Nauru Joins the IMF as 189th Member

  • IMF welcomes its newest member
  • Island can tap IMF surveillance, lending, and technical assistance to address unique challenges
  • Membership opens door for international community’s support
  • Mr. David Adeang, Minister of Finance of Nauru, signed the Articles of Agreement of the IMF at a ceremony held at the State Department in Washington, D.C. IMF officials witnessed the signing ceremony.

    “I am very pleased to welcome Nauru as a member of the IMF,” said Christine Lagarde, the IMF’s Managing Director. “As Nauru faces a number of challenges common to small island economies, including its geographical remoteness and climate change, it will benefit from participating fully in the economic cooperation of our global membership. The IMF stands ready to assist the government and people of Nauru in achieving their development objectives in cooperation with other partners in the international community,” she added.

    Small state

    Measured by its quota, Nauru will be the second smallest member of the Fund, after Tuvalu. This will be the case after it pays its quota increase under the 14th General Review (which will increase its quota to SDR 2.8 million). Nauru has an initial subscription of SDR 2 million, or about $2.81 million. It has a population of about 10,500 and a land area of about 8 square miles, compared with 68 square miles for Washington DC. Nauru is also the smallest sovereign state in the world after the Vatican City in terms of both population and area. The Australian dollar is the legal tender. There had been virtually no bank in the country during the past decade until the opening of Bendigo Bank agency in June 2015.

    Nauru’s economy relies on phosphate mining, the Australian Regional Processing Center (RPC) for asylum seekers, and revenue from fishing license fees. In recent years, growth has been strong, mainly driven by the RPC operations and phosphate exports, although it has moderated in 2015 due to problems with the seaport that lowered phosphate exports.

    The country faces a number of challenges common to small islands: small population, remoteness, climate change, narrow production base, high cost of public goods, and insufficient infrastructure. The key priorities include strengthening public finances, improving basic infrastructure, and diversifying its sources of growth.

    Membership benefits

    Membership allows the Fund and other development partners—the country has also joined the World Bank—to help the authorities implement...

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