely admitted and widely available. The government publishes occasional bulletins, and the opposition publishes its own newsletters. The government owns and operates Radio Nauru, the only radio station, and Nauru TV. A private television station provides sports news coverage. Internet connection began in 1998, and the government is the sole provider of internet services. Internet use is constrained by cost and the lack of reliable infrastructure outside the capital. Nauru's communication system is fragile; television service was unavailable for nearly two months in 2003 when a frequency amplifier broke.
The constitution provides for freedom of religion, and the government generally respects this right in practice. There were no reports of government suppression of academic freedom. There are two primary schools, a secondary school, and a technical school. The government provides scholarships for education overseas.
The government respects the rights of assembly and association in practice. There are a few advocacy groups for women, development-focused groups, and religious organizations. No trade unions or labor protection laws exist in this largely agriculture-based, subsistence economy.
The judiciary is independent, and defendants generally receive fair trials and representation. The Supreme Court is the highest authority on constitutional issues, and the parliament cannot overturn court decisions. Appeals in civil and criminal cases can be lodged with the high court of Australia. Traditional reconciliation mechanisms rather than the formal legal process are used in many cases, usually by choice but sometimes under communal pressure. A civilian head controls the 100-person police force. Police abuse is rare; however, foreign workers complain that the police are slow to act on cases filed against native employers. Nauru has no armed forces; Australia provides defense protection under an informal agreement.
Strict immigration rules govern foreign workers. Those who leave Nauru without their employer's permission cannot reenter, and immigrant workers must leave Nauru within 60 days of termination of employment.
The law provides equal freedom and protection for men and women, but societal pressures limit the ability of women to exercise these rights. Sexual harassment is a crime, though spousal rape is not. Domestic violence is frequently associated with alcohol abuse. Most incidents are reconciled informally within the family or by traditional leaders, although the police and judiciary generally respond to cases filed.