Nauru leader says nation's future insured with growing trust fund

By Mar-Vic Cagurangan

Nauru President David Adeang said the tiny Pacific island nation’s future is secured with the Nauru Intergenerational Trust Fund, which is currently inching toward a net value of close to half a billion dollars.

David Adeang

“Our government is determined not to see ourselves as victims, which is why we are positioning Nauru as a Pacific leader in financial stability and innovation,” said Adeang, the fund’s chairman.

At last week’s quarterly meeting in Brisbane, Nauru officials reported that the fund has earned $420 million since its establishment in 2015.

Adeang, who initiated the sovereign wealth fund when he was the finance minister, said the trust fund’s performance vindicated Nauru’s strategy to future-proof its economy.

“No one should underestimate the country’s economic turnaround or the importance of the fund to the current and future generations,” states a press release from the president’s office.

The trust fund is designed to provide a permanent income stream to fund government services and nation-building initiatives.

“The fund's value is forecast to hit $1 billion by 2034, and even before this if annual returns and contributions increase,” Adeang said.

 “Our government will channel the revenue from the fund into education, health, the environment and infrastructure to enhance the standard of living and quality of life for the people of Nauru,” he added. 

The trust fund’s original purpose and goals were to help stabilize the nation’s economy and minimize Nauru’s current reliance on donor funding.

While other nations that form the trust’s committee had contributed to the fund, Adeang said more than 75 percent of the contributions were domestic.

Nauru, with a population of 11,947, has a $160 million economy driven by the sale of fishing rights in its territorial waters and revenue from the Regional Processing Center.

These two industries have been Nauru's primary sources of revenue following the decline of the phosphate mining sector due to depletion of the nation’s mineral deposit.

The International Monetary Fund, however, has recommended that Nauru diversify its economy, noting that the Regional Processing Center is unpredictable and may not be a reliable source of revenue growth in the medium to long term.

“When I established this in 2015, I recognized that for too long our nation had been looking only at the present and was not learning from our past economic mistakes,” Adeang said. “But putting God’s will first means looking after our children and our children’s children."

Classified as a “high-income” economy, Nauru is set to lose its eligibility for Official Development Assistance in 2026.

Asterio Appi, climate change minister, pointed out the irony of Nauru’s situation.

While “distant spreadsheets” considered Nauru self-sufficient, Appi said donor agencies overlooked the nation’s fragility, isolation and reliance on external aid.

“Despite being labeled too wealthy for support, we rank as the 5th most vulnerable country globally according to the Multidimensional Vulnerability Index,” Appi said at the Third United Nations Ocean Conference in Nice, France, in June.

He said Nauru is facing several challenges, including inadequate housing, water systems, and under-resourced healthcare and education, along with high rates of noncommunicable diseases linked to poor nutrition.

However, Adeang said he will not let Nauru remain vulnerable.

“We’ve only just started and there is a long way to go, so we must stay the course," he said in a press statement.

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