The Nauruan economy peaked in the early 1980s, as it was dependent almost entirely on the phosphate deposits that originate from the droppings of sea birds. There are few other resources, and most necessities are imported. Small-scale mining is still conducted by RONPhos, formerly known as the Nauru Phosphate Corporation. The government places a percentage of RONPhos's earnings into the Nauru Phosphate Royalties Trust. The Trust manages long-term investments, which were intended to support the citizens once the phosphate reserves were exhausted. However, because of mismanagement the Trust's fixed and current assets were reduced considerably, and many never fully recovered. The failed investments included financing Leonardo the Musical in 1993, which was a financial failure. The Mercure Hotel in Sydney and Nauru House in Melbourne were sold in 2004 to finance debts and Air Nauru's only Boeing 737 was repossessed in December 2005. Normal air service resumed after the aircraft was replaced with a Boeing 737-300 airliner in June 2006. In 2005, the corporation sold its property asset in Melbourne, the vacant Savoy Tavern site, for $7.5 million.
The value of the Trust is estimated to have shrunk from A$1.3 billion in 1991 to $138 million in 2002. Nauru currently lacks money to perform many of the basic functions of government; for example, the National Bank of Nauru is insolvent. The CIA World Factbook estimated a GDP per capita of $5,000 in 2005. The Asian Development Bank 2007 economic report on Nauru estimated GDP per capita at $2,400 to $2,715.
There are no personal taxes in Nauru. The unemployment rate is estimated to be 90 per cent, and of those who have jobs, the government employs 95 per cent. The Asian Development Bank notes that although the administration has a strong public mandate to implement economic reforms, in the absence of an alternative to phosphate mining, the medium-term outlook is for continued dependence on external assistance
