Nauru's economy is primarily based on phosphate mining, which has historically been its main source of revenue. The island's phosphate deposits were heavily exploited in the 20th century, leading to significant economic growth. However, as these resources have dwindled, Nauru has faced economic challenges and is seeking to diversify its income sources. In recent years, Nauru has explored alternative revenue streams, including offshore banking and tourism. The government has also engaged in partnerships with countries like Australia for financial aid and development projects. Despite these efforts, the economy remains vulnerable due to its small size and reliance on limited resources.