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 for weeks because of the collapse of its telephone system.
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.
President Dowiyogo is quoted as saying that most of Nauru's off-shore investments in the US and Australia are mortgaged to the GEC Corporation in the US, and they are not making repayments.
He thanked Taiwan for paying Nauru's outstanding loan for its aircraft worth 2.7 million US dollars last year 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.
