WHAT does the tiny island nation of Nauru have to do with the world's economies?

TNP PHOTO ILLUSTRATION: SIMON ANG

Maybe a lot. What happened there may offer a glimpse of our own future.

Nauru is a funny little country. It is only 21sqkm, which is about 3 per cent the size of Singapore.

It lacks our strategic location and is stuck in the middle of nowhere, between Australia and Hawaii.

It has only one thing going for it: Phosphate fertiliser.

This was formed from the droppings of migratory birds when they stopped at the island on their way across the Pacific Ocean.

The droppings - called guano - mixed with the island's limestone and accumulated over the centuries.

Other places, like Christmas Island, also have guano-based fertiliser but Nauru's mixes with the limestone in a way that makes it extra pure.

A problem is that mining the fertiliser requires digging out much of the island.

Today, 80 per cent has been extracted and much of the island is gone. The deep mines caused sea water to seep into the pit, reclaiming part of the island.

The 1990s were good for Nauru. A fortune from the phosphate fertiliser went into its national trust fund. But the money wasn't invested well. Much was lost through bad investments or corruption. No one is sure which.

Today, the country is bankrupt. Its airline - Air Nauru - had one plane, which was seized by the lender, the Export-Import bank.

After 2000, things went downhill fast. Now, most of the phosphate has been depleted. Salt water is seeping in. The island is drowning and the money from decades of mining has vanished.

The island's unemployment rate stands at 90 per cent. The population of 14,000 has more or less given up. Incredibly, the entire nation has applied for asylum in Australia.

If it weren't so tragic, it would be funny.

Big picture

Have we, like Nauru, lived the good life for too long? Will we wake up one day to find our oil, minerals, land and water gone?

It is a problem that no country is addressing. All focus on exactly the opposite: How to boost demand. Raise consumption. It is what keeps the economic machine running.

More mining, building, travelling and eating increase the Gross Domestic Product. Less of it reduces GDP.

No nation has ever had a goal of reducing GDP. None has ever tried to push itself into a recession.

It's no surprise. You can't win elections by promising to make everyone poorer.

In a way, it doesn't matter what we do.

Suppose we go slow and extend the lifespan of available resources. Say that we hit ground zero in 11 instead of 10 generations. Does it really matter?

In the vast scheme of things, it is only a fraction of the billions of years the earth will be sitting around with no natural resources. A hundred years one way or the other makes little difference.

The easiest solution may be to do nothing. Simply stick with what we know best: Work hard. Charge ahead. Avoid recessions. Consume more. Produce more.

True, it uses resources to the max. But doing anything else would be a hard sell.

WE ARE ONLY RECENTLY RICH

YEAR : WORLD GDP PER PERSON

10,000BC : $160

0 : $160

AD1800 : $210

AD2000 : $9,000  Back to Columnists