Nauru's President, Bernard Dowiyogo, says his country's situation is critical and he has appealed to donor countries for help.
The appeal came in a speech made to mark Nauru's independence on January 31st, but which only reached the outside world at the weekend.
Nauru has been cut off from the world since early January because of the collapse of its telephone system.
The French agency, AFP, says that in the speech, President Dowiyogo, revealed that people have not been paid since early last year and sick people cannot be sent to Australia because of unpaid bills there.
According to Radio Australia, which obtained the speech, President Dowiyogo said that most of the country's off shore investments in Washington and Australia are mortgaged to the GEC Corporation in the US, and they are not making repayments.
President Dowiyogo thanked Taipei for paying Nauru's outstanding loan of two point seven million US dollars on its 737 plane owed to the US Exim Bank, but added that further payments were now due.
Mr Dowiyogo became President in January after winning a vote of no confidence against Rene Harris.
Reports say that since assuming power, the government has not been able to pass a budget and parliament has not been able to sit because of its failure to elect a speaker.
