Nauru

The purpose of this Country Strategy Paper (CSP) is to provide a framework for EC co-operation with Nauru under the Cotonou Agreement. The framework is based on global objectives of EC-ACP co-operation, Nauru’s own development policy, an analysis of the political and economic situation in the country, and an assessment of the past co-operation programmes of the EC and other donors. It concludes with the proposed EC response strategy of the 10th EDF and an Indicative Programme.

Nauru is an island republic in the South Pacific Ocean, approximately 40km south of the Equator and nearly 4,000 km north-east of Sydney. A raised coral atoll, Nauru is one of the three great phosphate rock islands in the Pacific Ocean. Nauru has a total area of 21 square kilometers and has a small population of around 13,000.

Nauru became a signatory to the Cotonou Agreement in 2000. Under the 9th EDF, the focal sector was renewable energy.

After becoming independent in 1968, Nauru became very wealthy through the exploitation of its mineral resource, phosphate, giving it one of the highest living standards in the Pacific. However the revenues from mining were not properly invested or allocated, and as its phosphate stores began to run out the Government found itself with no financial reserves. Nauru today faces serious economic challenges. Phosphate production has declined dramatically since the 1980s leading to huge loss of revenue. Nauru is therefore in serious trouble and the country is not expected to balance its budget until 2009. An important source of revenue is the granting of foreign fishing licenses, but Nauru has been unable to establish a fishing industry of its own.

Major investment in basic infrastructure is needed. As regards health, diabetes and other lifestyle related diseases remain high. Nauru has the second highest rate of type 2 diabetes in the world, and 75% of the adult population are overweight or obese. Whilst education is free and compulsory to around the age of 15, teaching and student learning standards are low, and the rate of truancy is high.

Key environmental issues, in light of these are: limited access to sustainable safe drinking water and sanitation, inadequate access to sustainable clean renewable energy sources and land degradation. Nauru also has insufficient arable land for its population, and the population has lost many of the fishing and horticulture skills possessed by former generations.

Under the 10th EDF the focal sector is Water and Energy (in particular renewable energy) to be delivered, if deemed feasible and desirable, via a Multi-Country Programme. The A envelope (programmable funds) is € 2.7 million and the B envelope (funds to cover certain unforeseen needs) is € 0.2 million. It is proposed to allocate 85 percent of the A envelope or € 2.3 million for the development of renewable energy. Non State Actors will be encouraged to participate in the implementation of the programme. The remaining 15 percent (€ 0.4 million) will be to establish a Technical Co-operation Facility from which necessary Technical Assistance, studies and other EDF-related activities will be funded.