We’ve all heard the cautionary tales of millionaires going broke due to an unhealthy obsession with luxurious vehicles. However a complete nation? Now that’s a flex gone fallacious. That is precisely the story of Nauru, a small island in Micronesia, situated within the southwestern Pacific Ocean.
Nauru went from being one of many richest nations on Earth to an financial saga story, all due to a poisonous mixture of useful resource mismanagement, monetary recklessness, and, sure, a weird obsession with supercars like Lamborghinis & Ferraris.
Nauru: A Nation Constructed on Phosphate Wealth
Nauru is a speck of land barely 21 sq. kilometres in measurement, with a inhabitants of a bit over 10000 — smaller than your common NFL stadium crowd. The island is thought for its coral reefs, pristine seashores, and picturesque views however it has a grim historical past of international exploitation that not many are conscious of.
For a lot of the twentieth century, phosphate mining was Nauru’s golden ticket. It was found within the early 1900s and was extracted and exported by British, Australian, and New Zealand corporations, who made a fortune whereas the locals received the quick finish of the stick.
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However after gaining independence in 1968, Nauru took management of its personal assets. Consequently, the per capita revenue of Nauru grew to become greater than that of oil-rich Gulf nations. It was even dubbed the “smallest and wealthiest unbiased democracy on this planet.” The island grew to become a tax-free paradise the place the federal government footed the invoice for every thing — from healthcare to abroad training. It was like profitable the lottery and instantly splurging on a fleet of supercars.
Which, because it seems, is precisely what they did.
Luxurious Automobiles in a Nation with One Primary Highway
If there’s one factor that actually outlined Nauru’s financial downfall, it was their impractical obsession with luxurious vehicles. Right here’s the kicker: the island has only one important street, and the nationwide velocity restrict is an informal 25 km/h (15 mph). But, Nauruans have been importing Ferraris, Lamborghinis, and Vary Rovers like they have been stocking up for an underground avenue racing league.
It will get higher (or worse, relying on the way you take a look at it). The native police chief himself purchased a Lamborghini, solely to grasp he bodily couldn’t match into the driving force’s seat. You’ll be able to’t make these things up.
Ultimately, as cash dried up, these once-pristine machines have been deserted, left to rust below the Pacific solar. At this time, they function eerie symbols of a time when the Nauruans believed they have been dwelling in The Quick and the Livid: Island Version.
Reckless Spending Choices
The posh automotive craze was simply the tip of the iceberg in its race towards chapter. The federal government, excessive on its newfound wealth, began making one questionable monetary choice after one other. One of many highlights was Nauru buying a fleet of Boeing 737s, regardless of having zero justification for an airline of that scale.
One other problematic choice was making all public companies fully free. No taxes. No payments. Want medical therapy? The federal government would fly you 2500 miles to Australia, all bills paid. Greater training prices for college students finding out in Australia have been additionally absolutely coated by the state. Whereas these initiatives have been well-intentioned, they have been clearly unsustainable in the long term.
After which there have been investments that aged like milk. Nauru poured its wealth into abroad actual property, luxurious resorts, and high-risk investments, most of which flopped spectacularly. By the early 2000s, the phosphate reserves had been practically depleted, and actuality got here crashing down. By 2022, Nauru’s GDP per capita had fallen to round $12,000 USD, in comparison with over $50,000 USD in its golden years.
With no monetary backup plan, the federal government was pressured to depend on international help, primarily from Australia, in alternate for housing asylum seekers within the controversial Nauru Regional Processing Heart which was a detention facility run by the Australian authorities. At this time, the island’s financial system nonetheless depends totally on international help and fishing.
A Misplaced Alternative
If Nauru’s story wasn’t already unusual sufficient, right here’s a plot twist. In 2022, the notorious “Crypto King” Sam Bankman-Fried apparently deliberate to purchase the island. His imaginative and prescient was to make Nauru into an unique billionaire wonderland the place he and his inside circle may experience out potential doomsday eventualities in luxurious.
Bankman-Fried reportedly invested over $130 million USD (~204 million AUD) right into a mission for “Humanity” on the island. Had his plan been executed, Nauru’s streets might need been filled with much more luxurious vehicles, although this time, they’d have most likely been Teslas.
Bankman-Fried doubtless had American historical past on his thoughts — akin to when America purchased Alaska from Russia in 1867. If America may purchase a territory, why couldn’t an American purchase a rustic? Apparently sufficient, this concept of shopping for territory from a international nation remains to be happening as US President Donald Trump expressed curiosity in buying Greenland from Denmark. Cheers to that.
At this time, with Bankman-Fried behind bars, the dream of “Crypto Island” stays simply that — a dream. As for Nauru, the place Lamborghinis as soon as roared (effectively, crawled at 15 mph), all that is still are rusted relics and lingering financial remorse.
