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IMF Report Highlights Key Issues and Recommendations for Nauru’s Development

The International Monetary Fund (IMF) has published a report on Nauru, an island nation in the Pacific Ocean. The report identifies several key issues and provides recommendations to support the country’s development.

Key Issues

  • Human Capital: Nauru has a young population with 35% of citizens of school age, but education enrollment rates and teacher-to-student ratios are lower than the world average.
  • Climate Change: Nauru is vulnerable to climate change, which could have long-term consequences for the country’s resilience.
  • Economic Diversification: The country relies heavily on a regional processing center (RPC) for asylum seekers, but this is being wound down, and structural reforms are needed to diversify the economy.
  • Governance and Corruption: Nauru has made progress in improving public financial management, but more needs to be done to strengthen fiscal governance and address corruption vulnerabilities.

Recommendations

  • Improve Human Capital:
    • Increase education spending to improve enrollment rates and teacher-to-student ratios.
  • Accelerate Climate Adaptation and Mitigation:
    • Continue to develop a climate resilient port and solar farms.
    • Review and update the National Adaptation Plan.
  • Diversify the Economy:
    • Complete the new port and related infrastructure to bring in new sources of growth and employment opportunities.
  • Address Governance and Corruption:
    • Strengthen fiscal governance.
    • Improve investor protection.
    • Address corruption vulnerabilities.

Next Steps

The IMF stands ready to support Nauru’s authorities to implement reforms through policy advice and continued capacity development engagement. The report will be published online by the Asia-Pacific Group (APG) and the Financial Action Task Force (FATF).