Sustainability of phosphate and potash reserves in Jordan

Rami Alrawashdeh and Khalid Al-Tarawneh

International Journal of Sustainable Economy, 2014, vol. 6, issue 1, 45-63

Abstract: The purpose of the paper is to estimate the level of necessary reinvestment 'user costs' needed to repay forthcoming generations for the depletion of phosphate and potash reserves in Jordan. El Serafy equation technique has been used to estimate the user cost for both resources from 2002 to 2010. On a discount rate of three percent, phosphate resources had a user cost of $US 0.99 million in 2002, $US 0.86 million in 2005 and $US 0.09 million in 2010. Also on a discount rate of three percent, potash resources had a user cost of $US 10.13 million in 2002, $US 41.39 million in 2005 and $US 92.07 million in 2010. The Sustainable Budget Index (SBI), used to measure whether the user cost was reinvested or used for public consumption, surpassed 1.0 from 2002 to 2010 which indicated that mineral revenues have been used for public consumption rather than for investment purposes.

Keywords: sustainable development; resource rent; resource depletion; user cost; reinvestment; capital recovery; true income; depreciation; royalties; genuine savings; net present value; Jordan; sustainability; phosphate reserves; potash reserves; mineral revenues; public consumption. (search for similar items in EconPapers)
Date: 2014
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