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ADB’s Work in Nauru

Broadening Opportunities

Coral cliffs in Nauru
Coral cliffs exposed at low tide

Nauru, the world’s smallest island nation, faces acute development challenges including distance from international markets, uncertain sources of future revenue, and inadequate infrastructure. ADB has been a key partner in helping build a more sustainable economic future.

In the 1990s, Nauru was facing a crisis. The royalties the country was earning from the sale of phosphate were declining, and overseas investments had lost value. After welcoming Nauru as a member in 1991, ADB initially provided economic advice and, in 1998, approved the Fiscal and Financial Reform Program, which helped the government improve its finances.

ADB and Nauru worked together in 2012 on the $4 million Public Financial Management Reform Program, ADB’s first grant to the country. The program supported the government’s wide-ranging efforts to improve its fiscal performance, support the private sector, and fund essential government services.

Under the program, the government enlarged its education and health allocations, enabling it to improve its delivery of social services to Nauru’s population. Tax collection was increased by the introduction of an employment and services tax, and procurement improvements helped contain costs, freeing up more resources for health and education.

"For more than 25 years, Nauru and ADB have been working together to strengthen public financial management, raise the performance of state-owned enterprises, improve service delivery, and address infrastructure needs. ADB is an important, long-term development partner to Nauru."

David Adeang
Minister for Finance and Sustainable Development

In addition, banking services were successfully restored after 15 years. After a thorough assessment by ADB of financial services, banking models, and service providers, Bendigo and Adelaide Bank—a major Australian regional bank—was selected. It opened its first customer service agency in Nauru in June 2015.

In 2014, Nauru partnered with ADB to formulate its first National Women’s Policy. The policy promotes equal participation of women in government decision making and leadership, as well as improved women’s health and economic status. It also supports equitable access to education and the elimination of violence against women.

“The policy reflects equal rights and equal participation for women in all areas of life,” says Charmaine Scotty, minister for home affairs.

Increasing connectivity

ADB plans to substantially increase its level of assistance to Nauru over the coming years. This will include strengthening fiscal sustainability and investments in solar power. Infrastructure will also be built, with port development as the centerpiece.

Nauru boy
A boy by the beach

The new, modern port facility being designed as part of the project will include a quay wall, access causeway, upgraded port buildings and container storage, and a strengthened port authority. It is expected to speed up turnaround of vessels, reduce charges associated with failure to load or discharge the ship on time, and improve safety.

ADB will also support Nauru’s participation in a multimillion dollar subregional undersea cable project in 2017, providing the country with an opportunity to enhance internet bandwidth, improve reliability, lower costs, and allow businesses and government to provide online services.

These projects will dramatically improve Nauru’s physical and virtual connectivity, reduce its geographic isolation, and open up new opportunities for its people.

This article was originally published in a special edition of Together We Deliver, which tells 50 stories highlighting the importance of good partnerships in Asia and the Pacific in meeting the complex development challenges of this dynamic region.