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Abstract

Since the 2000s, Peru, a country extremely rich in minerals has experienced strong economic growth. Would Peru be condemned to the resource curse because of its mineral wealth? For now this is not the case; however we point up a strong dependence upon the mining sector. The main question relates to the sustainability of the mining industry. The mineral depletion rate is a fundamental indicator to assess the situation. To calculate this, there are many forecasting methods available ; our microeconomic analysis based on the Hotelling rule provides a value of around 7 % of gdp for the period between 2000 and 2008, which represents double the estimation of the World Bank. We recommend the mineral depletion be taken into account when calculating traditional macroeconomic indicators; it would highlight the overestimation of economic growth. According to the Hartwick rule, it is clear that Peruvian development is not sustainable; mining revenues do not offset the mineral depletion and are not reinvested in the development of the country. Therefore, the solution should be to tax mining companies at a level equivalent to that of depletion and, with the new income, to create a natural resource fund. Saving only 8 % of the mineral depletion would suffice to generate sustainable rent for futures generations. In addition, the creation of a natural resource fund would reduce macroeconomic instability and enforce better governance.

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