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Annual Report 2002 : Pacific

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Nauru

Economic performance

The decrease in phosphate reserves and consequently of mining activity led to a decline in Nauru’s economy in 2002. The life expectancy of the phosphate industry, the major source of income and export, is estimated at less than 5 years, raising concerns for the future of the country. Economic and financial management has so far been unable to provide viable solutions for sustainable economic development.

The draft 2002 government budget indicated a total expenditure close to Australian dollars (A$)75 million and a deficit of A$49 million. In 2001–2002, bilateral assistance from Australia, the major foreign donor to Nauru, amounted to A$3 million. As more than 1,000 asylum seekers were transferred to Nauru, Australia committed a total of A$25.6 million in assistance to the country
for 2001–2003.

ADB operations

Operational strategy:ADB does not have an active program of assistance with the Government of Nauru. The unwithdrawn balance on the 1998 Fiscal and Financial Reform Program was canceled on 2 October 2002 because of overdue loan service payments and lack of loan progress.

Loans and technical assistance: No loans or technical assistance were approved in 2002.

Project implementation: Since joining ADB in 1991, Nauru has received one program loan of $5 million. Cumulative contract awards totaled $2.3 million, and the cumulative disbursements totaled $2.3 million.

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