The tiny island nation of Nauru, an eight-square-mile speck of land in the middle of the Pacific Ocean, was once one of the richest countries in the world, with a phosphate industry accounting for 80% of its economy. But around the year 2000, everything changed. The phosphate that had enabled many to live in affluence at home, buy houses abroad and send their children to expensive boarding schools was running out. The island needed to reinvent itself urgently.
For a few years, Nauru tried its luck at becoming a tax haven, which quickly led to accusations of illegal money laundering by the international community. It was also involved in the sale of passports and shady diplomatic favors like the recognition of Abkhazia and South Ossetia as independent territories, in exchange for $50 million from Russia.