We've all heard the cautionary tales of millionaires going broke thanks to an unhealthy obsession with luxury cars. But an entire country? Now that's a flex gone wrong. This is exactly the story of Nauru, a small island in Micronesia, located in the southwestern Pacific Ocean.
Nauru went from being one of the richest nations on Earth to an economic saga tale, all thanks to a toxic mix of resource mismanagement, financial recklessness, and, yes, a bizarre obsession with supercars like Lamborghinis & Ferraris.
Nauru is only 21 square kilometres in size, with just one main road where the maximum speed limit is 25 km/h. Image: Getty Nauru: A Nation Built on Phosphate Wealth
Nauru is a speck of land barely 21 square kilometres in size, with a population of a little over 10000 — smaller than your average NFL stadium crowd. The island is known for its coral reefs, pristine beaches, and picturesque views but it has a grim history of foreign exploitation that not many are aware of.
For much of the 20th century, phosphate mining was Nauru's golden ticket. It was discovered in the early 1900s and was extracted and exported by British, Australian, and New Zealand companies, who made a fortune while the locals got the short end of the stick.
But after gaining independence in 1968, Nauru took control of its own resources. As a result, the per capita income of Nauru became higher than that of oil-rich Gulf countries. It was even dubbed the "smallest and wealthiest independent democracy in the world." The island became a tax-free paradise where the government footed the bill for everything — from healthcare to overseas education. It was like winning the lottery and immediately splurging on a fleet of supercars.
Which, as it turns out, is exactly what they did.
Luxury Cars in a Country with One Main RoadIf there's one thing that truly defined Nauru's economic downfall, it was their impractical obsession with luxury cars. Here's the kicker: the island has just one main road, and the national speed limit is a casual 25 km/h (15 mph). Yet, Nauruans were importing Ferraris, Lamborghinis, and Range Rovers like they were stocking up for an underground street racing league.
Most of the luxury cars in Nauru have now been abandoned due to economic hardship and are gathering dust. Image: Travellina
It gets better (or worse, depending on how you look at it). The local police chief himself bought a Lamborghini, only to realise he physically couldn't fit into the driver's seat. You can't make this stuff up.
Eventually, as money dried up, these once-pristine machines were abandoned, left to rust under the Pacific sun. Today, they serve as eerie symbols of a time when the Nauruans believed they were living in The Fast and the Furious: Island Edition.
Reckless Spending DecisionsThe luxury car craze was just the tip of the iceberg in its race toward bankruptcy. The government, high on its newfound wealth, started making one questionable financial decision after another. One of the highlights was Nauru purchasing a fleet of Boeing 737s, despite having zero justification for an airline of that scale.
Another problematic decision was making all public services completely free. No taxes. No bills. Need medical treatment? The government would fly you 2500 miles to Australia, all expenses paid. Higher education costs for students studying in Australia were also fully covered by the state. While these initiatives were well-intentioned, they were clearly unsustainable in the long run.
In the 1980s, Nauru spent money on everything, from purchasing a Boeing fleet to sending its students to Australia for free education. Image: Facebook
And then there were investments that aged like milk. Nauru poured its wealth into overseas real estate, luxury resorts, and high-risk investments, most of which flopped spectacularly. By the early 2000s, the phosphate reserves had been nearly depleted, and reality came crashing down. By 2022, Nauru's GDP per capita had fallen to around $12,000 USD, compared to over $50,000 USD in its golden years.
With no financial backup plan, the government was forced to rely on foreign aid, primarily from Australia, in exchange for housing asylum seekers in the controversial Nauru Regional Processing Center which was a detention facility run by the Australian government. Today, the island's economy still relies primarily on foreign aid and fishing.
A Lost OpportunityIf Nauru's story wasn't already strange enough, here's a plot twist. In 2022, the infamous "Crypto King" Sam Bankman-Fried apparently planned to buy the island. His vision was to make Nauru into an exclusive billionaire wonderland where he and his inner circle could ride out potential doomsday scenarios in luxury.
Bankman-Fried reportedly invested over $130 million USD (~204 million AUD) into a project for "Humanity" on the island. Had his plan been executed, Nauru's streets might have been packed with even more luxury cars, though this time, they would have probably been Teslas.
Before his arrest, Sam Bankman-Fried considered buying Nauru. Image: Getty
Bankman-Fried likely had American history on his mind — such as when America bought Alaska from Russia in 1867. If America could buy a territory, why couldn't an American buy a country? Interestingly enough, this idea of buying territory from a foreign nation is still going on as US President Donald Trump expressed interest in purchasing Greenland from Denmark. Cheers to that.
Today, with Bankman-Fried behind bars, the dream of "Crypto Island" remains just that — a dream. As for Nauru, where Lamborghinis once roared (well, crawled at 15 mph), all that remains are rusted relics and lingering economic regret.
Read the full article How ‘World’s Richest Island’ Went Broke Buying Supercars It Couldn’t Drive on DMARGE. Don’t miss it!
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