Nauru

Nauru The world's smallest republic, the Pacific island state of 21.3 km² lies west of Kiribati and south of Micronesia. It was part of the German Marshall Islands protectorate until World War I, after which it came under joint British, Australian, and New Zealand administration under a League of Nations Mandate. The three countries divided up amongst themselves the profits from the exploitation of one of the world's richest phosphate deposits. During World War II it was occupied by Japan (1942–5), but thereafter reverted to its joint administration, now as a UN trust territory. From 1951, local government was gradually introduced and profits from phosphate exploitation shared, until Nauru gained independence on 31 January 1968. In 1993, Australia agreed to pay $A107 million in compensation for environmental damage caused by its phosphate mines. The island faced an existential crisis from the early twenty-first century onwards, when the depletion of its reserves of phosphates, which had accounted for almost 100 per cent of its exports, was forecast. The government tried to stem imminent economic decline for the country's 10,000 citizens by attracting offshore bank deposits through the institution of liberal banking laws. As a result Nauru came under pressure, as it had become a major centre for money laundering by the Russian Mafia and other organizations.