Nauru Phosphate Royalties Trust

Nauru Phosphate Royalties Trust

The Nauru Phosphate Royalties Trust (NPRT) was a sovereign wealth fund developed by the government of the Republic of Nauru in which the government invested money from the state owned mining company, Nauru Phosphate Corporation. This money was then re-invested in a real estate portfolio, among other things, to provide the government with a reliable national income following the depletion of minable phosphates on the island. Although at one time successful, mismanagement and corruption later essentially bankrupted the fund, thus virtually bankrupting the entire Republic.

Responsibility for the Trust rests with the Ministry for the Nauru Phosphate Royalties Trust, a Cabinet position. At present, the office is exercised by President Marcus Stephen himself.[1].

Contents

Beginnings

In 1970, the newly independent government of Nauru purchased the mining rights to the islands lucrative phosphate mines from their previous colonial ruler, Australia, for AU$21 million.

The mines brought considerable wealth to the tiny island of Nauru, with the industry bringing in around AU$100-120 million annually. Annual government expenditures amounted to around AU$30 million, thus giving the republic around AU$80 million per annum. This surplus was then added to the trust.

The prime years

At the peak of the trust's wealth, the NPRT had investments totaling AU$1 billion. These investments included properties in Australia, the Philippines, Guam, and the USA. A partial list of international investments includes:

  • Fiji: The Grand Pacific Hotel
  • India: Paradeep Phosphate
  • New Zealand: Auckland Sheraton Hotel, Roturua Sheraton Hotel
  • Philippines: Manila Pacific Star Hotel, Philippines Phosphate & Fertilisers
  • United States: Pacific House (Washington), Singer Building Development (665 acres - Houston), Hillside Property (600 acres - Oregon)
  • Hawaii: Nauru Hotel
  • Guam: Pacific Star Hotel
  • United Kingdom: 3 Chesham Street (London)
  • Samoa: Properties at Vaitele and Sogi
  • Australia: Nauru House (Melbourne) -- (this development was known as the "jewel in the crown" of Nauru's overseas properties)

Mismanagement

The great wealth of the tiny pacific island led it to be nicknamed the "Kuwait of the Pacific". With this great wealth, citizens and government officials flaunted it, believing it to be an endless supply. This led to high external representation and excessive official overseas travel (that included golf in the Bahamas) which blew out budgets year after year so that the government began to borrow money to supplement its huge spending. The public service had over 1,500 employees (in a country with a population less than 10,000) and the government ran deficits of AU$10 million in the 1990s.

Eventually, more than AU$200 million was borrowed. In order to consolidate this debt and pay interest, the government took out an AU$240 million loan from General Electrics Capital Division, which was levied against the nation's international real estate portfolio.

Downfall

The virtual end of mining on Nauru paired with running budget deficits made it very difficult for Nauru to pay its debts. International creditors were not receiving payments, then seizing rights to Nauru's entire real estate portfolio, and even seizing the sole aircraft of Air Nauru.

"The paradox"

In 1962, well before Nauru took over the phosphate industry and achieved independence, the United Nations offered a cautious note:

The problem of Nauru presents a paradox. The striking contrast is between a superficially happy state of affairs and an uncertain and indeed alarming future... But this picture of peace and well-being and security is deceptive. Indeed it is a false paradise. For these gentle people are dominated by the knowledge that the present happy state of affairs cannot continue.

See also

References

Further reading

  • United Nations (1962) Visiting Mission to the Trust Territories of Nauru and New Guinea. (New York, U.N.)

External links


Wikimedia Foundation. 2010.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • Nauru Phosphate Royalties Trust — Der Nauru Phosphate Royalties Trust (NPRT) (Nauruische Phosphatgewinnverwaltung) ist eine nauruische Gesellschaft, welche 1968 gegründet wurde, um den großen Gewinn des Phosphatabbaus auf Nauru zu verwalten. Der Eigentümer der NPRT ist die… …   Deutsch Wikipedia

  • Nauru Phosphate Corporation — The Nauru Phosphate Corporation (NPC) was a government owned company controlling phosphate mining in Nauru, now known as the Republic of Nauru Phosphate, or RONPhos. Contents 1 Failed investments 2 RONPhos 3 See also 4 References …   Wikipedia

  • Nauru Phosphate Corporation — Logo de Nauru Phosphate Corporation Création 1970 Disparition 2005 …   Wikipédia en Français

  • Nauru House — Localisation Localisation Melbourne Coordonnées …   Wikipédia en Français

  • Nauru House — General information Type office Location Melbourne, Australia …   Wikipedia

  • Nauru — This article is about the island country. For the Tanzanian village, see Nauru, Tanzania. Republic of Nauru Ripublikee Naoero …   Wikipedia

  • Nauru — 0° 31′ 56″ S 166° 55′ 58″ E / 0.5322, 166.9327 …   Wikipédia en Français

  • Nauru — Ripublik Naoero (nauru.) Republic of Nauru (engl.) Republik Nauru …   Deutsch Wikipedia

  • Nauru — Na|u|ru; s: Inselstaat im Pazifischen Ozean. * * * Nauru,     Kurzinformation:   Fläche: 21 km2   Einwohner: (2000) 12 000   Hauptstadt: Yaren   Amtssprachen: Nauruisch, Englisch   …   Universal-Lexikon

  • Cabinet de Nauru — Nauru Cet article fait partie de la série sur la politique de Nauru, sous série sur la politique …   Wikipédia en Français

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”