Nauru. In early February, general elections were held to
stave off a time of political instability. According to
Countryaah, three presidents had been deposed after a series of
distrustful votes in parliament since November 1996. The
newly elected 18-head parliament appointed Kinza Clodumar as
Nauru has no tax system. Government expenditures and
investments are made from a large fund, which is funded by
the revenue from the extraction of phosphate. Education,
health care and housing are free.
Hammer De Rount dominated the country's political scene
from its independence until 1976. During this period he held
the government, but lost it in 1976 to Bernard Dowiyogo of
the Nauru Party. In 1978, De Rount again regained the post.
At the 1986 election, a woman was elected to parliament for
the first time since independence.
Bernard Dowiyogo regained the presidential post in 1989.
During his reign, a lawsuit was launched against Australia
for the rampant extraction of phosphate over 50 years. In
1991, Australia recognized that Naura was entitled to claim
damages, and the UK and New Zealand agreed with Australia to
pay about $ 100 million to Nauru.
That same year, Nauru had a government budget deficit for
the first time. It was estimated that if extraction
continued at the same pace, resources would be depleted by
the year 2000.
In 1995, Lagumot Harris was elected head of government,
and the government now initiated investments in aircraft and
in the country's fishing fleet. At the same time, the
government was aiming to reduce the government deficit by
reducing government spending, raising taxes, freezing
workers' wages for a two-year term, closing some of the
country's consulates abroad and privatizing a number of
But the fall in world market prices of phosphate, the
high cost of maintaining the state airline and investments
in non-profit areas caused serious problems in the economy.