Although other island states may be smaller in area and/or less populous, they are all dependent territories of other countries, so Nauru keep the title of the world's smallest independent republic.
Mining of Nauru's phosphate deposits, which occupied about 90% of the island, began in the early 20th century under a German-British consortium. During World War I, the island was occupied by Australian forces and became a dependent territory. Nauru achieved independence in 1968. In the 1980s, phosphate exports briefly gave Nauruans one of the highest per capita incomes in the Third World. As of 2008, most of Nauru's revenue came from the export of phosphate to Australia, South Korea and New Zealand as well as other countries. The industry is controlled by the Nauru Phosphate Corporation NPC. It is anticipated that the phosphate reserves will be completely exhausted before 2050. The sale of fishing licences is the other major revenue raiser. Countries such as Australia and Taiwan provide substantial development cooperation funding. Despite this, the unemployment rate currently stands at 90%, which is the highest in the world. That is not the only problem on the island, as over 95% of the population is obese and over 40% suffer from diabetes.
In 2001 the container ship Tampa rescued several hundred asylum seekers from a sinking Indonesian vessel and attempted to deliver them to Christmas Island in the Indian Ocean, which is an Australian Federal Territory. In what was labelled The Pacific Solution, the Australian Government established an Off Shore Processing Centre OPC on Nauru where these people were housed, pending assessment of their claims to be refugees. The OPC was closed in early 2008.