🇳🇷 Nauru

Nauru is the world's third-smallest country by area (21 square kilometers) and smallest republic, with just 12,500 people and a GDP of about $150 million. The island was once one of the richest countries per capita in the world thanks to phosphate mining — in the 1970s and 80s, Nauruans had higher per capita income than Saudi Arabia. But the phosphate ran out, the trust fund was mismanaged, and the country went bankrupt. About 80% of the island's surface has been strip-mined, leaving a moonscape of coral pinnacles. Nauru now hosts an Australian offshore immigration detention center, which provides most of its revenue.

Australian detention center payments, fishing licenses, and residual phosphate exports are the main revenue sources. The country has no tourism industry to speak of. Nauru briefly became a money-laundering hub in the early 2000s, leading to international sanctions. The country has one of the highest obesity rates in the world (over 60% of the population), linked to the shift from traditional to imported processed food. There's essentially no private sector.

Nauru's phosphate wealth was so mismanaged that the country invested in a London musical about Leonardo da Vinci that flopped spectacularly, losing millions. The island has no rivers or streams — all fresh water comes from desalination or rainwater collection. Nauru is one of the few countries with no official capital city — government offices are in the Yaren district.

Nauru is a cautionary tale about resource depletion and mismanagement. The Australian detention center keeps the economy alive, but it's not a foundation for anything. The country's options are extremely limited.