How did risky investments and fraud affect Naoero's national wealth?

To prepare for the post-phosphate-mining era, Naoero invested a major portion of its phosphate mining earnings abroad to secure the nation's future economic well-being. However, these efforts were severely undermined when the investment program lost much of its value due to risky investments and fraud.1

This loss of national wealth, combined with the exhaustion of the island's primary phosphate deposits, left the country hovering on the edge of bankruptcy by the early 21st century. Consequently, the government was forced to implement austerity measures, which included significant cuts to public services.21