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With creditors baying, the South Pacific nation's survival hangs on today's vote

Swindled by crooks,  stripped of its one natural resource  and  its economy in tatters, the tiny South Pacific nation of Nauru will elect a new government today  in a last-gasp effort to evade  bankruptcy.

The election was called after government economic reforms intended to rescue Nauru from a financial quagmire of breathtaking proportions were blocked.

Thirty years ago Nauru  rivalled Brunei as the region's richest country per capita, owing to its huge phosphate deposit, exported to make fertiliser.

Millions of US dollars have since been squandered through  bad investments, poor financial advice and get-rich-quick-schemes, including backing  a short-lived West End musical about the life of Leonardo da Vinci.

The islanders' purchases were as lavish as they were foolhardy. A police chief bought a new Lamborghini, only to find he was too big  to fit into the driver's seat.

By the 1990s, Nauru was selling passports to foreigners and was home to shell banks  laundering  Russian mafia money. Not long after, it was  blacklisted by the Organisation for Economic Co-operation and Development.

In 20 years, about A$2 billion worth (HK$11 billion) in  phosphate revenue has gone  into the pockets of corrupt ministers or foreign profiteers masquerading as advisers.

After years of reckless spending,  Nauru  is almost bankrupt. The island owes A$236 million   to  General Electric Capital, which wants it back.

'People can only afford to buy rice, sugar and flour,' said Sean Oppenheimer, 37,  who runs the  country's only supermarket. 'Gone are the days of being able to afford steak or chicken. You wonder how people survive.'

Nauru's huge overseas property portfolio - bought in the heyday of the phosphate boom - is in the hands of receivers and  being sold off to pay the debt.

The government, led by President Ludwig Scotty,  put together  an ambitious economic reform package.  But the budget was stalled earlier this year when the health minister was  declared ineligible for office because he held joint citizenship with Australia.

Nauru's tiny 18-member Parliament  was dissolved, a state of emergency declared and a snap election called.  A group of reform-minded younger ministers squared up against an old guard which  presided over the island's stunning economic decline.

'The whole population has that 'what-could-have-been' feeling that just lingers through everything,' said Kieren Keke,  one of the new generation of politicians.  'There was so much potential to do better with the money we had.'

With phosphate reserves almost exhausted, Nauru is looking at commercial fishing and, somewhat optimistically, tourism, to sustain its future.

This despite the fact there are  two hotels and a single  road. The Lonely Planet guide  to the South Pacific advises that 'one day, or at most two, is plenty to see Nauru'.

'Something must be found to sustain the island,' said Helen Bogdan,  the country's public affairs officer in Australia. 'Having dragged people into a 21st-century, western lifestyle, you can't just tell them to go back to collecting coconuts and catching fish. It's not fair.'



Island counting on polls to avoid economic meltdown