As we all know our land is surrounded by water. It becomes even more obvious, when a person looks over the map of the Pacific Ocean. It’s the Great Ocean. It’s been called so since the time it was discovered by the Europeans in the Middle Ages. No one has ever dared to question its name or its grandeur. Only few islands dare to disturb its endless expanse. The closer it gets to the centre of the ocean, the fewer islands can be found.

This is the place where the smallest sovereign republic in the world is located. Apart from those who are seriously involved in off-shore business, few people have ever heard about the tiny island state of Nauru. It is one of the most isolated places on our planet. It is really complicated and head-aching to get there. Let’s see what a European who wants to visit Nauru has to go through. First of all a 12-hour flight to Bangkok. Then another 3.5 hours from Bangkok to Manila. Finally, a 10,5-hour flight from the capital of Philippines to Nauru. If you add to this all kind of delayed flights, nights spent in the transit zone, changes etc., you could arrive in bad shape having already flown hours in the air and no doubt spent hours on the ground too. Some daredevils manage to reach Nauru in a week. In a word, although the USA and Nauru are practically the same distance away from Europe, it’s much easier to get to America. One almost always arrives in Nauru dead tired. Located only 42 km away from the equator, Nauru has hot equatorial climate. If a business person does not plan to go back via Guam, Fiji, or Australia, he will have to spend at least a week in Nauru, since there is only one plane that flies directly to Nauru which belongs to Air Nauru. It constitutes the airfleet of Nauru. Planes of other companies either do not risk flying to the island, or do not find it profitable. No wonder. The climate is quite specific, there are no beaches and no tourists. Six thousand locals seem to be well fed, happy, and never in a hurry. The only reason why the people of Nauru decided to establish an air company of their own was because there are the same quantity of (about six thousand) guest workers who are mainly from China and Philippines. Having their own air company brought Nauru closer to civilization, at least in comparison to its neighbours (for example, the island of Banaba - ‘Ocean Island’ - which is located 300 km away from Nauru). A ship sails between these two islands once in two weeks. This is the only contact that Banaba has with the outward world. Anyone who knows Nauru as an off-shore jurisdiction must be happy that no off-shore services are offered in Banaba.

Nauru appeared on the face of the Earth thanks to corals activities and further raising of the ocean bed. Nowadays the huge “teeth” of the former reefs cover a part of the island. These reefs, or rather phosphate deposits between them, support the economy of the island. It so happened that the sea-birds played a major part in the creation of these deposits over a period of millions of years. Their droppings with the help of hot sun and the favourable climate turned into a substance with a lyrical name ‘guano’. The scientific word for guano is phosphate. It all is quite logical, since sea-birds fed on fish the bones of which, as is known, contain phosphorus.

Guano is the major export product for a number of islands not only in the Pacific Ocean. It is a universal natural fertiliser. Its extraction is entrusted to the foreign workers from China and the Philippines. When guano is extracted from in between the reefs a surrealistic picture comes into view. It resembles something on the Moon. Unfortunately the phosphate deposits are not unlimited. Since there is only 2 per cent left, the Nauru government had to transfer the presidential site and one of the villages to continue extraction from underneath of them. Such an attitude of a human being to their own habitat is quite recent. The first residents of the island which settled there in time immemorial were more considerate towards their home.

Nauru has its own history of colonisation. The first white people arrived in 1798, when it seemed everything in the world was divided. However, it was only in 1888 that Bismarck added Nauru to the German empire. From 1798 to 1888 many missionaries arrived to Nauru. They were able to settle there, since, unlike in other islands of Oceania, the natives of Nauru did not eat people. The most persistent were the Protestants. That is why nowadays 60 per cent of the inhabitants are Protestants.

Apparently the new owners of Nauru did not realise what the island had to offer. It is the only explanation why it was the English and not the Germans who discovered the phosphate deposits. After they bought the extraction rights from the Germans, the English began extraction in 1907.

During WW II the extraction was stopped, since the island was occupied by the Japanese army. The Japanese strategy was to create several strongholds in the Pacific. One such stronghold was Nauru. All the natives were at that time moved from Nauru to the island of Truk.

But after the war the island lost its strategic importance. That is why the Japanese had to wait several months for the arrival of the victors who took the Japanese soldiers back to Japan and returned to Nauru its poor native exiles. Since then peace reigns in Nauru.

When there is no war one starts thinking of a possible way to improve ones well-being. While there is still guano, the people of Nauru are the richest nation in world taking into account its GNP. But what will they do when there is no more guano? On the island there is neither fishing nor tourism. There are no beaches. Because of coral fragments people have to ware shoes when entering the water. But it was long before the fatal decrease of the phosphate deposits that the natives decided to create a financial paradise in Nauru. In 1974 the program of registering off-shore structures was adopted in Nauru. By the way, even after gaining its independence Nauru decided to remain a member of the British Commonwealth. That was a smart move. The off-shore programme was of great regional importance back in the mid-1970’s. Australia and Hong Kong have been co-operating with the Nauru off-shore jurisdiction for quite some time now. The Russian business circles discovered Nauru for itself recently. But as soon as they did, they began to co-operate enthusiastically.

This distant island very often provides services more complete than its closer to Europe rivals. Unlike other jurisdictions, the scope of services in Nauru actually includes the registration of off-shore banks. The government of Nauru guarantees minimum control. Other Pacific island jurisdictions tend to provide similar incentives and preferences. Today there are over 200 acting off-shore banks registered in Nauru. Here the ‘banks per person’ tratio is the highest among all other countries of the world. Who knows, maybe soon the Swiss will be sorry that they sent to Nauru their missionaries a century ago. At present, only the Cayman Islands surpass Nauru in this off-shore race. The density of telexes per person in the Cayman Islands is the highest in world. The logic is the following: each bank must have an office, and each office must have a telex. So far, Nauru does not make such demands. Maybe it is because the climate is too hot, maybe because it is hard to find volunteer representatives. At the moment we can certify that one can become an owner of a Nauru off-shore bank and join the world bank system without long tiring procedures required in other countries. Russian business people also have got this possibility thanks to several firm-incorporators which operate in the Russian market and which have established close business ties with Nauru. Anyway, several islanders were able to see our matryoshka and drink our Russian home vodka. So, one can say that Russian - Nauruan ties are getting stronger every day. As they say in Russia, «The Nauruans have the goods - the Russians have the merchants». All we need now is a good match-maker, which - if you listen very carefully - is already knocking at the door!