Oil Disad 2 - Scholars

Gonzaga Debate Institute 2008 1
Scholars Lab 2nd Wave Oil DA’s
4th Wave Oil DA’s (Venezuela/Nigeria/Indonesia/Mexico)

4th Wave Oil DA’s (Venezuela/Nigeria/Indonesia/Mexico)...........................................................................................1
***General Oil UQ – 4th Wave***................................................................................................................................5
Oil Prices ....................................................................................................................................................................6
Oil Prices  - AT: Biggest Price Decline in 17 Years....................................................................................................7
Oil Prices  - AT: Downward Trend..............................................................................................................................8
Oil Prices  - AT: Offshore Drilling .............................................................................................................................9
Oil Prices ...................................................................................................................................................................10
Oil Prices - Offshore Drilling....................................................................................................................................11
***Russian Oil Updates – 4th Wave***.......................................................................................................................12
Russia DA – UQ – Russia Econ ...............................................................................................................................13
Russia DA – UQ – Corruption ...................................................................................................................................14
Russia DA – UQ – Russia Diversification ...............................................................................................................15
Russia DA – Internals – Oil Key to Russian Econ........................................................................................................16
***Russia Answers – 4th Wave***..............................................................................................................................17
Russia Answers – UQ – Russia Econ ........................................................................................................................18
Russia Answers – UQ – Russia Infl .........................................................................................................................19
Russia Answers – Internals – AT: Oil Key to Russian Econ.........................................................................................20
Russia Answers – Internal Link Turn: Inflation K/T Econ...........................................................................................21
***Saudi Oil Updates – 4th Wave***..........................................................................................................................22
Saudi DA – UQ – Saudi Econ ..................................................................................................................................23
Saudi DA – UQ – Saudi Inflation ..............................................................................................................................24
Saudi DA – UQ – Impact: Coup = US Invasion...........................................................................................................25
***Saudi Answers – 4th Wave***................................................................................................................................26
Saudi Answers – UQ – Saudi Econ ...........................................................................................................................27
Saudi Answers – UQ – Saudi Inflation ....................................................................................................................28
Saudi Answers – UQ – Middle East Instability .......................................................................................................29
***Venezuelan Oil DA***...........................................................................................................................................30
Venezuela DA – 1NC....................................................................................................................................................31
Venezuela DA – UQ – Econ Up....................................................................................................................................32
Venezuela DA – UQ – Econ Down...............................................................................................................................33
Venezuela DA – UQ – Oil Up.......................................................................................................................................34
Venezuela DA – UQ – Oil Down (1/2).........................................................................................................................35
Venezuela DA – UQ – Diversification Up....................................................................................................................37
Venezuela DA – UQ – Diversification Down...............................................................................................................38
Venezuela DA – UQ – Inflation Up..............................................................................................................................39
Venezuela DA – UQ – Inflation Down.........................................................................................................................40
Venezuela DA – Oil K/T Economy (1/2)......................................................................................................................41
Venezuela DA – Investment K/T Oil............................................................................................................................43
Venezuela DA – A2: Oil Causes Poverty......................................................................................................................44
Venezuela DA – A2: Inflation (1/2)..............................................................................................................................45
Venezuela DA – Impact – Stability/War.......................................................................................................................47
Venezuela DA – Impact Module – Health....................................................................................................................49
Venezuela DA – Impact – Health – Oil K/T Health......................................................................................................50
Venezuela DA – Impact – Health – Health Care Up.....................................................................................................51
Venezuela DA – Impact – Health – Malaria.................................................................................................................52
Venezuela DA – Impact – A2: Turn: Arms Race/Instability.........................................................................................53
Venezuela DA – Impact – A2: Heg (1/2)......................................................................................................................54
Venezuela DA – Impact – A2: Terrorism......................................................................................................................56
Venezuela DA – Impact – A2: Colombian War (1/3)....................................................................................................57
Venezuela DA – Impact – A2: Chavez Bad – Oil Not K/T Chavez (1/2).....................................................................60
Venezuela DA – Impact – A2: Chavez Bad – Indict.....................................................................................................62
Venezuela DA – Impact – A2: Chavez Bad – Turn: Democracy/Stability (1/2)...........................................................63
Venezuela DA – Impact – A2: Chavez Bad – A2: Democracy.....................................................................................65
Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty/Econ (1/2).........................................................................66
Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty – It’s Down.......................................................................68
Venezuela DA – Impact – A2: Chavez Bad – A2: Bomb (1/4).....................................................................................70
Venezuela DA – Impact – A2: Chavez Bad – A2: Terrorism........................................................................................74
***Venezuela Answers***...........................................................................................................................................75
Venezuela Answers – No Internal Link – A2: Oil K/T Econ (1/2)...............................................................................76
Venezuela Answers – Internal Link Turn: Dutch Disease (1/2)....................................................................................78
Venezuela Answers – Internal Link Turn: Corruption..................................................................................................80
Venezuela Answers – Internal Link Turn: Inflation (1/2).............................................................................................81
Venezuela Answers – Internal Link Turn: Inflation K/T Econ.....................................................................................83
Venezuela Answers – Impact T/O – A2: Health Care...................................................................................................84
Venezuela Answers – Impact Turn -- Oil = Chavez......................................................................................................85
Venezuela Answers – Impact Turn – Chavez Bad: Oil = Chavez.................................................................................86
Venezuela Answers – Impact Turn – Chavez Bad: War/Lead/Democr 2AC................................................................87
Venezuela Answers – Impact Turn – Chavez Bad: Econ (1/3).....................................................................................88
Venezuela Answers – Impact Turn – Chavez Bad: Econ – Poverty Up........................................................................91
Venezuela Answers – Impact Turn – Chavez Bad: Democracy....................................................................................92
Venezuela Answers – Impact Turn – Chavez Bad: Democracy – Model.....................................................................93
Venezuela Answers – Impact Turn – Chavez Bad: Arms Race.....................................................................................94
Venezuela Answers – Impact Turn – Chavez Bad: Bomb............................................................................................95
Venezuela Answers – Impact Turn – Chavez Bad: Bomb – Feasibility........................................................................96
Venezuela Answers – Impact Turn – Chavez Bad: Bomb – NW..................................................................................97
Venezuela Answers – Impact Turn – Chavez Bad: Heg (1/4).......................................................................................98
Venezuela Answers – Impact Turn – Chavez Bad: Heg – K/T World........................................................................102
Venezuela Answers – Impact Turn – Chavez Bad: Terrorism.....................................................................................103
Venezuela Answers – Impact Turn – Chavez Bad: Columbia War (1/2)....................................................................104
***Nigerian Oil DA***..............................................................................................................................................106
Nigeria DA – 1NC.......................................................................................................................................................107
Nigeria DA – UQ – Econ Up......................................................................................................................................109
Nigeria DA – UQ – Econ Down..................................................................................................................................110
Nigeria DA – UQ – Oil Up..........................................................................................................................................111
Nigeria DA – UQ – Oil Down.....................................................................................................................................112
Nigeria DA – UQ – Diversification Up.......................................................................................................................113
Nigeria DA – UQ – Diversification Down..................................................................................................................114
Nigeria DA – UQ – Inflation Up.................................................................................................................................115
Nigeria DA – UQ – Inflation Down............................................................................................................................116
Nigeria DA- Oil K/T Economy...................................................................................................................................117
Nigeria DA- Oil K/T Economy...................................................................................................................................118
Nigeria DA- Oil K/T Economy- Employment............................................................................................................119
Nigeria DA- Oil K/T Economy- Gov’t Revenue........................................................................................................120
Nigeria DA- Oil K/T Economy- Foreign Exchange Reserves....................................................................................121
Nigeria DA- A2: Dutch Disease..................................................................................................................................122
Nigeria DA- A2: Inflation...........................................................................................................................................123
Nigeria DA- A2: Corruption.......................................................................................................................................124
Nigeria DA- Impact: Stability Up...............................................................................................................................125
Nigeria DA- Impact: Spillover....................................................................................................................................126
Nigeria DA- Impact: Regional Stability.....................................................................................................................127
Nigeria DA- Impact: Regional Stability.....................................................................................................................128
Nigeria DA- Impact: Heg............................................................................................................................................129
***Nigeria Answers***..............................................................................................................................................130
Nigeria Answers- No Internal Link- A2: Oil K/T Economy.......................................................................................131
Nigeria Answers- No Internal Link- A2: Oil K/T Economy.......................................................................................132
Nigeria Answers- Internal Link Turn: Dutch Disease.................................................................................................133
Nigeria Answers- Internal Link Turn: Inflation..........................................................................................................134
Nigeria Answers- Internal Link Turn: Corruption......................................................................................................135
Nigeria Answers- Internal Link Turn: Organized Crime............................................................................................136
Nigeria Answers- Impact T/O: Stability Down...........................................................................................................137
Nigeria Answers- Impact Turn: Coup Good...............................................................................................................138
***Mexican Oil DA***..............................................................................................................................................139
Mexican Oil DA – 1NC..............................................................................................................................................140
Mexico DA – UQ – Econ Up......................................................................................................................................141
Mexico DA – UQ – Econ Up......................................................................................................................................142
Mexico DA – UQ – Econ Down.................................................................................................................................143
Mexico DA – UQ – Oil Up.........................................................................................................................................144
Mexico DA – UQ – Oil Down....................................................................................................................................145
Mexico DA – UQ – Diversification Up......................................................................................................................146
Mexico DA – UQ – Diversification Down.................................................................................................................147
Mexico DA – UQ – Inflation Up................................................................................................................................148
Mexico DA – UQ – Inflation Down............................................................................................................................149
Mexico DA- Oil K/T Economy...................................................................................................................................150
Mexico DA- Oil K/T Economy...................................................................................................................................151
Mexico DA- A2: Reforms Turn..................................................................................................................................152
Mexico DA- A2: Dutch Disease.................................................................................................................................153
Mexico DA- A2: Inflation...........................................................................................................................................154
Mexico DA- A2: Corruption.......................................................................................................................................155
Mexico DA- A2: Organized Crime.............................................................................................................................156
Mexico DA – Impact: Key to World...........................................................................................................................157
Mexico DA – Impact: Key to World – A/T: 1996 ......................................................................................................160
Mexico DA – Impact – A2: Mexico Resilient.............................................................................................................161
***Mexico Answers***..............................................................................................................................................162
Mexico Answers- No Internal Link- A2: Oil k Econ..................................................................................................163
Mexico Answers- Internal Link Turn: Inflation..........................................................................................................164
Mexico Answers- Internal Link Turn: Reforms..........................................................................................................165
Mexico Answers- Internal Link Turn: Dutch Disease................................................................................................166
Mexico Answers- Internal Link Turn: Corruption......................................................................................................167
Mexico Answers- No Impact – Resilient....................................................................................................................168
Mexico Answers- No Impact – A2: Key to World......................................................................................................169
***Indonesian Oil DA***..........................................................................................................................................170
Indonesia DA – 1NC Shell..........................................................................................................................................171
Indonesia DA – 1NC Shell..........................................................................................................................................172
Indonesia DA – UQ – Econ Up...................................................................................................................................173
Indonesia DA – UQ – Econ Down..............................................................................................................................175
Indonesia DA – UQ – Oil Up......................................................................................................................................176
Indonesia DA – UQ – Oil Down.................................................................................................................................177
Indonesia DA – UQ – Diversification Up...................................................................................................................178
Indonesia DA – UQ – Diversification Down..............................................................................................................179
Indonesia DA – UQ – Inflation Up.............................................................................................................................180
Indonesia DA – UQ – Inflation Down........................................................................................................................181
Indonesia DA – Oil K/T Economy..............................................................................................................................182
Indonesia DA – A2: Dutch Disease.............................................................................................................................183
Indonesia DA – A2: Inflation......................................................................................................................................184
Indonesia DA – A2: Corruption..................................................................................................................................185
Indonesia DA – Impacts: Key Global Economy.........................................................................................................186
Indonesia DA – Impacts: Terror..................................................................................................................................187
Indonesia DA – Impacts: Democracy.........................................................................................................................188
Indonesia DA – Impacts: Democracy.........................................................................................................................189
Indonesia DA – Impacts: Democracy – It’s Up..........................................................................................................190
Indonesia DA – Impacts: Democracy Good—Heg.....................................................................................................191
Indonesia DA – Impacts: Democracy Good—Terrorism (1/2)...................................................................................192
Indonesia DA – Impacts: Democracy Good—Terrorism (2/2)...................................................................................193
Indonesia DA – Impacts: Democr K/T US Rel’s........................................................................................................194
Indonesia DA – Impacts: Relations – Terrorism.........................................................................................................195
Indonesia DA – Impacts: Relations – Democracy......................................................................................................196
Indonesia DA – Impacts: Relations – Asia Stability...................................................................................................197
Indonesia DA – Impacts: Democr K/T World Model.................................................................................................198
Indonesia DA – Impacts: Stability – It’s Up...............................................................................................................199
Indonesia DA – Impacts: Reg’l Stability....................................................................................................................200
Indonesia DA – Impacts: Reg’l Stability....................................................................................................................201
Indonesia DA – Impacts: Reg’l Stability – Escalation/NW........................................................................................202
Indonesia DA – Impacts: Hrts.....................................................................................................................................203
Indonesia DA – Impacts: Biodiversity T/O.................................................................................................................204
***Indonesia Answers***..........................................................................................................................................205
Indonesia Answers- Internal Link Turn: Inflation.......................................................................................................207
Indonesia Answers- Internal Link Turn: Corruption...................................................................................................208
Indonesia Answers- Internal Link Turn: Instability....................................................................................................209
Indonesia Answers- Turn: Biodiversity.......................................................................................................................210
Indonesia Answers- Econ Resilient.............................................................................................................................211
Indonesia Answers- Impact T/O: Stability..................................................................................................................212
Indonesia Answers- Impact T/O: Democracy.............................................................................................................213
Indonesia Answers- Democracy Bad—Terrorism......................................................................................................214
Indonesia Answers- AT: Democracy Solves Terrorism...............................................................................................215
Indonesia Answers- Democracy Bad— Conflict........................................................................................................216
***General Oil UQ – 4th Wave***

Oil Prices 
Despite drop, prices remain very high
The Wall Street Journal 7/16 (“Oil Matters” http://online.wsj.com/article/SB121622189274758757.html?mod=googlenews_wsj)

The Labor Department reported Wednesday that the consumer price index jumped 1.1% in June, marking the second-highest increase
since 1982 and the highest since 2005. Excluding food and energy, it advanced 0.3%. On a year-over-year basis, prices rose 5%, while
the "core" rate grew 2.4%, well above the Federal Reserve's preferred range. The inflationary effect of rising oil prices is certainly no
secret. But economists have been watching intensely for a spillover of that inflation into other categories. And Wednesday's data fed
such fears. "The June uptick in the core rate provides an early indication that the tidal surge in energy and other commodity costs are
trickling through to consumer prices at large," said Kenneth Beauchemin, of Global Insight. In testimony on Capitol Hill, Fed chief Ben
Bernanke said U.S. inflation "is too high" and reiterated that the Fed's aim is to achieve price stability. The problem, of course, is that
Mr. Bernanke and other policy makers are also contending with an economic slowdown made worse by turmoil in financial markets.
Raising interest rates to stifle inflation runs the risk of braking the economy even more. Cheaper oil would certainly serve
the goals of price stability and economic growth. And although nobody expects crude to retreat to levels
that are now viewed with nostalgia, its price is dropping. On Wednesday, light, sweet crude for August delivery dropped
$4.50 to $134.24 a barrel in morning trading in New York on government data showing a surprising spike in U.S. crude and gasoline
supplies. Prices fell $6.44 Tuesday in the biggest one-day drop in dollar terms since the Gulf War. But lest anyone start
celebrating, prices remain about 80% above where they were a year ago and up about 40% from the
start of the year.
Oil prices , supply concerns prove
AFP 7/15 (“Oil prices near record highs” http://afp.google.com/article/ALeqM5iULbqz7a_RWOvuo-LtKNAkNzTERw)

World oil prices jumped close to record heights on Tuesday as the dollar slumped to an all-time low against the euro,
and amid ongoing supply tensions including a strike in Brazil. New York's main oil contract, light sweet crude
for August delivery, gained 1.21 dollars to 146.39 dollars a barrel. That was close to the record high of 147.27 that was
struck last Friday. London's Brent North Sea oil for August gained 1.36 dollars to 145.31 dollars. Brent had jumped to an all-time high of
147.50 on Friday. "Oil prices were higher (on Tuesday), with the dollar resuming its decline against major currencies on downbeat
sentiment over US financial markets after the US government's reassurance to rescue Freddie Mac and Fannie Mae failed to boost
investor confidence," said Sucden analyst Andrey Kryuchenkov.
Oil prices  long term, supply concerns prove
Reuters 7/15 (“Tight supply, strong demand raising oil price: Bush”
http://www.reuters.com/article/politicsNews/idUSWAT00978920080715)
President George W. Bush said on Tuesday that speculators are not to blame for higher oil prices and it
is the market fundamentals of tight supplies and strong demand that are pushing up crude costs. "The
fundamentals are what's really driving the long-term price of oil," Bush told reporters at a White House
news conference. "Demand for oil has increased and supply has not kept up with it."
Oil Prices  - AT: Biggest Price Decline in 17 Years
The decline in prices is a small percentile decline – it has no impact on global oil profits
CNN Money 7/15 (“Biggest oil price drop in 17 years” http://money.cnn.com/2008/07/15/markets/oil/?postversion=2008071516)

The drop in oil was the largest single-day slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On
that day, President George H.W. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War. But in 1991,
oil was trading at just $32 a barrel, so the more than $10 slide in dollar terms represented a record
33% drop. Oil fell 4.4% Tuesday, which does not even crack the top 100 price declines in percentage
terms.
Oil Prices  - AT: Downward Trend
The drop in prices is temporary, prices will climb again soon
Washington Post 7/16 (“Speculating About an Oil "Bubble"”

http://newsweek.washingtonpost.com/postglobal/energywire/2008/07/speculating_about_an_oil_bubbl.html)
Today prices got another push downward because the Energy Department’s Energy Information Administration reported
that U.S. commercial inventories of crude oil and petroleum products climbed by 7 million barrels last week. One reason: an increase in
oil imports, perhaps partly as a result of slightly higher Saudi oil output last month (it takes 45 days for oil to get to the United States
from Saudi Arabia). The EIA data also showed that U.S. gasoline demand was down 375,000 barrels a day
from the same week a year earlier, continuing a trend of gradually declining U.S. fuel consumption.
That comes a day after Mastercard reported that last week’s purchases of gasoline fell 5.2 percent last week compared to a year earlier. It
was the twelfth consecutive weekly decline reported by Mastercard. That doesn’t mean high oil prices are over. U.S.
commercial oil inventories are still down 55 million barrels from last year this time.
Price drop is tempororary trend is still upward
The Capital Spectator 7/16 (“PRICE TROUBLES ONCE MORE, BUT STILL HOPING FOR A BREAK”
http://www.istockanalyst.com/article/viewarticle+articleid_2403169&title=Price_Troubles_Once.html)
But let's not get too giddy. Rising commodities prices generally, and oil in particular, are based on a
fundamental shift in the supply/demand equation in the global economy. To restate the obvious: demand
has risen sharply in recent years while supply growth has lagged. Perhaps we'll enjoy a break from the trend and
see energy prices fall in the wake of economic slowdown or worse. Maybe. It all depends on how much of a global slowdown we're
looking at, and how much influence the U.S. has over oil prices these days. The latter subject is open to debate, thanks to the rise of
China, India, etc. and the relative maturing of the U.S. economic growth outlook compared with emerging markets. In any case, it
wouldn't surprise us to see oil prices drop sharply from current levels. Volatility and commodities, after all, are old friends,
regardless of economic conditions. Longer term, however, it's unlikely that oil prices are due for a sustained
fall. Noise may dominate the short term, but supply and demand dictate price trends over time. That
means that while inflation pressures may ebb for a time, the respite will only be temporary, assuming it comes at all.
Oil Prices  - AT: Offshore Drilling

Lifting the ban on offshore drilling wont have any affect on oil prices for years
Money Matters 7/15 (“Oil steady, weighs demand fears vs supply risks” (http://www.livemint.com/2008/07/15085408/Oil-steady-
weighs-demand-fear.html)
Rising fuel costs have sparked global protests and cut US fuel demand during the typical peak summer gasoline season, but robust
growth in emerging economies continues to keep their appetite to consume high. On Monday, US President George W. Bush lifted
a
presidential ban on offshore drilling to boost domestic supplies and combat soaring energy prices.
Analysts said the plan would take a decade to bring real results and offer little short-term relief. A
congressional ban on offshore drilling also remains in place, and Senate Democratic Leader Harry Reid
later on Monday rejected Bush’s call to lift the moratorium. Markets were also eyeing a low-pressure system about 1,300
miles east of the Lesser Antilles that could develop into a tropical depression.
Any oil drilled would be sold at current prices
Concord Monitor 7/16 (“Drilling Wont Help Reduce Gas Prices”

http://www.redorbit.com/news/business/1480740/drilling_wont_help_reduce_gas_prices/)
Why would domestically produced oil be sold for any less? It isn't anticipated that so much oil would
be extracted from offshore locations that it would significantly impact the world market price. And
whether oil is drilled in Saudi Arabia or off the coast of Florida, it will be sold at the world price. It
makes little difference whether we purchase oil from Canada (our leading supplier), nations with anti-American governments like
Venezuela, or nations like Saudi Arabia where the money may filter into the hands of terrorists. If we ceased purchasing from Venezuela
tomorrow, they would simply sell to someone else for the same price. The same amount of oil money would flow into the coffers of
Hugo Chavez even if we managed to get 100 percent of our oil from friendly producers. Gas prices would still be at the same level. The
only realistic way to contain gasoline prices in the near term is to cut demand. That means driving more fuel-efficient vehicles, driving
less frequently and driving at slower speeds. In the long term, we'll need something other than drilled oil to power our transportation.
Drilling wont decrease prices
Associated Press 7/15 (“Oil rises, but back off day's high” http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-
tAD91UAQMG0)
Also, a weakening of the dollar helped to support commodity prices Tuesday. Many investors view oil and other commodities as hedges
against inflation and a weakening dollar, and their prices tend to rise as the currency declines. The dollar fell to 105.79 yen in Asian
currency trade, while the euro rose to an all-time high of $1.6038 in European trading, before settling back at $1.5983. On Monday,
President Bush lifted an executive ban on offshore oil drilling. That alone is not expected to loosen global
supplies in the short term since a Congressional prohibition remains in place and any new wells would
take years to complete.
Oil Prices
Oil prices continuing to decline
Associated Press 7/16 (“Oil tumbles again; prices fall over $10 in 2 days”
http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD91V4HL00)
Oil prices have settled sharply lower for the second straight day, capping a dizzying drop that has left
crude more than $10 cheaper in just two days of frenzied trading. Light, sweet crude for August delivery
fell $4.14 to settle at $134.60 a barrel on the New York Mercantile Exchange, after earlier sinking as low as
$132. The drop follows a $6.44 sell-off Tuesday, meaning prices have plummeted over $10 since Monday.
Oil Prices , decreased US demand proves
Reuters 7/15 (“Oil plunges $6 on mounting US economic concern” http://africa.reuters.com/wire/news/usnSP264611.html)

Oil dropped more than $6 Tuesday, the largest drop in dollar terms in 17 years, as growing concern
about the economic health of top energy consumer the United States stirred demand worries. Federal
Reserve Chairman Ben Bernanke said financial markets were under "considerable stress," adding to concerns about the strain of the
weak housing market and high energy and food prices on the U.S. economy. U.S. crude settled down $6.44 at $138.74 a barrel,
the biggest one-day drop since 1991, when prices retreated at the start of Operation Desert Storm. The session low was
notched at $135.92 earlier. London Brent crude fell $5.17 to $138.75.
Oil prices , decreased US demand proves
CNN Money 7/15 (“Biggest oil price drop in 17 years” http://money.cnn.com/2008/07/15/markets/oil/?postversion=2008071516)

Oil prices plummeted by the second-largest margin on record Tuesday as investors feared a further
decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke. Light, sweet crude fell $6.44 to
settle at $138.74 a barrel in trading on the New York Mercantile Exchange. The drop in oil was the largest single-day
slide in dollar terms since Jan. 17, 1991, when oil fell by $10.56. On that day, President George H.W. Bush withdrew oil
from the Strategic Petroleum Reserve ahead of the first Gulf War.
Oil Prices - Offshore Drilling

Drilling will lower prices
In Rich 6/17 (“Gilmore backs McCain's stance on offshore drilling” http://www.inrich.com/cva/ric/news.apx.-content-articles-RTD-2008-

06-17-0153.html)
Former Virginia Gov. Jim Gilmore, who is running for the U.S. Senate, today praised Sen. John McCain's support of lifting the federal
ban on offshore drilling. "As working families across the commonwealth of Virginia and across our country face
financial hardship due to soaring gasoline prices, I commend Senator John McCain for speaking out
on the need to decisively begin to decrease our dependence on foreign oil and increase American oil
production," Gilmore said in a statement. Gilmore said "drill here, drill now and pay less" is "our path to
quickly reduce our dependence on foreign oil" and to lower prices. Democrat Mark R. Warner, Gilmore's opponent in the Senate
race, will discuss his energy policy in an address Wednesday morning at the Science Museum of Virginia.
Drilling will lower prices
Washington Post 6/17 (“McCain: End Fed Ban on Offshore Drilling” http://news.aol.com/political-
machine/2008/06/17/mccain-end-fed-ban-on-offshore-drilling/)
Sen. John McCain called yesterday for an end to the federal ban on offshore oil drilling, offering an
aggressive response to high gasoline prices and immediately drawing the ire of environmental groups that the
presumptive Republican presidential nominee has courted for months. The move is aimed at easing voter anger over
rising energy prices by freeing states to open vast stretches of the country's coastline to oil exploration. In a
new Washington Post-ABC News poll, nearly 80 percent said soaring prices at the pump are causing them financial
hardship, the highest in surveys this decade. "We must embark on a national mission to eliminate our dependence on
foreign oil," McCain told reporters yesterday. In a speech today, he plans to add that "we have untapped oil reserves
of at least 21 billion barrels in the United States. But a broad federal moratorium stands in the way of
energy exploration and production. . . . It is time for the federal government to lift these restrictions."
***Russian Oil Updates – 4th Wave***

Russia DA – UQ – Russia Econ 
Russian econ strong
Washington Post 7/17 (“Slowing Economy Gives Way to Global Role Reversals” http://www.washingtonpost.com/wp-
dyn/content/article/2008/07/16/AR2008071602732.html)
Contrast that with oil-fat Russia -- a red-hot emerging market. As in many commodity-driven economies
in the developing world, soaring energy revenue has largely insulated Russia, the world's second-
largest oil exporter, from the turbulence in global markets. Its gross domestic product is expected to
grow 8 percent this year, and consumer spending continues to boom, with a 13 percent increase so far this
year, according to Troika Dialog, a Moscow investment house. "We are overloaded with money, crazy amounts of money
from the energy market," said Mikhail Bergen, a professor at Moscow's Higher School of Economics.
Russian econ strong
Neal 7/16 (Jeff Neal is Senior Writer, Options Strategist & Profit Strategies Radio Show, Market Correspondent.
http://www.optionetics.com/market/articles/19849)
Russia is still the largest market for foreign investments when looking at the Eastern European region.
The reason behind this is because Russia is by far the strongest economy. Russia’s Gross Domestic
Product increased an average of 7.5 percent per year for the last eight years. In addition, the nation’s
once large debts have been replaced with a $150-billion stabilization fund. Their trade balance shows a big
surplus of $72.5 billion and its benchmark RTS stock index has increased by 1,992 percent since 2000. Even with this growth most
analysts assert that Russian stocks are still cheap and the cheapest of any emerging market. Currently Russian companies are trading at
an average of just nine times forward earnings. This is a bargain when compared to the 14 times forward earnings of Latin American and
15 times forward earnings of Asian stocks or the 20 times forward earnings of U.S. equities.
Russian econ strong
Speedie 7/14 (David Speedie is Senior Fellow, Belfer Center for Science and International Affairs, John F. Kennedy School of
Government, Harvard University “The Rise of the Rest: How the Ascent of China and Russia Affects Global Business and Security”
http://www.policyinnovations.org/ideas/briefings/data/000066)
Two, realize and accept that Russia is a global economic player, although this has to be taken in perspective. There is
obviously a highly visible Russian commercial presence in London, Europe's finance capital, and this will be replicated in New York.
Under Yeltsin, Russian GDP peaked at $200 billion. Under Putin, it reached $1.3 trillion. However, even if
Russia ascends to the top five global economies, it will still be a mere fraction in terms of global GDP of, for example, the United States,
the European Union, and China. Three, Russia's economic growth under Putin has included, as said before, a
rising entrepreneurial middle class and a robust consumer economy. Just look at the piece in The New York
Times a couple of weeks ago that showed the Turkish resort on the Mediterranean where Russian tourists were basking in a replica of the
Kremlin and Saint Basil's Cathedral. This is the new Russian consumer with money to go abroad and be where they feel comfortable.
Russia DA – UQ – Corruption
Russia is more transparent and working to reduce bureacracy
Thompson Financial News 7/11 “Russian oil sector at 'critical juncture' – Putin” Thomson Financial News,
http://www.forbes.com/afxnewslimited/feeds/afx/2008/07/11/afx5205986.html
'The oil sector has reached a critical juncture,' Putin said after visiting the Sevmash shipyard in Severodvinsk where
Russia's first Arctic oil rig is under construction. He said tax cuts approved this year had already given oil companies more money to
spend on development and added that the government was considering additional tax breaks for companies operating in oil-rich regions
of Siberia. The government will also ease bureaucracy for companies opening new oil fields and develop
infrastructure in remote areas to encourage investment. 'Our energy policy will be clear, transparent,
liberal. We do not plan any economic egoism. We will take into account the legitimate interests of our
partners but we will also defend our national interests,' he added. 'We have no doubt that now, in the medium-term and in the long-
term, we will completely cover the growing demand of the Russian economy and fulfil our obligations to our foreign partners,' he
continued.
Russia DA – UQ – Russia Diversification 
Russia diversification 
Neal 7/16 (Jeff Neal is Senior Writer, Options Strategist & Profit Strategies Radio Show, Market Correspondent.
http://www.optionetics.com/market/articles/19849)
Russia has always been known for its abundance of natural resources. They have the world’s largest natural
gas reserves, the second largest coal reserves and the eighth-largest oil reserves. However, Russia is currently in the
process of transitioning from an economy focused just on natural resources to an economy based on
domestic consumption because of the big increases in disposable income. The bottom line is that these
emerging markets in Eastern Europe, led by Russia, are worthy of taking a closer look at for profitable opportunities.
Russia DA – Internals – Oil Key to Russian Econ

Oil key to Russian econ, vulnerable to drop in oil prices
Hugh 7/9 (Edward Hugh is a macro economist, who specializes in growth and productivity theory, demographic processes and their impact
on macro performance. “Russian Inflation: Is the Boom About To Bust?” http://seekingalpha.com/article/84286-russian-inflation-is-the-boom-
about-to-bust)
At the same time the price of Russia's Urals crude continues to touch all-time highs (it averaged $106 a barrel in the year through July 2,
compared with $60 a barrel in the same period a year earlier). Russia produced 9.77 million barrels of oil a day in
June, more than Saudi Arabia did, thus becoming the biggest exporter of the fuel. Russia also produces the energy
equivalent of about 11 million barrels a day of gas. As a result of such factors Russia's trade surplus hit a record $130.92
billion in 2007. So what could possibly go wrong? Well, the central point would be that the strong rise in oil
prices we have seen since the start of the century has only served to increase Russia’s dependence on
oil and gas revenue and has not been used to facilitate the kind of diversification which could allow for a
more stable development path. As such, the Russian economy—despite the outward semblance of "you've never had
it so good" boom times—has never been more vulnerable to sudden falls in oil and gas prices.
***Russia Answers – 4th Wave***

Russia Answers – UQ – Russia Econ

Russia’s economy is slowing
PrimeTass 7/17 ([http://www.prime-tass.com/news/show.asp?topicid=50&id=441576] Kudrin: Slower industrial

growth in Jun doesn't indicate long-term trend/ July 17, 2008)
Russian Finance Minister Alexei Kudrin said Thursday that he believed slower industrial output growth in
June did not indicate a long-term slow-growth trend. "For the time being, it's difficult to talk about a
trend," said Kudrin, who is also a deputy prime minister. Russia's industrial output rose 0.9% in June,
slowing down from a 1.4% growth rate in May, according to the Federal State Statistics Service. Kudrin
said, however, that he believed Russia's high inflation rate resulted in high interest rates, less
investment, and slower economic growth.
Russian econ growth slowing
Harrison 7/14 (Jon Harrison is Director of FX Strategy at Dresdner Kleinwort in London

http://www.reuters.com/article/reutersComService4/idUSDIS43812720080714)
GDP growth remains among the strongest in the EEMEA region (Eastern Europe, the Middle East and Africa), delivering 8.1 percent
year-on-year last year. High oil and commodity prices continue to put the economy in a strong position but
we do not expect Russia to be entirely insulated from the global economic slowdown. We forecast GDP
growth slowing to 6-7 percent this year and next.
Russian econ overheating, inflation 
about-to-bust)
At the same time there is now extensive evidence that the Russian economy is overheating. The IMF in
their June 2008 Article IV Consultation Report mention three factors: 1i) the fact that inflation has almost doubled
over the past year and now extends well beyond food and energy price increases; 2) domestic demand is
increasing at an annual rate of 15 percent in real terms, while GDP is growing at 8 percent, a rate which is somewhat
above the level that can be maintained without causing accelerating inflation, according to estimates by both Russian and IMF experts;3)
resource constraints have now become strikingly evident in labor markets, where shortages are causing real
wage increases of about 16 percent annually, well above growth in labor productivity (see chart below), and unit labor costs are
now rising steadily. Domestic resource constraints are also evident in the rise in import volume growth
to almost 30 percent annually.
Russia Answers – UQ – Russia Infl 

Russian econ overheating, inflation 
about-to-bust)
Russia's inflation rate remained tantalizingly frozen at its highest in more than five years in June as energy and
food prices continued to move on upwards. Russian consumer prices were up 15.1 percent from a year ago—
matching the rate in May—according to data released earlier this week by the Federal Statistics Service. As a result, the Russian
government is struggling to bring inflation down towards its 10.5 percent target after increased income from
rising global energy prices boosted domestic demand and made possible 300 billion rubles ($13 billion) of extra government spending
on items like pensions and state wages in the runup to last December's elections. The result has been a massive surge in
consumer spending and construction activity, which has pushed the rate of expansion in the Russian
economy above its long-term "comfort" capacity level. In this post we will look at the general macro economic
situation of the Russian economy, and we will see that, with output in the resource sector effectively at or near its peak, the main
drivers of Russian growth are now construction and domestic consumption. Since long-term labour
supply issues mean that Russia is unable to comfortably grow at its current rate of expansion, the end
product is rising inflation and structural distortions in the development of the manufacturing sector. Policy
limitations at the level of fiscal demand management and exchange rate adjustment mean that this
whole process is only being accelerated rather than contained. As a result, the living standards improving
boom could easily, under unfavourable circumstances, be converted into precisely its opposite: an impoverishing
bust.
Russia Answers – Internals – AT: Oil Key to Russian Econ
Oil is not the key factor in Russian econ growth
about-to-bust)
The structure of Russian real GDP growth has shifted significantly towards non-tradable sectors in
recent quarters, partly reflecting booming domestic demand and the appreciating real effective
exchange rate of the ruble. There has decline in the relative importance of resource extraction - oil
output has stopped rising, and was 1% down year on year in June - and an increasing dependence on
imports and construction. In the earlier years of this century, and in particular during 2003-2004, oil
and some industrial sectors were the key engines of economic growth. From 2005 onwards, however,
the expansion has largely been driven by non-tradable services and goods production for the domestic
market, including manufacturing goods. In 2007 the wholesale and retail trade alone accounted for almost a
third of the overall economic growth. Booming construction and manufacturing contributed another 30
percent. Within the industrial sector, manufacturing - which is largely directed towards the domestic market -
was a key driver, expanding by 7.4 percent in 2007, compared to only 2.9 percent in the previous year. In
contrast growth in the resource extraction industry has virtually ground to a halt, reflecting binding
capacity constraints and the comparative remoteness (and cost) of new deposits.
Russia Answers – Internal Link Turn: Inflation K/T Econ

Inflation is the worst threat to Russian growth
Rautava 8 (Jouko, BOFIT Online, June, www.bof.fi/bofit, “The Challenges of the Medvedev Era”)
Inflation began to accelerate in the second half of 2007, and today is a central issue of contention in
economic policy. The actual inflation figure of 11.9 % handily beat the government’s 2007 inflation target of
8.5 %. This year, inflation continues to gain steam, although there is hope it may ease during the summer
due to seasonal factors. After an almost continuous decline since 1999, inflation is accelerating (at least
temporarily). This is disconcerting for several reasons. Respondents to Russian opinion polls
consistently rank inflation as the worst threat to their personal finances. If trust in a strong rouble
falters, flight to other currencies could very well destabilise the financial system. Even small changes
can have large effects on saving patterns and capital flows. The lack of coherent economic policy
response is the inability to agree on what is causing the inflation. As in other countries, the problem can
be seen in higher food prices. Yet, while nearly a third of foodstuffs in Russia are imported, the biggest
problem is domestic. Russian food production has not managed to keep up with the boom in consumer
spending, so prices of both animal and vegetable products have shot up dramatically. A second
interpretation of the leap in inflation is that larger-than- anticipated amounts of foreign currency have
made there way into the country via the trade and capital accounts. The third, perhaps most realistic,
explanation is that the Russian economy is simply overheated. A variety of bottlenecks put upward
pressure on wages, raw material prices and building costs. All of these explanations conveniently align
with the various measures proposed for fiscal, monetary and exchange rate policy.
***Saudi Oil Updates – 4th Wave***

Saudi DA – UQ – Saudi Econ 

Saudi econ 
AME Info 7/13 (“Saudi wealth reaches new heights” http://www.ameinfo.com/163321.html)

Saudi crude production has reached 9.7 million barrels-per-day (bpd) in July. By the end of 2009, sustainable
capacity is due to be increased to 12. 5 million bpd. Peter Burnett chief executive of UBS Investment bank in the Middle East and North
Africa, which has just received a licence to operate in the kingdom, says: 'They have petrodollars flowing in and are in
the process of enormous wealth creation.' The kingdom's economy has doubled in size since 2002 and
its nominal gross domestic product is projected to reach $465bn in 2008, and already accounts for half the wealth
management business in the Middle East. Should oil prices continue at present levels and above, Saudi income is likely to grow well
beyond the $1bn a day it had already reached before world prices hit $140 a barrel.
Saudi DA – UQ – Saudi Inflation

Saudi inflation down
Ghafour 8 (Abdul, Arab News

[http://www.arabnews.com/?page=6&section=0&article=111329&d=29&m=6&y=2008] Inflation lets up a little in
Kingdom/ June 29, 2008)
Annual inflation in Saudi Arabia hit 10.5 percent in April this year, the highest in more than 30 years. As a
result the government took a series of measures to curb inflation and rising prices of essential
commodities. Hamad Al-Sayari, governor of Saudi Arabian Monetary Agency (SAMA), has predicted the
Kingdom’s inflation rate would come down by the second half of this year. “Unfortunately, the forces
pushing inflation are still active. We expect that it will slow down in the second half of the year as a
result of the slowdown of the global economy and impact on demand for commodities,” he said. With
crude oil selling for prices above $140 a barrel, forces pushing inflation in Saudi Arabia include housing and
rent, and they are taking time to ease, Al-Sayari said.
Saudi taking measures to control inflation
Gulf Daily News 7/17 ([http://www.gulf-daily-

news.com/Story.asp?Article=223290&Sn=BUSI&IssueID=31119] Inflation in Oman 'to stabilise as food crisis
eases'/ July 17, 2008)
Gulf governments have increased price controls, boosted subsidies and raised employee wages in
response to inflation. As the impact of such anti-inflation measures kicks in, price rises in Saudi Arabia
are likely to ease in the second half of the year, its central bank governor has said. Inflation in the
world's top oil exporter eased slightly to 10.4pc in May from an at least 30-year high of 10.5pc a month
earlier. Oman's central bank has tightened lending curbs three times in less than a year to rein in money
supply growth.
Saudi DA – UQ – Impact: Coup = US Invasion
Saudi coup would force a US military intervention
World Tribune 5 (“U.S. fears prospect of Saudi coup, weighs invasion plans”
http://www.worldtribune.com/worldtribune/05/front2453676.157638889.html)
The United States has raised the prospect of a military invasion of Saudi Arabia. The House Armed
Services Committee considered the possibility of a Saudi coup and U.S. response during a hearing on Oct. 26.
Saudi Arabia, with 200,000 military and National Guard troops, is the largest oil producer and exporter, with an output of nine million
barrels of oil per day, according to Middle East Newsline. The Arab kingdom is the third largest supplier of oil to the United States, with
more than 1.55 million barrels per day. The scenario was outlined by Michael O'Hanlon, a senior fellow of the Brookings Institution,
who cited a Saudi coup as one of several threats to the United States. "How should the United States respond if a coup,
presumably fundamentalist in nature, overthrows the royal family in Saudi Arabia?" O'Hanlon asked.
"Such a result would raise the specter of major disruption to the oil economy." The response could
include the deployment of three U.S. Army divisions backed by fighter-jets and airborne early-warning
and alert aircraft. In all, the U.S.-led mission could include up to 300,000 troops. Congressional sources said
the House hearing, which focused on future threats in the Middle East and other regions, marked increasing U.S. concern of Saudi
instability. They said the open hearing echoed a series of briefings on Saudi and Gulf Arab instability given by non-government analysts
to the State Department, Defense Department and National Security Council since 2002. The House committee was told that
U.S. concern of a Saudi coup appears greater than ever. O'Hanlon said such a coup would also
destabilize Pakistan, a nuclear power since 1998. "This type of scenario has been discussed for at least
two decades and remains of concern today — perhaps even more so — given the surge of terrorist
violence in Saudi Arabia in recent years as well as the continued growth and hostile ideology of Al
Qaida along with the broader Wahabi movement," O'Hanlon said. In his testimony, O'Hanlon envisioned a
Saudi coup as resulting in the emergence of what he termed a fundamentalist regime intent on
acquiring nuclear weapons. Another prospect was that the new regime would seek to disrupt the oil market. "Indeed, it might
be feasible not to do anything at first, and hope that the new regime gradually realized the benefits of reintegrating Saudi Arabia at least
partially into the global oil economy," O'Hanlon said. "But in the end the United States and other western countries might consider using
force." O'Hanlon envisioned a U.S.-led military operation designed to seize Saudi oil wells, located along
the eastern coast. Washington and its allies would place the proceeds from Saudi oil sales into escrow
for a future pro-Western government in Riyad. A U.S.-led military force of 300,000 would be required to secure the
entire Saudi Arabia, O'Hanlon said. He said about 10,000 troops could capture eastern Saudi Arabia, which contains virtually all of the
kingdom's oil wells. But more than 100,000 additional troops would be required to protect the wells and other vital infrastructure. "An
operation to overthrow the new Saudi regime and gradually stabilize a country of the size in question would probably require in the
vicinity of 300,000 troops, using standard sizing criteria," O'Hanlon said. "So in fact a coastal strategy, while easier in some ways and
perhaps less bloody in the initial phases, could be fully half as large and might last much longer."
***Saudi Answers – 4th Wave***

Saudi Answers – UQ – Saudi Econ
Saudi econ declining, stock markets prove
Bloomberg 7/12 (“Samba and Banque Saudi shares drag Saudi Arabian index down”
http://archive.gulfnews.com/articles/08/07/13/10228378.html)
Saudi Arabian shares declined for a third day, led by Banque Saudi Fransi and Samba Financial Group. The Tadawul All
Share Index retreated 0.3 per cent to 8,971.32 at 1.02pm in Riyadh. The index has lost 5.7 per cent during its three-day
losing streak. Banque Saudi Fransi, the Saudi lender partially owned by a unit of Credit Agricole SA, slid 2.4 per cent to 81 riyals.
Samba, the second-largest bank, dropped 1 per cent to 73.25 riyals. The Tadawul is the only Arab exchange monitored by Bloomberg
that's open on Saturdays.
Saudi Answers – UQ – Saudi Inflation 

Saudi inflation is 
Gulf Times 7/17 (“No revaluation on council proposal: Sama economist” http://www.gulf-
times.com/site/topics/article.asp?cu_no=2&item_no=230410&version=1&template_id=48&parent_id=28)
A top economist at Saudi Arabia’s central bank, the Saudi Arabian Monetary Agency (Sama), said yesterday that the kingdom won’t
revalue or depeg its currency from the dollar after a proposal to appreciate the riyal by 20% was submitted to the Shura Council this
week. “I don’t see any change in the value of the riyal happening,” Saudi-based Sama economist Fadi Alajaji told Zawya Dow Jones in
an exclusive interview. Inflation in Saudi Arabia, the Mideast’s largest economy, is running at a 30-year
high, fueled in part by the riyal’s peg to the dollar, which drives up the cost of imports and forces Saudi
Arabia to mimic the US’ currently loose monetary policy. In May, annual inflation in Saudi Arabia hit
10.6%, compared with 2.96% in May 2007.
Saudi Answers – UQ – Middle East Instability 
Middle east instability now
Barrons 7/14 “You Won't Go Broke Filling Up on the Stock”

http://online.barrons.com/article/SB121582947553448191.html?mod=googlenews_barrons
Obviously, the Middle East is synonymous with political instability and depends on a single commodity,
oil, whose price some believe has peaked. But even at lower oil prices, money will continue to roll into these
countries at unprecedented rates. And instability, as Iran's missile tests underscored again last week,
only seems to lift the price of oil. Over the past six years, Gulf states have built up nearly $1 trillion in financial reserves they
can spend in the unlikely event of a collapse in prices.
Middle east instability now
Pollack 7/15 (Kenneth M. Pollack, a senior fellow at the Brookings Institution's Saban Center for Middle East Policy. “How the Middle
East Wastes Its Oil Wealth Squandered Riches”
http://www.istockanalyst.com/article/viewiStockNews+articleid_2394912&title=How_the_Middle_East.html)
You might think that $140 per barrel oil would be good for at least one part of the world, the Middle East.
It's too soon to tell for certain, but the region may well turn out to be the part of the world that suffers the
most. As painful as the current (or coming) oil-driven recession will be for Americans, it does seem to be persuading us to make the
sacrifices necessary to diminish our reliance on oil. Over the long term, that could prove a huge boon for our economy, our environment
and our national security. In the Middle East, the situation may be reversed. Right now, the region is experiencing an economic boom,
creating the opportunity to address the deep-seated political, economic and social problems that have spawned terrorist groups like Al
Qaeda. That's certainly what the people of the region hope. The danger is that the way that the rising revenues are
being spent will more likely worsen the region's instability over time. And that's a problem, because
problems in the Middle East have a bad habit of becoming big problems for the rest of the world. The
Middle East isn't Las Vegas: What happens there doesn't stay there.
***Venezuelan Oil DA***

Venezuela DA – 1NC
Venezuela’s GDP at record highs
Latin Business Chronicle 8 ([http://www.latinbusinesschronicle.com/app/article.aspx?id=2535] Venezuela:

Latin America's Richest?/ June 23, 2008)
Venezuela will replace Chile as the country with the region's highest GDP per capita and Argentina
as the region's third-largest economy, according to a Latin Business Chronicle analysis of data from the
International Monetary Fund (IMF). Venezuela's GDP per capita is estimated to reach $11,933 this year.
That's higher than the estimated figure for Chile of $10,126. The IMF estimates also show that Venezuela's
GDP is set to reach $334.7 billion this year, while that of Argentina will likely end up at $323.8 billion.
Oil revenue is critical to Venezuelan poverty eradication
Collier 6 (Robert, Nonprofit Organization [http://www.commondreams.org/headlines06/1002-06.htm] Venezuela's

Oil Wealth Funds Gusher of Anti-Poverty Projects/ October 2, 2006)
While the Venezuelan president has caused international controversy with his angry denunciations of
the Bush administration, this is where the rubber meets the road for Chavez's radical rhetoric. He is
spending billions of dollars on anti-poverty programs, in what experts say may amount to the largest
such effort in a developing nation. And in a gamble that turns part of his own government's power structure on its head, he is handing a
large degree of authority over these spending programs to thousands of these elected local councils. "The issues in these neighborhoods are very old fights --
water, land, decent housing," said Andres Antillano, a professor of social psychology and criminology at the Central University of Venezuela in Caracas who
has been an adviser to many neighborhood groups. "For many years, the only relationship with the state was the police. They came here and put everyone
against the wall," Antillano said. "Chavez has chosen to gamble on legitimizing these issues. The communal councils are a very serious attempt at grassroots
organizing." The policy appears especially popular in the hard-bitten slums of Caracas -- although as is true elsewhere around the country, the electorate
seems divided between a strongly pro-Chavez minority and an apathetic majority. San Juan's new council was chosen in local voting a week previously,
with only 330 of the neighborhood's 916 eligible adult residents casting ballots. "We like Chavez because he's giving us control," said Leomar Aquino, who
had just been chosen head of the Education, Culture, Recreation and Sports Committee, one of a half-dozen such panels on the council. "If you don't want to
participate in it, hey papito, that's your problem." On this night, nobody seemed to know exactly how much their neighborhood would receive. Nor, the next
day, did anyone at the offices of the local district government or in the central government buildings downtown. What is certain, however, is that
Venezuela's petroleum export earnings are rising rapidly, and the government is spending the money
with abandon. The government initially budgeted $857 million for social spending in 2006. But as oil
money floods in, officials keep increasing the amount. It now stands at $7 billion, although many experts
view that figure as a guesstimate of money being spent on the fly. Public works projects are everywhere,
ranging from subway lines in Caracas and Valencia to bridges over the Orinoco River. New medical
clinics -- mostly staffed by Cuban doctors provided under Chavez's oil aid program to Fidel Castro -- are
within reach of almost everyone in this nation of 25 million people. Illiteracy, formerly at 10 percent of
the population, has been completely eliminated, and infant mortality has been cut from 21 deaths per
1,000 births to 16 per 1,000. Another initiative that could change the lives of millions of poor
Venezuelans is a new program aimed at increasing land ownership.
Poverty outweighs nuclear war – Their impact args are biased
Abu-Jamal 98 (Mumia, political activist, http://www.mumia.nl/TCCDMAJ/quietdv.htm)

This form of violence, not covered by any of the majoritarian, corporate, ruling-class protected media, is
invisible to us and because of its invisibility, all the more insidious. How dangerous is it -- really? Gilligan notes:
"[E]very fifteen years, on the average, as many people die because of relative poverty as would be killed in a nuclear war
that caused 232 million deaths; and every single year, two to three times as many people die from poverty throughout the
world as were killed by the Nazi genocide of the Jews over a six-year
period. This is, in effect, the equivalent of an ongoing, unending, in fact accelerating, thermonuclear war, or genocide on
the weak and poor every year of every decade, throughout the world." [Gilligan, p. 196] Worse still, in a thoroughly
capitalist society, much of that violence became internalized, turned back on the Self,
because, in a society based on the priority of wealth, those who own nothing are taught to loathe themselves, as if
something is inherently wrong with themselves, instead of the social order that promotes this self-loathing. This intense
self-hatred was often manifested in familial violence as when the husband beats
the wife, the wife smacks the son, and the kids fight each other. This vicious, circular, and invisible violence,
unacknowledged by the corporate media, uncriticized in substandard educational systems, and un-understood by the very
folks who suffer in its grips, feeds on the spectacular and more common forms of violence that the system makes damn
sure -- that we can recognize and must react to it.
Venezuela DA – UQ – Econ Up
Venezuela’s GDP at record highs

Venezuela will replace Chile as the country with the region's highest GDP per capita and Argentina
as the region's third-largest economy, according to a Latin Business Chronicle analysis of data from the
International Monetary Fund (IMF). Venezuela's GDP per capita is estimated to reach $11,933 this year.
That's higher than the estimated figure for Chile of $10,126. The IMF estimates also show that Venezuela's
GDP is set to reach $334.7 billion this year, while that of Argentina will likely end up at $323.8 billion.
Venezuela’s economy is expected to grow

Venezuela's economy grew by 8.4 percent last year, but is starting to see a slowdown. This year it should
expand by 5.8 percent and next year only by 3.5 percent, according to IMF forecasts. Argentina's economy
will see a similar trend, albeit not as marked. Last year, its economy expanded by 8.7 percent. This year it
should grow by another 7.0 percent before expanding by 4.5 percent in 2009.
Increased democratic participation improves Venezuelan economy

Jordan 8 (James, Political Affairs [http://www.politicalaffairs.net/article/articleview/7046/1/340/] Close the Mis-
named National Endowment for Democracy/ June 19, 2008)
Has participatory democracy been good for Venezuela? Since the people gained popular power in 1998,
the poverty rate has dropped from 54% to 38.5%--30% if food and health subsidies are factored in;
millions have gained access to free health care; half the population is enrolled in free, public education; and
over 5 million acres of fallow land have been turned over to rural people for agricultural development. The
economy has been growing steadily since NED funded attempts to overthrow the government in 2002.
Venezuela DA – UQ – Econ Down

Venezuela’s economy is down
Sabino 8 (Carlos, Latin Business Chronicle [http://www.latinbusinesschronicle.com/app/article.aspx?id=2510]
The Absurd Venezuelan Economy/ June 16, 2008)
The next several months will bring increased inflation, more shortages, and greater internal strife
within Chavismo. CARACAS—To any observer walking through the streets of this city, the poor
performance of the Venezuelan economy is a powerful revelation. The basic elements of Venezuelans’
daily diet are missing; it is hard—sometimes impossible—to find milk, chicken, or flour; and there is a
shortage of medicine and other products essential to good health. But as the state budget continues to
increase due to a dramatic rise in oil revenues since 2003, wages have been frozen for years despite the
government’s claim to operate on the people’s behalf.
Venezuela is experiencing inflation and slow growth

AP 8 (Associated Press [http://www.baltimoresun.com/news/nation/bal-te.venezuela15jun15,0,3509271.story]
Venezuela boom deflates/ June 15, 2008)
Boom times are waning in oil-rich Venezuela, even as world crude prices soar. Inflation is nearing 30
percent, the highest in Latin America, and annual economic growth slowed to 4.8 percent in the first
quarter, a four-year low. Analysts say President Hugo Chavez's economic policies are hindering private
investment and growth just as he hopes to boost support ahead of November's regional elections. Many
point to the economy as his Achilles' heel.
Venezuelan economic growth cut in half

AP 8 (Associated Press [http://www.baltimoresun.com/news/nation/bal-te.venezuela15jun15,0,3509271.story]
Venezuela boom deflates/ June 15, 2008)
Foreign direct investment fell to $646 million in Venezuela last year, about half its average for the
previous four years, according to the U.N. Economic Commission for Latin America and the Caribbean.
Analysts warn that slowing flow of capital is a drag on the country's annual growth rate, which slowed
to 4.8 percent at the end of the first quarter from 8.8 percent last year.
Venezuela DA – UQ – Oil Up
Venezuela has future oil reserves

Amaral 8 (Rodrigo, Fund Strategy [http://www.fundstrategy.co.uk/cgi-bin/item.cgi?id=168858] Prepare to Fly/
July 14, 2008)
"Venezuela has a difficult president, but also has lots of oil and will pay its debts," he says. "It raises the
classic point: the client has money to pay its debt. But does it want to pay? I think Venezuela does." Kassim
says that some market analysts may be moved by other factors than purely economic analysis to have
developed such contempt for Venezuelan bonds. "With all the oil they have, Venezuelan bonds are
delivering yields of 10.5-11 percent. It doesn't make any sense. The market doesn't like Venezuela, but I
do."
Venezuela has larger reserves than Saudi Arabia

Business News 8
([http://www.monstersandcritics.com/news/business/news/article_1414579.php/Era_of_cheap_oil_is_gone_Venezue
lan_expert_says__Roundup_] Era of cheap oil is gone, Venezuelan expert says (Roundup)/ July 2, 2008)
Non-OPEC countries are expected to use up their reserves by the late 2020s, according to Calderon. The
most important future OPEC producers will include Venezuela, whose reserves are the worlds biggest,
surpassing those of Saudi Arabia, the former energy minister said. Calderon denied that Venezuela's oil
production had declined, and put production at more than 3 million barrels a day, as opposed to other
estimates of 2.4 million barrels.
Venezuela has the world’s largest oil reserves

Sugget 8 (James, Venezuela Analysis [http://www.venezuelanalysis.com/news/3643] Venezuela Increases Oil
Financing for Petrocaribe Nations/ July 15, 2008)
Chávez encouraged countries to pay part of their debt in “goods and services,” assuring that “a
distinct market will be born in Petrocaribe” which creates “opportunities for integral development.”
Chávez also proposed that Petrocaribe nations create mixed enterprises with the Venezuelan state oil
company PDVSA to extract oil from the Orinoco Oil Belt, where Venezuela has some of the world’s
largest oil reserves. This way, each country in Petrocaribe would produce its own oil supply, strengthen its
economy, and be less affected by the soaring oil prices, Chávez explained.
Venezuela DA – UQ – Oil Down (1/2)

Oil revenue and investment are down
GAO 6 (June, http://www.gao.gov/new.items/d06668.pdf)

Future foreign investment is uncertain given the Venezuelan government’s recent decision to unilaterally change its
business dealings with foreign companies. Beginning in 2005, the Venezuelan administration took steps to make private
Venezuelan and foreign companies producing crude oil under the 32 operating service agreements renegotiate those
agreements. Essentially, the new agreements increase the maximum royalty from 16-2/3 percent to 30 percent, increase
income taxes from 34 percent to 50 percent, and give PDVSA at least a 51 percent share of the operations covered by the
agreement. Oil industry officials and experts have generally reacted negatively to the changes in the agreements. Most
company officials we contacted told us that Venezuela’s move to unilaterally impose new agreements increased their risk
and eroded the investment climate in Venezuela, likely leading to future production declines. Many oil industry officials
and experts told us that the changes in the foreign company participation structure, such as mandating a majority share of
the operation for PDVSA, pose investment risks and uncertainty for foreign companies because the Venezuelan
government has ultimate control in decisionmaking. When France’s Total and Italy’s Eni oil companies failed to sign new
agreements, the Venezuelan government seized control of their operations in April 2006; five other fields were turned
over to PDVSA after negotiations, according to the Venezuelan spokesperson. Also, ExxonMobil and Norway’s Statoil
chose to sell their minority stakes in smaller fields rather than accept Venezuela’s required changes. Furthermore, in May
2006, the Venezuelan Congress approved a new oil extraction tax. According to the Venezuelan spokesperson, the
extraction tax is 33.33 percent applied to well production, with royalty fees deducted from this tax.
More ev…
Alvarez & Hanson 6-27 (Cesar & Stephanie, Council on Foreign Relations,
http://www.cfr.org/publication/12089/venezuelas_oilbased_economy.html)
Venezuela has an estimated 78 billion barrels of proven conventional crude oil reserves and an additional
estimated 235 billion barrels of unconventional extra-heavy crude oil in the Orinoco Belt region located
southeast of Caracas. If development in the region can turn this extra-heavy tar-like oil into a more
marketable commodity, Venezuela’s total reserves could rival those of Saudi Arabia, reports the New York
Times. Oxford Analytica notes, however, that PDVSA will struggle to develop its heavy-oil reserves in a
timely fashion given its lack of infrastructure investment and the ongoing oil nationalizations. Oil industry
experts suggest that PDVSA needs to invest at least $3 billion annually into its existing fields just to maintain
current production levels.
Venezuelan oil production down
Rocky Mountain News 8 ([http://www.rockymountainnews.com/news/2008/jul/05/dont-scapegoat-energy-

price-runup/] Don't scapegoat energy price runup/ July 5, 2008)
One cause driving up prices at the margins doesn't get a lot of headlines: 77 percent of the world's known
petroleum reserves are controlled by state-owned oil companies. As Reason magazine science
correspondent Ronald Bailey has noted, oil production from several of the world's largest suppliers -
Iran, Mexico, Nigeria and Venezuela - has recently slipped. Corruption is sometimes to blame, but the
greater problem is that the state companies are inefficient and they haven't reinvested enough oil profits
in infrastructure and technology.
Venezuelan oil production declining

Seeking Alpha 8 (leading provider of stock market opinion and analysis [http://seekingalpha.com/article/81979-
oil-s-supply-and-demand] Oil's Supply and Demand/ June 19, 2008)
Another important factor is that the production in many oil-exporting nations has been in decline due to
under investment in new drilling and infrastructure by state run oil companies. Venezuela and Iran are
two countries that fit into this category. Production in Venezuela and Iran is declining due to years of
under investment as oil profits have been funneled into social programs designed to keep each
country’s ruling party in power. Recent political instability in the Middle East has also contributed to the
oil price rise.
Venezuela DA – UQ – Oil Down (2/2)

Venezuela’s oil production decreasing
The Market Oracle 8 (Financial Markets Analysis & Forecasting online publication
[http://www.marketoracle.co.uk/Article5187.html] China Raises Fuel Prices: Is this the End of the Oil boom?/ June
23, 2008)
Worst of all, Mexico's production crisis is deepening: In April, Mexico's oil output fell to a nine-year low of
2.8 million barrels a day, mostly because of a decline in the Cantarell field. Think that's scary? Consider this:
At current rates of decline, Mexico will become a net oil importer by 2016, and maybe sooner, according to
Mexico's Energy Ministry! And it's not just Mexico. Venezuela, another big supplier of U.S. imported oil,
is hemorrhaging oil production due to the slipshod management by its deluded president, Hugo
Chavez. Result: The combined net oil exports from Venezuela and Mexico to the U.S. dropped by
414,000 bpd in just five months recently. That's an astounding annual decline rate of 32% a year!
Venezuelan oil revenue is down
Johnson & Cohen 4 (8-12, Stephen & Ariel, Heritage Foundation, http://www.heritage.org/Research/LatinAmerica/bg1787.cfm)
During its 20-year history before Chávez, PDVSA built a reputation for smooth operation and competence,
but the 2002-2003 national strike devastated the oil giant. Some 35,000-40,000 skilled workers, including
fire fighters, walked out while spillage and fires ensued. Production capacity dropped from three mbd to
600,000 barrels. Chávez fired 18,000 skilled managers and workers, further undermining PDVSA's
precarious situation.17 To regain and maintain pumping capacity at an estimated 2.5 mbd, PDVSA engineers
reportedly "goose" wells by pumping air and water into them to coax Venezuela's viscous petroleum to the
surface, endangering the long-term viability of existing fields.
Despite recent high oil prices that have provided a fresh infusion of cash, PDVSA remains in disarray.
Venezuelan economist Gustavo García calculates that this year's internal investment fell from $5 billion to
$4.3 billion while salaries went up 60 percent despite no apparent increase in productivity or number of
employees.18 Without reinvestment in equipment and maintenance, PDVSA will not be able to maintain
current production levels. Moreover, Chávez has reportedly channeled between $1.6 billion and $3.7 billion
from PDVSA into a special account that he is using to finance social programs to influence voters in the
upcoming referendum on his presidency.
Venezuela DA – UQ – Diversification Up
Venezuela’s economic diversification up
Hugo Chavez took office in 1999. Since then, Venezuela’s economy has remained squarely centered on oil
production. In 2006, Chavez announced a nationalization of oil fields managed by foreign companies, which
resulted in an increase of the government’s shares in these projects from 40 percent to 60 percent.
Government officials argue, however, that economic growth efforts are not solely focused on oil. Venezuela’s
ambassador to the United States, Bernardo Alvarez Herrera, wrote in a 2006 Foreign Affairs essay that the
non-oil sector, which includes mining, manufacturing, and agriculture, grew 10.6 percent in 2005, “indicating
an important diversification of the country's economy.” Yet even if the country is working to diversify,“oil
still predominates,” says Miguel Tinker-Salas, a professor of Latin American history at Pomona College.
Venezuela DA – UQ – Diversification Down

Diversification in Venezuela is down
Berry 8 (Albert, Professor Emeritus of Economics at the University of Toronto, with a research focus on the
economics of Latin America, March,
http://www.focal.ca/publications/focalpoint/fp0308se/?article=article4&lang=f)
Dutch disease constitutes at least some degree of threat in Venezuela, Bolivia, Ecuador, Mexico, Colombia
and Brazil. The threat is currently greatest in Venezuela and Bolivia. In fact, Venezuela’s stagnation in
the wake of the previous oil price hikes of the 1970s qualifies it as a classic victim of this disease: slow
growth as manufacturing and agriculture are hamstrung by the appreciated exchange rate; low
employment creation in productive sectors; and the resulting high levels of “informalization” and
inequality. Bolivia’s level of inequality still shows Dutch disease’s impact on tin from earlier times. Mexico
(now) and Brazil (when its oil becomes a major export) are less likely to suffer ill effects from energy exports
because they are bigger, more diversified countries, and probably also because their decision-makers will
have a better handle on how to deal with the problem.
Diversification low- Venezuela dependent on oil profits

Jordan 8 (James, Political Affairs [http://www.politicalaffairs.net/article/articleview/7046/1/340/] Close the Mis-
named National Endowment for Democracy/ June 19, 2008)
While Venezuela is engaged in a massive effort to diversify its economy, it still remains dependent on
oil profits which, under participatory democracy, support social spending. Community members are
involved in decisions about whether or not to develop oil resources and, for the first time in Venezuelan
history, indigenous nations most affected by oil development, take part in these decisions.
Kay & Quispe-Agnoli 2 (Stephen J, Myriam, Atlanta Fed's Latin America Research Group,
http://findarticles.com/p/articles/mi_m0KXG/is_3_4/ai_93610810)
Venezuela, for example, is more dependent on oil than any other country in Latin America with year-
2000 petroleum-export revenue accounting for approximately 23 percent of gross domestic product,
half of the government's revenue, and 86 percent of exports. Consequently, the Venezuelan economy
undergoes cycles of expansion and contraction associated with the price of oil. The economic swings are
exacerbated by the fact that fiscal policy has traditionally been procyclical, with government spending rising
during the boom years and shrinking when revenues fall. An oil stabilization fluid is a tool that governments
can use to enact countercyclical fiscal policies that could potentially reduce the disruptive impact of a sharp
drop in the price of oil.
Venezuela DA – UQ – Inflation Up
Inflation skyrocketing
Cancel 7/8 (Daniel [http://www.bloomberg.com/apps/news?pid=20601086&sid=a_s9FFSShDfI&refer=news]
Venezuelan Inflation Surges to Five-Year High in June/ July 8, 2008)
Venezuela's annual inflation rate reached the highest in five years last month as the easing of price caps on
foods caused supermarket prices to surge. Consumer prices rose 32.2 percent from a year earlier,
exceeding the 31.4 percent median forecast of 12 analysts surveyed by Bloomberg. Monthly inflation was
2.3 percent, according to the central bank's benchmark index of prices in Caracas.
Inflation in Venezuela high

The Economist 8 ([http://www.economist.com/world/la/displaystory.cfm?story_id=11585215] A funny way to
beat inflation/ June 19, 2008)
Nevertheless, the economy slowed sharply in the first quarter of this year (see chart). That came as a
surprise to the planning ministry, which had forecast growth of 6.7%. To make matters worse, the
government's inflation forecast of 12% for this year has proved even more wildly optimistic. This is
particularly bad news for the poor, Mr Chávez's main constituency. The price of food is rising faster than
the overall index. According to the Centre for Documentation and Analysis (CENDA), a group linked to the
trade unions, the cost of feeding a family of five rose by 2.4% in May and stands some 60% higher than
the minimum wage, even though this was recently increased. For the first time in the past three years, the
living standards of ordinary Venezuelans are declining.
Inflation in Venezuela at 29%

The Vancouver Sun 8 ([http://www.canada.com/windsorstar/news/editorial/story.html?id=1dc006ab-b7f1-
4699-b015-768b1de09f99] Renewed inflation looms for Canadians/ July 14, 2008)
In Thailand, inflation has jumped to a 10-year high of 8.9 per cent. In Russia, inflation is running at more
than 14 per cent; in Argentina, 23 per cent (unofficially); in Venezuela, 29 per cent; and in Indonesia, nine
per cent (with analysts predicting 12 per cent next year).
Venezuela DA – UQ – Inflation Down

Venezuela taking steps to decrease inflation
Sugget 8 (James, Venezuela Analysis [http://www.venezuelanalysis.com/news/3584] New Venezuelan Finance
Minister Presents Plan to Fight Inflation/ June 23, 2008)
On Sunday, Ali Rodríguez, the new Venezuelan Finance Minister, detailed ministry plans to take on the
“immediate challenge” of inflation by investing Venezuela’s “overflowing” oil revenues in a broadened
state apparatus to stimulate agricultural production and gradually leave behind “state capitalism.”
Rodríguez recommended that inflation “be combated in two directions, on the one hand, the stimulation of
production principally in the food sector and, on the other hand, we must carry out a very prudent moderation
of consumption.”
Inflation down in Venezuela

Herald Tribune 8 ([http://www.iht.com/articles/ap/2008/07/08/business/LA-GEN-Venezuela-Inflation.php]
Venezuela inflation reaches 15.1 percent in first six months/ July 8, 2008)
President Hugo Chavez's government has been battling South America's highest inflation rate. The
Central Bank says monthly inflation has slowed to 2.4 percent in June — down from 3.2 percent a
month earlier. The Central Bank said Tuesday that price increases have slowed primarily in the food
sector, partly due to an increased supply of agricultural products
Venezuela DA – Oil K/T Economy (1/2)

Oil key to Venezuelan economy
Venezuela's proven oil reserves are among the top ten in the world. Oil generates about 80 percent of the
country’s total export revenue, contributes about half of the central government’s income, and is responsible
for about one-third of the country’s gross domestic product (GDP). Increases in world oil prices in recent
years have allowed Venezuelan President Hugo Chavez to expand social program spending, bolster
commercial ties with other countries, and boost his own international profile. Though Chavez has threatened
to stop exporting Venezuelan oil and refined petroleum products to the United States, its biggest oil-trading
partner, experts say a significant short-term shift in oil relations between Venezuela and the United States is
unlikely. The medium-term outlook for state oil company PDVSA is questionable, however, and analysts
draw links between PDVSA's profitability and the political stability of the country.
Oil key to Venezuelan Economy
Cibils and Scott 1 (Vicente Fretes Lead Specialist, LAC, The World Bankand Kinnon World Bank. Washington,
D.C http://wbln0018.worldbank.org/LAC/lacinfoclient.nsf/e9dd232c66d43b6b852567d 2005ca3c5/fe8ed
dae8d8fdec985256b0b005a28b9/$FILE/C-II.pdf)
Over the last ten years, the structure of the economy has changed: Venezuela has become more
dependent on the oil sector with the share of oil–GDP in total real GDP increasing from about 21
percent in the early 1990s to about 26 percent in the late 1990s.3 At the same time, the share of
agriculture in total real GDP decreased from about 6 percent in 1990 to about 5 percent in 2000 and
manufacturing decreased from about 13 percent to about 11 percent.4 The service sector (including
government, commerce and other services) remained at about 47 percent of real GDP. Finally, reflecting the
failure of exports to diversify away from the oil sector, and the impact of the overvaluation of the
domestic currency on the external competitiveness over time, the share of non–oil exports to total
exports remained, on average, below 25 percent.
More ev…
Sullivan & Olhero 8 (1-11, CRS Report, Specialist in Latin American Affairs, http://www.fas.org/sgp/crs/row/RL32488.pdf)
Since Venezuela is a major supplier of foreign oil to the United States (the fourth major foreign supplier in
2006, after Canada, Mexico, and Saudi Arabia), providing about 11% of U.S. crude oil imports, a key U.S.
interest has been ensuring the continued flow of oil exports. Some 68% of Venezuela’s oil exports are
destined for the United States, highlighting the dependency of Venezuela on the U.S. market, and oil exports
account for the overwhelming majority of Venezuela’s exports to the United States. In 2006, Venezuela’s
total exports destined for the United States amounted to $37.2 billion, with oil products accounting for $35.1
billion, or 94% of the total.106 The December 2002 strike orchestrated by the opposition reduced
Venezuela’s oil exports, but by May 2003, Venezuelan officials maintained that overall oil production
returned to the pre-strike level. Venezuela’s state-run oil company, PdVSA, owns CITGO, which operates
three crude oil refineries and a network of some 14,000 retail gasoline stations in the United States. The
Chávez government has benefitted from the rise in world oil prices, which has increased government
revenues and sparked an economic boom. As a result, Chávez has been able to increase government
expenditures on anti-poverty and other social programs associated with his populist agenda.
Venezuela DA – Oil K/T Economy (2/2)

Low oil prices would devastate Venezuela’s economy
Lapper 6 (Richard, Council on Foreign Relations

[http://www.cfr.org/content/publications/attachments/VenezuelaCSR.pdf] Living with Hugo U.S. Policy Toward
Hugo Chávez’s Venezuela/ November 2006)
But Venezuela also suffers from considerable weaknesses. Venezuela’s failure to diversify its economy and
invest sufficiently in its hydrocarbons industry has made shortterm growth dependent on oil prices.
Should prices decline, Venezuela, along with countries that rely on Chávez’s financial support, may face
tough economic challenges. Even if oil prices remain high, further investment is necessary to create enough
jobs for a growing workforce and make recent improvements in living standards sustainable. Yet, unless
Venezuela is able to make its public sector more transparent, the government is unlikely to be able to attract
adequate quantities of foreign capital.
US demand is key

Yet, despite Chávez’s tendency to publicly insult American leaders and whip up anti-American sentiment, the
United States and Venezuela remain mutually dependent. Chávez relies on U.S. oil demand to sustain the
Venezuelan economy; roughly 60 percent of Venezuelan oil exports are destined for the United States.
Threats by Caracas to divert energy exports to China are not credible in the short term, given the
tremendous infrastructure and transportation costs such a shift would involve.
Venezuela DA – Investment K/T Oil

Investment critical to Venezuelan oil

The oil industry is capital-intensive and heavily dependent on continuous investment to maintain existing
wells, establish new wells for crude oil production, and develop and maintain the infrastructure supporting
the production network. According to the EIA, PDVSA is Venezuela’s largest employer and accounts for
about one-third of the country’s GDP, about 50 percent of the government’s revenue, and 80 percent of
Venezuela’s export earnings. PDVSA stated in 2005 that it plans to invest $26 billion to expand its oil
production to 5.8 million barrels per day by 2012.
Foreign investment is critical

According to Venezuelan officials, as of late 2005, no agreements had been signed or investments made to
start implementing the major oil production expansions detailed in the plan; experts told us that, without
agreements, the plan will face significant delays, at best. The absence of such deals increases the likelihood
that Venezuelan oil production will continue to fall because, given that PDVSA’s own production is in
decline, Venezuela needs willing foreign oil company partnership to maintain its current level of oil
production.
Venezuela DA – A2: Oil Causes Poverty

Oil is lifting Venezuela out of poverty
Washington Post 6 (http://www.washingtonpost.com/wp-dyn/content/article/2006/11/22/AR2006112200

252.html)
Millions of Venezuelans like her have come to rely on the heavily subsidized state-run grocery stores
established by the government of President Hugo Chavez, and she says it's a big reason why she will vote
to re-elect him in Dec. 3 elections. "He has done many things. You can see it," said Oliveros, who struggles
to raise two children on her husband's salary of $230 a month at a car wash. The cheap food and other
programs funded by Venezuela's oil wealth haven't lifted her family out of poverty, but she says getting
by is easier today than when Chavez was elected in 1998. It's a view often echoed in the poor barrios of
Venezuela, where Chavez remains popular as he seeks another six-year term. He has pledged to eliminate
poverty completely by 2021, when he hopes to be in office still. Drawing on billions of dollars in oil
revenues, Chavez has started a long list of social programs, called "missions," which offer everything
from job training to cash assistance for single mothers.
Venezuela DA – A2: Inflation (1/2)

No inflation risks in Venezuela – Tools check it
Weisbrot & Sandoval 7 (Mark & Luis, Center for Econ Policy Res, http://www.venezuelanalysis.com/indicators)
Inflation itself is a problem, now running at 19.4 percent. But it should be emphasized that double-digit
inflation rates in a developing country such as Venezuela are not comparable to the same phenomenon
occurring in the United States or Europe. Inflation in Venezuela was much higher in the pre-Chávez years,
running at 36 percent in 1998 and 100 percent in 1996. It has fallen through most of the current recovery,
from a 40 percent annual rate (monthly, year-over-year) at the peak of the oil strike in February 2003 to 10.4
percent a year ago, before climbing again to its present rate (see Figure 3). Over the last three months it
appears to have stabilized at 19.4 percent.
Because of its large current account surplus, large reserves, and low foreign debt, the government has a
number of tools available to stabilize and reduce inflation – as well as eventually bring the currency into
alignment – without sacrificing the growth of the economy. It appears the government is committed to
maintaining a high rate of growth, in addition to its other goals. Therefore, at present it does not appear that
the current economic expansion is about to end any time in the near future.
More ev…
The current uptick in inflation is fueled by a combination of shortages and the accumulated effects of three
and a half years of very rapid growth. How serious of a problem is this increased inflation, and could it lead
to an economic crisis and/or the end of the current economic expansion? First, it should be kept in mind that
there is no consensus in the macroeconomic research on inflation as to how high it can go without a negative
impact on growth, with some studies finding a threshold of 20 percent or more – a threshold that Venezuela is
just now approaching.31 Second, it should be emphasized that double-digit inflation rates in a developing
country such as Venezuela are not comparable to the same phenomenon occurring in the United States or
Europe. Inflation in Venezuela was much higher in the pre-Chávez years, running at 36 percent in 1998 and
100 percent in 1996. Although much of the public does not understand this, it is real (after-inflation) growth
in incomes— and employment – that affects people's living standards, not the rate of inflation per se. This is
true so long as inflation does not spiral to the point where it actually reduces real growth. So far, it does not
appear that inflation in Venezuela is getting out of control. In the last 3 months it has stabilized at about 19.4
percent. Beginning in February of this year, the government reduced the value added tax, in an effort that
probably contributed to stabilizing the inflation rate. It is also worth noting that inflation has fallen sharply
through most of the current economic recovery, and has only risen over the last year. In the last year it has
risen to about half of its peak in February 2003, which was driven by the oil strike of that year.
More ev…
Furthermore, since the country is running such a large current account surplus, and the government is taking
in more revenue that it can spend, it has a number of tools to fight inflation without necessarily sacrificing
economic growth. One has been sterilization, whereby the government takes excess domestic currency out of
circulation by issuing bonds. The recent sale of $7.5 billion worth of bonds by PDVSA in April, which were
snapped up by a large number of investors,32 are an example of the government using bond sales for this
purpose. Venezuela's current account surplus also gives it the leeway to defuse inflation through imports.
This is what happened through most of the current economic recovery, when inflation was falling despite
very rapid growth – excess domestic currency was converted into dollars and spent on imports. As can be
seen in Table 6, imports tripled from their depressed level of $10.5 billion in 2003 to $32.2 billion, or 17.8
percent of GDP in 2006. But exports, fueled by rising oil prices and the recovery of oil production from the
strike, grew much faster, from $27.2 billion in 2003 to $65.2 billion, or 36 percent of GDP. As a result, the
country is running a huge current account surplus: it was 15 percent of GDP for 2006. In the last 2 quarters
this surplus has shrunk considerably, but is still about 8 percent of GDP.
Venezuela DA – A2: Inflation (2/2)

Inflation isn’t a threat and the gov’t can cushion it
In sum, inflation has been rising over most of the last year but it is not an imminent threat to the current
expansion. This is likely to remain the case so long as Venezuela maintains a large current account surplus.
Nonetheless, the government will need to make sure that inflation does not begin another upward climb of
the sort that has happened over the last year. Fortunately, given the government's favorable current account,
international reserves and borrowing capacity, it has the ability to bring down inflation without a sharp
slowdown in economic growth.
Venezuela DA – Impact – Stability/War

Collapse of Chavez government causes war
Carlson 8 (5-12, Chris, Staff – Venezuela Analysis, http://www.venezuelanalysis.com/news/3433

Venezuelan President Hugo Chavez warned opposition leaders against any attempts to break away from
Venezuela on his weekly talk show Aló Presidente on Sunday. In light of the recent proposal for autonomy in
the oil-rich state of Zulia, President Chavez aired his weekly show from the capital of this state and warned
that any attempts at breaking away would be cause for war.
“It would be a cause for war if someone came here and tried to divide up Venezuela,” he said from
Maracaibo, state capital of Zulia. Chavez warned opposition leaders that they better “get an army” if they
plan on trying to break away from the country.
Venezuela DA – Impact – Instability Bad: Kills Millions
Venezuela war risks millions while threatening the world’s oil supply
Logan 6 (Int’l Security Network, Sam, Investigative journalist “Invasion or civil war for Venezuela?”
http://www.isn.ethz.ch/news/sw/details.cfm?id=15232)
For years, Venezuelan President Hugo Chavez has claimed to be protecting his people from the corrupt
and greedy Venezuelan elite class, represented by the Venezuelan political opposition. Now he is protecting
them from an external foe, the US, which he has accused of intending to invade Venezuela. Riding on the
rhetoric of an eventual US invasion, Chavez is building up a massive civilian militia answerable directly, and
only, to him. That militia, however, is more likely intended to deter a military coup than a US invasion. After
the 2002 attempt to overthrow his government, Chavez changed tactics, taking on a larger role as protector of
his people from the US. As such, he must continue to claim that the US will someday invade Venezuela and that
they only thing that will keep the Yankees at bay is two million trained civilians. The formation of a civilian
militia gives physical presence and weight to Chavez's rhetoric that the US will one day invade. Considering
the many rumors of a palace coup and the shuffling of military commanders in Chavez’s top brass, however, the
formation of a civilian militia looks more like another bulwark intended to protect himself against a military-
led coup d’etat. The only conventional army likely to threaten Chavez is Venezuela’s own military forces, the
FAN. In the event of a successful FAN-orchestrated coup, two million hardcore supporters with military
training could be ordered to drag the country into a civil war. Given the world’s dependence on Venezuelan
oil, such a possibility would have serious international repercussions.
More ev…
Logan 6 (Int’l Security Network, Sam, Investigative journalist “Invasion or civil war for Venezuela?”
http://www.isn.ethz.ch/news/sw/details.cfm?id=15232)
What military analysts call asymmetrical warfare, also referred to as fourth-generation warfare, is
characterized by war between a nation-state and a non-state actor. Latin America’s history is riddled with
examples of how asymmetrical warfare has been used to overthrow a government, such as the Cuban
Revolution, or used to prolong a struggle, such as the Revolutionary Armed Forces of Colombia (FARC). In
some cases, these non-state actors have been integrated into politics, such as the FMLN in El Salvador. Chavez
is in a position to take advantage of this history to promote his ideology of a region-wide resistance against US
imperialism. It is convenient rhetoric that veils what many believe are his intentions to deter a military coup. By the
end of 2007, it is quite possible that a total of two million Chavez supporters will have been trained and
reinserted back into their normal lives, ready to resist at a moment’s notice. It is highly unlikely that this
militia will be called to protect Venezuela from an outside invader. Rather, they could be called on to protect
Chavez’s regime from a cadre of military officers and others who want to remove him from office. If Chavez
manages to survive such a coup attempt, he may go quietly or he may seek to embody the spirit of Cuba’s Fidel
Castro and regional revolutionary hero Ernesto “Che” Guevarra by leading his faithful into a civil war. The FAN is
believed to have at least 80,000 professional soldiers, who could be forced to face two-million urban guerrillas.
A civil war in Venezuela would be intense, extremely destructive, and spell doom for the future of Venezuela’s
economy, society, and oil output. Due to the nature of asymmetrical warfare, it would be nearly impossible to
completely eradicate a group of dedicated and trained Chavez supporters.
Venezuela DA – Impact Module – Health

Oil revenue is invested in Venezuela’s health care infrastructure
Briggs and Roberts 7 (Charles L. is a Professor of Anthropology at UC Berkeley and Venezuelan public health
physician and Associate Researcher, Emily is a master’s student in the Schools of Public Health and Social Welfare,
http://socrates.berkeley.edu:7001/Events/spring2007/02-05-07-briggs/index.html)
Three weeks after Chávez told the health minister, “Get me that program!” Misión Barrio Adentro was
nationalized. Although Chávez did not initiate the Barrio Adentro movement, his leadership proved
instrumental and led to a rollout of resources to build, stock and staff the clinics. Thirty thousand
Cuban health professionals were brought over to take posts across the country. The implementation of
Misión Barrio Adentro sparked new ideas for locally-based social programs which in turn led to the
reallocation of millions of dollars in oil revenues to finance the wide array of education, health, social
and cultural programs visible in Venezuela today.
A strong health care system saves millions from malaria
Travel Health Service 5 (Department of Health Government of Hong Kong Special Administrative Region
http://www.travelhealth.gov.hk/english/outbreaknews/2005/ond13march2005.html)
A research paper published in Nature estimated that there were around 515 million cases of malaria
worldwide in 2002, nearly double previous estimates in 1998 by the World Health Organization. One third
of the population in the world i.e. 2.2 billion people, are at risk from the malaria. The disease claims 1
million lives a year in sub-Saharan Africa alone, most of them children under 5 years old. Of the 4 malaria
parasites, Plasmodium falciparum is the most dangerous, which is prevalent throughout the tropics (including
Southeast Asia), and has developed resistance to most anti-malarial drugs. Health experts worry about the
situation in Southeast Asia. Many people with malaria do not go to clinics and many clinics do not submit
disease figures. There are many more malaria cases in Southeast Asia than recognised before. Global control
of malaria relies on efficient public health measures, health education, provision of bed-nets and
effective drugs to persons needed.
Venezuela DA – Impact – Health – Oil K/T Health

Oil drives the Venezuelan health care system
Schuyler 3 (Department of history University Central Arkansas

http://www.soc.uoc.gr/kousis/KOIN1/Health/NeoLiberalismHealth/NeolibHealthVenezuela.pdf)
Popular participation played a key role in the adjustment processes of both Venezuela and Cuba. Venezuela’s
democratic governance has been highly centralized with great inequality and little effective participation at
the grassroots. Policy decisions have traditionally come from the top down. When oil income and social
spending dropped sharply in the 1980s and 1990s, poor Venezuelans participated even less in the health
care system. Collapsing public health helped shape the popular perception that the democratic system
was using a collective resource – oil – for the privileged few. Political legitimacy and trust in the
leadership dissolved, leading to attempted golpes and, in the late 1990s, the election of Hugo Chávez, a
former coup leader, as president.
Venezuela DA – Impact – Health – Health Care Up

Venezuela’s national healthcare program solves
World Development Indicators 0 ([http://www.nationsencyclopedia.com/economies/Americas/Venezuela-
POVERTY-AND-WEALTH.html] Distribution of Income or Consumption by Percentage/ 2000)
Venezuela enjoys some of the highest health standards in South America in terms of infant mortality
(26.4 per 1,000 population) and longevity (73.07 life expectancy). Much of this was made possible by
government intervention. Much of the population gets its medical care from facilities and hospitals
operated by the Venezuelan Social Security Institute. Treatment at the country's clinics is free, though
there is a small charge for prescription drugs. At the public hospitals, the poor receive treatment for free,
and a small fee is charged to those who can afford to pay it. There is also a public welfare program that
provides survivor and old-age pensions, maternity benefits, and payment for work-related accidents
and illnesses. The institute finances its activities by a mandatory payment of 12 percent of the salaries of all
Venezuelan workers. The government has had great success in implementing programs of prenatal care
and children's immunization, improving water and sanitary conditions, and eliminating diseases.
Modern technology is improving Venezuela’s healthcare

The World Bank 4
([http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/VENEZUELAEXTN/0,,menuPK:3317
77~pagePK:141132~piPK:141107~theSitePK:331767,00.html] Venezuela Country Brief/ August 2004)
The Endemic Disease Control Project helped to control malaria and other endemic diseases such as
Chagas, dengue, yellow fever, leprosy, and leishmaniasis. The project lowered the incidence and impact of
endemic diseases, and strengthened the institutions that are responsible for their control. Currently,
Venezuela is better prepared to apply modern technology to control and treat these causes of ill health
thanks to expanded training and the creation of research, diagnostic, and field support facilities.
Between 1996 and 2000, the project saved an estimated 11,500 lives, prevented 500,000 illnesses, and
treated about 3.5 million non-lethal infections. Under the project, the Malaria Directorate was able to
control malaria in approximately 408 square kilometers where the disease is endemic. The number of
deaths due to malaria dropped from 25 per year in 1995 to 7 in 1999, while the number of cases
decreased from 22,056 to 21,685. In the state of Bolívar, the time from onset of symptoms to treatment was
cut by 33 percent, diminishing the prevalence and possibility of transmission. A significant decline in
mortality due to dengue was also achieved between 1995 and 1999. In 1995, dengue took the lives of 65
people. By 1999, the number of deaths dropped to 15, and the number of cases decreased from 32,280 to
26,602. Strengthened control activities also moved Venezuela into the elimination phase of leprosy,
according to Pan American Health Organization standards. Improvements in detection and treatment
decreased the number of children affected and people incapacitated by the ailment.
Venezuela DA – Impact – Health – Malaria

An outbreak of diseases is coming
Hong 00 (Evelyn Third World Network Prepared for the Peoples Health Assembly http://www.phmovement.org
/pdf/pubs/phm-pubs-hong.pdf)
Global economic forces have given rise to a situation where exposure to pathogenic microorganisms has
increased and human resistance has been weakened. It has led to new emerging diseases and old diseases
have staged a comeback. In 1993, WHO estimated 14.4 million people died of infectious diseases. In the US,
TB rose by 18 percent between 1985 and 1992. One third of the world’s population is said to be
carrying the infection. The spread of the HIV virus, which destroys the immune cells that keep the TB germ
under control in the body, will cause many to die of the disease. With several strains of the TB bacterium
now resistant to all anti-TB drugs, the WHO admits that the disease ‘is out of control in many parts of the
world’. Diptheria has reemerged as a major killer of adults in Russia. Plague has resurfaced in India, while
malaria has returned to regions which it had been eliminated and is spreading to previously unaffected areas. Cholera has re-emerged
as a major killer in South America. Epidemics of dengue fever transmitted by the Aedes Aegypti mosquito have swept parts of
Venezuela, Brazil, India and Australia the first time ever. Yellow fever is on the increase in Africa.
A malaria outbreak will happen in Venezuela
Hong 00 (Evelyn Third World Network Prepared for the Peoples Health Assembly http://www.phmovement.org
/pdf/pubs/phm-pubs-hong.pdf)
The incidence of vector borne and water borne diseases climbs during El Nino and La Nina years,
especially in areas hit by floods or droughts. Longterm studies in Colombia, Venezuela, India and
Pakistan reveal, that malaria surges in the wake of El Ninos: regions stricken by flooding or drought
during the El Nino of 1997-1998 (the strongest of the century) often experience a convergence of diseases
borne by mosquitoes, rodents and water. Additionally, in many dry areas, fires raged out of control,
polluting the air for miles around.
Venezuela DA – Impact – A2: Turn: Arms Race/Instability

Bilateral talks prevent regional war
Flight International 8 (“Latin America: military modernisation or arms race?”

http://www.forecastinternational.com/notable/flightglobal.pdf 3/19/08)
Venezuela - The Chavez administration's purchases of Russian military equipment continue with the
December 2007 contract for an initial four Kazan Ansat light utility helicopters. Venezuela also planning to buy
12 more Russian-built aircraft, says Barrett, with a mix of Ilyushin Il-76 transports and Il-78 tankers likely to be
procured to replace the ageing Lockheed C-130s. In 2006, the Chavez administration purchased 24 Sukhoi Su-
30MK2 fighters, the last of which will be delivered to the air force this year. The Venezuela army, meanwhile, is
receiving a total of 53 Mil Mi-17V5 transport, Mi-26T heavylift and Mi-35M2 combat helicopters. "There has been
an application, but no contract yet, for the purchase of Russian Mi-28 Night Hunter combat helicopters," she says.
Particularly disturbing for the US government, which keeps up a war of words with leftist Chavez, Venezuela has
plans with Belarus to develop an integrated air-defence and electronic-warfare system, as well as to purchase diesel-
electric submarines from Russia. But Barrett believes continued bilateral talks between nations will prevent
Latin America's long pent-up military modernisation escalating into a regional arms race. "Venezuela has the
equipment to be a threat but, for Hugo Chavez, so far it has only been talk," she says.
No arms race – Just normal modernization

"While some might see this as a potential arms race, I believe that it is more nations' attempts to meet a pent-
up demand for modernisation of their armed forces," says Rebecca Barrett, Latin America analyst with
Forecast International. "This is not to say that Venezuelan procurement activity is not extravagant, or
necessary to the extent to which President Chavez has brought it," she says. "He remains the region's hot-
headed leader who will continue to incite non-allying nations until the end of his term."
Venezuela DA – Impact – A2: Heg (1/2)

US leadership is Latin America is done
Flynn 7-11 (Mathew, Center for Intl Policy Staff, http://americas.irc-online.org/am/5362)

South America's relationship with the rest of the world has changed substantially in recent years. While the
United States has been preoccupied with the War on Terrorism and focusing its attention mainly in the
Middle East, South America has increased its trade relations with the rising economies of Asia. The Council
on Foreign Relations recently released a report saying the United States is losing hegemony in the region and
new direction is needed.5 The Council's Task Force on Latin America bluntly states this new reality: "If there
was an era of U.S. hegemony in Latin America, it is over."
Military deterrence checks

Analysts continue to debate on how to measure military power in Latin America, but all agree that if a
"strategic imbalance" exists in the hemisphere, it continues to favor the United States. SouthCom's
communications officers did not respond to requests concerning its operating budget, but documents
available on the internet put it around US$170 million for 2008.17 This amount does not include military aid.
Oddly enough, since the end of the Cold War when U.S. economic aid was more than the amount of military
aid, now the two are growing closer. In 2005, Congress appropriated $921.07 million in economic aid and at
least $859.69 million in military aid.
More ev…
BBC 5-10 (http://www.venezuelanalysis.com/news/3427)

With regard to the supposed U.S. military challenges in the region, Sánchez added: “Let’s be honest. Even if
Venezuela acquires a Russian submarine, or Brazil wants to develop a nuclear submarine, neither of these
countries can present a military threat to the United States.”
From the analyst’s perspective, the U.S. navy’s recent decisions demonstrate, among other things, that “no
matter which Latin American country is in an arms race, they cannot compare to U.S. military power.”
Democracy and free markets make influence resilient
Brookes 8 (Heritage Foundation, Peter, Senior fellow. “Uncle Sam’s Latin challenge” http://www.heritage.org/Press/Commentary/ed013108a.cfm)
Another positive note: Democratic politics, with some notable exceptions, have become entrenched in the
Latin psyche since the end of the Cold War. Free markets are also on the march, fostered by regional free
trade agreements.
So, has the United States "lost" Latin America? Nah.
While some nations, prodded by Chavez's petrodollars, have moved left and become less democratic, that
trend is balanced by positive developments in democracy and free markets.
Venezuela DA – Impact – A2: Heg (2/2)

Latin America is not influenced by Chavez

Despite these noteworthy trends, it would be a mistake to exaggerate Chávez’s ability to influence
regional political dynamics. Bolivian government officials have expressed a desire to act independently
of Venezuela, and pressure from regional interests seeking greater autonomy may well limit the ability of
President Morales to centralize power in the same way as Chávez. On numerous occasions, Latin
American electorates have resisted the prospect of Venezuelan interference in their countries’ internal
affairs. President Alan García’s aggressive stance toward Caracas proved to be a vote winner in Peru.
Similarly, accusations (probably unfounded) that Mexico’s Andrés Manuel López Obrador was close to
Chávez helped Felipe Calderón turn the tables on his opponent and eventually win Mexico’s election in July.
More consolidated democratic and nationalist political cultures in Latin America, especially in
countries such as Brazil, Argentina, Chile, and Uruguay, are generally resistant to the crude populist
appeal and interventionist tactics of Chávez. For the same reasons, however, many Latin Americans view
U.S. attempts to intervene in Venezuelan domestic politics with equal suspicion. As long as the United States
is seen to covertly support opposition groups and promote regime change in Venezuela, U.S. denunciations of
Chávez’s own regional activities will ring hollow.
Venezuela DA – Impact – A2: Terrorism

Venezuela has no terrorist affiliations
AP 8
([http://www.naharnet.com/domino/tn/NewsDesk.nsf/0/BE358F609E1E6A16C225746E0025780C?OpenDocument]
Venezuela Says 'No Terrorists Here' After U.S. Action Against Alleged Hizbullah Supporters/ June 20, 2008)
Venezuela's foreign minister on Thursday rejected U.S. government accusations that a Venezuelan
diplomat helped finance Hizbullah in Lebanon. Foreign Minister Nicolas Maduro did not specifically refer
to Ghazi Nasr al Din, who was targeted Wednesday in a U.S. Treasury Department action ordering any assets
he controls in the United States to be frozen and forbidding U.S. citizens from doing business with him. But
Maduro told reporters that "there are no terrorists here," and said officials should be going after the
assets of U.S. President George Bush. "If they want to search for terrorists, look for them in the White
House," he said. Washington considers the Iranian- and Syrian-backed Hizbullah a terrorist group.
Wednesday's action accuses Nasr al Din of using his position as a diplomat and a leader of a Caracas-based
Shiite Islamic center to help the group. The main Shiite Muslim center in Caracas is the Imam al Hadi
Venezuelan Islamic Center, said Mohamad Mtayrek, a 42-year-old Lebanese immigrant who helps
manage the small mosque and community center in a two-story house. Mtayrek said the center has no
link to Hizbullah and dismissed Washington's allegations as "politics." He said he knows Nasr al Din but
declined to speak about him, saying "it's not my business."
Venezuela opposes terrorism
Venezuela Analysis 3 [http://www.venezuelanalysis.com/news/142] Venezuela Ratifies its Commitment to

Fight Terrorism/ October 5, 2003)
In the face of the recent bomb attacks against government buildings in Venezuela, and claims by the
U.S. News and World Report of possible Venezuelan support for terrorists, the country has confirmed its
strong commitment to fight terrorism. Venezuela has recently ratified several international
treaties through which it makes clear its condemnation and repudiation of that type of crime in all its
forms, and its commitment to fight against this threat to peace and international security. The International
Convention for the Suppression of Terrorist Bombings, the Terrorist Financing Convention and the
Convention on the Rights of the Child on the involvement of children in armed conflicts, were the
instruments ratified at the United Nations, during the 58th Ordinary Session of the General Assembly of the
UN. By ratifying these treaties, they automatically become national laws of obligatory enforcement,
according to the Bolivarian Constitution of Venezuela, approved in December of 1999. Venezuela also
reinforced its commitments for the international cooperation between the States with the development
and the adoption of practical and effective measures to prevent terrorist acts and the trial and
punishment of the perpetrators of these acts.
Venezuela DA – Impact – A2: Colombian War (1/3)

Chavez does not want a war with Colombia
Weisbrot 8 (Mark Co-Director of the Center for Economic and Policy Research, in Washington, D.C.
http://www.venezuelanalysis.com/analysis/3554 )
Washington's foreign policy establishment - and much of the U.S. media -- was taken by surprise this week
when President Hugo Chávez of Venezuela stated that the Revolutionary Armed Forces of Colombia
(FARC) should lay down their arms and unconditionally release all of their hostages. The FARC is a
guerrilla group that has been fighting to overthrow the Colombian government for more than four
decades. Chávez's announcement should not have come as a surprise, because he had already said the same
things several months ago. On January 13, for example, Chávez said: "I do not agree with the armed
struggle, and that is one of the things that I want to talk to Marulanda (the head of the FARC who died last
March) about." Chávez also stated his opposition to kidnapping, and has made numerous public appeals
for the FARC to release their hostages. Chávez had also explained previously that the armed struggle
was not necessary because left movements could now come to power through elections, something that
was often difficult or impossible in the past because of political repression. The surprise in U.S. policy
and media circles is a result of a misconception of Chávez's recent role in Colombia's conflict. A
comparison: former President Jimmy Carter has recently called upon the United States to negotiate with Hamas - dismissed as a terrorist organization by the
U.S. and its allies in Israel and Europe. Carter is not an advocate of Hamas nor of armed struggle. He has met with Hamas and called for negotiations
because he is trying to promote a peace settlement.
Documents saying Chavez wants to attack Colombia can not be verified
Grandin and Hylton 8 (Greg New York University - Professor of History, Forrest New York University -
Department of History http://www.venezuelanalysis.com/analysis/3440)
We once again appeal to the media for objectivity, and to treat unsubstantiated allegations the same
way they would treat such allegations if they were made against the United States government -- i.e. to
have some standards of evidence. Interpol cannot and will not verify the validity of any charges made
against the Venezuelan government.. There are as yet no allegations that would hold up in a court of
law. Over the last month, the Colombian government's strategy has involved a media campaign with timed leaks of new documents to the New York
Times, the Wall Street Journal, the Miami Herald and other outlets, many of whom relied on the Colombian interpretation
of their meaning, and with little acknowledgement of the deep controversy surrounding them. Even if
the documents were indeed produced by the FARC, this does not mean that the information is
accurate. As Adam Isacson of the Center for International Policy, who has analyzed the documents, noted,
"We are forced to rely on accounts from far-flung guerrilla leaders who have a strong incentive to
portray their overtures to Venezuela as successful. For the FARC, getting material support from
Caracas was probably the main benefit they hoped to win from these contacts, so anything that even
appeared to hint at progress toward getting arms or cash was prominently reported, possibly in an
exaggerated way."
No war – Columbia wont fight
Reuters 3-6-8 (http://www.reuters.com/article/topNews/idUSL0632108620080306)

Colombian Vice-President Francisco Santos said on Thursday he saw no risk of war with Venezuela or
Ecuador despite military mobilization in a dispute over Colombian FARC rebels.
"I don't think there is a risk of war. The Colombian government has been very clear it won't use force,"
Santos told Reuters in an interview during a visit to Brussels for talks with EU officials. "It won't fall into the
game of provocation."

Newest evidence proves no war
Venezuela Analysis 7-12 (http://www.venezuelanalysis.com/news/3639)

Venezuela’s President Hugo Chavez and Colombia’s President Alvaro Uribe reconciled and said they “moved
on” to overcome differences, following a two-hour private meeting on Friday.
Chavez said the meeting, which took place in the Venezuelan peninsula of Paraguaná, “started and ended
well.” The meeting covered not only the recent differences between the two presidents over Venezuela’s
supposed support for the Colombian guerilla group the FARC, but also touched on the various agriculture
and energy cooperation agreements between the two countries.
“We had a frank and warm conversation where we completely moved on [past the earlier differences],” said
Chavez in a press conference following the meeting, adding, “With the force with which we began this new
phase, I am sure we will recover lost time and confront the common challenges.”
Neither side has a motive
Dyer 8 (3-8, Marcia, Journalist, Yemen Observer, http://www.yobserver.com/opinions/10013876.html

But they’d never actually go to war, would they? It still seems very unlikely, in particular because the far
more experienced Colombian army would dismantle any forces the Ecuadorians sent against it in a matter of
days. Venezuela and Colombia are more evenly matched, and for that very reason it would not be in either
government’s interest to have a war: neither side would win.
Columbia is the aggressor, not Chavez
Podur 8 (Josh, writer & activist, http://www.venezuelanalysis.com/analysis/3112)

Plan Colombia and Uribe's rule were enough to kill the last attempt at a political solution to the conflict. This
outcome has served US interests in the region in several ways. Within Colombia, as described above, the war
provides a pretext for attacking all social movements and resistance, and a cover for displacing peasants from
resource rich territories that end up in the hands of multinationals and landowners. More than this, however,
Colombia's war and the close relationship between the US and the Colombian military have provided the US
with a base from which to monitor, and attack, Venezuela, a major oil producer with an independent political
project of its own.
More ev…

Throughout those years, analysts have argued that one of the true targets of Plan Colombia was in fact
Venezuela, its oil, and its revolutionary process (4).
And indeed, border incidents and troubles over the past several years, as well as tensions between Chavez
and Uribe, have shown that Colombia is a base for attacks on Venezuela. In March 2003, Colombian
'irregulars' raided across the Venezuelan border and were answered by bombing from the Venezuelan air
force (5). About a year later (May 2004), dozens of Colombian paramilitaries were arrested on a ranch near
Caracas on a terrorist plot (6). Some later confessed and were charged, while others were returned to
Colombia. Around the same time as the paramilitaries were infiltrating Venezuela (March 2004), Colombia
made a high-profile announcement that it was going to acquire several dozen tanks, from Spain, for posting
on the Venezuelan border (7). The deal had been made under Spanish Prime Minister Jose Maria Aznar,
however.

Venezuela is peaceful – No war risk

Entering the Colombian conflict on this basis has been risky for Venezuela, but it also seems to be very
intelligent and principled diplomacy. Venezuela could have responded to US and Colombian provocations
militarily, getting sucked into an arms race and militarization, diverting resources and political capital from
social programs and social change to war preparations and militarism, perhaps supporting FARC militarily.
Or it could have capitulated to a show of force. Instead, Chavez's government responded politically, taking
advantage of the popular desire for peace in Colombia and throughout Latin America. Even though Uribe
counts on some 5-6 million voters who believe strongly in his anti-guerrilla politics, Colombia has 44 million
people and most want peace despite Plan Colombia, despite Uribe's tenure as President, and despite all US
efforts to the contrary. If Uribe and the US win, they will paint Venezuela as a supporter of terrorist crimes
and achieve what they sought, a pretext to attack Venezuela, destroy the Bolivarian project, and strengthen
control of the region. Peace would give Venezuela's process time to develop and Colombia's movements
room to breathe. The stakes are high for everyone involved.
Venezuela DA – Impact – A2: Chavez Bad – Oil Not K/T Chavez (1/2)
Chavez is insulated from oil prices – They govt budgets conservatively and has reserve
funding
Oil prices collapsed beginning in 1981, and the Venezuelan economy went down with them.6 Is this sort of
unraveling ahead in Venezuela, as many analysts predict? Of course, the future of oil prices is difficult to
project. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65.56
per barrel for 2007 and $66.92 for 2008.7 The risks of unanticipated supply shocks seem to be mostly on the
downside, which would increase prices. Most importantly, there is the potential for adverse supply shocks
from the Middle East, where the Bush Administration has threatened to bomb Iran if the standoff over that
country's nuclear program cannot be resolved; and the general risk of widening war, terrorism, or rebellion
there carries an unknown risk for other major world suppliers in the region. However, there is always the risk
of an unexpected downturn in oil prices. If such an unanticipated reduction in oil prices is temporary,
Venezuela would seem well-prepared to withstand it. The government has about $25 billion, or about 14
percent of GDP, in international reserves. This is much more than is needed maintain a safe level of reserves
for imports or other needs. As discussed below, the country also has relatively low levels of public and
foreign public debt, and if necessary could borrow rather than cut government spending or public investment
enough to seriously slow the domestic economy. The government also budgets conservatively for oil prices
that are far below current prices: for 2006, the government budgeted for oil at $26 per barrel, whereas the
average price of Venezuelan crude oil was $60.20 (see below). The probability of an economic collapse
brought on by falling oil prices therefore appears to be very small.
More ev…
Venezuela has budgeted conservatively with respect to the price of oil, and the prospect of a collapse in oil
prices in the foreseeable future seems unlikely – as described above. Critics also point to the run-up in
government spending as an unsustainable trend. Table 5 shows the government's finances since 1998. As can
be seen, there has indeed been a very large increase in central government spending, from 21.4 percent of
GDP in 1998 to 30 percent in 2006. However, revenues increased even more, from 17.4 to 30 percent of GDP
over the same period, leaving the central government with a balanced budget for 2006. For 2007, the
government has once again budgeted very conservatively for oil at $29 per barrel, 52 percent under the
average $60.20 dollars per barrel that Venezuelan crude sold for last year. However, what the government
generally does as oil revenue far exceeds the budgeted price, is to spend beyond budgeted expenditures.
Thus, while a fall in oil prices will not cause a budgetary crisis, it could lead to reduced government spending
from current levels. This could slow the economy from its present very rapid pace, but it is unlikely to cause
a downturn, because Venezuela has a considerable cushion to deal with a decline in oil prices.
Venezuela DA – Impact – A2: Chavez Bad – Oil Not K/T Chavez (2/2)
Chavez can borrow out of low oil prices
As can be seen in Table 5, Venezuela has taken advantage of the current expansion and increased oil revenues
to reduce its public debt, and especially foreign public debt. Total public debt increased quite substantially
through the crisis of 2002-2003, reaching a peak of 47.7 percent of GDP in 2003. But by 2006 it was down to
a modest 23.8 percent of GDP. The government also transitioned away from foreign financing, leaving the
external component of the foreign debt at just 14.7 percent of GDP. Goldman-Sachs projects a further decline
of total debt to 20 percent of GDP, despite their projection of a growth slowdown (from 10.3 to 7 percent of
GDP).27 Total interest payments on the public debt, foreign and domestic, summed to a relatively small 2.1
percent of GDP in 2006.
Thus there is plenty of room to borrow, if necessary, if Venezuela were to face an unexpected decline in oil
revenues. But before having to borrow, the government could dip into its international reserves. As can be
seen in Table 6, the government's foreign exchange reserves, as of June 30 were $25.2 billion, or about 14
percent of GDP. This has dropped sharply from its peak of $37.4 billion last year, but it is still much larger
than the country's needs, enough to pay off almost its entire foreign public debt. The recent depletion of
reserves was the result of a $6.77 billion transfer to the National Development Fund (FONDEN), the creation
of an offshore account by the National Treasury for PDVSA’s tax payments in order to manage monetary
liquidity (i.e. this is central government tax revenue held in dollars and not being spent), a significant
increase in the volume of currency transactions to finance imports approved by CADIVI28, and the recent
purchase of dollars from the Central Bank by PDVSA as a result of placing $7.5 billion in international bonds
(i.e. money raised in bolivares and sold to the Central Bank in order to absorb liquidity). Therefore, these
actions do not represent any economic trend that would be expected to further deplete reserves. Also, if we
add the offshore accounts of the FONDEN and the National Treasury to the current level of international
reserves, the total is in excess of $40 billion29– with some estimates of these total effective international
reserves as high as $45 billion.30 The government's revenue from oil last year was $28.9 billion. In the face
of an unanticipated decline in oil prices, the government could therefore draw on reserves and borrowing
from financial markets for some time before any serious budget cuts would be necessary. For example, if oil
revenue were to decline by as much as 20 percent, this could be absorbed from reserves, which would
otherwise be expected to grow over the next year.
Venezuela DA – Impact – A2: Chavez Bad – Indict

Their sources are biased
Herrera 6 (Bernardo, July/Aug, Ambassador to US, Foreign Affairs)

In her recently released book, Friendly fire: Losing Friends and Making Enemies in the Anti-American
Century, Latin America scholar Julia Sweig writes, "When U.S. elites -- in government, media, and the
private sector -- get their information mainly from their counterparts in other societies, the United States
becomes disconnected from the conditions, feelings, preferences, and experiences of those living on the
margins of what Americans have incorrectly assumed to be a universal phenomenon of political, social, and
economic progress promised by democracy and globalization."
As Venezuela's ambassador to the United States, I have spent a large part of my tenure attempting to
encourage Washington's policy and government establishments to look beyond the information they receive
about Venezuela from Venezuelan elites. Given the generally hostile attitudes toward Venezuela and its
president, Hugo Chávez, in Washington today, it seems that there is much work left to be done.
Venezuela DA – Impact – A2: Chavez Bad – Turn: Democracy/Stability (1/2)
Declining Venezuelan oil revenue prevents Chavez from protecting regional democratic
stability – Causes secessionist oil grabs
Lendsman 8 (Stephen, 6-2, Ctr for Research on Globalization, http://www.venezuelanalysis.com/analysis/3516)

It's vital because Venezuela is also threatened. It's oil-rich Zulia state has similar secessionist ideas. Big Oil
exploits them, and their local allies in the past supported a referendum to choose independence from Caracas.
Its governor is Manuel Rosales. He ran against Chavez in 2006 and lost big. He backs the idea, is close to the
Bush administration, and signed the infamous "Carmona Decree" after the April 2002 coup. It dissolved the
National Assembly and Supreme Court, erased the Constitution, and ended Bolivarianism for the people. For
now, more autonomy is enough for Rosales but unthinkable if Chavistas can help it. They condemn the idea
and will fight it.
Stay tuned. November approaches in both countries. The Bush administration's tenure is short. But it's got
plenty of time left to incinerate two continents and end the republic if that's its plan. An inert public needs
arousing. Michel Chossudovsy says we're "at the crossroads of the most serious crisis in modern history." It's
part of a "war and globalization" process. The stakes for humanity are incalculable, but rogue states don't
weigh them. World communities better while there's time.
Chavez is critical to regional democracy
Pilger 8 (John, Staff, New Statesman, http://www.venezuelanalysis.com/analysis/3385)

With Colombia as its front line, the war on democracy in Latin America has Chávez as its main target. It is
not difficult to understand why. One of Chávez's first acts was to revitalise the oil producers' organisation
Opec and force the oil price to record levels. At the same time he reduced the price of oil for the poorest
countries in the Caribbean region and central America, and used Venezuela's new wealth to pay off debt,
notably Argentina's, and, in effect, expelled the International Monetary Fund from a continent over which it
once ruled. He has cut poverty by half - while GDP has risen dramatically. Above all, he gave poor people
the confidence to believe that their lives would improve.
The irony is that, unlike Fidel Castro in Cuba, he presented no real threat to the well-off, who have grown
richer under his presidency. What he has demonstrated is that a social democracy can prosper and reach out
to its poor with genuine welfare, and without the extremes of "neo liberalism" - a decidedly unradical notion
once embraced by the British Labour Party. Those ordinary Vene zuelans who abstained during last year's
constitutional referendum were protesting that a "moderate" social democracy was not enough while the
bureaucrats remained corrupt and the sewers overflowed.
Chavez is good for Latin American democracy and stability
Weisbrot 8 (Mark Co-Director of the Center for Economic and Policy Research, in Washington, D.C.
http://www.venezuelanalysis.com/analysis/3554 )
The whole controversy is an illustration of the vast gulf between most of Latin America, which now has left-
of-center governments, and the United States foreign policy establishment. For Latin America, Chávez is a
friend and important ally who has promoted regional economic integration and growth - even helping
to create new institutions for this purpose such as the Bank of the South and UNASUR. He has shared a
good part of Venezuela's oil wealth with his neighbors, even helping some to deliver on their electoral
promises, thereby contributing to democratization in the region. He has tried to promote a peaceful
settlement to the conflict in Colombia. He has been democratically elected repeatedly, and to the region
his government is as legitimate as any in the world. For Latin America's leaders, these considerations
far outweigh any differences they may have with his rhetoric or confrontational style vis-à-vis the United
States - which after all, did support a military attempt to overthrow his democratically elected government in
2002.
Venezuela DA – Impact – A2: Chavez Bad – Turn: Democracy/Stability

(2/2)
Venezuelan democracy is up – Self-reports prove
Herrera 6 (Bernardo, July/Aug, Ambassador to US, Foreign Affairs)

A recent survey on democracy in Latin America sheds some light on contemporary Venezuela. Conducted by
Latinobarómetro, a well-respected independent Chilean polling firm, the survey found that of the populations
of the 18 Latin American countries studied, Venezuelans were the most likely to describe their government as
"totally democratic." Similarly, Venezuela came in second in terms of citizens' satisfaction with their system
of democracy, ranking behind only Uruguay. In fact, satisfaction with the government in Venezuela has been
higher during President Chávez's tenure than ever before, and it remained so even during 2003, when an
opposition-led oil sabotage heightened a sense of political crisis. None of this should be surprising: the 1999
constitution broadened the definition of rights and responsibilities, expanded political participation, and
encouraged Venezuelans to become more active stakeholders in the country's political, economic, and social
development. Venezuelans have participated in numerous elections since President Chávez took office,
including one specifically designed to allow citizens to cut short the tenure of an elected official -- in this
case, the president himself.
Venezuela DA – Impact – A2: Chavez Bad – A2: Democracy

Checks in place prevent Chavez’s concentration of power
A key decision for President Chávez will be how he proceeds politically in the aftermath of the defeat of the
constitutional reform. In the past, the President has resorted to harsh political rhetoric and polarization to win
at the ballot box, and ensure his popular support. The defeat of the referendum, however, could be a sign that
such hardline tactics may no longer be as successful. Some observers think that the defeat could cause
Chávez to use more pragmatic political tactics that would appeal to moderate Chavistas and those supporters
that abstained in the 2007 referendum. Such an approach might enable the President to regain strong popular
support, or enough support to again attempt efforts to achieve passage of constitutional reforms in the future,
particularly the elimination of presidential term limits. Other observers contend that it is unlikely that Chávez
will refrain from hardline tactics to enact his radical agenda, especially given now that he is term limited until
early 2013. Such a strategy of continued polarization, however, could be counterproductive for the President
at the ballot box if it alienates moderate Chavistas. Moreover, at this juncture, the government’s attempt to
impose any unpopular policy that affects civil rights or the state of democracy risks triggering widespread
street protests by an energized student movement and the political opposition.
Checks prevent Chavez from threatening democracy and fomenting anti-American regimes
The good news is that the majority of Venezuelans do not support Chávez's evolving dictatorship. Opponents
have succeeded in petitioning for a referendum to recall him from office on August 15. Democratic
governance and free markets are making slow strides in Latin American countries formerly ruled by
dictators. While oil resources give him power, countries can buy oil from other vendors.
Democracy is resilient in Latin America
Walser 8 (Ray, 3-11, Heritage Foundation, http://www.heritage.org/Research/LatinAmerica/hl1079.cfm)

There is no silver bullet, no quick solution to creating greater energy security in the Western Hemisphere.
The Western Hemisphere, with one glaring exception, is made up of 35 sovereign states committed to
democratic governance. Nations committed to democracy, free markets, and more open trading account for
more than 85 percent of the gross domestic product of Central and South America. Some "carnivores" may
face extinction quicker than we imagine.
Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty/Econ (1/2)

Oil revenue isn’t diverted – Investments are productive
Critics of Chavez think he should be pouring money into infrastructure to ensure a sustainable oil industry
rather than allocating so much for social and foreign policy initiatives. According to the Wall Street Journal,
PDVSA “spent just $60 million on exploration in 2004, compared with $174 million in 2001.” But Vicente
Frepes-Cibils, the lead economist for Venezuela at the World Bank, says “investment is increasing” and
Venezuela has an accumulation of reserves including outside funds ranging from $10 billion to $15 billion
that it is planning to use for oil infrastructure.
High oil prices solves poverty, health care and unemployment in Venezuela
Schuyler 0 (George, Department of History University of Central Arkansas
[http://www.soc.uoc.gr/kousis/KOIN1/Health/NeoLiberalismHealth/NeolibHealthVenezuela.pdf] Healltth and
Neolliiberralliism:: Venezuella and Cuba/ 2000)
During the last two decades, low oil prices, rising debt and lagging foreign investment drove Venezuela into
an economic crisis. Pressured by the International Monetary Fund and advised by neoliberal gurus such as
the Harvard economist Jeffrey Sachs, Venezuela transformed its development strategy from state-led
industrialization to neoliberalism: open markets, free trade, exports, privatization and limited government
spending and involvement in the economy. In the 1980s, per capita gross domestic product fell by 20 percent
or more. By 1988, real wages dropped by one-third, to their 1964 level.18 Unemployment and
underemployment rose steadily, inflation soared and income inequality widened. By 1989, poverty was
150 percent more than in 1980 and continued to engulf Venezuelans in the 1990s. A study by the
Catholic University Andres Bello indicated that 57 percent of Venezuelan families lived in poverty while a
labor union claimed that only 10.2 percent of Venezuelans could afford to buy the basic supply of food
deemed necessary for adequate nutrition and health.19
The Venezuelan economy has grown under Chavez
There is much evidence to contradict this conventional wisdom. Venezuela suffered a severe economic
growth collapse in the 1980s and 1990s, with its real GDP peaking in 1977. In this regard it is similar to the
region as a whole, which since 1980 has suffered its worst long-term growth performance in more than a
century. Hugo Chávez Frias was elected in 1998 and took office in 1999, and the first four years of his
administration were plagued by political instability that had a large adverse impact on the economy. (See
Figure 2). This culminated in a military coup that temporarily toppled the constitutional government in April
2002, followed by a devastating oil strike from December 2002-February 2003. The oil strike sent the
economy into a severe recession, during which Venezuela lost 24 percent of GDP.
But in the second quarter of 2003, the political situation began to stabilize, and it has continued to stabilize
throughout the current economic expansion. The economy has had continuous rapid growth since the onset of
political stability. Real (inflation-adjusted) GDP has grown by 76 percent since the bottom of the recession in
2003. It is likely that the government's expansionary fiscal and monetary policies, as well as exchange
controls, have contributed to the current economic upswing. Central government spending has increased from
21.4 percent of GDP in 1998 to 30 percent in 2006. Real short-term interest rates have been negative
throughout all or most of the recovery (depending on the measure—see Figure 4).
Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty/Econ (2/2)

Oil profits improve the quality of life in Venezuela
The World Bank 4

Oil confers a competitive advantage in international trade, but also creates an imbalance in the domestic
economy. Petroleum accounts for about 25 percent of gross domestic product (GDP), about 80 percent of
exports and approximately 50 percent of fiscal revenues. A windfall from Venezuela’s natural resource
wealth has bolstered development progress in some areas: • 92.4 percent of the country’s children
are enrolled in primary school; • 83 percent of the population has access to an improved water source;
and • Child mortality decreased from 27 per 1,000 in 1990 to 22 per 1,000 in 2002.
Oil profits are spent on improving public services
Collier 6 (Robert, Nonprofit Organization [http://www.commondreams.org/headlines06/1002-06.htm] Venezuela's

Oil Wealth Funds Gusher of Anti-Poverty Projects/ October 2, 2006)
While the Venezuelan president has caused international controversy with his angry denunciations of
the Bush administration, this is where the rubber meets the road for Chavez's radical rhetoric. He is
spending billions of dollars on anti-poverty programs, in what experts say may amount to the largest
such effort in a developing nation. And in a gamble that turns part of his own government's power structure on its head, he is handing a
large degree of authority over these spending programs to thousands of these elected local councils. "The issues in these neighborhoods are very old fights --
water, land, decent housing," said Andres Antillano, a professor of social psychology and criminology at the Central University of Venezuela in Caracas who
has been an adviser to many neighborhood groups. "For many years, the only relationship with the state was the police. They came here and put everyone
against the wall," Antillano said. "Chavez has chosen to gamble on legitimizing these issues. The communal councils are a very serious attempt at grassroots
organizing." The policy appears especially popular in the hard-bitten slums of Caracas -- although as is true elsewhere around the country, the electorate
seems divided between a strongly pro-Chavez minority and an apathetic majority. San Juan's new council was chosen in local voting a week previously,
with only 330 of the neighborhood's 916 eligible adult residents casting ballots. "We like Chavez because he's giving us control," said Leomar Aquino, who
had just been chosen head of the Education, Culture, Recreation and Sports Committee, one of a half-dozen such panels on the council. "If you don't want to
participate in it, hey papito, that's your problem." On this night, nobody seemed to know exactly how much their neighborhood would receive. Nor, the next
day, did anyone at the offices of the local district government or in the central government buildings downtown. What is certain, however, is that
Venezuela's petroleum export earnings are rising rapidly, and the government is spending the money
with abandon. The government initially budgeted $857 million for social spending in 2006. But as oil
money floods in, officials keep increasing the amount. It now stands at $7 billion, although many experts
view that figure as a guesstimate of money being spent on the fly. Public works projects are everywhere,
ranging from subway lines in Caracas and Valencia to bridges over the Orinoco River. New medical
clinics -- mostly staffed by Cuban doctors provided under Chavez's oil aid program to Fidel Castro -- are
within reach of almost everyone in this nation of 25 million people. Illiteracy, formerly at 10 percent of
the population, has been completely eliminated, and infant mortality has been cut from 21 deaths per
1,000 births to 16 per 1,000. Another initiative that could change the lives of millions of poor
Venezuelans is a new program aimed at increasing land ownership.
More ev…
Venezuela is using windfall oil profits to boost social spending and programs to fight poverty. Beginning in
2003, the Chávez government began implementing an array of social programs and services known as
misiones, or missions. As a result of the booming economy and increased social spending, poverty rates in
Venezuela have declined. The U.N. Economic Commission for Latin America and the Caribbean reports that
poverty fell from 48.6% in 2002 to 30.2% in 2006, with extreme poverty falling from 22.2% to 9.9% over the
same period.
Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty – It’s Down

Poverty down
The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 to 30.4 percent at end of 2006,
as would be expected in the face of the very rapid economic growth during these last three years. (See Table
3). If we compare the pre-Chávez poverty rate (43.9 percent) with the end of 2006 (30.4 percent) this is a 31
percent drop in the rate of poverty. However this poverty rate does not take into account the increased access
to health care or education that poor people have experienced. The situation of the poor has therefore
improved significantly beyond even the substantial poverty reduction that is visible in the official poverty
rate, which measures only cash income. Measured unemployment has also dropped substantially to 8.3
percent for June 2007, its lowest level in more than a decade; as compared to 15 percent in June 1999 and
18.4 percent in June 2003 (coming out of the recession). Formal employment has also increased significantly
since 1998, from 44.5 to 49.4 percent of the labor force.
More ev…
The poverty rate has decreased rapidly from its peak of 55.1 percent in 2003 to 30.4 percent at end of 2006,
as would be expected in the face of the very rapid economic growth during these last three years. Table 3
shows the poverty rate since 1997, by household and population. If we compare the pre-Chávez poverty rate
(43.9 percent) with end of 2006 (30.4 percent) this is a 31 percent drop in the rate of poverty, which is
substantial.21 However this poverty rate measures only cash income – it does not take into account the
increased access to health care or education that poor people have experienced. As we have shown
previously, taking the most conservative estimate of just the value of the health care benefits – what the poor
would have spent on health care in the absence of these new programs – would lower the measured poverty
rate by about 2 percentage points. 22 Of course, this is a very conservative estimate of the value of just the
increased health care benefits to the poor, since in the absence of these benefits, most poor people would
simply have gone without health care, and therefore suffer from worse health, lower income, and lower life
expectancy. So the value of these health care services is much greater than the amount that they would have
spent out-of-pocket in the absence of the government programs.23 The situation of the poor has therefore
improved significantly beyond even the substantial poverty reduction that is visible in the official poverty
rate, which measures only cash income.
Venezuela DA – Impact – A2: Chavez Bad – A2: Heg
Chavez doesn’t undermine US hegemony- Latin American countries are not influenced
Petras 4 (James, Professor of Sociology at Binghamton University
[http://www.venezuelanalysis.com/analysis/682] Myths and Realities: Venezuela's Chavez and the Referendum/
September 2, 2004)
Evidence to the contrary is abundant. Brazil under Lula has sold oil exploration rights to US and
European multinational corporations, provides a contingent of 1500 troops (along with Argentina, Chile
etc) to Haiti to stabilize Washington's puppet regime imposed through the kidnapping of President-elect
Aristide. Likewise in the other Andean countries (Ecuador, Peru, Bolivia and Colombia) the elected
regimes propose to privatize public petroleum companies, support ALCA and Plan Colombia and pay
their foreign debts. The Broad Front in Uruguay promises to follow Brazil's neo-liberal policies. While
Chavez promotes the regional trading bloc MERCOSUR, the major members Brazil and Argentina
are increasing their trade relations outside the region. In effect there is a bloc of neo-liberal regimes
arrayed against Chavez's anti-imperialist policies and mass social movements. To the extent that
Chavez continues his independent foreign policy his principle allies are the mass social movements and
Cuba.
Chavez isn’t looking undermine US influence in Latin America

Petras 4 (James, Professor of Sociology at Binghamton University
[http://www.venezuelanalysis.com/analysis/682] Myths and Realities: Venezuela's Chavez and the Referendum/
September 2, 2004)
But a defeat of imperialism does not necessarily mean or lead to a revolutionary transformation, as
post-Chavez post-election appeals to Washington and big business demonstrate. More indicative of
Chavez politics is the forthcoming $5 billion dollar investment agreements with Texaco-Mobil and
Exxon to exploit the Orinoco gas and oil fields. The euphoria of the left prevents them from observing the
pendulum shifts in Chavez discourse and the heterodox social welfare--neo-liberal economic politics he has
consistently practiced. President Chavez's policy has always followed a careful balancing act between
rejecting vassalage to the US and local oligarchic rentiers on the one hand and trying to harness a
coalition of foreign and national investors, urban and rural poor to a program of welfare capitalism.
He is closer to Franklin Roosevelt's New Deal than Castro's socialist revolution. In the aftermath of the
three political crises--the failed civil-military coup, the debacle of the oil executives lock out, and the defeat
of the referendum--Chavez offered to dialogue and reach a consensus with the media barons, big
business plutocrats and US government, on the basis of the existing property relations, media
ownership and expanded relations with Washington.
Venezuela DA – Impact – A2: Chavez Bad – A2: Bomb (1/4)

Chavez can’t possess nuclear capabilities for 10 years at least
Logan 5 (Sam, Writer for ISN. “Venezuelan nuclear technology is a long shot” http://www.isn.ethz.ch/news/sw/details.cfm?ID=13286)
Chavez has a strong track record. He has engaged Argentina and Brazil for assistance in developing
so-called peaceful nuclear technology. Argentina and Brazil have tacitly agreed, effectively giving him the
regional support he covets. The reality that Chavez does not have a group of Venezuelan nuclear scientists
cannot be ignored. He needs to borrow the expertise from elsewhere. He does not know how to build a
reactor, or operate one. And his neighbors in the region, while having demonstrated an ability to build
and operate nuclear reactors, are still subject to international pressure in the form of the IAEA.
Additionally, the countries in the region that do have nuclear energy required no less than ten years to
build a reactor. If Chavez is serious about bringing nuclear power to Venezuela, he would need at least
ten years, if not closer to 20, to realize the first kilowatt of nuclear power output. There is currently little
guarantee that he can stay in power that long. Producing nuclear power would allow Venezuela to
export more oil and generate additional revenues for the state treasury. If Chavez manages to stay in
power long enough to take advantage of nuclear technology in Venezuela, he is likely to use the extra energy
to alleviate domestic need for oil he would rather export. Herein lies the strongest chord of truth.
No nuclear program for 5 yrs and it would be peaceful
Markey 5 (Patrick 10-1, Staff http://osdir.com/ml/culture.discuss.cia-drugs/2005-10/msg00392.html

Venezuela‘s President Hugo Chavez is approaching his wary South American neighbors about developing a
nuclear energy program, raising questions in Washington about his atomic ambitions.
Chavez, a self-described socialist revolutionary fiercely opposed to the U.S. administration, says he wants to
cooperate with Argentina, Brazil and possibly Iran to develop nuclear energy as part of his drive for regional
integration.
But energy experts estimate it will take his government at least five years of studies, training and investment
to develop a sustainable nuclear energy project in Venezuela, the world‘s No. 5 oil exporter.
"Nuclear energy is for peaceful purposes. We are not the ones developing atomic bombs, it‘s others who do
that. We are not the ones who launch atomic bombs," Chavez told a Brazilian newspaper this week,
dismissing fears over his proposal.
No real plans yet and it would be for power generation

Venezuelan officials have given mixed signals about what they want and initially suggested they could
use nuclear energy to power oil operations. But Energy Minister Rafael Ramirez said the program is
still in its infancy.
"We don‘t have any plans to buy a nuclear reactor. We are just evaluating where we could put one," he
told reporters this week. "We would use it for electricity generation."
Can’t obtain materials – US and EU check

Scientists said a Canadian CANDU reactor used by Argentina was the most feasible for Venezuela as it
would require no complex fuel enrichment and uses only natural uranium.
But to build a reactor with the average of around 700 megawatts to 1,000 megawatts of power Venezuela
would have to go beyond Argentina and bring in other commercial partners from the United States, Canada
or Europe, experts said.

Argentina and Brazil will not transfer nuke tech
Logan & Cirino 5 (1-26, ISN Security Watch Staff, Sam & Julio, http://www.isn.ethz.ch/news/sw/details.cfm?ID=13286)
Argentina is interested in completing the sale, but is adamant about meeting international standards and
expectations for transparency, which means it would register its intent with the IAEA. The IAEA, in turn,
would monitor the process closely and is likely to request a complete review of the plant once the facility is
installed and operational in Venezuela.
There is no guarantee, however, that Venezuela will yield to the will of an international agency, much less
one that has been ignored and badgered by countries around the world since its inception.
There are questions in Argentina, however, as to whether the transfer of the technology required to operate a
mid-sized nuclear reactor would constitute a “dual-use” situation. This is a touchy subject. It is difficult to
see how Argentina would benefit from transferring technology necessary to operate a dual-use nuclear
reactor. The international pressure would be fierce.
More ev…
Brazil’s capacity to enrich uranium is certainly attractive for Venezuela. But the Brazilian government
is hesitant to bring more attention from the IAEA to this continent, which is exactly what would
happen if the two countries announced a deal to share nuclear fuel enrichment facilities.
Regional alliances are stronger than the fear of upsetting an international regime perceived to be
largely controlled by the US. But these alliances are trumped by sovereignty and national security
considerations. Neither Brazil nor Argentina would benefit from a nuclear weapons program in
Venezuela.
“There is nothing concrete,” insists Brazilian presidential foreign policy advisor Marco Aurelio Garcia.
He argues that Brazil’s nuclear program is transparent and protected from any military use.
Aurelio Garcia goes further to speculate that in any initial phase of a nuclear program in Venezuela,
Argentina would provide the reactor while Brazil would provide the enriched uranium. He believes
that neither country would provide enough technology transfer to allow the Venezuelans to take
complete control of the process.
No tech transfer – Int’l pressure
Brazil’s capacity to enrich uranium is certainly attractive for Venezuela. But the Brazilian government is
hesitant to bring more attention from the IAEA to this continent, which is exactly what would happen if the
two countries announced a deal to share nuclear fuel enrichment facilities.
Regional alliances are stronger than the fear of upsetting an international regime perceived to be largely
controlled by the US. But these alliances are trumped by sovereignty and national security considerations.
Neither Brazil nor Argentina would benefit from a nuclear weapons program in Venezuela.
“There is nothing concrete,” insists Brazilian presidential foreign policy advisor Marco Aurelio Garcia. He
argues that Brazil’s nuclear program is transparent and protected from any military use.
Aurelio Garcia goes further to speculate that in any initial phase of a nuclear program in Venezuela,
Argentina would provide the reactor while Brazil would provide the enriched uranium. He believes that
neither country would provide enough technology transfer to allow the Venezuelans to take complete control
of the process.

10 years from Chavez bomb
Any use of a peaceful nuclear program to conceal or hint at a nuclear weapons program would come as
a fringe benefit, an ace up Chavez' sleeve, but nothing more than that. This prospect is something to
watch out for, but will not be a threat to regional security for at least a decade, if at all.
More ev…
Additionally, the countries in the region that do have nuclear energy required no less than ten years to
build a reactor. If Chavez is serious about bringing nuclear power to Venezuela, he would need at least
ten years, if not closer to 20, to realize the first kilowatt of nuclear power output. There is currently
little guarantee that he can stay in power that long.
The program would be peaceful, dedicated to energy production
Producing nuclear power would allow Venezuela to export more oil and generate additional revenues for the
state treasury. If Chavez manages to stay in power long enough to take advantage of nuclear technology in
Venezuela, he is likely to use the extra energy to alleviate domestic need for oil he would rather export.
Herein lies the strongest chord of truth.
Venezuelan oil output is limited. Many suggest the country's oil output has declined and will continue to do
so. Chavez’s intention to pull together the region with the carrot of generous oil export contracts and other
financial incentives suggests that over time, he will need more money, more oil, and another reliable source
of energy.
Chavez is bluffing – No interest in nukes
Yet sources within Venezuela are convinced that Chavez’s nuclear announcement is more political than
actual.
“The nuclear plan is [hollow],” Venezuelan journalist and political observer, Manuel Malaver told ISN
Security Watch.
Malaver argues that Chavez has embarked on a strategy similar to that of the North Koreans, threatening the
use of nuclear technology and leveraging heightened international tensions to ensure access to resources and
technology that he could not obtain otherwise.
“I don’t believe Chavez has an interest in developing nuclear [technology], which would take years,
considering Venezuela does not have nuclear scientists,” Malaver said, adding, “for Chavez it’s more
important to demonstrate that he has the support of the region in his desires for nuclear technology than to
actually have the technology itself.”
Reactor safety prevents diversion
Newsmax 5 (10-28, http://archive.newsmax.com/archives/ic/2005/11/28/173737.shtml)

Chavez in August made a formal offer to purchase a nuclear reactor from Argentina. It is unknown whether
Argentina will agree to a sale, but scientists claim there is no threat that the reactors in question will be used
for military purposes.
"The technology is quite advanced,” said Argentine scientist Elias Palacios, co-secretary to the Brazilian-
Argentine Agency for Accounting and Control of Nuclear Materials. "Because of the system of safeguards
and inspections,” Palacios told the New York Times, "there is no way to divert it” into weapons programs.

Chavez is bluffing
NYT 5 (10-27)
José Goldemberg is a physicist who as minister of science and technology in the 1990's led the dismantling
of Brazil's nuclear weapons program. While he says he worries that even a flirtation with Venezuela will hurt
the reputation of two countries that have won praise for renouncing their nuclear arms programs, he does not
think much will come of Mr. Chávez's campaign.
"This is braggadocio," he said. "It's a way of challenging Bush, of making themselves feel important and
forcing the United States to pay attention."
The US will pressure Argentina and Brazil
NYT 5 (10-27)
With relations between the Bush administration and Mr. Chávez so hostile, Washington has little leverage
over Venezuela. But that is not the case with Brazil and Argentina, which have extensive ties, and the United
States seems to have decided to focus its efforts there.
"We consider partners like Brazil and Argentina to be responsible partners on issues like nuclear power and
proliferation," said Thomas A. Shannon, the assistant secretary of state for hemispheric affairs. "We fully
expect them to act in a responsible fashion."
Safeguards prevent diversion
NYT 5 (10-27)
The technology is quite advanced, and because of the system of safeguards and inspections, there is no way
to divert it" into weapons programs, said Elías Palacios, an Argentine scientist who is co-secretary of the
Brazilian-Argentine Agency for Accounting and Control of Nuclear Materials. "If it's economically profitable
for Argentina, there's no reason why it shouldn't be done."
Venezuela DA – Impact – A2: Chavez Bad – A2: Terrorism

No risk of Latin American terrorism
Walser 8 (6-30, Ray, Heritage Foundation, http://www.heritage.org/Research/LatinAmerica/bg2152.cfm

Latin America cannot afford to be seen as half terrorist-friendly and half terrorist-hostile. In the long run,
radical populist regimes will likely run out of steam as they are consumed by non-competitiveness,
corruption, and inefficiency, spawning the sorts of popular backlashes that ended previous efforts to construct
populist paradises.
U.S. success in Iraq and Afghanistan against Islamist terrorism will curb or contain its expansionary ways.
Even in Iran, shifts in leadership among the mullahs could easily undo Iran's inroads into the Western
Hemisphere. In the long run, the U.S. and the strengthening democracies of the region can prevail. An era of
good feeling of the sort experienced in the 1990s may be restored as nations turn to improving Latin
America's global competitiveness and development.
***Venezuela Answers***
Venezuela Answers – No Internal Link – A2: Oil K/T Econ (1/2)

Oil dependency causes widespread poverty in Venezuela
In the environment provided by the low and unstable real income growth, with high dependency on the
oil sector and inconsistent economic policies, real wages and employment opportunities have decreased
significantly over the last decade. The deterioration in real per capita income, employment and labor
productivity—despite the problems and limitations with the data and the methodologies—indicate that
poverty in Venezuela has increased. Indeed, while there is no consensus on the level of poverty, poverty is
unambiguously higher in the late 1990s than in the early 1980s. Moreover, inequality increased between
the early 1980s and late 1990s. This finding is statistically robust, despite changes in computational methods. Poverty and inequality have,
however, remained below the average for the LAC region throughout the 1990s. Other composite welfare indexes and social indicators also show that the
living standards in Venezuela deteriorated significantly during the 1990s.
Venezuela Answers – No Internal Link – A2: Oil K/T Econ (1/2)

Venezuela is insulated against oil price declines
In sum, the performance of the Venezuelan economy during the Chávez years does not fit the mold of an "oil
boom headed for a bust." Rather it appears that the economy was hit hard for the first few years by political
instability, and has grown rapidly since the political situation stabilized in the first quarter of 2003. High oil
prices have certainly contributed to this growth, as has the government's expansionary fiscal and monetary
policy. Containing and reducing inflation, as well as realigning the domestic currency, appear to be the most
important challenges in the intermediate run; in the long run, diversifying the economy away from its
dependence on oil is also a major challenge.
However, the declining public debt (as a percentage of GDP), the large current account surplus, and the
accumulation of reserves have given the government considerable insurance against a decline in oil prices.
This favorable macroeconomic situation has also left the government with much flexibility in dealing with
inflation and the related imbalance in the exchange rate. Since the government is committed to maintaining
solid growth, it does not seem likely that it would sharply curtail economic growth in order to bring down
inflation, as is often done. This is especially true since it has not exhausted other alternatives. Therefore, at
present it does not appear that the current economic expansion is about to end any time in the near future.
The gains in poverty reduction, employment, education and health care that have occurred in the last few
years are likely to continue along with the expansion.
Venezuela Answers – Internal Link Turn: Dutch Disease (1/2)

Oil fuels a lack of diversification that dooms the Venezuelan economy
The performance of the Venezuelan economy over the last decade has been dismal, and economic
policy makers have been unable to cope with the oil cycles and the general decline in real oil prices (and
real oil revenues) over the long–term.1 This has resulted in low economic growth with bursts of inflation
and recurrent recessions. Over the last ten years, real GDP per capita growth averaged –1.2 percent per
year and the inflation rate averaged about 40 percent per year (with a declining trend over the last five
years). For the same period, real non–oil GDP per capita growth average about –2 percent per year. At the
same time, as the economy failed to diversify, it became more vulnerable to the boom and bust cycles
generated by the oil sector (see Graph 1).
Lack of diversification kills the Venezuelan economy
While the economic plan includes important initiatives, the main challenges for the Government remain to
sustain stability and growth, without major social disruptions, to diversify the economic structure over the
longer term, and to improve the living standards of the population. To restore and sustain stability over the
long term, the non– oil fiscal deficit must be reduced through the adoption of measures to enhance
non–oil revenues and control expenditures. Moreover, the strong links between oil price volatility and
public sector expenditure must be reduced (this could be achieved by imposing an inter–temporal budget
constraint through the full implementation of the oil stabilization fund). To complement these policies, the
external position should be strengthened through a combination of exchange and monetary policies.
With regard to the exchange rate, to ensure external competitiveness of non–oil exports, a more
flexible exchange rate regime could be adopted to adjust prices to significant and protracted changes
in the terms of trade, thereby avoiding the full adjustment through real wages. In turn, a restricted
monetary policy of high interest rates cannot be used as a substitute for non–oil fiscal adjustment and
a mis–aligned real exchange rate, as high real interest rates will delay economic recovery and growth.8
Venezuela Answers – Internal Link Turn: Dutch Disease (2/2)

Venezuela cannot deal with large influxes of oil revenue, creating Dutch Disease –
empirically proven
St. Hilaire 4 (12, “Dutch Disease, Oil and Developing Countries,” http://209.85.141.104/search?q=cache:-
hwrE75a6uYJ:www.business.ualberta.ca/cabree/pdf/2004%2520Fall%2520UG%2520Projects/Dutch%2520disease,
%2520oil%2520and%2520developing%2520countries.pdf+Mexico+%22Dutch+Disease%22&hl=en&ct=clnk&cd=
5&gl=us&client=firefox-a)
However, this did little to stall the impending crisis and the 50% reduction in the price of oil in 1986 did
nothing to help the situation. In 1989 the IMF stepped in with loans and the price increases related to the
reforms necessary for the loans caused rioting and the worst violence the country had seen since it became a
democracy. The increase in the price of oil in the 1970s caused Venezuela to be affected negatively
although its peak oil production point had already been reached in 1970. Because of the increase in the
price of oil the government relied completely on oil revenue and like Mexico, was reluctant to take steps
to prevent a crisis. The IMF had to impose the increases in domestic prices necessary to complete the cycle
that played out. Protectionism through government subsides and spending held domestic prices low
enough to remain competitive imports. In this sense Venezuela was escaping Dutch Disease. However,
these prices were supported not through true market value but through borrowing and extra revenue.
As soon as those avenues shut down so did the government’s ability to control domestic prices. The
sudden jump in prices imposed by the IMF caused recession so severe that rioting was induced. Another case
of the lack of value-added industry creation led to the eventual downfall of an economy given the opportunity
to grow. Essentially, the government had relied completely on revenue from oil because these revenues
were so large. The Venezuelan government bet that the price of oil would continue to rise. This was
risky bet even with the trends of the seventies; the price of oil was so high because of the decisions
made be OPEC not because of true market value. An eventual return to market value caused the sharp
decrease in prices and Venezuela lost its bet. The development of a domestic traded manufacturing sector
simply did not occur. Therefore, the revenue from oil was spent primarily on imports. Because nearly all
industry was supported through subsidies the country was unattractive to foreign investment. Also, high
tariffs on imports and exchange rate manipulation had protected the domestic market. Thus, Venezuela had
avoided Dutch Disease only temporarily and as a factor of having little traded manufacturing that was
truly competitive to begin with. Traditional exports of oil, iron, coffee, and cocoa made 95% of the
exported commodities in the early 1980s. The closed economy, while initially protecting against the lower
prices of imports could not sustain this position. The decision to depend further on the high price of oil in
the early 1980s led the country into a tailspin that would deteriorate the economy. According to the
Economist, Venezuela is currently suffering from a 27% drop in real GDP between 1998 and 2003. This
has created a poor majority in Venezuela and with little real recovery since the economic crisis their
current president, Hugo Chavez, seems to be stretching for a solution. His main focus is on attracting
foreign direct investments in the oil industry. Whether and how Venezuela will recover from its crisis still
remains to be seen. Chavez is a politically controversial figure and he has been unable to turn the country
around. Two patterns have emerged through the discussion of these two countries. The first is a reflection of
the oil price increase in the 1970s. While North America, and doubtless the rest of the world, suffered
through the temporary increase in oil prices the developing countries with oil seem to have fared much worse
in the long run. The increase in the price of oil, in both cases, caused an unprecedented increase in
revenue for these countries. Combine this fact with the lack of wise government in both places and
economic ruin results. Many postulate that Dutch Disease is only a temporary structural problem concerned
with the adjustment of the economy to the acquisition of the resource however it seems that developing
nations can suffer lengthy consequences. This is especially the case where the increase is related to the
sale of oil and no other valuable industry is created from this wealth. It seems that developing
countries do not have the capacity to deal properly with the large inflow of resources. Perhaps an
analysis of an Arab country belonging to OPEC will shed some light on the whether the control of supply can
aid in the avoidance of Dutch Disease.
Venezuela Answers – Internal Link Turn: Corruption
Oil fuels corruption which hurts growth
IPS 3 (Inter Press Service, August 20, “Industry: The Murky Business of Oil”)
"The reason corruption is so rampant in oil-exporting countries is not difficult to see," Terry Karl, co-author of
the CRS report says in a telephone interview.. "There is no other commodity that produces such great profit --
and this is generally in the context of highly concentrated power, very weak bureaucracies, and weak rule of
law. 'People rob', the finance minister of Venezuela once said to me many years ago, 'because there is no reason
not to." Of the eleven members of the Organization of the Petroleum Exporting Countries (OPEC), Indonesia,
Nigeria and Venezuela are listed in the TI Index. The TI report says these are among most corrupt in the
world at positions 96, 101 and 81 respectively. The other OPEC members are Algeria, Iran, Iraq, Kuwait, Libya,
Qatar, Saudi Arabia and the United Arab Emirates -- hardly examples of transparency. Big oil names are also
directly linked with corruption.
Venezuela Answers – Internal Link Turn: Inflation (1/2)

Oil fuels inflation
Economic Times 8 (June 8, “Despite oil wealth, Venezuela inflation rises”

http://economictimes.indiatimes.com/articleshow/msid-3111726,prtpage-1.cms)
Boom times are waning in oil-rich Venezuela, even as world crude prices soar. Inflation is nearing 30
percent, the highest in Latin America, and annual economic growth slowed to 4.8 percent in the first
quarter, a four-year low. Analysts say President Hugo Chavez's economic policies are hindering private
investment and growth just as he hopes to boost support ahead of November's regional elections. Many point
to the economy as his Achilles' heel. Already complaining of inflation and food shortages, voters last
December rejected constitutional changes that would have allowed Chavez to run for re-election indefinitely
his first blow at the ballot box, where he had enjoyed four straight electoral and referendum wins. Inflation
has been a familiar problem, but a newly slowing growth rate is making it a more urgent concern.
Chavez plans to announce a package of economic measures to boost growth in coming days and to name a
new finance minister to lead the strategy, Information Minister Andres Izarra said. Venezuela, the world's
10th-largest producer of crude, has seen its annual budget triple to US$63.9 billion (euro41 billion) since
2004 as oil prices soared. State oil monopoly Petroleos de Venezuela SA provides about half of the
government's income. Chavez pumped huge amounts of that revenue into social programs for the poor,
flooding the economy with cash and fueling a consumer spending boom while banks increased lending.
Stanford University political scientist Terry Karl says oil booms always send growth soaring until an
economy reaches what she calls an `àbsorption crunch.'' ``You just can't absorb that huge influx of money
properly,'' Karl said. ``You get problems with your prices, you get problems of supply. ... All those
bottlenecks slow down growth and eventually create inflation.'' Like many oil-producing nations,
Venezuela has a history of inflation, which reached 103 percent in 1996, two years before Chavez was first
elected. As prices now climb again, Chavez's government has tried to tame the trend issuing US$4 billion
(euro2.6 billion) in bonds in April to absorb excess cash, enforcing price controls on basic foods and holding
the currency to a fixed exchange rate. It introduced a new monetary unit in January to boost confidence in its
sagging ``bolivar,'' and changed the way inflation is measured, incorporating data from smaller cities with
less cash on hand. The Central Bank embraced a more traditional anti-inflationary measure in March, raising
interest rates on credit cards to 32 percent and on savings deposits to 10 percent to slow consumer spending.
But inflation is galloping, with rates of roughly 30 percent after running at nearly 20 percent a year
earlier. And some of Chavez's tactics have backfired. Price caps have caused sporadic shortages, as
some food producers sought other, more profitable work. And foreign exchange controls make it
harder for businesses to get dollars to buy imports, driving them to buy the US currency on the black
market, where it has sold at times for twice the official rate further inflating prices.
Venezuela Answers – Internal Link Turn: Inflation (2/2)

High oil prices mean inflation for Venezuela
Stack and Daragahi 8 (Megan K., Borzou, Los Angeles Times Staff Writers, July 17,
http://www.latimes.com/news/printedition/front/la-fg-oil17-2008jul17,0,6710073.story)
But vast oil wealth comes with risks. All three countries are struggling with inflation, which might
slowly erode popular support. In Russia, public spending doubled from 2004 to 2007. Oil and gas revenues
are expected to surpass $178 billion in 2008, nearly $33 billion more than originally projected. The
International Monetary Fund, wary of inflation, has warned Russia against rampant spending. Inflation in
Iran has aggravated a devaluation of the currency. Political changes wrought by the oil windfall also may
backfire. Venezuela's output is declining in part because skilled engineers and foreign companies are
fleeing. Analysts say sanctions, brain drain and dearth of foreign investment have badly hurt Iran's
potential output because of a lack of modern techniques. For now, however, all three are riding high on
oil revenue.
More ev…
Cancel 8 (Daniel, Bloomberg News, http://www.sun-sentinel.com/news/local/caribbean/sfl-

0624venoil,0,1492641.story)
Venezuela Finance Minister Ali Rodriguez said higher consumer prices are being driven by a greater
distribution of oil wealth to the population. Rodriguez said inflation, which in May accelerated to 31.4
percent from a year earlier, results from increased spending power among Venezuelans, causing
demand to outpace supply, according to a statement on the Information Ministry's Web site. He was named
finance minister June 15. ``The inflation phenomenon should be combated in two ways,'' Rodriguez said.
`Òn one hand, production needs to be stimulated, and on the other, consumption needs to be moderated by
restructuring measures that don't improve the general well- being in the population.'' Venezuela has the
fastest inflation of 79 countries tracked by Bloomberg. Food costs surged 6.1 percent in May after the
government eased price restrictions on basics such as milk, eggs and chicken that had become scarce.
Rodriguez, 70, a former president of OPEC, is the ninth finance minister under President Hugo Chavez
since 1999. He said yesterday that controlling inflation is his biggest challenge.
Venezuela Answers – Internal Link Turn: Inflation K/T Econ

Inflation is a threat to critical sectors of Venezuela’s economy
El Universal 8 (July 14, http://english.eluniversal.com/2008/07/14/en_eco_art_less-growth-and-

high_14A1795039.shtml)
Historically, Venezuelans have associated increases in oil prices with wealth and economic growth.
However, the first semester of 2008 shows an unusual result: in spite of an unexpected jump in the oil
prices, which averaged USD 100 per barrel by the end of the first half this year, the Venezuelan economy
has lost momentum and skyrocketing inflation is deeply hurting consumers' purchasing power.
According to the data provided by the Central Bank of Venezuela, the economic growth was 4.8 percent in
the first quarter. This represents a sharp fall with respect to an 8.8 increase in the same period in 2007. This is
the lowest growth since 2003. Such slowdown hits some areas that are vital for job creation and
production. The construction sector was down from a 27 percent growth in the first quarter of 2007 to just
2.6 percent during the same period in 2008. On the other hand, manufacturing decreased from 6.8 percent in
the first three months of 2007 to 1.4 percent in the same period this year.
According to the data provided by the Central Bank of Venezuela, the economic growth was 4.8 percent in
the first quarter. This represents a sharp fall with respect to an 8.8 increase in the same period in 2007.
This is the lowest growth since 2003.
Such slowdown hits some areas that are vital for job creation and production. The construction sector
was down from a 27 percent growth in the first quarter of 2007 to just 2.6 percent during the same period in
2008. On the other hand, manufacturing decreased from 6.8 percent in the first three months of 2007 to 1.4
percent in the same period this year.
Venezuela Answers – Impact T/O – A2: Health Care

Decrease oil prices wont decrease Venezuelan social spending
However, Venezuela has a large cushion of reserves to draw upon before an oil price decline would begin to
squeeze its finances. A decline in oil prices of 20 percent or more could be absorbed from official
international reserves, which at $25.2 billion are enough to pay off almost all of Venezuela's foreign debt.
This does not include other government offshore accounts, which are estimated to be in the range of an
additional $14-$19 billion. With its low foreign debt (14.6 percent of GDP), the government could also tap
international credit markets in the event of an oil price decline. Furthermore, a collapse of oil prices does not
appear to be likely in the foreseeable future. The July 10 short-term outlook of the US Energy Information
Agency projects oil prices at $65.56 per barrel for 2007 and $66.92 for 2008. The risks of unanticipated
supply shocks – especially in the volatile Middle East − seem to be mostly on the downside, which would
increase prices.
Social programs aren’t improving mortality
Opinion is divided over the effect of Chavez's policies on Venezuela's economy. Some economists say the
tremendous rise in social spending under Chavez has greatly reduced poverty and pushed unemployment
below 10 percent, its lowest level in more than a decade. According to a February 2008 report from the
Washington-based Center for Economic and Policy Research, not only has unemployment dropped, formal
employment has increased significantly (PDF) since Chavez took office. But other economists express
concerns about the country's high inflation levels. The IMF has forecast inflation of 25.7 percent in 2008 and
31.0 percent in 2009—among the highest rates for any country in the world—and according to news reports,
the country is already experiencing food shortages of goods such as sugar and milk. Francisco Rodriguez,
former chief economist of the Venezuelan National Assembly, writes in a 2008 Foreign Affairs article that
income inequality has increased during Chavez's tenure, and further, Chavez's social programs have not
had a significant impact on infant mortality rate or literacy rates among Venezuelans.
Venezuela Answers – Impact Turn -- Oil = Chavez

US oil consumption fuels Chavez –No revenue goes to productive economic purposes
Bremmer 7 (Ian, President of Eurasia Group. “Hugo Chavez's Most Dangerous Enemy?” It's Chavez Himself
http://www.realclearpolitics.com/articles/2007/11/hugo_chavezs_most_dangerous_en.html)
In proven and unproven reserves, Venezuela is believed to control some 270 billion barrels of oil, the
deepest supply in the world. As crude prices lurch toward $100 per barrel, President Hugo Chavez would appear
to hold the only weapon he needs to further tighten his grip on domestic political power and extend his
foreign-policy influence. But a close look at how his government milks the country's cash cow suggests he has
serious cause for concern. Chavez remains popular at home, but if Venezuela's economy turns south and state
spending on popular social programs is substantially cut, he may not be popular for long. His fortunes
increasingly depend on the future of Venezuela's oil production, because the government's cash comes almost
exclusively from the country's state-run energy giant, Petróleos de Venezuela (PDVSA). As recently as the mid-
1990s, PDVSA hoped that joint development projects with foreign firms would lift production to 6.5 million barrels
per day (bpd). In 1998, the company produced about 2.9 million bpd. Output has since fallen to around 1.6 million.
There are two main reasons. First, during a power struggle with Chavez in 2003, PDVSA's workers went on
strike. The president retaliated by firing 18,000 of them, including the vast majority of the company's most
talented and experienced engineers. Nearly five years later, the company has yet to recover from the loss of
expertise. Second, Chavez is bleeding the company of the revenue that might be reinvested in aging
infrastructure and new equipment. He has diverted $12 billion into a fund meant to subsidize health and
education projects. Some argue that this is a worthy undertaking, but this spending represents three times the amount
devoted to oil exploration and the maintenance of PDVSA's existing assets, the source of Venezuela's future income.
In addition, all these subsidies are awarded off the books. It's impossible to know exactly how all that money is
really being spent. The company's profit margins fell by about 25 percent in 2006, despite the surge in oil prices. In
the first quarter of 2007, the company took on $12 billion in new debt. These are official figures; the reality may be
much worse. The broader economy is already in rough shape. The most optimistic estimates put core inflation at 20
percent, and the real figure might be closer to 35 percent. Foreign investment in the country is severely limited by
Chavez's habit of voiding contracts with international firms, creating product shortages across the board.
Venezuela is a net importer of virtually everything except oil and remains deeply dependent on its neighbors,
including the United States, for goods and services vital to the country's economy. Convinced that oil production
will rise and that high prices are here to stay, Chavez has aggressively antagonized the United States, his best
oil customer. He has essentially awarded exclusive rights to future development deals in the country's oil-rich
Orinoco belt, believed to hold the largest petroleum reserves in the world, to CNPC (China), ONGC (India), LUKoil
(Russia), Gazprom (Russia), Petrobras (Brazil), NIOC (Iran), and Repsol YPF (Spain). He has repeatedly
threatened to divert oil exports now destined for the United States toward consumers in Asia. Herein lies the
shortsightedness of Chavez's plans. The new prominence of foreign state-owned energy companies comes at the
expense of multinationals like ExxonMobil and ConocoPhillips. Chavez has squeezed these and other
international companies operating in the country by tearing up existing contracts to seize a bigger share of
their profits. If the economy slows further and Chavez needs more cash, he'll find it a lot tougher to push
around the state-owned firms of would-be allies. In addition, Venezuela needs access to U.S. energy markets,
because crude oil shipments to America represent more than half of the country's total exports. Chavez can't
simply redirect that much oil toward China and India. Venezuela has no direct access to the Pacific Ocean. Its
rusting tanker fleet must pay transit fees to use the Panama Canal, and it takes a Venezuelan tanker seven weeks to
reach East Asia. More to the point, neither China nor India will have the capacity to refine that much of Venezuela's
heavy crude oil anytime soon. Hugo Chavez's most dangerous enemy is Chavez himself. His quixotic rule
continues to generate damage that his ministers must scramble to minimize. On May 1, the Venezuelan president
proudly pledged that his country would withdraw from the International Monetary Fund and World Bank,
institutions he considers appendages of an "evil empire" based in Washington. His finance minister was among those
taken by surprise by the announcement. Chavez apparently didn't know that clauses in the country's IMF agreement
stipulate that withdrawal from the fund could trigger a large-scale debt default as other lenders were freed to demand
immediate repayment of $21 billion in sovereign debt. Informed of this by his ministers, Chavez has now begun to
hint that the time might not be ripe for such a bold move. Chavez has also announced the state takeover of
Venezuela's largest telecom company and power utilities along with several ambitious energy projects without a
clear plan on how the move should be executed. In response, the country's stock market plunged 20 percent in a
single day.
Venezuela Answers – Impact Turn – Chavez Bad: Oil = Chavez

Oil revenue key to Chavez

While Chávez pursues his aggressive agenda and erodes the efficiency and long-term viability of his energy
sector, Washington understands that a sudden reduction in the price of oil would ripple through PdVSA and
Venezuela, severely undercutting Chávez and his ability to govern. Mounting inflation, widespread food
shortages, and violent crime have lessened Chávez's approval ratings, and his domestic grip appears to have
slipped. The failure to achieve popular approval of a package of constitutional reforms in December 2007 has
raised hope in opposition circles that the Venezuelan people may be able to select new leadership in 2012.
Oil revenue funds Chavez’s agenda
Under Chavez, however, the company's mandate has drastically expanded. In 2002, Chavez redefined
PDVSA’s role to include the government’s social priorities. PDVSA must now spend at least 10 percent of its
annual investment budget on social programs. This money is funneled through the National Development
Fund, or Fonden, an investment fund set up in 2005 that is not included in the government's budget. Peter
Hakim, president of the Inter-American Dialogue, a Washington-based center for policy analysis, says that
Chavez’s gradual takeover of PDVSA has given him an enormous bankroll to pursue his political and
economic ambitions.
Low oil prices are key to undermining Chavez’s power
Shifter 6 (Michael, Adjunct Professor of Latin American Studies at Georgetown University's School of Foreign
Service [http://www.foreignaffairs.org/20060501faessay85303-p0/michael-shifter/in-search-of-hugo-ch-vez.html] In
Search of Hugo Chávez/ June 2006)
To be sure, Chávez's capacity to govern the country is not unlimited. A drop in oil prices, although
unlikely in the near term, would prove highly problematic for his plans. There are credible reports of large-
scale corruption within the regime and, as evidenced by infrastructure problems, major inefficiencies in the
economy and the public sector. Shortages in basic commodities have begun to appear sporadically, the result
of prolonged price controls. Incipient splits within Chávez's amorphous coalition could become more
pronounced and create problems for governance. And although Chávez remains personally popular,
polls indicate that the population is becoming increasingly dissatisfied over a variety of key issues.
Chavez uses oil revenues to increase his influence in Latin America and fund guerrilla
groups
Hanson 8 (Stephanie, Council on Foreign Relations

[http://www.cfr.org/publication/12089/venezuelas_oilbased_economy.html#2] Venezuela’s Oil-Based Economy/
June 27, 2008)
Increased oil revenues have also given Chavez the ability to extend assistance programs outside
Venezuela’s borders. For example, he provides oil at a preferential price to many countries in the Caribbean
through the Petrocaribe initiative. In August 2007, the Associated Press calculated that Chavez had
promised $8.8 billion in aid, financing, and energy funding to Latin America and the Caribbean
between January and August 2007, a figure far higher than the $1.6 billion of U.S. assistance for the
entire year. Though it is impossible to determine how much of that funding was actually dispersed, the
difference in aid is striking. Chavez is also suspected of funneling money to the FARC, a Colombian
guerrilla group, as well as providing funds to Argentine President Cristina Kirchner’s election
campaign in 2007—though he denies both charges.
Venezuela Answers – Impact Turn – Chavez Bad: War/Lead/Democr 2AC
Venezuelan oil revenue finances anti-American dictatorships in Latin America causing

regional war
Hugo Chávez is no democrat. At home, he has concentrated the powers of the state in his presidency,
expropriating budgets from municipal governments, strengthening the national police, and packing the
Supreme Court with cronies.23 Abroad, he appears to be in the initial stages of creating a confederation of
nations opposed to the United States that is sustained by oil and united by an improvised nationalist ideology.
History suggests a future of conflict and poverty, both for those under his rule and for all those who are allied
with him.
Other countries in Latin America share some of Venezuela's economic characteristics--abundant resources
and high rates of poverty that make them easy prey for populist demagogues. A bloc of states united in leftist
authoritarianism and oil extortion could ignite the flames of armed confrontation again in the Western
Hemisphere. To avoid needless conflict as well as a possible energy crisis, the United States should help
direct Venezuela back toward democracy, develop alternate sources of petroleum, and engage Latin America
more effectively to help allies strengthen democratic institutions and market economies.
Latin America key to worldwide democracy
Diamond 8 (Larry, Council on Foreign Relations [http://www.foreignaffairs.org/20080301faessay87204-p0/larry-

diamond/the-democratic-rollback.html] The Resurgence of the Predatory State/ April 2008)
In the coming decade, the fate of democracy will be determined not by the scope of its expansion to the
remaining dictatorships of the world but rather by the performance of at-risk democracies such as
Kenya. A list of such democracies would encompass more than 50 states, including most countries in Latin
America and the Caribbean, four of the eight democracies in Asia, all of the post-Soviet democracies that do
not belong to the European Union, and virtually all of the democracies in Africa. The most urgent task of
the next decade is to shore up democracy in these countries.
Democracy stops nuclear war
Larry Diamond, Hoover Institution, Stanford University, December, PROMOTING DEMOCRACY IN THE
1990S, 95, p. http://www.carnegie.org//sub/pubs/deadly/diam_rpt.html //.
Nuclear, chemical and biological weapons continue to proliferate. The very source of life on Earth, the
global ecosystem, appears increasingly endangered. Most of these new and unconventional threats to
security are associated with or aggravated by the weakness or absence of democracy, with its
provisions for legality, accountability, popular sovereignty and openness. The experience of this century
offers important lessons. Countries that govern themselves in a truly democratic fashion do not go to
war with one another. They do not aggress against their neighbors to aggrandize themselves or glorify their
leaders. Democratic governments do not ethnically "cleanse" their own populations, and they are much less
likely to face ethnic insurgency. Democracies do not sponsor terrorism against one another. They do not
build weapons of mass destruction to use on or to threaten one another. Democratic countries form more
reliable, open, and enduring trading partnerships. In the long run they offer better and more stable climates
for investment. They are more environmentally responsible because they must answer to their own
citizens, who organize to protest the destruction of their environments. They are better bets to honor
international treaties since they value legal obligations and because their openness makes it much more
difficult to breach agreements in secret. Precisely because, within their own borders, they respect
competition, civil liberties, property rights, and the rule of law, democracies are the only reliable
foundation on which a new world order of international security and prosperity can be built.
Venezuela Answers – Impact Turn – Chavez Bad: Econ (1/3)

All oil revenue is diverted to Chavez, killing the economy

Chávez uses his oil revenues as a massive ATM for domestic spending and to prop up the Castroite
Communist regime in Cuba ($2 billion to $4 billion annually), to purchase influence with smaller, energy-
dependent Caribbean and Central American nations via PetroCaribe, and to spend billions on the purchase of
Russian small arms, jets, helicopters, and submarines. He has dispatched bags of soft political cash as far as
Argentina and is lending support to advance the electoral prospects of the leftist Farabundo Martí Liberation
Front in El Salvador in 2009. Chávez's recent uptick in support for the Revolutionary Armed Forces of
Colombia (FARC) and his momentary flirtation with war threats against Colombia lead to serious questions
about his long-term ambitions regarding the future stability and democratic governance of Colombia. The
enormous costs of these undertakings draw away from productive investments in energy and other sectors of
productive growth.
Oil prices drive fuel Chavez’s inefficient spending which hurts Venezuela’s economy
Ashwell 5 (Nick, World markets Analysis, September 14, “GDP May Reach Double Digits in 2005, Says
Venezuelan Official”)
Central bank director Domingo Maza said yesterday that GDP in Venezuela is likely to grow by 8-10%
over 2005 as a whole, well above the official forecast of 5%. The chief factor behind Venezuela's
stronger-than-expected performance is high oil prices, according to Zavala. These are allowing sharp
increases in public spending; the price of Venezuelan crude has averaged US$43.35 per barrel so far this year
- well above the US$23 assumed in the 2005 budget. Zavala forecast GDP growth in the third quarter of 10%
year-on-year, above the 9.3% recorded in the first half of 2005 (see Venezuela: 19 August 2005: Oil Industry
Underpins Double-Digit GDP Growth in Venezuela). He also said that annual inflation should end this year at
less than 15% (see Venezuela: 2 September 2005: Consumer Inflation in Venezuela Accelerates Somewhat in
August Amid Rising Food Prices). Significance: As ever, the performance of the Venezuelan economy
remains heavily dependent on the trajectory of oil prices. Rather than taking advantage of bumper
revenues to strengthen the public finances and diversify the economy, the administration of President
Hugo Chavez is cranking up social spending at a remarkable pace, while undermining investor
confidence by embarking on an expropriation campaign of 'unused and under-used' land and
corporate plants.
Oil wealth doesn’t solve poverty
Despite the country’s oil wealth, economic conditions in the country deteriorated in the 1990s. The
percentage of Venezuelans living in poverty (income of less than $2 a day) increased from 32.2% to 48.5% of
the population between 1991 and 2000, while the percentage of the population in extreme poverty (income of
less than $1 a day) increased from 11.8% in 1990 to 23.5% in 2000.51 In 2002-2003, the country’s political
instability and polarization between the government and the opposition contributed to a poor investment
climate, capital flight, and declines in GDP. The national strike orchestrated by the opposition from late 2002
to early 2003 contributed to a contraction of the national economy by almost 9% in 2002 and 7.7% in 2003.

Chavez hurts the Venezuelan economy and causes regional instability
Johnson 6 (Stephen, Hertiage Foundation. “Is Hugo Chávez a threat?” http://www.heritage.org/Research/LatinAmerica/hl938.cfm May 1, 2006)
Biographers tell us that Hugo Chávez trained for a radical career ever since childhood, though no one guessed he would be president. He learned Marx
and Machiavelli from a neighborhood historian but seemed disinterested. In the Venezuelan Army, he joined a group of left-leaning officers that secretly advocated
Marxism and military rule, calling themselves Bolivarians after the Venezuelan patriot Simón Bolívar. They got little notice. When Chávez and a handful of fellow
officers attempted to overthrow President Carlos Andrés Pérez in 1992, few took him seriously. When Pérez got impeached a year later on corruption charges, people
saw Chávez as a reformer. Released from jail in 1994, he formed his own Fifth Republic Movement and promised to clean up government and relieve poverty.
Venezuela’s political parties were running on empty. Its caretaker state, based on exploiting natural resources and distributing profits through social spending
Venezuelans living under the poverty line had gone from 27 percent
programs, had become sluggish and inefficient. Since 1980,
of the population to more than 50 percent. Chávez called his predecessors “squalids” and referred to the
capitalism they espoused as “savage.” The public brushed it off as rhetoric. The mainstream daily newspaper El Nacional and TV networks
Venevisión and Televén even supported Chávez’s candidacy. Chávez in Power Opinions changed after he was elected in 1998. Instead of governing by
consensus, which was what Venezuelans had become accustomed to, he led by confrontation. Politicians, civil society, and the commercial
sector fell into paralysis. He had the constitution rewritten to consolidate his powers and extend his mandate.
In 2002, an uprising took him temporarily from office, but he came back a crusader, successfully linking his cause
with the state. Thereafter, he attacked opponents with a vengeance. He enacted a “social responsibility” law permitting the government to close radio and
TV stations for airing content that “causes anxiety.” Another imposed jail terms for even mildly criticizing the government. In the background, prosecutors began
rounding up opposition leaders for show trials conducted by provisional, handpicked judges. In August 2004, the president survived a recall vote by padding electoral
rolls and intimidating opponents. Now politicians from opposition parties seem increasingly unwilling to run against him or his candidates. Outside his borders,
Chávez threatens non-leftist states. Financed by the national oil industry he directly controls, the president
sees himself taking over Fidel Castro’s leadership of the Latin American left and strengthening hemispheric
ties to such rogue nations as Iran and North Korea.
More ev…
Washington Times 7 (Richard W. Rahn, Director general of the Center for Global Economic Growth, a project of the FreedomWorks Foundation.
“Collapsing Venezuela” http://www.washingtontimes.com/news/2007/jan/21/20070121-102603-4793r/)
If Venezuelan President Hugo Chavez deliberately intended to sabotage his nation's economy, he
would be hard-pressed to do anything different from what he is now doing to his country. It has been widely
reported that Mr. Chavez has been increasingly taking control of the oil, telecommunications and energy
sectors, as well as the media. What has not been reported is the full extent of the corruption in Venezuela and
how this ultimately will destroy the economy. The financial scandal taking place is far bigger than Enron, and
may ultimately even exceed the U.N. "oil-for-food" scandal, the biggest financial disgrace of all time.
Venezuela has had a rapidly growing economy for the last few years, due to high oil prices, but the house of
cards is about to collapse. The former Venezuelan representative to Transparency International, Gustavo Coronel, has documented how much of this
corruption has taken place in a report published by the Cato Institute's Center for Global Liberty and Prosperity. Forty years ago, Venezuela had become a
functioning democracy and was experiencing solid economic growth, but beginning in the mid-1970s
corruption increased. Partially as a result, Hugo Chavez was elected president in December 1998 on an anti-
corruption platform. In the years since, Mr. Chavez has been dismantling the independent political institutions
and sharply reducing transparency. He has also stripped the Central Bank of its independence and
misappropriated much of its reserves. Some of the funds have been used to buy billions of dollars of Argentine bonds, to buy influence in
Argentina. That country has not been able to sell bonds in the international markets since its 2001 default because Argentina still has not come to an agreement with its
private creditors, despite having extensive and growing foreign exchange reserves.

Chavez diverts oil funding to unproductive sources
Washington Times 7 (Richard W. Rahn, Director general of the Center for Global Economic Growth, a project of the FreedomWorks
Foundation. “Collapsing Venezuela” http://www.washingtontimes.com/news/2007/jan/21/20070121-102603-4793r/)
The Argentine bonds were then sold by the Venezuelan government to cooperative local banks at artificial
rates as a way to get rid of the bonds. Venezuela established exchange controls several years ago to try to reduce
capital flight, which immediately resulted in a parallel (black or free market) market, giving Venezuela two
different exchange rates (the official and the black or free market rate). The government uses the existence of
these two rates to reward "friendly" banks and "intermediaries" (some of whom are known terrorists). Since
2004, the Venezuelan Central Bank has transferred about $22.5 billion to accounts abroad by the Chavez
government, and about $12 billion of that remains unaccounted for. It has also been reported that the gold reserves
have been removed from the Central Bank. Mr. Chavez has also set up a "development bank," which operates
without transparency. As the Chavez government takes over more and more of private industry, it also ceases
reporting on the financial results of those industries, such as the state-owned oil company, which operates
Citgo in the U.S. Mr. Chavez announced this month he will take over the privately owned telecommunications
and power companies, and we can expect that shortly after he does so his government will also stop reporting
their finances. Increasingly, Mr. Chavez uses the massive oil revenues the country receives, as well as other
government revenues, as his own private piggy bank.
More ev…
Washington Times 7 (Richard W. Rahn, Director general of the Center for Global Economic Growth, a project of the FreedomWorks
Foundation. “Collapsing Venezuela” http://www.washingtontimes.com/news/2007/jan/21/20070121-102603-4793r/)
Where has all the money gone? It has gone to buy foreign political influence and loyalties in places like
Cuba, Bolivia, Nicaragua and even the United States (notably to subsidize some New England fuel oil consumers
through a company controlled by members of the Kennedy family). The money has gone to buy weapons from
Russia, Spain and elsewhere, endearing those countries to Mr. Chavez. The money has gone to local cronies
for inflated infrastructure and economic development projects and to buy the loyalty of government officials
and supporters, including judges. The Venezuelan economy will collapse, despite massive oil revenues because
we know socialist economies perform poorly. While the rest of the world has been moving away from socialism
for the last quarter-century for good reason, Venezuela is becoming socialist. We know governmental use of central
banks to basically print money to cover expenditures results in rising inflation and eventually monetary
meltdown. Venezuela no longer has an independent central bank, and inflation is already up to 17 percent
and rapidly rising. We know countries thrive with economic freedom but decline without it, and Venezuela is
now down to 126 out of 130 nations in the 2006 Economic Freedom of the World the most rapid decline ever
(in 1995 it was No. 75). And, finally, we know that when a state becomes totally corrupt an economic collapse
always follows. Mr. Chavez and his cronies had already been spending far more than they were taking in before the
recent drop in oil prices. Without a big jump back up to $70 a barrel or more for oil, the Venezuelans will be
increasingly squeezed, and you can bet the blood from the innocent Venezuelan people will be drained long
before those on the take from Mr. Chavez agree to have their looting stopped.
Venezuela Answers – Impact Turn – Chavez Bad: Econ – Poverty Up
Poverty high in Venezuela

Helwege 7 (Ann, GLOBAL DEVELOPMENT AND ENVIRONMENT INSTITUTE
[http://www.ase.tufts.edu/gdae/Pubs/wp/07-02LatinAmPoverty.pdf] Declining Poverty in Latin America?
A Critical Analysis of New Estimates by International Institutions/ September 2007)
Four of the region’s more developed countries – Argentina, Colombia, Peru, and Venezuela – have shown
the worst performance. As a group, they’ve seen moderate poverty balloon from 11% to 25%, while
extreme poverty jumped from 2% to 10% (WB). In all four cases, the data are incomplete and sometimes
inconsistent, but the extent of problems in these relatively large countries raises doubts about prospects
for halving poverty by 2015.
Poverty rates rapidly increasing in Venezuela

The World Bank 4
Despite the country’s progress, the percentage of Venezuelans living in poverty (household income of less
than $2 a day) has increased from 32.2 percent in 1991 to 48.5 percent in 2000. Likewise, the proportion
of those living in extreme poverty —below $1 a day— rose from 11.8 percent to 23.5 percent. This
increased poverty is accompanied by a widening inequality gap. Currently, the richest 20 percent of
Venezuelans receives 53 percent of all income, while the poorest 20 percent accounts for only a three
percent share of the country’s total income. Most observers agree that the biggest obstacle to stable
growth in Venezuela is the country’s polarized political climate. A successful conclusion to continuing
efforts at mediation of the country’s political divisions would be a strong factor in favor of improving
Venezuela’s prospects for growth and poverty reduction.
Venezuela Answers – Impact Turn – Chavez Bad: Democracy
Chavez undermines Latin American democracy
Johnson 6 (Stephen, Heritage Foundation, 5-1, http://www.heritage.org/Research/LatinAmerica/hl938.cfm

In fact, Chávez has made good on all his promises except to curb poverty and corruption, which have increased under his rule. He has
successfully corralled opponents at home and has targeted the democratic, free-market West. His
diplomats actively support radical parties in such countries as Bolivia, Peru, Ecuador, Panama, Nicaragua, El Salvador, and Mexico.
He hopes to link Latin American radicals with Middle Eastern jihadists and exploit nuclear technology
with Iran. One should not take that lightly.
But his menace could also serve as a wake-up call. Elsewhere in the region, powerful presidencies still impose agendas out
of touch with public desires while subservient legislatures and judiciaries fail to curb their excesses. In
most countries, party leaders, not voters, choose candidates who are placed on lists and elected according to the proportion of votes collected by each party.
Today, half the countries in Latin America have poverty levels at about the 50 percent mark. Most of those economies are still manipulated to shield state or
family-owned monopolies while placating the middle class and poor with social programs. Increased trade helps established industries and contributes to
economic growth but fails to create enough jobs to keep up with population growth, which will increase by 200 million in 20 years. The region cries for
change, but whose vision will prevail?
To guard against Chávez-style authoritarianism spreading throughout the rest of Latin America, countries with “at-risk” profiles of high poverty, high
unemployment, poor social integration, and lagging opportunity for social advancement must undertake reforms to become “opportunity societies.” More to
the point, Washington can help by engaging more vigorously with our neighbors to:
Promote deeper political reforms, bolstering homegrown efforts to improve governance, strengthening citizen control of political parties now dominated by
founder/owners, establishing links between legislators and constituent districts, enhancing separation of powers, and promoting equal treatment of all
citizens before the law.
Foster freer markets by concluding pending bilateral free trade accords with Panama and the Andean countries of South America. Beyond trade, U.S.
diplomacy and assistance should help strengthen property rights, simplify business licensing for small enterprises, encourage banking competition to make
credit more affordable, and provide models for privatization that enhance competition, not stifle it.
Improve security through regional cooperation by encouraging regional partnerships based on day-to-day military-to-military and law enforcement-to-law
enforcement cooperation to promote common standards and practices as well as share intelligence on criminal and terrorist threats.
Boost communication with the audiences Chávez seeks by reviving public diplomacy programs such as scholarships and exchanges for poor and indigenous
youth to study and visit the United States as well as expanding Voice of America broadcasts to Latin America to balance the propaganda of Venezuela’s
Telesur TV network.
Toward Venezuela, U.S. diplomats should avoid responding to Hugo Chávez’s provocations—a device he uses to show followers that he can taunt world
powers. Still, Washington should support Venezuelan democrats by urging continued international scrutiny of human rights under Venezuela’s emerging
police state and pressing U.S. allies to join in denouncing Chávez’s dictatorial policies.
Since childhood, Hugo Chávez has been underestimated. Today, he is
becoming a major irritant, if not a threat, to Latin
America’s fragile democracies and to the United States. As an antidote, the United States and its allies should ignore verbal provoca-
tions, but stand by Venezuela’s democrats, and help democracy and markets fulfill their promise in the rest of the hemisphere.
More ev…

Loosely networked and filled with a variety of left sympathizers, the Chávez left draws from a collection of
old-line Communists, radicals, indigenous leaders, and anti-Americans who travel freely from Havana to
Caracas to La Paz and other locations. Assisted by Venezuelan financial aid, it hides its dangerous tendencies
behind a smokescreen of unabashed apologetics. The groups that make up this movement aspire to become
catalysts for the destabilization of democratic, free-market, pro-U.S. governments and do not play by normal
rules of the political game.
Venezuela Answers – Impact Turn – Chavez Bad: Democracy – Model
Latin America key to worldwide democracy
Diamond 8 (Larry, Council on Foreign Relations [http://www.foreignaffairs.org/20080301faessay87204-p0/larry-

diamond/the-democratic-rollback.html] The Resurgence of the Predatory State/ April 2008)
In the coming decade, the fate of democracy will be determined not by the scope of its expansion to the
remaining dictatorships of the world but rather by the performance of at-risk democracies such as
Kenya. A list of such democracies would encompass more than 50 states, including most countries in Latin
America and the Caribbean, four of the eight democracies in Asia, all of the post-Soviet democracies that do
not belong to the European Union, and virtually all of the democracies in Africa. The most urgent task of
the next decade is to shore up democracy in these countries.
Venezuela Answers – Impact Turn – Chavez Bad: Arms Race

Chavez uses oil profits to buy weapons
Chávez has also used oil money to buy weapons, which he justifies by invoking the threat of a U.S.
invasion. He has purchased combat helicopters and 100,000 AK-47s from Russia and has struck a deal
with Spain for some $2 billion in military equipment. Although it is uncertain whether the deals that have
been announced will actually materialize (Washington has tried to block arms purchases from Spain and
Brazil), it is clear that such moves are part of Chávez's mission to increase his own power vis-à-vis the
world's only superpower.
Venezuela’s oil revenues go to purchasing weapons

Hanson 8 (Stephanie, Council on Foreign Relations
[http://www.cfr.org/publication/12089/venezuelas_oilbased_economy.html#2] Venezuela’s Oil-Based Economy/
June 27, 2008)
Military expenditures are also funded by the government's flush coffers. Between 2004 and 2006,
Venezuela spent roughly $4.3 billion on weapons, according to a January 2007 Defense Intelligence
Agency report. As part of deals signed with Russia in 2006, Venezuela purchased 100,000 Kalashnikov
rifles, twenty-four Sukhoi-30 fighter planes, and fifty-three Russian helicopters. In March 2008, it
hired Belarus to build an air defense system.
Chavez fuels a regional arms race
As noted above, the Bush Administration has expressed concerns about Venezuela’s purchases of military
equipment. Defense Intelligence Agency Director Lt. Gen. Michael Maples expressed concern in February
2006 congressional testimony about Venezuela’s arms purchases, maintaining that Venezuela was seeking to
increase their capability for their own defense and to operate elsewhere in Latin America and the Gulf
area.122 State Department officials maintain that Venezuela’s military purchases from Russia go far beyond
what the country needs for self-defense. Secretary of State Donald Rumsfeld cited concerns among
neighboring Latin American countries about Venezuela’s military purchases and also a concern that the
assault rifles could end up in the hands of terrorist groups like the Revolutionary Armed Forces of
Colombia.123 President Chávez criticized Secretary Rumsfeld for suggesting that countries such as
Colombia are concerned about Venezuela’s military purchases. In January 11, 2007 testimony before the
Senate Select Committee on Intelligence, Director of National Intelligence John Negroponte expressed
concern that the President Chávez’s military purchases and moves toward developing his own weapons
production capability are increasingly worrisome to his neighbors, and could fuel an arms race in the region.
An arms race causes conflict due to strategic imbalances

The Chavez government has reacted angrily to the U.S. bases surrounding Venezuela and U.S. generals
listing "radical populism" a major new security threat.14 One dangerous scenario (outright war would be
worse) is an acceleration of the alleged arms race occurring in South America. Former Brazilian President
Jose Sarney and other regional leaders warn about Venezuela increasing its military strength. "If [Venezuela]
truly becomes a military power, an arms race in Latin America will ensue. It will lead to a strategic
disequilibrium on the continent," Senator Sarney cautioned.15
Venezuela Answers – Impact Turn – Chavez Bad: Bomb

Chavez will obtain a nuke and fuel a regional arms race
He has proposed energy cartels, such as PetroCaribe and PetroSur, to integrate Latin America’s state hydrocarbon industries under one roof minus the
participation of private U.S. companies. And, despite controlling the seventh largest oil and tenth largest natural gas reserves in the world, Chávez
announced last May plans to acquire nuclear technology from Iran, fueling fears that he may try to develop a
bomb. He is friendly with the Revolutionary Armed Forces of Colombia (FARC) guerrillas and allowed FARC units to camp out in Venezuelan territory. His
government granted FARC commander Rodrigo Granda Venezuelan citizenship before he was captured on a bounty and sent back to Colombia. His new regional
satellite TV network called Telesur bashes Colombia for its relations with the United States in addition to beaming Marxist propaganda throughout South America.
Chávez opposes the planned Free Trade Area of the Americas while advocating his own Bolivarian Alternative for the Americas (ALBA)—a notional aid network to
be financed largely by Venezuelan oil profits. Although the highway from Caracas to its international airport lies in disrepair, he has committed more than $3 billion a
year in aid to Latin American neighbors and has bought up Argentine and Ecuadoran debt, which is passed on to international financial markets. Chávez
has
embarked on an arms buildup to scare Brazil and Colombia. He has announced plans to buy more than a
million rifles and acquire armored vehicles and new attack aircraft from Russia. Recently, he called for
Britain to leave the Falkland Islands. In the United States, his government has paid lobbyists up to $100,000 a month to polish his image before the
public and U.S. Congress. It reportedly funds the Venezuela Information Office, a public relations firm operating under the Foreign Agents Registration Act. Although
they claim no direct link to the Venezuelan state, pro-Chávez activist groups called “Bolivarian Circles” have surfaced in Miami, Chicago, and other cities.[2] After
years of persuading fellow OPEC (Organization of Petroleum Exporting Countries) members to suppress petroleum production to raise prices, Chávez has negotiated
with selected U.S. Congressmen to sell small amounts of discount heating oil to poor neighborhoods in northern U.S. cities, to help these lawmakers to gain political
clout.[3] By meddling in U.S. internal politics, Chávez hoped to drive a wedge between the American people and their government. A Call to Action Whether
Venezuela’s President Chávez is a serious threat or a threatening buffoon depends on your point of view. If he cuts off oil shipments to the United States, other
suppliers can step in. If he buys Russian MiGs, Washington could theoretically send his neighbors F-16s.
Chavez supports terrorism and intends to acquire nuclear weapons from Iran
Moreover, how much trouble can Venezuela cause with an annual gross domestic product comparable to that of St. Louis, Missouri?
In fact, Chávez has made good on all his promises except to curb poverty and corruption, which have increased under his rule. He has successfully corralled
opponents at home and has targeted the democratic, free-market West. His diplomats
actively support radical parties in such countries
as Bolivia, Peru, Ecuador, Panama, Nicaragua, El Salvador, and Mexico. He hopes to link Latin American
radicals with Middle Eastern jihadists and exploit nuclear technology with Iran. One should not take that lightly. But his
menace could also serve as a wake-up call. Elsewhere in the region, powerful presidencies still impose agendas out of touch with public desires while subservient
legislatures and judiciaries fail to curb their excesses. In most countries, party leaders, not voters, choose candidates who are placed on lists and elected according to
the proportion of votes collected by each party. Today, half the countries in Latin America have poverty levels at about the 50 percent mark. Most of those economies
are still manipulated to shield state or family-owned monopolies while placating the middle class and poor with social programs. Increased trade helps established
industries and contributes to economic growth but fails to create enough jobs to keep up with population growth, which will increase by 200 million in 20 years. The
region cries for change, but whose vision will prevail?
Chavez will use oil funds to acquire a nuke and go to war w/Columbia
Fortunately, Chavez's outlandish antics, such as a UN speech where he referred to President Bush as "the devil," undermine his appeal. Many Latin
Venezuela is awash in oil profits, which
Americans see him more as a disruptive hothead than the model statesman he fancies himself. But
Chavez is using to consolidate power at home, bankroll Leftist pols across the region, provide cut-rate oil to
amigos like Cuba, buy billions in Russian weaponry and back guerillas in Colombia. He's also chummy with
Iran's President Mahmoud Ahmadinejad. The two nations have signed a number of joint-venture deals, but
the real worry is the prospect of Iranian missile or even nuclear (weapon) proliferation to Venezuela. Castro's
Mini-Yo also hopes to squeeze the United States by cutting off oil shipments, too - if he can find a new customer base. (Venezuela produces 15 percent of our
imported oil.) Happily, Chavez failed to win a key ally when Felipe Calderon won the 2006 presidential election in Mexico, an important US trading partner. But US-
Mexico relations are a mixed bag - complicated by thorny issues such as Mexico being a prime source of illegal immigrants to the US, and the preferred transit route
for more. Another problem: narcotics trafficking. Calderon has felt obliged to call in the army to deal with the drug lords; he's even asked the United States to help
fight gangs, narco-gunslingers and corrupt cops. Chavez gets along far better with Bolivia's Evo Morales and Ecuador's Rafael Correa, two populist leftist leaders
who've gotten financial support from him - and take many political cues from him, too. Each is looking at rewriting his nation's constitution (as Chavez has tried to do)
to consolidate power and nationalize energy resources. Bloodshed
and civil strife can't be ruled out, especially as indigenous
peoples are politically mobilized. Then there's Nicaragua's President Daniel Ortega. Chavez backed his campaign, forgave Nicaraguan debt and
provides aid. Some worry Ortega still longs for the bad ol' Sandinista days. Ortega and Ahmadinejad are buds, too. On a recent visit, the Iranian leader claimed he and
Ortega "have common interests, common enemies, and common goals." On an earlier visit, Ortega honored his Iranian guest with two of Nicaragua's highest medals
of national honor. Ortega has supported Iran's nuclear ambitions at the United Nations, while Ahmadinejad has promised Ortega hundreds of millions in public-works
projects.
Venezuela Answers – Impact Turn – Chavez Bad: Bomb – Feasibility

Chavez bomb entirely feasible w/o US
Argentina and Brazil have the capability and technology to deliver all of Chavez' requirements to effectively
execute a nuclear energy program. And many observers do not discount the fact that Chavez has the money
and the political connections to take such a program and bring it close enough to a nuclear weapons program
to ensure a believable bluff.
North Korea or Iran could feasibly give Chavez a bomb
Logan & Cirino 5 (1-26, Investigative Journalist & Historian, ISN Security Watch Staff, Sam & Julio,
http://www.isn.ethz.ch/news/sw/details.cfm?ID=13286)
What worries observers in Washington, however, is not Brazilian or Argentine intentions - which many
consider to be carefully thought out and to have benign motivations - but rather Chavez’s constant
communication with Iran and North Korea. Though this is not alarming at present, it is worth careful
consideration.
If Brazil and Argentina are not willing to provide the technology transfer required for an independent
Venezuelan nuclear program, it is possible that both Iran and North Korea will be more accomodating -
especially North Korea, considering its need for fuel and Venezuela’s abundance of oil.
Both North Korea and Iran are relatively advanced in the field of nuclear technology, an area where
Venezuela has literally no experience or technological know-how. Neither country would suffer adverse
effects from a nuclear weapons program in Venezuela.
Considering their antagonistic stance vis-à-vis the US, it is more plausible that North Korea and Iran would
support Venezuela’s intention to at least threaten to acquire a nuclear weapons program.
It is plausible that Chavez has already invited scientists from both countries to Venezuela. The confirmed
installation of a North Korean embassy in Caracas reinforces the possibility of North Korean scientists in
Venezuela.
They would build a bomb – They have the motive
Newsmax 5 (10-28, http://archive.newsmax.com/archives/ic/2005/11/28/173737.shtml)

No matter what Mr. Chavez says, Scheinman told the Times, if Venezuela acquired the technology to produce
nuclear energy, he would have the material necessary to build a nuclear bomb.
"One has to contemplate that possibility,” he warned. "We do have a problem here of a country that’s very
antagonistic toward the United States and linking itself with Cuba. There is reason to be vigilant.”
Chavez has a “prestige” motive for nuclear weapons
NYT 5 (10-27)
But Lawrence Scheinman, who was assistant secretary of state for nonproliferation and disarmament in the
Clinton administration, notes there is "a prestige factor involved" in having nuclear reactors, and prestige has
always interested Mr. Chávez. No matter what Mr. Chávez says now, if Venezuela acquired the technology to
produce nuclear energy, he would have uranium and fuel that could be used to build a bomb.
Venezuela Answers – Impact Turn – Chavez Bad: Bomb – NW

Venezuelan proliferation guarantees Latin American arms race which escalates to nuclear
war
Zulauga 5 (Felipe, wrier for visions of South America. “Venezuela…A Good Neighbor?” http://www.ucis.pitt.edu/clas/publications/Visions_vol1_issue1.pdf)
Although Chavez indicates that the development of nuclear power is to be for peaceful purposes only,
his statement in May was not well received in the majority of Venezuela’s neighboring countries or in the
United States. But why is Chavez’s idea regarded with suspicion by the international community? Why is his
initiative viewed as a threat rather than a positive development? The most likely answer can be summed up
by security and stability reasons, as Venezuela is seeking a more secure position in the global context.
However, this ambition engenders concerns in the Latin American region and could potentially generate
serious repercussions for the entire Latin American community Among these concerns is determining the true
reason as to why President Chavez aspires to acquire nuclear energy. According to Douglas Mackinnon in an article
from the Houston Chronicle, the real reason that Chavez wants to develop nuclear technology is for the
purpose of developing nuclear weapons! It may be hard to determine the credibility of this statement, but
considering Mackinnon’s source is a high ranking official for a Latin American government, it should not be taken
lightly. It is upsetting and almost incomprehensible to conceive of the Venezuelan government developing
nuclear weapons. This not only poses a threat to the stability and security of the Latin American region, but it
also has the potential to cause a nuclear crisis at the global level. If nuclear technology is developed in
Venezuela for the purpose of acquiring nuclear arms, the country will violate the Treaty of Tlatelcol, which
prohibits nuclear weapons in Latin America. This treaty, signed by 23 Latin American states, has been the
pillar in maintaining nuclear security for the entire region and sets an example for other regions to
successfully achieve nuclear-free zones. However, if Venezuela officially decides to break the treaty by
achieving nuclear power, it is probable that other countries with previous intentions to develop military
nuclear capacity - such as Mexico, Chile, Brazil and Argentina – will follow suit.
Venezuela Answers – Impact Turn – Chavez Bad: Heg (1/4)

Chavez undermines U.S. leadership
Maintaining - or regaining - America's influence in our own neighborhood will be a key challenge for
the next US president. The perceptions are especially grim these days. Latinoamericanos accuse Uncle Sam of
neglecting their needs at the same time they chastise us for unwelcome meddling. And the rise of leftist anti-
Yanqui leaders has many Norteamericanos lamenting what they see as a precipitous decline in America's influence
to the South. One anti-American is on his way out, though: the "Bearded One" - Fidel Castro, who'll join other
communist cronies in the dustbin of history any time now. On death's door for months, Fidel has turned running the
government over to his "First Brother," Raul. Sadly, Havana's communist cadre will likely retain their nearly 50-year
death grip on the Cuban people. Meanwhile, Venezuela's caudillo president, Hugo Chavez, intends to replace
Castro as leader of the Latin Left. While his political fortunes have been on a rollercoaster, Chavez has made
a sport of taunting the United States in both word and deed. He'd like to place a kindred anti-US spirit at the
helm of every Latin or Caribbean nation. Just last week, Chavez urged countries in the region to form an
alliance against the United States - proposing that Nicaragua, Bolivia, Ecuador, Cuba and Dominica become a
unified military force.
Chavez uses oil money to foment anti-Americanism
Fortunately, Chavez's outlandish antics, such as a UN speech where he referred to President Bush as "the
devil," undermine his appeal. Many Latin Americans see him more as a disruptive hothead than the model
statesman he fancies himself.
But Venezuela is awash in oil profits, which Chavez is using to consolidate power at home, bankroll Leftist
pols across the region, provide cut-rate oil to amigos like Cuba, buy billions in Russian weaponry and back
guerillas in Colombia.
Oil money allows Chavez to check US influence in Latin America and acquire nuclear capability
The Washington Times 6 (“Chavez and Tehran” April 5, 2006 http://www.washtimes.com/news/2006/apr/04/20060404-085855-4644r/)

Venezuelan President Hugo Chavez is accustomed to rallying his populist support through his fiery
anti-Americanism and public support for regimes that oppose the United States. But there is growing concern
that his government may have moved beyond mere rhetorical support with a deal that could allow Iran access
to known uranium deposits in Venezuela. Allying himself with countries that share his dislike of the United
States is nothing new for the oil-rich Mr. Chavez and his brand of authoritarianism, but any movement
toward a joint nuclear effort with Iran is alarming. "Iran has every right, like many other countries have done, to develop its atomic energy
and continue its research in this field," Mr. Chavez said in March 2005, after meeting with Iranian President Mohammad Khatami. The two leaders also used that
meeting to build their economic ties, including infrastructure projects in Venezuela, which have continued to strengthen relations between the second- and third-
leading oil exporters of the Organization of the Petroleum Exporting Countries. Along with Cuba and Syria, Venezuela voted in January against referring the Iranian
nuclear program to the U.N. Security Council. Last month, Mr. Chavez claimed that "it's absolutely false that the Iranian government is developing an atomic bomb."
During a visit to Caracas in February by the speaker of the Iranian parliament, however, several agreements were announced, one of which could lead to the mining of
Chavez has also expressed interest in nuclear technology, though
Venezuelan uranium for Iranian use, according to press reports. Mr.
Caracas claims, like Tehran, that the technology is only for civilian uses. One serious question that needs to be
posed is why would Iran, which already has a uranium-mining operation, be interested in uranium deposits in
Venezuela? Potential answers all smack of nuclear proliferation. Mr. Chavez has found that heading the world's
fifth-largest oil exporter has given him sufficient resources, often manifest in foreign aid, to influence his
Latin American neighbors. Critics accuse Mr. Chavez of inserting himself and his leftist influence into politics in
Bolivia, Colombia, Mexico and Nicaragua. It's clear that both his influence and his propensity to exert that
influence have increased substantially in recent years, helped along by increasing oil prices. To what extent Mr.
Chavez intends to wield this influence in more strategic ways -- and over how much broader of a geographical scope
-- is yet to be fully determined. But it needs to be watched carefully.

Chavez will use oil revenue to undermine US influence
Dr. Cohen et al. 6 (9-6, Heritage Foundation, Ariel, Stephen Johnson & William Schirano,
http://www.heritage.org/Research/LatinAmerica/em1010.cfm)
Mentored by Castro, Chávez is keenly aware of prior defeats and how to avoid them. Though freely elected,
he has replaced Venezuela’s checks and balances with a crony congress, silenced critics with draconian media
laws, and placed the state oil company under his thumb as head of the National Oil Council. Unbridled by
popular will or economic sense, Chávez wants to block U.S. influence and become a power unto himself—
picking up where Castro left off.
Courting Outside Partners. Soon after his election in 1998, Chávez began to curtail 50 years of U.S.–
Venezuelan military cooperation. Finally, in 2004, his government asked the U.S. military mission to leave
Venezuela’s armed forces headquarters in Caracas. Anti-drug operations and training of Venezuelan pilots in
U.S.-supplied F-16 fighters ceased. Shortly thereafter, Venezuela began to seek arms from Russia. The Bush
Administration suspended arms sales in May 2006, and Spain and Sweden are withholding weapons with
U.S. components.
Chávez has signed contracts worth $3 billion for 24–30 military airplanes and more than 50 helicopters, has
agreed to buy some 100,000 Kalashnikov assault rifles to arm a new reserve force, and reportedly is seeking
short-range surface-to-air missiles. During the last week of July 2006, he was in Moscow to finalize the
purchase of the Su-30 supersonic fighter-bombers and Mi-35 assault helicopters. He also signed an
agreement to purchase a Kalashnikov weapons and munitions plant.
In Belarus, Chávez announced a strategic alliance with President Alexander Lukashenko to keep “hands at
the ready on the sword” against imperialism. Iranian President Ahmadinejad awarded him a medal and
promised collaboration on developing new oil fields. In China, Chávez pledged to shift more petroleum
exports to Beijing. Meanwhile, ties with North Korean leader Kim Jong-Il could facilitate the acquisition of
intermediate-range missiles.
Venezuela is replacing some military equipment that has fallen into disrepair, but setting up a Russian
weapons plant and striking alliances with state sponsors of terrorism (Iran, Cuba, and North Korea) is
alarming. Chávez already allows Colombian rebels to resupply in Venezuela and funds like-minded
Bolivarian movements in neighboring countries. Venezuelan Kalashnikovs could help them go from street
marches to armed attacks. The Su-30 will be Latin America’s most advanced attack aircraft. With North
Korean ballistic missiles, Venezuela could threaten neighbors and the United States, and a gelling global oil
alliance could limit U.S. imports at a critical moment.
More ev…
Venezuelan President Hugo Chávez is systematically leading his country into dictatorship by provoking
internal conflict and characterizing his internal opponents as traitors. Beyond Venezuela, he sees himself
replacing Fidel Castro as the leader of Latin America's radical left--uniting the region against U.S.-style
democracy, free markets, and American influence.
Chávez derives popular support from fellow ideologues and a small but committed segment of Venezuela's
largely poor population, and he is beginning to use the hemisphere's dependence on Venezuelan oil to
encourage leftist movements elsewhere and to pressure other countries into acquiescing to his activities. By
politicizing and mismanaging the state petroleum industry, Chávez is jeopardizing vital U.S. interests in the
Western Hemisphere.
More ev…
The bad news is that Chávez has consolidated his hold over Venezuela's public institutions and is
manipulating the electoral system in his favor. Increasing global demand for petroleum has given him an
international power base, and his anti-American political agenda--fueled by petrodollars--could threaten
nearby fledgling democracies and flourishing markets.

Chavez can undermine US influence in Latin America
Beyond the hemisphere, Chávez is preparing to shift PDVSA's customer base toward Asia and an
increasingly oil-thirsty China, making Venezuela less dependent on petroleum sales to immediate neighbors.
A deal signed on July 14, 2004, to build oil and gas pipelines between the Maracaibo Basin in Venezuela and
the Caribbean and Pacific coasts in Colombia may seem innocuous, but it would enable Venezuela to ship
petroleum to China without using the Panama Canal. This would make it more critical than ever for Chávez
to secure a pliant government in Colombia to keep this facility operating in Venezuela's interest.16 Chávez
would thus have the luxury of cutting deliveries to those who opposed him, forcing them to seek other
sources at greater cost. By destabilizing and replacing democratic governments in hydrocarbon-rich Bolivia,
Colombia, and Ecuador, he also could achieve a regional energy monopoly that could support rogue regimes
and frustrate U.S. interests in the hemisphere.
Chavez promotes regional anti-Americanism and nationalism which crush international coop,
especially on drugs and terrorism

While radical populism claims to respond to economic and social demands of the excluded and
impoverished, it draws substantial guidance from 20th century models of social revolution and violent
political change. In addition to revering the memory of Simón Bolívar, South America's great Liberator,
radical populists often seek guidance from the ideas and deeds of Lenin, Mao, Fidel Castro, and Ernesto
"Che" Guevara.[6]
Fascination with the struggles of the armed left runs deep in the fabric of radical populism and exerts a
powerful influence over the minds of intellectuals, journalists, politicians, and would-be revolutionaries.[7] It
is reflected in continued glorification of arch-guerrilla icon Guevara, dedication to the armed path to power,
and infatuation with the FARC's terrorist bravado.[8] While radical populism wins legitimacy by mobilizing
dissatisfaction at the ballot box, it also fosters an aggressive, conspiratorial, nationalistic worldview.
Central to radical populism is strident anti-Americanism. While it is fashionable to attribute this attitude to
the past sins of American interventionism, dependency, U.S. hegemony, or even the missteps of the Bush
Administration in Iraq, radical populists long ago learned from Juan Perón and Fidel Castro that demonizing
the U.S. and embracing anti-Americanism is a powerful demagogic tool for winning the public's attention
and mobilizing popular support.
The chief danger of anti-Americanism is not the harm that it does to the American psyche, but the distrust
that it creates between the U.S. and its practitioners. Extreme anti-Americanism leads entire nations to opt
out of cooperative international arrangements and programs to combat terrorism and trafficking in drugs and
arms. In the Andes, it seriously threatens to dismantle progress achieved in counterdrug cooperation. Not
surprisingly, the amount of cocaine transiting Venezuela has risen from an estimated 57 metric tons in 2004
to 250 metric tons in 2007, while drug seizures have fallen by half.

Chavez is undermining US influence in Latin America
Hanson 6 (Stephanie, Council of Foreign Relations
[http://www.cfr.org/publication/12086/six_more_years_of_chavez.html] Six More Years of Chavez/ December 4,
2006)
The opposition’s momentum appears of little concern to Chavez, who continues to direct his rhetorical fire
at the United States. At his final election rally he cried, “We are confronting the devil," (BBC), a
reference to President Bush. The United States has remained quiet in the run-up to Venezuela’s elections but
U.S. aid to Venezuelan organizations, some of which are critical of Chavez and the government, has irked
Venezuelan officials (NYT). The government’s hammering on the United States has trickled down to the
streets: A recent poll conducted by the Associated Press and Ipsos shows that half of Venezuelans think
the United States is a military threat (PDF) to their country.
Chavez undermines US influence in Latin America

From the outset, it has been clear that Venezuela, with a population of 26 million, is too small a stage for
Chávez's ambitions. Chávez has taken full advantage of a confluence of favorable factors -- lots of
money, Latin America's political disarray, U.S. disengagement from the region, widespread hostility to the
Bush administration -- to construct alliances throughout the Western Hemisphere and beyond. He has
skillfully managed to establish himself as a global and regional leader, using oil money and brash anti-
Americanism to attempt to construct a counterweight to U.S. power. Chávez's close friendship with
Castro has been integral to this project. In exchange for Cuban teachers and doctors, Chávez furnishes the
financially strapped island some 90,000 barrels of oil a day. Castro probably also provides Chávez with
strategic advice, along with some military support and intelligence. More and more, Cuba and Venezuela
are important referents for each other. When Venezuelans mention "the embassy," they now mean the
Cuban, not the U.S., embassy in Caracas. Chávez's aggressive oil diplomacy has also enhanced his
influence. Last year, he inaugurated Petrocaribe, under which Venezuela will provide 198,000 barrels of oil a
day to 13 Caribbean nations with "soft" financing for up to 40 percent of the bill. Chávez has also given
high priority to the countries of the continent's southern cone, especially Argentina and Brazil, which
are central to his plan to launch Petrosur, another regional energy initiative that he has pledged to
largely bankroll. He has bought $2.8 billion in Argentine bonds and $25 million in Ecuadorian bonds and
has substantially underwritten Telesur, a Latin American alternative to CNN.
Chavez undermines US influence around the world

The primacy of petroleum has also given Chávez leverage beyond Latin America. He defended his
visits with Saddam Hussein and Qaddafi on grounds of Venezuela's membership in OPEC. He has also
worked to forge stronger ties with key countries such as India and China, in keeping with his declared
intention to eventually direct Venezuelan oil away from its current principal market -- the United States. He
has vowed to build a pipeline through Panama for trans-Pacific shipments, and PDVSA opened an
office in Beijing last year.
Venezuela Answers – Impact Turn – Chavez Bad: Heg – K/T World

Latin America is key to US leadership
The Brookings Institute 8 ([http://www.brookings.edu/projects/latin-america/about.aspx] Brookings Latin

America Initiative/ May 14, 2008)
“As we prepare for a new U.S. administration, we believe it is an opportune time to take stock of the U.S.-
Latin American relationship and stimulate new partnerships across a host of critical issues, including
trade, poverty alleviation, immigration, security and energy,” said Strobe Talbott, president of Brookings
and a member of the Partnership for the Americas Commission. “The Commission will advance
recommendations and new solutions for the hemisphere. It is one of the first steps in a major new Brookings’
Latin America Initiative that will seek to sustain U.S.-Latin American engagement on the critical challenges
for the hemisphere.” The Partnership for the Americas Commission is co-chaired by former Mexican
President Ernesto Zedillo and former U.S. Under Secretary of State Thomas R. Pickering. "It is time to
improve cooperation in our hemisphere and the Partnership for the Americas Commission seeks to
provide guidance and ideas on how to re-invigorate our relationships, focus on a common agenda, and
deliver solutions," Zedillo said. “The change in the U.S. political leadership provides a critical
opportunity to engage with our neighbors in Latin America constructively and cooperatively across a
range of important issues. We must enhance our partnership with Latin America if we are to resolve
global challenges,” added Pickering.
Venezuela Answers – Impact Turn – Chavez Bad: Terrorism

Chavez foments anti-American terrorism

The files on these computers and devices chronicle the thoughts and actions of the FARC and raise serious
questions about the effectiveness of U.S. regional policies against the interconnected challenges of terrorism,
insurgency, and drug violence in the Western Hemisphere. The FARC files are essentially a smoking gun that
proves that Venezuelan President Hugo Chávez is supporting the FARC.
The revelations from the FARC files have prompted several Members of Congress to call for the U.S. to
place Venezuela on its list of state sponsors of terrorism. However, doing so could jeopardize economic and
commercial ties with the fifth-largest supplier of crude oil to the U.S. and an important U.S. trading partner.
It would also likely spark a nationalist backlash in Venezuela and more anti-Americanism throughout Latin
America. A more prudent policy would be a course of targeted sanctions against individuals who are illegally
supporting the FARC.
In addition, Chávez's growing ties with Iran appear to open a door for Islamist terrorism and raise the
question of whether the U.S. has done enough since 9/11 to protect against backdoor terrorist threats
originating in the Western Hemisphere. The U.S. needs to explore ways to strengthen vigilance and to
prevent Iran from exploiting this potential conduit to the homeland.
More ev…

Radical populist Hugo Chávez and his network of allies—Bolivia, Cuba (a state sponsor of terrorism),
Ecuador, and Nicaragua—are deeply engaged in a campaign to bolster the FARC's legitimacy and
survivability at the expense of Colombia and to perpetuate the conflict indefinitely or to achieve a political
and military victory.[4]
In their anti-American zeal, Chávez and company are demonstrating a tendency to make common strategic
cause with Iran, potentially opening the Western Hemisphere to exploitation and infiltration by Islamist
terrorists.
Venezuela Answers – Impact Turn – Chavez Bad: Columbia War (1/2)

Chavez undermines regional stability and intends to make war on Columbia
Podur 8 (Justin. Writer and activist. “Colombia’s war and Venezuela’s foreign policy” http://www.venezuelanalysis.com/analysis/3112)
Chavez's rule in Venezuela coincides with the rise and fall of the last peace process in Colombia. He
came to power in 1998, the same year the demilitarized zone was declared in Colombia. He was Venezuela's
President through the declaration of Plan Colombia in 2000 and its implementation, and then through the years
of Uribe's rule in Colombia. Throughout those years, analysts have argued that one of the true targets of Plan
Colombia was in fact Venezuela, its oil, and its revolutionary process (4). And indeed, border incidents and
troubles over the past several years, as well as tensions between Chavez and Uribe, have shown that Colombia
is a base for attacks on Venezuela. In March 2003, Colombian 'irregulars' raided across the Venezuelan border
and were answered by bombing from the Venezuelan air force (5). About a year later (May 2004), dozens of
Colombian paramilitaries were arrested on a ranch near Caracas on a terrorist plot (6). Some later confessed
and were charged, while others were returned to Colombia. Around the same time as the paramilitaries were
infiltrating Venezuela (March 2004), Colombia made a high-profile announcement that it was going to acquire
several dozen tanks, from Spain, for posting on the Venezuelan border (7). The deal had been made under
Spanish Prime Minister Jose Maria Aznar, however.
Colombia/Venezuela war leads to a Latin American arms race

Military procurements in Latin America have sparked fears of a new arms race, led by Venezuela.
But is it really a build-up or more a need to modernise ageing hardware? Now defused, the border confrontation
between Colombia and Venezuela in early March has underlined the continued volatility of a region where
recent procurement activity has lead to forecasts of a new Latin American arms race. Venezuelan president
Hugo Chavez is usually viewed as the instigator of the race, as he has drastically increased the country's
defence procurement levels, buying front-line fighters and other equipment from Russia. Several other Latin
American nations have followed suit, seeking to restore and enhance their decrepit military inventories.
"While some might see this as a potential arms race, I believe that it is more nations' attempts to meet a pent-up
demand for modernisation of their armed forces," says Rebecca Barrett, Latin America analyst with Forecast
International. "This is not to say that Venezuelan procurement activity is not extravagant, or necessary to the extent
to which President Chavez has brought it," she says. "He remains the region's hot-headed leader who will
continue to incite non-allying nations until the end of his term." The most recent instigation was Chavez's
belligerent reaction to a 1 March raid by Colombian forces into neighbouring Ecuador to strike a rebel camp.
The raid, which involved the Colombian air force's Embraer Super Tucanos, killed a senior commander of the
insurgent Revolutionary Armed Forces of Colombia. Chavez, who maintains relations with FARC,
immediately warned Colombia that any similar raid into Venezuela would be a cause for war. Tensions
between the two countries have been high for months, but appeared to ease after the exchange of rhetoric
following the border incident.
This escalates to full-scale regional war
CSM 8 (Newser.com “Mistrust' Fueling Latin American Arms Race” http://www.newser.com/story/16574.html)

(Newser) – Recent bursts of defense spending from Brazil and Venezuela have experts wondering if
Latin America—decades removed from a war between nations—has entered an arms race, the Christian Science
Monitor reports. Chile has also invested in weapons recently, and Colombia is rife with war-on-drugs
firepower. “There is a real risk of it escalating,” one expert said. “There is tremendous mistrust between
countries.” “Brazil won’t say it, but Chavez’s buildup is what made it invest in its military,” said one analyst of
Venezuela's combative president. But each country also has internal reasons for bulking up. Brazil, for example,
wants to shut down drug traffickers, keep out Colombian guerillas, and protect newfound oil wealth. “Venezuela
comes fairly low down the list” of enemies, deadpanned one analyst.
Venezuela Answers – Impact Turn – Chavez Bad: Columbia War (2/2)

Chavez will go to war w Columbia – It will escalate regionally
Anderson 6-23 (Jon Lee, Staff, New Yorker,

http://www.newyorker.com/reporting/2008/06/23/080623fa_fact_anderson/?currentPage=all)
Suddenly, there was talk of regional war. Television broadcasts showed Venezuelan tanks moving toward
Colombia’s borders; trade between the two countries ground to a halt, and diplomats were expelled. One
Latin-American diplomat told me he feared that the situation could easily escalate into a larger armed
conflict. “Chávez is using this incident to divert public attention from his internal problems,” he said. “And I
think he is also trying to demonstrate that he is the leader of the region’s popular forces. It is a very risky
calculation.”
***Nigerian Oil DA***

Nigeria DA – 1NC
Nigerian growth is up
Ogbonna 8 (Amechi, The Daily Sun

[http://www.sunnewsonline.com/webpages/news/businessnews/2008/jul/16/bussines-16-07-2008-002.htm] ICAN
boss predicts increase in FDI/ July 16, 2008)
According to the ICAN boss the quantum of foreign direct investment grew from and average of
$1.477billion between 1990 and 2000 to $5.445billion in 2006, pointing out that it was indicative of the
growing confidence of the international community in the Nigeria economy. He remarked; “What has
become evident with this massive inflow of investible funds, is that the Nigerian business environment
or landscape has assumed a different outlook.”
Oil is key
Financial Times, The Banker, “Nigeria - Fuel Injection - High Prices And New Finds Mean
Nigeria's
Dependence On Hydrocarbon Exports Will Go On, Albeit With A Greater Emphasis On In-
house Refining. John
McCarthy Reports,” April 1, 2007, lexis
Since the oil crisis of the mid-1970s, Nigeria's oil and gas industry has grown to become the
single largest contributor to Nigeria's economy, turning over about $25bn annually and accounting for
more than one-fifth of gross domestic product (GDP). Soaring oil prices over recent years have
seen the Nigerian government reap a revenue windfall. By the end of 2005, high oil prices had
propelled Nigeria's foreign exchange reserves to $28bn, up two- thirds from the $17bn recorded a
year earlier, enabling the government to pay down Nigeria's huge foreign debt and invest in some
strategic infrastructure improvements.
Economic decline causes regional war and terrorism
Brown 7 (Michael A., Council on Foreign Relations, 6-7, http://www.internationalrelations.house.gov/110/35872.pdf)

The United States must pay close attention to Nigeria for its own national security interests. If the Nigerian
economy became afflicted with a cold because of the chilling effects on investment occasioned by political
instability, peace and prosperity in the fragile ECOWAS region would be jeopardized, and become a
promising target for Al Qaeda penetration or recruitment. Nigeria’s vast oil and gas resources would also be
targeted. Proven reserves are estimated at 25 billion barrels; natural gas reserves exceed 100 million cubic
feet. Crude oil production averages 2.2 million barrels per day. Nigeria, as the fifth largest exporter to the
United States, supplies it with approximately 11% of its aggregate oil imports.
African conflict escalates to nuclear war

Deutsch 2, PhD and political risk consultant and Founder, Rabid Tiger Project, 11/18/, Jeffrey
(http://www.rabidtigers.com/rtn/newsletterv2n9.html)
The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa. Civil wars in the Congo (the country
formerly known as Zaire), Rwanda, Somalia and Sierra Leone, and domestic instability in Zimbabwe, Sudan and other countries,
as well as occasional brushfire and other wars (thanks in part to “national” borders that cut across tribal ones) turn into a really
nasty stew. We’ve got all too many rabid tigers and potential rabid tigers, who are willing to push the button rather than
risk being seen as wishy-washy in the face of a mortal threat and overthrown. Geopolitically speaking, Africa is open
range. Very few countries in Africa are beholden to any particular power. South Africa is a major exception in this
respect - not to mention in that she also probably already has the Bomb. Thus, outside powers can more easily find client states
there than, say, in Europe where the political lines have long since been drawn, or Asia where many of the countries (China, India, Japan) are
powers unto themselves and don’t need any “help,” thank you. Thus, an African war can attract outside involvement very
quickly. Of course, a proxy war alone may not induce the Great Powers to fight each other. But an African
nuclear strike can ignite a much broader conflagration, if the other powers are interested in a fight. Certainly, such a strike
would in the first place have been facilitated by outside help - financial, scientific, engineering, etc. Africa is an ocean of troubled waters, and
some people love to go fishing.
Nigeria DA – UQ – Econ Up
Nigeria’s economy has a positive outlook
Ogbonna 8 (Amechi, The Daily Sun

[http://www.sunnewsonline.com/webpages/news/businessnews/2008/jul/16/bussines-16-07-2008-002.htm] ICAN
boss predicts increase in FDI/ July 16, 2008)
According to the ICAN boss the quantum of foreign direct investment grew from and average of
$1.477billion between 1990 and 2000 to $5.445billion in 2006, pointing out that it was indicative of the
growing confidence of the international community in the Nigeria economy. He remarked; “What has
become evident with this massive inflow of investible funds, is that the Nigerian business environment
or landscape has assumed a different outlook.”
Nigeria’s economy growing
Reuters 8 ([http://africa.reuters.com/business/news/usnBAN347656.html] Nigerian economy growth slows in Q1

- central bank/ June 23, 2008)
Nigeria's economy grew by 6.49 percent year-on-year in the first quarter of 2008, compared with a
revised figure of 7.82 percent in the last quarter of 2007, the central bank said on Monday. The bank said
overall GDP growth was driven by a 9.67 percent growth in the non-oil sector of sub-Saharan Africa's
second biggest economy. Nigeria had originally reported a GDP growth rate of 7.64 percent for the final
quarter of last year.
Nigeria’s economy is strong

BusinessWire 8
[http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080703005146&newsLang=
en] Nigeria Commercial Banking Report Q2 2008 Available Now/ July 3, 2008)
In absolute terms, Nigeria’s banking sector enjoyed very good growth through the year to December 31
2007. In local currency terms, total assets, total loans and total deposits increased by 58%, 96% and
60% respectively. The loan/deposit, loan/asset and loan/GDP ratios all rose. Relative to other countries
surveyed by BMI, these achievements are even more impressive. Of the 59 countries surveyed, Nigeria
ranks second in terms of local currency asset growth, third in terms of both local currency loan growth
and local currency deposit growth. However, it needs to be remembered that all three of the ratios are
rising from very low levels. Nigeria’s rankings in terms of its loan/deposit, loan/asset and loan/GDP ratios are
36th, 39th and 53rd respectively. In a country with per capita GDP of US$1,114, deposits per capita are just
US$334.
Nigeria DA – UQ – Econ Down

Nigeria’s economy down
Okolo 8 (Paul [http://www.bloomberg.com/apps/news?pid=20601116&sid=awebvCIXTbCo&refer=Africa]
Nigerian Oil Output Fell 4% in First Quarter, GDP Growth Slows/ July 23, 2008)
Nigeria's crude oil production fell almost 4 percent in the first quarter following the sabotage of oil
facilities, crimping economic growth, the central bank said. Oil production slid to 2.05 million barrels
per day, while economic growth slowed to 6.5 percent from 7.8 percent in the previous three months,
the Abuja-based Central Bank of Nigeria said today in a quarterly report published on its Web site.
Nigeria’s GDP projected to fall

Kirk 8 (Leigha, Business Daily [http://www.businessdayonline.com/energy/11846.html] News Analysis: What the
attack on Bonga might unleash/ June 24, 2008)
Forecast revenue is at risk because planned production levels may not be attained. Before the attack,
government had, through the minister of finance, Shamsudeen Usman, said the country was producing 1.8
million barrels per day. With the shut in of an extra 200,000 from Bonga (which brings Shell’s total to
400,000), current production would be as low as 1.6 million barrels per day. Industry insiders say it may be
lower. It was 2.7 billion in 2006. For contributing 30 percent to Nigeria’s Gross Domestic Product (GDP),
the drop in production has implications also for projected GDP, which is put at over 10 percent by
government and 6.1 percent by the Economist Intelligence Unit. These projects may be revised further
down. The inflation fears of the Central Bank may now be confirmed as the shut in triggers further
rise in the international price of crude. And because our refining capacity is short handed, the nation would
import fuel at higher prices with the full inflation implications. With further inflation, the thought of meeting
the Millennium Development Goal of halving poverty becomes mere conjecture.
Nigeria DA – UQ – Oil Up
Nigeria has vast future oil reserves
Rice 8 (Xian, The Guardian [http://www.guardian.co.uk/business/2008/jul/14/oil.internationalaidanddevelopment]
'The best thing that could happen to the country is if no oil is found'/ July 14, 2008)
The twin islands of São Tomé and Príncipe squat in the Gulf of Guinea. Their nearest neighbours are
Nigeria, Cameroon, Equatorial Guinea and Gabon. All have found significant reserves of oil, much of it
offshore. In 1997, a tiny Houston-based company called Environmental Remediation Holding Corporation
(ERHC), which had no history of oil finds or production, decided São Tomé might have its own deep-water
deposits. In return for near-exclusive mineral exploration and exploitation rights for 25 years and a half share
of profits, ERHC offered São Tomé $5m and its marketing services. São Tomé, heavily in debt and reliant on
donors to fund most of its $30m budget, was desperate for cash. The deal was signed. Industry watchers such
as Mohamed Yahya, of the UK-based peacebuilding NGO International Alert, would later describe the
contract as "one of the worst in the history of oil". And ERHC's gamble paid off. Seismic data showed
there could be up to 11bn barrels of oil under the sea around the islands. The most promising area was
north of Príncipe, in waters also claimed by Nigeria.
Nigeria has 33 billion barrels of oil reserves

Adeoye 8 (Yemie, Vanguard Online
[http://www.vanguardngr.com/index.php?option=com_content&task=view&id=11825&Itemid=0] FG moves to
separate gas business from oil/ July 8, 2008)
We shall begin this discussion by reviewing the available gas resource. It would be necessary to express that
the estimated oil reserve in Nigeria is put at 33 billion barrels (28 of which are in the Niger-Delta and 5
in the Deepwater),while our gas reserves is about 187 Tcf (27 Tcf in the Deepwater and 160 Tcf in the
Niger-Delta).
Nigeria DA – UQ – Oil Down

Nigeria’s oil production at a 25 year low
Chip 8 (Brian, Fox Business [http://www.foxbusiness.com/story/markets/industries/energy/comtex-smartrendr-
morning----june/-1756064925] Comtex SmarTrend(R) Morning Call -- June 23, 2008)
A hastily-called oil summit ended in the expected 200,000 b/d Saudi production increase, pushing Saudi
production to its highest in 30 years, but well short of the 400K-500K b/d analysts advised needed to
make a meaningful impact on supplies and offset recent production declines resulting from militant
activity in Nigeria. Arguments continued to rage on the root of the price gains, with producers claiming
speculators at fault and others pointing to burgeoning demand from developing countries. Cuts in gasoline
and diesel prices in China led to a 3.5% drop in crude on Thursday, before analysts dispelled expectations for
a demand drop, and prices again headed higher. However, on Sunday Niger militants announced a
ceasefire, although still remaining unwilling to participate in upcoming peace talks. Nigeria's
production is now at its lowest in 25 years.
Nigeria’s oil production slowing

Leigh 8 (Kirk, Business Day [http://www.businessdayonline.com/economic-watch/13006.html] Falling oil
production: The good news/ July 8, 2008)
Oil production in Nigeria is at low ebb in Nigeria and this gives concern to not a few given that it earns the
most revenue for the country but there is a bright side and you don't have to be a sadist to see it. True oil has
been a factor in Nigeria 's growing revenue profile not because we are producing more but because the price
wouldn't stop tracing an upward path. In fact oil production is responding to gravitational pull from a
combination of factors including militants attack and the cut back on capital expenditure by the oil
majors. This has resulted in cuts from a position of 2.6 million barrels a day two years ago to about 1.3
million barrels. This should bring down revenue but not so since the price of crude keeps rocketing from
pent up demand by China and India , unrest in the Gulf and activities of militants in Nigeria 's Delta region.
Nigeria DA – UQ – Diversification Up
Nigeria’s economy is diversifying
Amaefule 8 (Everest [http://www.punchng.com/Articl.aspx?theartic=Art200807083205446] Nigeria loses 30% of
budget revenue to N’Delta crisis/ July 8, 2008)
The minister said the reforms initiated by the present administration would soon help the nation to leave its
current six per cent growth rate. He said, “The Nigerian economy is rapidly transforming; the
contribution of non-oil sectors such as real estate, services, telecommunications and agriculture have
shown remarkable improvements. “Currently growing above six per cent GDP rate, the economy is set to
depart from the six per cent group to an economy with superior GDP growth rate.
Nigeria’s telecoms sector is growing

Senge 8 (Miebe, Vanguard Online Edition
[http://www.vanguardngr.com/index.php?option=com_content&task=view&id=12392&Itemid=0] The Starcomms
stocks challenge and expectations of the telecom industry/ July 16, 2008)
IT was the most unlikely telecommunications company in Nigeria expected to get listed on the Nigerian
Stock Exchange, but listed it did last Monday and in the process made history as the first company in
highly lucrative sector. Starcomms Plc, Nigeria’s fourth largest telecommunications by last Monday’s listing
of its 6, 878, 478, 096 ordinary shares of 50 Kobo at N13.56K breasted the tape ahead of more robust GSM
mobile operators — MTN Nigeria, Celtel Nigeria and Globacom — to become the first telecom operator to
be listed on the Exchange. Before Monday’s listing on the floor of the Nigerian Stock Exchange, Starcomms
Plc had successfully raised N64.35 billion through a private placement offer. The private placement beefed
up the company capital base. However two institutional investor Actis, and Emerging Capital Partners LLC,
(ECP) divested some of their holdings from the company thus widening the shareholder base. The shares of
the company which were listed at 12.27 p.m made significant gain immediately, as it went up five per
cent after only five minutes of listing/trading to close at N14.33k. Reacting to the development Mr. Maher
Qubain, Chief Executive Officer said: “At Starcomms, we do not just cook up figures. We operate as a
transparent company and today’s history making event is meant to drive our growth. We want to become the
3rd, if not 2nd biggest telecom operator in Nigeria by 2010. This is a promise, and at Starcomms, we keep
our promise”. The historic listing presents an excellent opportunity for every Nigerian to buy into one
of the fastest growing and profitable sectors of the telecom sub-sector of the Nigerian economy.
Nigeria DA – UQ – Diversification Down

Oil is the keystone of Nigeria’s economy
Thill 8 (Scott [http://www.alternet.org/audits/89692/?ses=6e1c01335219ab1b41c846a850bedd38] Africa: The
Next Victim in Our Quest for Cheap Oil/ July 14, 2008)
Commercial oil production began in 1956, and the first exports in 1958. Since that time, perhaps $600
billion in oil revenues have been accrued by the Nigerian government. The government takes a share
through a legal joint venture contract with the international oil companies of about 80 percent of the value of
each barrel of oil. Since oil accounts for 90 percent of all Nigerian exports and 80 percent of government
revenue, and about half of GDP, oil is the Nigerian economy. The country is a classical petro-state
dependent upon one resource. The book shows how this vast wealth has been stolen: Estimates from the
World Bank vary from $100 (billion) to $200 billion. It has also been wasted. The International Monetary
Fund says that oil has probably not added to the standard of living of average Nigerians. This is a stunning
indictment.
Nigeria DA – UQ – Inflation Up
Inflation high in Nigeria
Akpe 8 (Ameto, Business Day [http://www.businessdayonline.com/energy/12322.html] Soludo warns danger
ahead over government expenditure/ July 2, 2008)
Nigeria has is oil and tampering with the resources makes the country run at risk. Nigeria's inflation rate
(year-on-year) rose from 8.2 percent in April 2008 to 9.7 percent in May, heightening worries over the
return of double-digit inflation rates in the country. Rising price levels has also brought about hikes in
the Monetary Policy Rate (MPR) by the CBN from 9.5 per cent in December 2007 to 10 per cent in April
2008 and also 10.25 per cent in June. Soludo explains that any amplification in the oil benchmark would
crowd-out the private sector because of the peculiar source of government revenue.
Nigerian inflation hitting double digits

Daily Guide 8 ([http://dailyguideghana.com/portal/modules/news/article.php?storyid=6197] Business : Prime Rate
Rises Again?/ July 15, 2008)
Inflation which reached a new height of 18.41 percent last Friday as predicated by Databank Research
Department was the main factor that led to the increase in the prime rate- the rate at which the Central Bank
does its overnight lending to universal, commercial and merchant banks in order to check the supply of
money in circulation. India and Nigeria who had been enjoying stable single digit inflation for sometime
had also been hit by these global factors with India seeing a new inflation of over 12 percent.
Inflation high in Nigeria

Okolo 8 (Paul [http://www.bloomberg.com/apps/news?pid=20601116&sid=axUjEXUV1Kew&refer=Africa]
Nigerian Inflation Accelerated to 9.7% in May on Food (Update1)/ June 23, 2008)
Nigeria's inflation rate rose to 9.7 percent in May, the highest in two years, as the cost of food, energy
and building materials increased. Inflation accelerated from 8.2 percent in April, the National Bureau of
Statistics, based in the capital Abuja, said today in a statement on its Web site. Prices rose 1.9 percent in the
month. `Ìnflationary pressures are here to stay'' as prices of food and fuel continue to rise, said
Bismarck Rewane, Chief Executive Officer of Financial Derivatives Ltd., a Lagos-based fund manager. ``The
moment it goes into double digit, we're likely to see a more restrictive response from the central bank.''
Nigeria DA – UQ – Inflation Down

Nigeria keeping inflation to single digits
Komolafe 8 (Babajide, Vanguard News [http://allafrica.com/stories/200806230179.html] Nigeria: Interest Rate -
a Slide to the Ugly Past?/ June 23, 2008)
On the 2nd of June, the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by
25 basis points to 10.25 from 10.0 per cent. This would be the third time the apex bank will be increasing the MPR since it was
introduced December 2006 It would be recalled that the MPR replaced the Minimum Rediscount Rate (MRR), as the bench mark for interest rate in the
economy. While the MRR represents the minimum interest rate banks can borrow from the CBN, the MPR is a short- term interest rate at which banks can
predictably borrow from the apex bank. Thus, the MPR serves as an indication for other interest rates be it deposit or lending rate in the economy
The MPR was introduced at 10.0 per cent with spread of 600 basis points around the rate, i.e. 300 basis points above and 300 basis points below. This
translates into an upper limit of 13 per cent and a lower limit of 7 per cent. The first movement in the MPR was announced on June 5, 2007, a 200 basis
point reduction from 10.0 per cent to 8.0 per cent as well as a reduction in the width of the interest rate corridor from plus or minus 300 to plus or minus 250
basis points. But that was the last reduction as subsequent movements were increases. The first increase was a 100 basis point upward review to 9.0 per cent
in October 2007, the second increase was a 50 basis points upward review to 9.5 per cent in December 2007. Later on, at the beginning of 2008, the MPR
was further increased by 50 basis points to 10.0 per cent. Also pertinent is the fact that the increases in the MPR were occasioned by one major factor, which
is the need to forestall upward movement in the inflation rate. For example, in the communiqué that announced the first increase in October 2007, the CBN
stated: "The MPC noted that year-on-year headline inflation would continue to remain single-digit in the rest of 2007, but at the upper region of the single
digit range. Overall, a combination of stable food prices and a restrictive monetary policy stance is expected to help sustain the headline inflation within
single digit. The Committee also noted the challenges arising from rising autonomous private inflows and the attendant risk of further appreciation of the
naira/dollar exchange rate. In addition, the Committee also noted the high possibility of substantial fiscal injections in the fourth quarter, arising from the
supplementary budget at the federal and state levels. Similarly, in announcing the increases in December 2007, April 2008 and June 2008, the CBN stated,
"The Monetary Policy Committee (MPC) noted that the overall macroeconomic picture in 2007 has
reflected improved stability; just as the prospects for the first quarter 2008 appear good. The bank's
projections show that the year-on-year (headline) inflation could remain single-digit in the first quarter
of 2008, provided CBN continues to take proactive steps to manage the liquidity surfeit.
Nigeria fighting inflation

Komolafe 8 (Babjide, Vanguard News
[http://www.vanguardngr.com/index.php?option=com_content&task=view&id=11439&Itemid=43] N563bn excess
crude fund crashes inter-bank interest rate/ July 2, 2008)
Market operators however said that the excess liquidity occasioned by the inflow might be short lived as the
Central Bank of Nigeria (CBN) is already mopping up the liquidity to forestall upward pressure on the
inflation rate. The apex bank according to sources issued a huge amount of treasury bills to the market as
well as a ten year federal government bond.
Nigeria DA- Oil K/T Economy

The oil industry is key to the Nigerian economy
Financial Times, The Banker, “Nigeria - Fuel Injection - High Prices And New Finds Mean
Nigeria's
Dependence On Hydrocarbon Exports Will Go On, Albeit With A Greater Emphasis On In-
house Refining. John
McCarthy Reports,” April 1, 2007, lexis
Since the oil crisis of the mid-1970s, Nigeria's oil and gas industry has grown to become the
single largest contributor to Nigeria's economy, turning over about $25bn annually and accounting for
more than one-fifth of gross domestic product (GDP). Soaring oil prices over recent years have
seen the Nigerian government reap a revenue windfall. By the end of 2005, high oil prices had
propelled Nigeria's foreign exchange reserves to $28bn, up two- thirds from the $17bn recorded a
year earlier, enabling the government to pay down Nigeria's huge foreign debt and invest in some
strategic infrastructure improvements.
Nigeria DA- Oil K/T Economy

Oil is vital to Nigeria’s economy
Olusegun 8 (Gbadebo, Department of Economics and Development Studies Covenant University,

http://www.ogbus.ru/eng/)
Oil is a major source of energy in Nigeria and the world in general. Oil being the mainstay of the
Nigerian economy plays a vital role in shaping the economic and political destiny of the country. Although
Nigeria’s oil industry was founded at the beginning of the century, it was not until the end of the Nigeria civil war (1967 - 1970) that the oil industry began
to play a prominent role in the economic life of the country. Nigeria
can be categorized as a country that is primarily rural,
which depends on primary product exports (especially oil products). Since the attainment of independence in 1960 it has
experienced ethnic, regional and religious tensions, magnified by the significant disparities in economic, educational and environmental development in the
the major discovery of oil in the country which affects and is
south and the north. These could be partly attributed to
affected by economic and social components. Crude oil discovery has had certain impacts on the Nigeria economy both positively
and adversely. On the negative side, this can be considered with respect to the surrounding communities within which the oil wells are exploited. Some of
these communities still suffer environmental degradation, which leads to deprivation of means of livelihood and other economic and social factors. Although
large proceeds are obtained from the domestic sales and export of petroleum products, its effect on the growth
of the Nigerian economy as regards returns and productivity is still questionable, hence, the need t evaluate the relative impacts of crude oil on the economy.
In the light of the study, the main objective is to assess the impact of crude oil on the Nigerian economy. Given the fact that the
oil sector is a
very crucial sector in the Nigeria economy, there is the dire need for an appropriate and desirable production and export policy for the
sector. In Nigeria, though crude oil has contributed largely to the economy, the revenue has not been properly used. Considering
the fact that there are other sectors in the economy, the excess revenue made from the oil sector can be invested in them
to diversify and also increase the total GDP of the economy. This study comprises of five sections. Section two presents the
background of the study, while the third section focuses on the research methodology. Section four includes data analysis and interpretation of results, and
the final section presents and policy proposal and study conclusions.
The oil industry directly increases Nigeria’s GDP

In general, the contribution of an industry or branch of activity to the gross domestic product (at factor
cost) during any accounting period is measured by its gross output less the cost of inputs-materials,
equipment, services, etc. purchased from other industries or branches of activity. (Deduction of any
taxes net of subsidies paid, gives the gross domestic product at market prices). The gross output of the
petroleum sector consists of the proceeds from oil exports, local sales of crude oil for local refining, and
local sales of natural gas. But because of the massive involvement of foreign operators in the Nigerian petroleum industry, not all of the
industry's value added is retained in the country; at the moment a substantial proportion is sent out in the form of factor payments profits, dividends, interest,
fees, and wages and salaries paid abroad. It
is therefore more realistic to consider the industry's contribution to gross
national product i.e., gross domestic product less factor payments made abroad. The industry's value
added can also be obtained by adding together the various payments to the government in the form of
rents, royalties, profit taxes, harbor dues, etc.; the wages and salaries of employees paid locally; and
any net retained earnings.
The Oil industry stimulates local economic growth

The oil industry's periodic injection of purchasing power through its local expenditure on goods and
services is another of its important contributions to the Nigerian economy. Apart from direct payments
to the government, oil industry expenditure in Nigeria takes the form of payments of wages and
salaries, payments to local contractors, local purchases of goods and services, harbor dues, vehicle
licenses, telephone and postal charges, local rents, educational grants and scholarship awards,
donations and subventions, and other minor social charges Cumulative expenditure on these items totaled
about 950 million by the end of 1974. Apart from the direct stimulation given to the producers of these
goods and services such injections also exert secondary influences, through the multiplier process, on
the level of output and employment in other related sectors of the economy, the magnitude of the
overall effect depending on the size of the initial injection and the extent of leakages out of the local
economic system that may exist.
Nigeria DA- Oil K/T Economy- Employment

The oil industry directly increases employment and capital investment

One of the first contributions of the oil industry to the Nigerian economy was the creation of
employment opportunities. From the start, Nigerians were employed in a variety of non-basic activities
such as the building of roads and bridges, the clearing of drilling sites, transportation of materials and
equipment, and the building of staff housing and recreational facilities. As time went on and as the industry's
training programme progressed, they began to be employed in seismic and drilling operations, and in
supervisory and managerial functions. However, direct oil industry employment in Nigeria is not likely to
expand significantly in the future because the industry is very highly capital intensive, as is illustrated by
the size of the capital-labour ratio in the industry, compared with other industries. The very high capital-
labour ratio in the oil industry means that growth in oil operations is generally reflected, not in the
relative expansion of employment, but in the expansion of capital investment. This will be particularly
the case when, with the passage of time and increased extraction, the need arises for increased
investment in costly techniques of secondary recovery. At the moment total oil industry employment in
Nigeria (including employment by ancillary firms) represents only 1.3 per cent of total modern sector
employment in the country.
Nigeria DA- Oil K/T Economy- Gov’t Revenue

Oil revenue directly increases Nigerian economic growth

The payment of substantial revenues to the government is another important aspect of the contribution
of the oil industry to the Nigerian economy. The significant increase in government receipts in recent
years is a reflection of three factors: increased crude oil production in Nigeria; the huge increase in
crude oil prices and the more favorable fiscal arrangements obtained by the government as a result of
its improved bargaining position over the years. At the early stages of oil operations when the prospects of
establishing a viable oil industry in Nigeria were rather uncertain, the government was in a weak bargaining
position via the oil companies. Consequently, the terms negotiated at that time with the Shell-BP Petroleum
Company of Nigeria were favorable to the Company, and included relatively low concession rents, a 12.5 per
cent royalty rate, a 50150 profit-sharing formula based on realized prices, and large capital allowances. The
use of realized prices in the calculation of taxable profits meant that the country's oil revenues fell as
oil prices fell throughout most of the 1960. But as the country's oil prospective improved and the
government's bargaining power consequently increased, these terms were progressively revised to take
account of the changed conditions. These changes resulted in a significant increase in government oil
revenues, particularly in 1973 and 1974. As noted above, a large part of the increase in oil revenues was
accounted for by the huge increase in crude oil prices during 1973-74. How far oil prices will continue to be
high in the future will depend on the balance between the demand for and the supply of energy-in particular,
on the level of economy in energy consumption, and the speed of development of substitute fuels in
consuming.
Nigeria DA- Oil K/T Economy- Foreign Exchange Reserves

The oil industry allows Nigeria to amass foreign exchange reserves, increasing development

This is an important aspect of the oil industry's contribution to the Nigerian economy, which could not
have come at a more opportune moment because the country is embarking upon a massive programme of
industrialization and economic development which postulates huge imports of capital goods and specialized
services involving massive expenditure of foreign exchange. In many underdeveloped countries,
especially those that depend heavily on a narrow range of primary commodities, acute shortages of
foreign exchange, often exacerbated by massive declines in world commodity prices, constitute a major
obstacle to effective economic development. The oil industry in Nigeria now has substantial foreign
exchange reserves and is in the healthy position of being able to finance the foreign exchange cost of
her development programmes. The industry's contribution to foreign exchange is not measured by the gross
value of crude oil exports because the practice followed by the oil companies is to retain the entire proceeds
from exports abroad, and to remit to the producing country only the amount needed to sustain their local
operations.
Nigeria DA- A2: Dutch Disease

Stable oil is key to a transition and diversification of Nigeria’s energy sector

Another contribution of the oil industry to the Nigerian economy is the provision of a cheap and/or readily
available source of energy for industry and commerce, through the operations of the local refinery and the
utilization of locally discovered natural gas. The Elesa Eleme refinery, near Port Harcourt, which came into
operation in November 1965, had an initial capacity of 1.9 million tonnes per annum, and was designed to meet the
country's main product requirements at that time, with the exception of bitumen, aviation gasoline, and lubricating
oils. A liquefied petroleum gas plant, with a capacity of 15,000 tonnes per annum, was added in 1966. The refinery
was damaged during the civil war but has since been rebuilt and expanded to a capacity of about 2.75 million
tonnes. It is planned further to expand the capacity of the refinery to 3.75 million tonnes per annum and to build two
new refineries one at Warri in Bendel State (now Delta State) and the other at Kaduna in Kaduna State-during the
current National Development Plan (1975 - 1980). The objective is to eliminate the scandalous shortage of
petroleum products in a country that is currently swimming in oil. The availability of huge reserves of natural
gas provides a good opportunity for the supply of cheap energy to industry and commerce. Already,
associated natural gas natural produced jointly with crude oil is being supplied by Shell-BP to the National
Electric Power Authority for thermal electricity generation; to the Nigerian Petroleum Refining Company for
use as fuel in petroleum refining at Elesa Eleme; and to a number of industrial undertakings around the
centres of oil operations. Total consumption of natural gas in Nigeria, excluding the amount used as fuel at the
oilfields by the producing companies has increased from 1,100 million cubic feet in 1963 to 6,916 million cubic feet
in 1973. However, annual consumption is still a tiny proportion of total production and the latter, which at the
moment comes wholly from oilfields, is much less than available productive capacity.
Nigeria DA- A2: Inflation

Nigeria is able to curb inflation in the face of economic struggle
Adesida 7 (Seun, Chief Executive Officer of Intercontinental Bank Plc, August 6,

http://www.sunnewsonline.com/webpages/features/ceomagazine/2007/aug/06/ceomagazine-06-08-2007-001.htm)
Despite the disappointments in the areas of poverty reduction, tackling unemployment and weak
consumer purchasing power, a number of achievements were made on the economic front. Core
inflation stabilized and actually dipped below the single digit levels for the first time since the 80s;
while adroit foreign reserve management and fiscal discipline ensured that the country paid off its foreign
debts and meant that our reserves hit an all-time high of over N43 billion.
Nigeria DA- A2: Corruption

Reforms solve corruption

During 2003–2007 Nigeria has attempted to implement an economic reform program called the National
Economic Empowerment Development Strategy (NEEDS). The purpose of NEEDS is to raise the
country’s standard of living through a variety of reforms, including macroeconomic stability,
deregulation, liberalization, privatization, transparency, and accountability. NEEDS addresses basic
deficiencies, such as the lack of freshwater for household use and irrigation, unreliable power supplies,
decaying infrastructure, impediments to private enterprise, and corruption. The government hope that
NEEDS will create 7 million new jobs, diversify the economy, boost non-energy exports, increase
industrial capacity utilization, and improve agricultural productivity. A related initiative on the state
level is the State Economic Empowerment Development Strategy (SEEDS).
Corruption solved – New commission
Ribadu 6 (Nuhu, Executive Chair, Economic & Financial Crimes Commission, May 19,
http://www1.worldbank.org/publicsector/anticorrupt/bbagdetails.cfm?ID=267)
For years Nigeria has suffered a string of rulers bent on looting the national treasury. Presidents,
military dictators, parliamentarians, and state governors all took advantage of their position to steal
literally billions of dollars of the national patrimony. But things are beginning to change. Corrupt
proceeds secreted abroad are being returned and senior officials prosecuted for wrongdoing. While
these successes represent the coordinated response of many agencies in Nigeria and reflect the strong support
of its President, outside observers say much of the credit is due to the work of the Economic & Financial
Crimes Commission. Formed in April 2003, it has recovered or seized assets from various people guilty of
fraud inside and outside of Nigeria, including a syndicate with highly placed government officials who were
defrauding the Federal Inland Revenue Service (FIRS). Several influential individuals, including the
governors of two states, have been arrested and are currently awaiting trial. This success has come at a
price, however. Three of the Commission's investigator's have been assassinated this year alone and many
more have received death threats. Nuhu Ribadu, a former police officer and prosecutor, has headed the
commission since its inception. He will review the commission's record and discuss the factors that help
explain its success.
Nigeria DA- Impact: Stability Up

Instability in Nigeria low
Lesser 8 (Howard, VOA News [http://www.voanews.com/english/Africa/2008-07-16-voa4.cfm] Court Upholds

Election of Nigeria's Senate President/ July 16, 2008)
Attorney and legal consultant Emmanuel Ogebe is a managing partner in the Washington office of the US –
Nigeria law group. He says that yesterday’s decision favoring Mark, who is a member of the ruling
People’s Democratic Party (PDP), would also appear to help President Yar’Adua, who faces an appeals
ruling later this year from his two opponents in last year’s presidential vote, which was widely
condemned as flawed. “This is a huge sign that Nigeria is on the step towards stability. In March, we had
a ‘super Tuesday,’ where the courts decided in the space of 48 hours on the validity of the elections of the
president, the vice president, and then the third in line of succession, the senate president. So in essence, if
the courts had kicked them all out, we would have had a power vacuum and a constitutional crisis. So
the fate of the senate president is actually almost as decisive as the fate of the president and the vice
president,” he said.
Nigeria DA- Impact: Spillover

A Nigerian coup overthrow would spill over into other regions of Africa
NIC 5 (National Intelligence Council [http://www.dni.gov/nic/confreports_africa_future.html] Mapping Sub-
Saharan Africa's Future/ March 2005)
Other potential developments might accelerate decline in Africa and reduce even our limited optimism. The
most important would be the outright collapse of Nigeria. While currently Nigeria's leaders are locked in a
bad marriage that all dislike but dare not leave, there are possibilities that could disrupt the precarious
equilibrium in Abuja. The most important would be a junior officer coup that could destabilize the
country to the extent that open warfare breaks out in many places in a sustained manner. If Nigeria
were to become a failed state, it could drag down a large part of the West African region. Even state
failure in small countries such as Liberia has the effect of destabilizing entire neighborhoods. If
millions were to flee a collapsed Nigeria, the surrounding countries, up to and including Ghana, would
be destabilized. Further, a failed Nigeria probably could not be reconstituted for many years—if ever—and
not without massive international assistance.
A coup overthrow in Nigeria would collapse West Africa

Eboh 5 (Camilius, The Union Tribune [http://www.signonsandiego.com/news/world/20050525-0956-nigeria-
collapse.html] Nigeria could collapse and bring down W.Africa-CIA/ May 25, 2008)
A coup in Nigeria could cause the oil exporting country to collapse and bring down much of West
Africa with it, the CIA's National Intelligence Council said in a long-term outlook released in Nigeria on
Wednesday. The catastrophic scenario was listed as a possible risk in a long-term forecast for Africa which
also saw most of the continent becoming increasingly marginalised over the next 15 years. 'While Nigeria's
leaders are locked in a bad marriage that all dislike but dare not leave, there are possibilities that could
disrupt the precarious equilibrium in Abuja,' said the report, which was given to the press by Nigerian
lawmakers. 'The most important would be a junior officer coup that could destabilise the country to the
extent that open warfare breaks out in many places in a sustained manner. 'If Nigeria were to become
a failed state, it could drag down a large part of the West African region.'
Nigeria DA- Impact: Regional Stability

Nigeria is key to stability in the region
Lymen 5 (Princeton, Adjunct Senior Fellow for Africa Policy Studies

[http://www.cfr.org/publication/8136/electoral_reform.html] ELECTORAL REFORM: THE NEXT MILESTONE
IN NIGERIA’S DEMOCRACY/ March 19, 2005)
If it were only Nigeria’s democracy at stake in the effectiveness of its electoral process, that would be serious
enough. But the truth is that Nigeria’s importance runs far beyond its borders. Nigeria is a leader in
much of what is happening throughout the continent. It was President Obasanjo, along with South
Africa’s President Thabo Mbeki, Senegal’s President Wade, and Algerian President Bouteflika, who
developed the New Partnership for African Development (NEPAD) that set out principles of good
governance and economic management that is now a key policy framework of the Africa Union. NEPAD has
also become the foundation for the evolving new partnership between Africa and the industrialized countries
of the world. Because of NEPAD, there now exists an Africa Action Plan that charts the future relationship
between the G8 and Africa in terms of trade, aid and security. Beyond just words and principles, Nigeria has
become the key actor in pushing back efforts to undermine democratic progress in West Africa. In
Guinea-Bissau, Sao Tome and Principe, and most recently in Togo, Nigeria together with its allies in
the Economic Commission for West Africa (ECOWAS) forced reversal of coups and the undermining of
constitutional processes. Had these actions not been taken, NEPAD would have been only words on a
page. Now these principles are a part of reality.
Nigeria key to solving conflict in the region
Lymen 5 (Princeton, Adjunct Senior Fellow for Africa Policy Studies

[http://www.cfr.org/publication/8136/electoral_reform.html] ELECTORAL REFORM: THE NEXT MILESTONE
IN NIGERIA’S DEMOCRACY/ March 19, 2005)
Finally, Nigeria has been playing a central role in resolving conflicts. Nigerians have paid a heavy price
for peace, in the many lives lost and in the treasure expended in the peacekeeping operations of Sierra Leone
and Liberia. Nigerians have not flinched from this responsibility. In Burundi, in Congo, and most
recently in the Darfur region of Sudan, Nigeria dedicates peacekeepers, money, and time to end the
terrible conflicts that have afflicted those countries. Today, it is Nigeria that is providing the leadership
and the venue for the political talks that are critical to ending the tragedy in Darfur. What this means
for the subject we have been discussing these last three days is that the future of Nigeria’s democracy has
repercussions far beyond Nigeria. Nigeria is very much a bellwether for the progress of democracy in
Africa. Moreover, should the worst happen, should problems in the elections in 2007 lead to unrest and
instability in Nigeria, the impact would be even greater, unsettling the region and weakening one of the
most important forces for peace and progress on the continent. Nigeria thus carries a heavy
responsibility, first and foremost for its people but also for the continent. This is not new for Nigeria. And I
know that Nigeria will not shy from the responsibility just as it has not shied away from the responsibilities I
have already mentioned.
Nigeria DA- Impact: Regional Stability

Economic decline causes regional war and terrorism

The United States must pay close attention to Nigeria for its own national security interests. If the Nigerian
economy became afflicted with a cold because of the chilling effects on investment occasioned by political
instability, peace and prosperity in the fragile ECOWAS region would be jeopardized, and become a
promising target for Al Qaeda penetration or recruitment. Nigeria’s vast oil and gas resources would also be
targeted. Proven reserves are estimated at 25 billion barrels; natural gas reserves exceed 100 million cubic
feet. Crude oil production averages 2.2 million barrels per day. Nigeria, as the fifth largest exporter to the
United States, supplies it with approximately 11% of its aggregate oil imports.
Nigeria is key to African stability
Committee On Foreign Affairs 7 (house of representatives http://www.internationalrelations

.house.gov/110/35872.pdf)
Nigeria has played, and continues to play, a critical role in the region and subregion and it is an
important partner to the United States. It has the second-largest economy in Africa and is the
continent’s largest producer of oil. The country generates over $47 billion a year in oil and gas revenues. It
is the third-largest oil supplier to the United States and the largest beneficiary of U.S. investment on the
continent. Through the Economic Community of West African States and the African Union, Nigeria has
provided peacekeeping troops for missions that western governments are unwilling to do. Nigeria sent
troops to Sierra Leone while the Revolutionary United Front was still wreaking havoc in that country, and
they deployed to Liberia during the last days of the Charles Taylor regime. If Nigeria had not sent
troops to those countries, it is doubtful that those conflicts there would have ended when they did. They
also sent a strong message to Sao Tome and Principe to tell the troops there to stay in the barracks and,
therefore, avoided a coup d’etat.
African conflict escalates to nuclear war

Deutsch 2, PhD and political risk consultant and Founder, Rabid Tiger Project, 11/18/, Jeffrey
(http://www.rabidtigers.com/rtn/newsletterv2n9.html)
The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa. Civil wars in the Congo (the country
formerly known as Zaire), Rwanda, Somalia and Sierra Leone, and domestic instability in Zimbabwe, Sudan and other countries,
as well as occasional brushfire and other wars (thanks in part to “national” borders that cut across tribal ones) turn into a really
nasty stew. We’ve got all too many rabid tigers and potential rabid tigers, who are willing to push the button rather than
risk being seen as wishy-washy in the face of a mortal threat and overthrown. Geopolitically speaking, Africa is open
range. Very few countries in Africa are beholden to any particular power. South Africa is a major exception in this
respect - not to mention in that she also probably already has the Bomb. Thus, outside powers can more easily find client states
there than, say, in Europe where the political lines have long since been drawn, or Asia where many of the countries (China, India, Japan) are
powers unto themselves and don’t need any “help,” thank you. Thus, an African war can attract outside involvement very
quickly. Of course, a proxy war alone may not induce the Great Powers to fight each other. But an African
nuclear strike can ignite a much broader conflagration, if the other powers are interested in a fight. Certainly, such a strike
would in the first place have been facilitated by outside help - financial, scientific, engineering, etc. Africa is an ocean of troubled waters, and
some people love to go fishing.
Nigeria DA- Impact: Heg

Nigeria is key to Africa’s growth and stability and to US heg in the region
U.S. Department of State, States News Service, “REMARKS ON U.S. ASSISTANCE TO

NIGERIA,”
October 30, 2006, lexis
Nigeria is arguably our most important strategic partner in Africa. It is Africa's most populous state
as well as its second-largest economy. Nigeria is our largest African trading partner, and a growing key
oil supplier to the United States. It is a crucial continental power broker in dealing with African
institutions and in resolving armed conflict. It is a vital player in the War on Terror. Located along
the Sahel, Nigeria exerts great influence on African political, economic, and socio-cultural trends. A
prosperous Nigeria is vital to Africa's growth and stability, and to projecting U.S. influence as a
strategic partner. U.S. policy objectives in Nigeria--which conform to the established goals
of the Government of Nigeria--are to enhance Nigeria's ability to deliver social
services; strengthen democracy, pluralism, and good governance; promote a more
market-led economy; and to enhance Nigeria's capacity as a responsible regional and
trade partner. Support for professionalism in, and reform of, the security services is
integral to this strategy. Given Nigeria's size and our limited resources, we are trying to
focus on the impoverished Muslim North and on the oil-rich and unstable Niger River
Delta.
***Nigeria Answers***
Nigeria Answers- No Internal Link- A2: Oil K/T Economy

Oil revenue doesn’t help Nigerian economy – only 1% goes to population

Nigeria’s economy is struggling to leverage the country’s vast wealth in fossil fuels in order to displace
the crushing poverty that affects about 57 percent of its population. Economists refer to the coexistence
of vast natural resources wealth and extreme personal poverty in developing countries like Nigeria as
the “resource curse”. Nigeria’s exports of oil and natural gas at a time of peak prices have enabled the
country to post merchandise trade and current account surpluses in recent years. Reportedly, 80 percent of
Nigeria’s energy revenues flow to the government, 16 percent covers operational costs, and the remaining 4
percent go to investors. However, the World Bank has estimated that as a result of corruption 80 percent
of energy revenues benefit only one percent of the population. During 2005 Nigeria achieved a milestone
agreement with the Paris Club of lending nations to eliminate all of its bilateral external debt. Under the
agreement, the lenders will forgive most of the debt, and Nigeria will pay off the remainder with a portion of
its energy revenues. Outside of the energy sector, Nigeria’s economy is highly inefficient. Moreover, human
capital is underdeveloped Nigeri ranked 151 out of 177 countries in the United Nations Development Index
in 2004 and non-energy-related infrastructure is inadequate.
The Nigerian oil industry is too flawed to be the economic keystone

The oil sector has been plagued by various problems which undermined it’s optimal development over
the years. In general terms, the oil sector of the Nigerian economy in the 1990ies faced (and still faces
some of) the following problems: Public control and bureaucracy The Nigerian National Petroleum Corporation (NNPC)
is controlled by the Ministry of petroleum Resources. It lacks autonomy, as a result of which decision taking is often bureaucratic and unnecessarily
delayed. Therefore, the operation of the NNPC is characterized by ineffiiency, especially in refinery operations, distribution and marketing. Poor
funding of investments Frequent delays in the payment of cash calls to the joint venture operators have tended to discourage increase in the level
of investment by the oil companies. Insufficiency of funds has also constrained adequate equipment maintenance and efficient refinery operations by the
NNPC. The Federal Government’s delays in the payment of cash calls for its JV operations in the upstream sub-sector, focusing more on maintenance rather
than growth. Communal Disturbances There had been frequent communal disturbances which disrupts crude production as oil communities’
clamour for higher stake in oil operations. Smuggling and diversion of petroleum products There are reported cases of massive smuggling of petroleum
products across the borders in quest for foreign exchange and to take undue advantage of the lower domestic prices vis-а-vis neighboring countries prices.
Fraudulent domestic marketing practices Some marketers hoard products in periods of scarcity in order to sell in the black market at higher prices. Products
adulteration This is encouraged largely by price differential of some products and the proliferation of illegal sales outlets where some adulterations occur.
Others are Relatively low level of investments in the sector, compared to its potentials. High technical cost of production, due to low
level of domestic technological development. Restrictions imposed by crises and production disruptions caused by host communities.
Environmental degradation due to the flaring of associated gas.
The oil industry only serves to hurt the population of Nigeria
Africa News 4 (July 12, Daily Champion, “Nigeria: Oil: Prize or Curse?”)
Meanwhile, deep in the Ecuadorian forest, discharges from 333 wells despoil Indian homelands and
contaminate the headwaters of the Amazon. In Africa's most populous nation, sludge sickens communities
as slicks bathe Niger River banks. In the Gulf of Mexico, the Niger River Delta, and the Persian Gulf,
fish nibbling near drilling sites get their fill of mercury and other toxins and pass it on to birds, marine
mammals, and humans who eat them. Refining emits benzene, which causes cancer, and burning
pollutes the air and water with mercury, particles, and smog and causes acid rain
Nigeria Answers- No Internal Link- A2: Oil K/T Economy

Oil turns Nigeria toward economic disaster

Petroleum production and export play a dominant role in Nigeria's economy and account for about 90
% of her gross earnings. This dominant role has pushed agriculture, the traditional mainstay of the
economy, from the early fifties and sixties, to the background. While the discovery of oil in the eastern and
mid-western regions of the Niger Delta pleased hopeful Nigerians, giving them an early indication soon
after independent economic development was within reach, at the same time it signaled a danger of
grave consequence: oil revenues fueled already existing ethnic and political tension and actually
"burned" the country. This tension reached its peak with the civil war that lasted from 1967 to 1970. As
the war commenced, the literature reflected the hostility, the impact, and fate of the oil industry. Nigeria
survived the war, and was able to recover mainly of the huge revenues from oil in the 1970s. For some three
years an oil boom followed, and the country was awash with money. Indeed, there was money for
virtually all the items in its developmental plan. The literature of the postwar years shifted to the analysis of the world oil boom and
bust, collectively known as the "oil shock." Starting in 1973 the world experienced an oil shock that rippled through Nigeria until the mid - 1980s. This
oil shock was initially positive for the country, but with mismanagement and military rule, it became
all economic disaster. The larger middle class produced by the oil boom of the 1970s gradually became disenchanted in the 1980s, and rebellious
in the 1990s. The enormous impact of the oil shock could not escape scholarly attention. For almost twenty years (1970s - 1990s), the virtual obsession was
to analyze the consequences of oil on Nigeria, using different models and theories. A set of radical-oriented writers was concerned with the nationalization
that took place during the oil shock as well as the linkages between oil and an activist foreign policy. Regarding the latter, the emphasis was on OPEC,
Nigeria's strategic alliance formation within Africa, the vigorous efforts to establish the Economic Community of West African States (ECOWAS), and the
If many had hoped that oil
country's attempts to use oil as a political weapon, especially in the liberation of South Africa from apartheid.
would turn Nigeria into an industrial power and a prosperous country based on a large middle class,
they were to be disappointed when a formally rich country became a debtor nation by the 1980s. The
suddenness of the economic difficulties of the 1980s "bust years" had an adverse effect on class
relations and the oil workers who understood the dynamics of the industry. As if to capture the labor crisis, writings
on oil workers during this period covered many interrelated issues, notably working conditions, strikes, and state labor relations. To be sure, labor issues
were not new in the 1980s, since the left-oriented scholars had made a point of exposing labor relations in the colonial era. What was new after 1980 was
the focus on oil workers, unions, and class conflict [OPEC annual report 1983].
Oil money doesn’t solve instability from inequality

Nigeria is beset by perhaps the most unequal distribution of wealth in the world. The Niger Delta is
emblematic. Despite its lucrative oil and gas resources, the indigenous population barely subsists. The
infrastructure is either ramshackle or non-existent. A chronic militancy and worrisome violence has arisen.
Oil and gas production has been periodically interrupted. President Yar’ Adua, however, has pledged
in his first hundred days to fashion a plan for catalyzing economic and social development in the Niger Delta.
The plan could include contract or employment setasides for qualified local businesses or employees and job
training opportunities.
Nigeria Answers- Internal Link Turn: Dutch Disease

Dependence on oil creates systemic impacts on Nigerian economy

The oil boom of the 1970s led Nigeria to neglect its strong agricultural and light manufacturing bases
in favour of an unhealthy dependence on crude oil. In 2000 oil and gas exports accounted for more
than 98 % of export earnings and about 83 % of federal government revenue. New oil wealth, the
concurrent decline of other economic sectors, and a lurch toward a statist economic model fueled
massive migration to the cities and led to increasingly widespread poverty, especially in rural areas. A
collapse of basic infrastructure and social services since the early 1980s accompanied this trend. By
2000 Nigeria's per capita income had plunged to about one-quarter of its mid-1970s high, below the
level at independence. Along with the endemic malaise of Nigeria's non-oil sectors, the economy continues
to witness massive growth of "informal sector" economic activities, estimated by some to be as high as 75 %
of the total economy. Nigeria's proven oil reserves are estimated to be 35 billion barrels; natural gas reserves
are well over 100 trillion ftі (2,800 kmі). Nigeria is a member of the Organization of Petroleum Exporting
Countries (OPEC), and in mid-2001 its crude oil production was averaging around 2.2 million barrels
(350,000 mі) per day. Poor corporate relations with indigenous communities, vandalism of oil
infrastructure, severe ecological damage, and personal security problems throughout the Niger Delta oil-
producing region continue to plague Nigeria's oil sector. Efforts are underway to reverse these troubles. In
the absence of government programs, the major multinational oil companies have launched their own
community development programs. A new entity, the Niger Delta Development Commission (NDDC), has
been created to help catalyze economic and social development in the region. Although it has yet to launch its
programs, hopes are high that the NDDC can reverse the impoverishment of local communities. The U.S.
remains Nigeria's largest customer for crude oil, accounting for 40% of the country's total oil exports;
Nigeria provides about 10% of overall U.S. oil imports and ranks as the fifth-largest source for U.S. imported
oil.
Oil dependency takes out all local efforts at economic success

Oil dependency, and the allure it generated of great wealth through government contracts, spawned
other economic distortions. The country's high propensity to import means roughly 80 % of government
expenditures is recycled into foreign exchange. Cheap consumer imports, resulting from a chronically
overvalued Naira, coupled with excessively high domestic production costs due in part to erratic electricity
and fuel supply, have pushed down industrial capacity utilization to less than 30 %. Many more Nigerian
factories would have closed except for relatively low labor costs (10 % - 15 %). Domestic manufacturers,
especially pharmaceuticals and textiles, have lost their ability to compete in traditional regional
markets; however, there are signs that some manufacturers have begun to address their competitiveness.
Oil revenue isn’t used productively
Blocher 7 (10-31, Christopher Charles,

http://internationalbusiness.wikia.com/wiki/Nigerian_Economic_Markets_and_Structures)
“Nigeria's entire economy revolves around oil - with large reserves meaning the country has, in theory, the potential to
build a very prosperous economy” (Hale, 2002). The main reason why Nigeria has never seen much profit from this oil is
because the money stays within the central government and never trickles outside to the areas in need of it. Another large
factor in why there are little profits seen in the production of oil in Nigeria is the state and condition that much of the
equipment is in. The dilapidated equipment places production way under normal capacity. Nigeria’s oil sales “account for
40% of its GDP. It is the 12th largest producer of petroleum in the world and the 8th largest exporter, and has the 10th
largest proven reserves” (Economy of Nigeria). The export of crude oil accounts for almost 85% of Nigeria’s Federal
Government revenue. The needless spending of the government dwarfs this revenue. This careless spending has been
going on since the 1980’s. While, a “new entity, the Niger Delta Development Commission (NDDC), has been created to
help catalyze economic and social development in the region” (Economy Nigeria), the organization has shown little or no
progress. This organization has actually wasted more money then helping out with Nigeria’s economic downfall.
Nigeria Answers- Internal Link Turn: Inflation

More oil revenue translates to increased inflation

Expanded government spending also has led to upward pressure on consumer prices. Inflation which had
fallen to 0 % in April 2000 reached 14. 5% by the end of the year and 18.7 % in August 2001. In 2000
high world oil prices resulted in government revenue of over $16 billion, about double the 1999 level.
State and local governmental bodies demand access to this "windfall" revenue, creating a tug-of-war
between the federal government, which seeks to control spending, and state governments desirous of
augmented budgets preventing the government from making provision for periods of lower oil prices.
Increased oil revenue creates market distortions and inflation

The monetization of oil revenue has been a major factor in liquidity management in Nigeria. Measuring
liquidity as the narrow and broad money definitions by the CBN, the early 1990s saw increases that were
dampened by 1995 up until the civilian administration came on board in 1999. The new Government
maintained disciplined fiscal operations for about one year and thereafter, the floodgates were opened. Since
then, the CBN has been battling to keep liquidity in check, in order to ensure that it does not create
adverse effects on the three key macroeconomic prices (i.e., interest rate, exchange rate and inflation
rate). The greatest challenge is when Nigeria generates more revenue from crude oil sales than it
budgeted, like now. Such excesses have always been monetized, creating market distortions and
inflationary pressure [Biodun Adedipe 2004].
Nigeria Answers- Internal Link Turn: Corruption

Oil has fueled corruption in Nigeria
In Nigeria, Ecuador, Venezuela and Sudan, oil has widened economic divides and the wealth generated
engenders conflicts. Nigeria has suffered profoundly from political unrest fueled by oil and from
reprisals in which thousands have been killed. The corruption spawned by oil casts a vast net of social
pain that has not abated with the transition to democracy.
Corruption disrupts any attempts at improving Nigerian well being

A long-term economic development program is the United Nations (UN) sponsored National Millennium
Goals for Nigeria. Under the program, which covers the years from 2000 to 2015, Nigeria is committed
to achieve a wide range of ambitious objectives involving poverty reduction, education, gender
equality, health, the environment, and international development cooperation. In an update released in
2004, the UN found that Nigeria was making progress toward achieving several goals but was falling
short on others. Specifically, Nigeria had advanced efforts to provide universal primary education,
protect the environment, and develop a global development partnership. However, the country lagged
behind on the goals of eliminating extreme poverty and hunger, reducing child and maternal mortality,
and combating diseases such as human immunodeficiency virus/acquired immune deficiency syndrome
(HIV/AIDS) and malaria. A prerequisite for achieving many of these worthwhile objectives is
curtailing endemic corruption, which stymies development and taints Nigeria’s business environment.
Corruption mostly harms Nigerians themselves, but the country is widely known around the world for a
fraudulent activity known as the "Advance fee fraud" scheme, a.k.a the "419" scam or the Nigerian scam,
which seeks to extort money from foreign recipients of letters and emails with the promise to transfer a
nonexistent windfall sum of money.
Nigeria Answers- Internal Link Turn: Organized Crime

Oil increases Nigerian organized crime
Arvantides and Butcher 8 (Chip, Jamey, http://www.american.edu/ted/hpages/crime/Nigeria.htm)

Nigerian organized crime has become influential in transnational illegal activities only recently. It can be
traced to the collapse of oil prices in the early 1980s and the subsequent problems that this caused for
an economy that relied on oil exports for 95 percent of its earnings. This resulted in a number of well-
educated Nigerians, many living in other countries, to be deprived of their primary source of income. This in
turn created a wave of individuals turning to crime as a means of supplementing their income. Nigerian
Criminal Enterprises have developed large scale drug trafficking operations that are second only to
the Asian triads in their import of heroin into the United States. This has been facilitated by a
relatively secure home base, characterized by lack of legislation and law enforcement capacity, as well
as political instability, corruption and few sources to devote to fighting organized crime. Further,
Nigerian organizations have engaged in extensive fraud and extortion activities, including credit card
fraud, and fraudulent activities through commercial banks and government assistance programs.
Nigerian Criminal Enterprises are difficult to infiltrate due to the fact that they operate in a tribal structure.
These groups also have little problem accepting menial jobs, which include narcotics trafficking activities,
despite a membership that has a generally high level of education.
Organized crime funnels money out of Nigeria
Mutume 7 (Gumisia, July, http://www.un.org/ecosocdev/geninfo/afrec//vol21no2/212-organized-crime.html)

Because drug trafficking, prostitution, gambling, loan-sharking and official corruption are illegal and
many transactions are consensual, experts note that the extent of organized crime is hard to establish
on the basis of official data, in Africa or elsewhere. “But perception surveys, as well as international
crime intelligence and seizures of contraband, suggest that Africa may have become the continent most
targeted by organized crime,” UNODC states in a 2005 report, Crime and Development in Africa. “Lack of
official controls makes the continent vulnerable to money laundering and corruption activities, both of
which are vital to the expansion of organized crime.”
Nigeria Answers- Impact T/O: Stability Down

Rebel attacks are increasing in Nigeria
Fletcher 8 (Sam, Oil & Gas Journal
[http://www.ogj.com/display_article/334097/7/ONART/none/GenIn/1/MARKET-WATCH:-Supply-fears-push-
energy-prices-higher/] MARKET WATCH: Supply fears push energy prices higher/ July 9, 2008)
A statement by the Movement for the Emancipation of Niger Delta that its 2-week ceasefire will end July
12 also helped boost energy prices. Rebels indicated they would resume attacks because of the recent
promise by US officials to back the Nigerian government in the conflict that has already shut in a quarter
of Nigeria's oil production in the last 2 years. In the interim, security forces said gunmen kidnapped
employees of a German construction firm in Port Harcourt, Nigeria, on July 11. The abductees work for
Julius Berger Nigeria PLC, a unit of Bilfinger Berger AG, Germany's second-largest builder.
Nigeria Answers- Impact Turn: Coup Good

A coup to overthrow the illegitimately elected president in Nigeria would ultimately
strengthen democracy
Jean Herskovits, Research Professor of History at the State University of New York, “Nigeria's
Rigged
Democracy,” Foreign Affairs, July/August 2007
Many Nigerians say that in the wake of the discredited elections, nothing is off the table. Although
coups are said to be out of fashion in much of Africa, in Nigeria they have repeatedly been used against
a misbehaving political class. Such military intervention would not, of course, be the preference of
most
Nigerians -- or of the U.S. government. But the flagrantly rigged elections were not either, and in
the
event of a coup carried out by leaders committed to returning the country to democracy within
months, Western governments should pause before imposing sanctions. The notion that a coup could
lead to democracy may seem counterintuitive, but if nothing is done to redress the 2007 electoral
travesty, many Nigerians would welcome a short-lived military regime whose goal was to arrange
legitimate elections. Nigerians have again shown their commitment to democracy, and nothing should
be done by people far away to further dim their prospects for eventually achieving it, however they
can.
Oil revenue causes inequality which generates Nigerian instability
Blocher 7 (Christopher Charles, 10-31,

http://internationalbusiness.wikia.com/wiki/Nigerian_Economic_Markets_and_Structures)
Perhaps the most explosive threat facing future Nigerian economic growth lies with internal conflict and
unrest. Critical oil production occurs along the Niger Delta, which is also a home for militant groups like the
Movement for the Emancipation of the Niger Delta (MEND) [5]. Due to the impoverished nature of the
region, and fueled by the lack of non-oil economic growth, the poverty seems to be a breeding ground for
militant groups dissatisfied with government corruption. A government position is often a path to wealth, and
many government officials have been known to enrich themselves with money appropriated for economic
development, blunting any appeals they might make to militant groups which kidnap civilians, which then
disrupt oil production and oil profits[6].
***Mexican Oil DA***

Mexican Oil DA – 1NC

Mexican econ strong – Oil is key
Dickerson 8 (Marla, Las Angeles Times [http://www.latimes.com/news/nationworld/world/la-fi-mexgdp23-

2008may23,1,6979146.story] Mexico prospering despite U.S. slowdown/ May 23, 2008)
Skyrocketing crude prices might be pinching U.S. drivers, but they've meant record oil revenue for
Mexico, the world's sixth-largest oil producer. The petroleum windfall is bankrolling a slew of
government spending and investment, which is helping to keep the economy rolling. Total public
spending increased 9.5% in the first three months of the year compared with the same period last year.
Mexico is critical to the world
Rubin and Weisberg 3 (Roburt Rubin U.S. Secretary of the Treasury, Jacob Weisberg American political
journalist, currently serving as editor of Slate magazine and a columnist for the Financial Times)
I told the President that the Mexican government faced an imminent threat of default and that, in the hope of preventing it, we were recommending that he
support a massive, potentially unpopular, and risky intervention: providing billions of dollars to the Mexican government to avoid a collapse in its currency
and economy. Then I asked Larry to explain the situation in more detail. It took him ten minutes to spell out our essential analysis and recommendation,
which we'd finished formulating in a meeting with Fed chairman Alan Greenspan hours earlier. If
our government didn't step in to
help, and help quickly, the immediate and long-term consequences for Mexico could be severe. But the
real reason for acting was that critical American interests were at stake. The alternatives to the massive
intervention we were recommending were not promising. If Mexico defaulted on its foreign obligations,
Larry and I went on to explain, the flow of capital out of Mexico would probably accelerate and the peso
would collapse, likely triggering severe inflation, a deep and prolonged recession, and massive
unemployment. And that would surely have a substantial impact on the United States. Mexico was our
third-largest trading partner, which meant that many American companies and workers would be
hurt. We presented estimates that a Mexican default could increase illegal immigration by 30 percent, a
half-million additional refugees a year. The flow of illegal drugs could intensify as well. A crisis in Mexico
might also hurt us indirectly, by affecting other countries. Fears of a Mexican default were already
producing wobbles in developing markets throughout the hemisphere, a phenomenon that came to be
known as the "Tequila Effect." Such a chain reaction could lead investors to pull back from emerging
markets around the world indiscriminately. That, in turn, could affect economic conditions in the
United States-since roughly 40 percent of our exports went to developing countries. According to an
estimate made by the Federal Reserve Board, a Mexican default and the consequent "contagion" that was
possible could, in a worst-case scenario, reduce growth in the United States by 1/2 to 1 percent a year. We
weren't proposing intervention for the sake of Mexico, despite our special relationship, but to protect
ourselves. That was our case for asking Congress to provide billions of dollars in loan guarantees, as
part of a package to be coordinated with the International Monetary Fund (IMF).
Econ collapse leads to nuke war

Nyquist, economic expert, 07[7-6-07,J. R. Nyquist, “The Path of Dissolution,”
http://www.financialsense.com/stormwatch/geo/pastanalysis/2007/0706.html, accessed 7-6-07]
The world is made up of armed nation states, and some of those states have nuclear and biological
weapons that could easily kill several hundred million people. We don’t like to think that these weapons
would ever be used, but it’s safe to say they’ll be used all the same. Weapons are always used. This is not
because of some dark conspiracy to use them. They are used because they exist to be used, and the occasion
for using them – though unwelcome by most of us – nonetheless recurs through time. People always seem
ready to hate somebody, to blame somebody, and to unleash destruction on somebody. The reasons for
hatred may be ethnic, religious or ideological. We can see these reasons falling from the lips of al Qaeda
spokesmen, from Latin American dictators and Chinese generals. Everyone knows that war plans were
drawn up in Washington and Moscow long ago. But war did not come when the two sides were carefully
watching one another; mainly on account of the nuclear “balance of terror.” Such balances, however, do
not last forever. In fact, a major economic disruption might overthrow the “balance of terror.”
Mexico DA – UQ – Econ Up
Mexico is experiencing economic growth

A sizzling stock market. A strengthening peso. Good economic growth. Someone forgot to tell Mexico
that the U.S. has been flirting with recession. Mexico's gross domestic product expanded at an annualized
rate of 2.6% in the first three months of the year compared with a year earlier, according to government
figures released Thursday. It's a respectable performance that highlights the nation's surprising resilience in
the face of a U.S. slowdown.
Mexico’s GDP up by 3.8%

The growth appeared muted compared with the fourth quarter of 2007, when Mexico's GDP expanded by
3.8%. But there was statistical noise in the first-quarter numbers. The government this year adopted a
new international standard for calculating GDP, which is the value of all goods and services produced in the
economy. And the January-to-March period was hobbled by this year's early Easter week holiday,
which resulted in fewer working days compared with the first three months of last year. Adjusting for those
factors, first-quarter GDP growth was a solid 3.7%, according to the Treasury secretariat.
Mexican econ strong because of high oil prices

Skyrocketing crude prices might be pinching U.S. drivers, but they've meant record oil revenue for
Mexico, the world's sixth-largest oil producer. The petroleum windfall is bankrolling a slew of
government spending and investment, which is helping to keep the economy rolling. Total public
spending increased 9.5% in the first three months of the year compared with the same period last year.
.
Mexico DA – UQ – Econ Up
Mexico’s economy is in an upward trend
Focus Economics 8 (June 30, Global economic insight with a regional focus http://www.latin-focus.com/focus-
economics/indicators/080630_mexico_economic_activity.htm)
A more complete set of data for first quarter gross domestic product (GDP) confirms the 2.6%
expansion reported earlier. The first quarter reading represented a notable deceleration compared with the 4.2% growth observed in the
fourth quarter. The deterioration over the previous quarter was broad-based, as both domestic demand and the external sector decelerated over the fourth
quarter. Total consumption slowed from 4.0% growth in the fourth quarter to 3.3%, while investment expanded 2.7% year-on-year (Q4 2007: +4.8%
yoy). Meanwhile, the net contribution of the external sector to overall growth deteriorated, as exports decelerated from 7.8% in the fourth quarter to 5.4%,
More recent data point to a
while imports picked up the pace and increased 8.8% over the same quarter last year (Q4 2007: +8.2% yoy).
recovery in economic activity. According to the global indicator for economic activity (IGAE, Indicador
Global de la Actividad Económica), the economy increased 6.2% in April over the same month last year.
The reading constituted a strong rebound compared to the 1.5% contraction registered in March,
which had been negatively affected by the Easter holidays, and also came in ahead of market expectations,
which had anticipated economic activity expanding 4.5% annually. The acceleration over the previous month
was broad-based, as all three main economic sectors registered higher growth rates. Agriculture experienced
the sharpest rebound and expanded 7.2% over the same month last year, after having contracted 5.3% in
March. The industrial sector also bounced back and increased 5.5% year-on-year (March: -4.9% yoy).
Finally, the services sector expanded 6.7% (April: +1.1% yoy). A month-on-month comparison does not
corroborate the acceleration suggested by the annual figures, as economic activity declined 0.17% over
the previous month in seasonally adjusted terms, which contrasted the 1.01% expansion recorded in
March. Nevertheless, as a result of the strong April reading, the annual average growth rate stepped
up from 3.3% in March to 3.6%.
Mexico DA – UQ – Econ Down

Mexican economy slowing- US downturn spilling over
Garr 8 (Emily, Economic Policy Institute [http://www.epi.org/content.cfm/webfeatures_snapshots_20080709] As
U.S. construction slows, remittances to families in Mexico decline/ July 9, 2008)
More remittances are sent to Mexico in May than any other month of the year, driven in part by the number
of immigrants (a majority of them Mexican) working in construction. With the deflating housing bubble
and the decline of construction jobs in the first quarter of 2008, the unemployment rate of Hispanic
immigrants rose to 7.5%, and Hispanic construction workers now earn less than they did in the first
quarter of 2006.1 The continuing economic slowdown in the United States will undoubtedly affect
Mexicans on both sides of the border.
Mexican economy down

Lang 8 (Jason, The Union Tribune [http://www.signonsandiego.com/news/mexico/20080709-1502-mexico-
economy-inflation.html] Mexico inflation jumps to highest since late 2004/ July 9, 2008)
The quickening pace of inflation comes as the economy is starting to slow, hurt by weaker growth in
the United States, Mexico's top trading partner. The economy expanded at an annual pace of 3.7
percent in the first quarter, discounting the effect of Holy Week holidays, down from 4.2 percent in the
fourth quarter of 2007.
Mexico DA – UQ – Oil Up
Mexico is using technology and future reserves to keep oil production high
Luhnow 8 (David, The Wall Street Journal [http://rastrup.eu/verdens-n%C3%A6stst%C3%B8rste-oliefelt-

udt%C3%B8rer-1269.htm] Mexico/ July 9, 2008)
Pemex hopes to largely offset Cantarell’s decline in the next three years by doing the same kind of
nitrogen injection at its second-biggest producer, Ku-Maloob-Zaap, a collection of three fields within
eyeshot of Cantarell’s platform. (Its Mayan names translate to “nest,” “good,” and “charcoal.”) But Ku-
Maloob-Zaap, which is also ranked in the world’s top 20 fields, will start its own decline in 2011, according
to Pemex. Pockets of Oil That leaves Chicontepec, a massive onshore field in eastern Mexico that was
discovered in the 1920s, but hasn’t been fully developed because it is broken up into tiny pockets of oil
that spread out over thousands of square miles in rocky terrain. Pemex says it will need more than 15,000
wells to fully tap the field — a big stretch for a company that has drilled about 23,000 wells since it was
formed in 1938. Developing Chicontepec is also difficult politically; there are scores of nearby towns that
may take a dim view of oil production in their backyard. For now, Pemex is doing what it can to keep
Cantarell going as long as possible. A narrowing band of oil means that wells that are drilled at lesser
depths have started to hit gas, which is less valuable than oil. Wells that are too deep hit greater amounts of
water, which must be extracted from the oil before sale.
Mexico DA – UQ – Oil Down

Mexico’s oil production is at a 9 year low
The Market Oracle 8 (Financial Markets Analysis & Forecasting online publication
[http://www.marketoracle.co.uk/Article5187.html] China Raises Fuel Prices: Is this the End of the Oil boom?/ June
23, 2008)
Worst of all, Mexico's production crisis is deepening: In April, Mexico's oil output fell to a nine-year
low of 2.8 million barrels a day, mostly because of a decline in the Cantarell field. Think that's scary?
Consider this: At current rates of decline, Mexico will become a net oil importer by 2016, and maybe
sooner, according to Mexico's Energy Ministry! And it's not just Mexico. Venezuela, another big supplier
of U.S. imported oil, is hemorrhaging oil production due to the slipshod management by its deluded
president, Hugo Chavez. Result: The combined net oil exports from Venezuela and Mexico to the U.S.
dropped by 414,000 bpd in just five months recently. That's an astounding annual decline rate of 32%
a year!
Mexico’s future reserves are dwindling
Katusa 8 (Marin, The Resource Investor [http://www.resourceinvestor.com/pebble.asp?relid=44271] Securing the

Insecure: U.S. Oil Imports/ July 10, 2008)
Mexico has less of a currency conundrum than the Canadian exploration companies, but they face a much
larger problem – their reserves are dropping quickly, with little ability to replace them. For example,
production at Cantarell, one of the world’s largest oil fields, is conservatively estimated to fall to half of
its 2003 peak by the end of 2008. This problem is exacerbated by Mexico's increasing domestic
consumption. Its population already consumes 60% of its crude. Mexico, and its rapidly dwindling
resources, could become a net importer of crude oil in the near future. (Jeffery Brown’s Export Land Model
estimates that this reversal will occur no later than 2014… six short years from now.)
Oil revenue is limited – Bureaucracy and corruption

The petroleum situation in Mexico is less rosy. Mexico is the world's fifth-largest oil producer and in 2007
the second-largest supplier to the U.S. Yet in many respects Mexico is paying the price for its past bout with
resource nationalism. The Mexican oil industry was nationalized under former President Lázaro Cárdenas in
1938, which led to the creation of Petróleos Mexicanos (PEMEX). March 18, 2008, marks the 70th
anniversary of oil nationalization in Mexico and will be celebrated widely in Mexico. Yet overall, Mexicans
may have little real reason to be jubilant at this time.
Since 1938, a heavy reliance on PEMEX has powered Mexico's development, but the petroleum monopoly
has also served as a huge fount of corruption to sustain workers' unions, inefficient bureaucrats, and state and
national politicians. Today, earnings from PEMEX cover 42 percent of Mexico's national budget. State
ownership of subsoil wealth and hydrocarbons remains firmly embedded in the Mexican psyche and political
ethos. A majority of Mexicans continue to oppose opening PEMEX to private and foreign investment.
PEMEX, say most oil experts, is in serious trouble. It is the world's most indebted oil company. Output from
Mexico's flagship oil field, Canterell, which is located in the Gulf of Mexico, peaked in 2004. The Canterell
field once produced 60 percent of Mexico's petroleum. The field now yields 42 percent of national output,
dropping by 5.7 percent in 2007. Production difficulties continue as a result of under-investment. Four of
every 10 gallons of gasoline consumed in Mexico are imported from abroad, as is much of Mexico's natural
gas.
Mexico DA – UQ – Diversification Up
Mexico is diversifying its market
Tiku 8 (Pran, The Street Journal [http://www.thestreet.com/story/10426035/1/emerge-richer-with-six-sizzling-
markets.html] Emerge Richer With 'Six Sizzling Markets'/ July 14, 2008)
Mexico, the eleventh-largest country in terms of population, benefits from NAFTA, but it has also been
decreasing its reliance on the U.S. by diversifying exports. Mexico is producing industry leaders like
America Movil(AMX - Cramer's Take - Stockpickr), which continues to build a footprint in Latin
America, and cement giant Cemex(CX - Cramer's Take - Stockpickr), which is expanding globally,
taking market share and even buying companies in Europe.
Mexico DA – UQ – Diversification Down

Oil makes up 40% of Mexico’s economy
Schwartz 8 (Jeremy, The Palm Beach Post
[http://www.palmbeachpost.com/business/content/business/epaper/2008/07/06/sunbiz_mexicodollars_0706.html]
Plunging U.S.dollar hurts some, helps some in Mexico/ July 6, 2008)
When it comes to remittances, though, the weak dollar has had a powerful, if often overlooked impact. The
strengthening peso means that the $7.3 billion sent home in the first four months of the year lost about
$366 million in value compared to last year's exchange rate, based on numbers from Mexico's central
bank. But the dollar's biggest impact in Mexico may be on Pemex's oil profits. Oil money is crucial for
Mexico since it accounts for 40 percent of the federal budget.
Mexico DA – UQ – Inflation Up
Inflation in Mexico has hit a 5 year high
Rota 8 (Valerie [http://www.bloomberg.com/apps/news?pid=20601086&sid=aIDSsULInmG0&refer=news]
Mexico's Peso Holds Near Five-Year High on Interest-Rate Spread/ July 14, 2008)
Mexico's peso held near a five-year high on mounting speculation the difference between Mexican and U.S.
benchmark lending rates will continue to widen, drawing investors to the nation's higher-yielding securities.
The peso has risen 5.8 percent this year as two interest- rate increases by Banco de Mexico since October
have swelled the spread between Mexican and U.S. lending rates to 5.75 percentage points, the biggest
since September 2005. Mexican central bankers will raise the key rate by a quarter-percentage point to 8
percent when they meet on July 18, according to the median estimate of 20 analysts surveyed by Bloomberg.
Inflation high in Mexico

Lang 8 (Jason, The Union Tribune [http://www.signonsandiego.com/news/mexico/20080709-1502-mexico-
economy-inflation.html] Mexico inflation jumps to highest since late 2004/ July 9, 2008)
Mexican inflation jumped in June to its fastest pace in over three years on higher food and energy
prices, increasing pressure on the central bank to raise borrowing costs despite a slowing economy. The
central bank said Wednesday that consumer prices rose 5.26 percent in the 12 months through June – the
highest inflation rate since November 2004. The May rate was 4.95 percent.
Mexico DA – UQ – Inflation Down

Mexico fighting inflation
Gould 8 (Erik [http://www.bloomberg.com/apps/news?pid=20601086&sid=aqrSSajQI8wg&refer=news] Mexico
May Raise Benchmark Rate to Tame Inflation: Week Ahead/ July 14, 2008)
Mexico's central bank will probably raise its benchmark interest rate for a second consecutive month
in a bid to curb the fastest inflation in 3 1/2 years. Banco de Mexico policy makers will increase the rate
at least a quarter percentage point to 8 percent on July 18, according to 12 of 16 economists surveyed by
Bloomberg. The four other analysts forecast no change.
Mexico increasing rates to fight inflation

Rota 8 (Valerie
[http://www.bloomberg.com/apps/news?pid=20601086&sid=auyorqUBhLKA&refer=latin_america] Mexican
Bonds Rise on Bets Central Bank to Keep Rates Unchanged/ July 15, 2008)
Yields on the benchmark government bond fell for the first time in three days on speculation Banco de
Mexico may wait until at least next month to increase lending rates. Last month the bank raised its key
rate by a quarter-percentage point to 7.75 percent to slow the fastest inflation in 3 1/2 years.
Mexico DA- Oil K/T Economy

The plan decreases oil prices which are up and critical to Mexican economic growth
Jardon 8 (Eduardo, April 17,

http://www.zibb.com/article/3084378/Mexican+oil+revenue+exceeds+forecasts?expired=2586195)
This year Mexico could obtain around 220bn pesos [21.008bn dollars] in additional oil revenue, if the
average price of the Mexican oil blend stays at its current level. According to government estimates, the
effect on oil revenue of a one-dollar change in the annual average price of crude oil is equivalent to 0.06
per cent of GDP. For 2008, the Finance and Public Credit Secretariat (SHCP) has predicted that the nominal
value of the economy will be 10.424 trillion pesos [995.416bn dollars]. So, it turns out that for every
additional dollar in the price of a barrel of oil the government will obtain extra funds totalling
approximately 6.255bn pesos [597.307m dollars]. So far in 2008, the price of Mexican oil has averaged
84 dollars, which is 35 dollars above the 49 dollars set for this year in the Revenue Law. Based on these
figures, the additional funds from crude oil would represent 2.1 per cent of GDP, or around 220bn pesos
[21.008bn dollars]. This amount is equivalent to double the revenue estimated for this year from the
collection of the Single Business Tax (IETU), which totals 110.615bn pesos [10.563bn dollars].
Nevertheless, the SHCP adjusted the average price of crude oil for 2008 to 59 dollars. With that price, the
government would obtain an additional 50.3bn pesos [4.803bn dollars] in oil revenue. In the Revenue Law,
865.559bn pesos [82.655bn dollars] are expected to be collected in that area this year. Oil revenue has
exceeded the government's forecasts since 2002, since the price of crude oil has been greater than the
price set for drawing up the budget. Various factors, such as greater demand by developing countries,
mainly China, as well as climate change and conflicts in the geopolitical arena, have pushed prices of the
hydrocarbon to record levels. The changes in the prices observed, compared to the estimates, have meant
additional revenue totaling 474bn pesos [45.264bn dollars] over the last six years. Government spending
depends to a great extent on funds from oil sales. In 2007, funds from this source represented 35 per
cent of budget revenue. Yesterday, the price of a barrel of the Mexican export blend reached a record
level of 94.90 dollars, resulting in a 15.1 per cent increase so far this year. Pemex [Mexican Petroleum]
estimates that this month the price of a barrel of Mexican crude oil will be 90.18 dollars, which is 65.3 per
cent greater than the price observed in April of last year and 2.5 per cent greater than the March figure.
Mexico DA- Oil K/T Economy

Oil key to Mexican growth
Malkin 6 (Elisabeth, May 17,

http://www.nytimes.com/2006/05/18/business/worldbusiness/18peso.html?_r=1&fta=y&pagewanted=print&oref=sl
ogin)
Mexico's economy expanded 5.5 percent in the first quarter over the similar period last year, the
Finance Ministry said Wednesday, the fastest growth since 2000. Economists pointed to the data as evidence
that Mexican industry was recovering from the shock of Chinese competition. A surge in
manufacturing that began late last year and increased construction spending was behind the growth,
analysts said. Mexico's auto industry has had the most notable rebound: output grew 54 percent in the
first quarter as plants here began producing models like the Ford Focus. At the same time, the federal
government is flush with additional revenue from the soaring price of Mexican oil exports. By law,
much of that money must go toward spending on infrastructure. With an eye to presidential elections on July
2, both the federal and state governments are hurrying to make those investments. Alfredo Thorne, an
economist with J. P. Morgan Chase in Mexico City, remarked, "The truth is that all the stars are aligned in
favor of Mexico, and that's what the numbers are showing." On a seasonally adjusted basis, the economy
grew 1.54 percent over the preceding quarter, the ministry said.
Mexico’s economy is dependent on oil
Kay and Quispe-Agnoli 2 (Stephen J., Myriam, Atlanta Fed’s Latin America Research Group, third quarter,
http://www.frbatlanta.org/invoke.cfm?objectid=1B0BDCE0-904D-43E4-BF7E42DC3F12D06F&method=display)
The United States depends on Latin America for a significant portion of its oil. In 2001 Mexico and
Venezuela were respectively the second- and fourth-largest suppliers of U.S. oil imports, and for the
month of May 2002, Mexico surpassed Saudi Arabia as the largest single supplier of crude oil to the United
States. Yet only a few Latin American countries — Venezuela, Mexico, Ecuador and Colombia — are
large net oil exporters. Some countries, like Argentina, have become self-sufficient and have begun to
export oil while others, including Brazil, seek self-sufficiency in the coming decade. The rest of the region,
however, resembles the United States in its dependency on oil imports. The bottom line is that oil has a
significant effect on the economy of every Latin American country.
Mexico DA- A2: Reforms Turn

Oil funding supports reform
OECD 7 (Organisation For Economic Co-operation,

http://www.oecd.org/document/61/0,3343,en_2649_34569_39415037_1_1_1_1,00.html)
Mexico has gained a solid reputation for fiscal rectitude, and the new fiscal responsibility law is expected to facilitate prudent fiscal management. It
establishes strict budget rules and defines new guidelines for allocating excess revenue and drawing from the various stabilisation funds (the States Revenue
Stabilization Fund, PEMEX Investment Stabilization Fund and the Oil Stabilization Fund). Also important to improving the soundness of public finances
has been the reform of the federal government employees’ pension system (ISSSTE), on which the government managed to build a consensus and which
was approved in March 2007. The reform substantially reduces the government’s pension liabilities and allows portability of pension rights between the
government and the private sector. Building on it, the government should now reform the other social security sub-systems of government agencies and
state-owned companies. Other key
reforms are needed to reduce the dependence of the budget on oil revenue and
address fundamental weaknesses in public finances. Aware that the current fiscal settings fall short of
what is needed to support the growth process, the government submitted to Congress in June 2007 a
wide-ranging public finance reform. The reform package includes four main pillars: *Improving tax administration in
order to facilitate tax compliance and to fight tax avoidance and evasion more effectively. * Establishing an institutional structure that guarantees more
efficient and transparent spending at the three levels of government. * Redefining fiscal federalism by providing states and municipalities with better tools
Setting the foundations for a tax system
and incentives and promoting responsibility and accountability at all levels of government. *
that allows the substitution of oil revenues with more stable sources of income.
Mexico DA- A2: Dutch Disease

Mexico’s economy is diversified now—only 10% of exports are oil
Johnson 7 (Scott, Newsweek, October 17, http://www.newsweek.com/id/55642/output/print)

The paradox is a result of Mexico's unique place in the global economy. Unlike many oil states, Mexico
has a relatively diversified economy--only 10 percent of its exports come from oil. The problem is that
the other 90 percent, including things like electronics, textiles and medical supplies, go almost wholly to
the United States. And there, high oil prices are beginning to have a dampening effect on the economy.
What's more, non-oil exports are facing increasing competition from China, which has siphoned off
thousands of Mexican manufacturing jobs. And a sclerotic state-controlled oil sector hasn't invested enough
in homegrown refineries, meaning that Mexico must buy refined petroleum from the United States, at the
going prices. The result, says Alejandro Werner, a senior adviser at the Finance Ministry, is a situation in
which "the Mexican economy may slow down, even as oil prices continue to go up."
Mexico DA- A2: Inflation

Mexico is successful at managing inflation
Amiel 6 (Rafael, Global Insight, August 10, “Inflation Remains on Target Despite Political Uncertainty in
Mexico”)
The central bank of Mexico (Banxico) has succeeded in controlling inflation: the 12-month inflation
rate went down from 3.18% at the end of June to 3.06% at the end of July, i.e., practically on the
targeted rate. Banxico targets inflation at 3% plus/minus one percentage point. Annual inflation has been
within the targeted band since August 2005.
Mexico DA- A2: Corruption

Mexican corruption is down

Mexican President Felipe Calderón inherited from President Vicente Fox a crisis of public insecurity. Violent
drug cartels were working as a conduit for Andean cocaine and were deeply involved in the production and
distribution of methamphetamines, marijuana, and heroin in U.S. markets. After assuming office, Calderón
called in the Mexican military to fight the cartels in several Mexican states. While largely a stopgap measure,
the move demonstrated Calderón's commitment to restoring public security.
Calderón has also stepped up cooperation with the United States. In 2007, Mexican authorities extradited 80
criminal suspects to the U.S., including 65 Mexicans. For the longer term, Calderón's administration has
developed a seven-point strategy that includes creating a professional and corruption-free national federal
police, developing community policing, overhauling the judicial process, and adding new crime-fighting
technologies and training facilities.
Mexico DA- A2: Organized Crime

Mexico and the US are working now to eradicate organized crime
Sarukhan and Lugar 8 (Ambassador Arturo, Sen. Dick, May 15, “Hands across the border” Politico.com)
At issue is an administration request for the first allocation of $500 million for Mexico's anti-drug
efforts as part of the upcoming supplemental spending bill. This represents the possibility for a sea change
in US-Mexico relations and the way both our nations fight organized crime. It was born from a
proposal formulated by Mexican President Felipe Calderon, who has changed Mexico's traditional
approach to bilateral cooperation by seeking deeper security ties with the United States. At a March
2007 meeting in Merida, Mexico, our two leaders agreed to take a decisive step toward significantly
enhanced cooperation. This commitment, known as the Merida Initiative, to jointly address the challenge
of drug trafficking includes a multiyear program to strengthen Mexico's capabilities to fight organized
crime with resources for training and equipment, information sharing, enhanced border security and
support for judicial reform, respect for human rights, and the fight against corruption.
Mexico DA – Impact: Key to World

Mexico is key to the world’s economy
Hansen 4 (Fay, Workforce Management contributing editor http://www.workforce.com

/section/06/feature/24/78/99/index.html)
Mexico’s economy and business environment remain closely tied to the United States, but signs are emerging
that Mexico is succeeding in its attempt to break away from the U.S. business cycle and establish itself as a
major trading nation in the world market. Within the next decade, Mexico may be able to build
significant trade and investment relationships with European and Asian nations and with other Latin
countries. For the immediate future, however, it is largely dependent on the United States as its largest trading partner and primary source of foreign investment
Mexico affects the global economy
Hansen 4 (Fay, Workforce Management contributing editor http://www.workforce.com

/section/06/feature/24/78/99/index.html)
Although trade with the U.S. is critical, Mexico has moved rapidly in recent years to expand its role in
the world economy. Greater global integration offers Mexico the opportunity to accelerate economic
growth and develop trade beyond NAFTA and the cyclical movements of the U.S. economy. “Mexico is
intricately tied into the U.S., but it is also a key player in Latin America,” says Luis E. Ramirez Thomas, a
principal in the Phoenix-based law firm of Lewis and Roca, LLP and part of the firm’s international business
unit for Mexico and Latin America. Within Latin America, Mexico’s economy is second in size only to the
Brazilian economy, but Mexico’s foreign trade is greater than the combined trade of Brazil, Argentina,
Chile and Colombia, he notes. Since the signing of NAFTA a decade ago, Mexico has pursued free trade
agreements (FTAs) around the world, resulting in FTAs with 41 nations, including the 25 members of the
European Union, and partial scope agreements with three others. “The most notable agreements have
facilitated trade with Europe and Central America where future trade prospects are the brightest,” says
Pisani. “Mexico is also working on increased trade linkages with Asia bi-laterally and through APEC, with a particular focus on Japan. Nonetheless, Mexico’s trade fortunes lie with
the U.S., and with these other trade partners it may only hope to help smooth out the North American business cycle, of which Mexico is part and parcel.” After the recent signing of a
FTA with Japan, the Mexican economic minister announced that Mexico would temporarily halt negotiations for new free trade agreements. “Mexico has enough free trade
agreements for the development stage that the country is confronting at this moment,” notes Joey Bremauntz, Vice President of Sherwood Partners, a business continuity advisory
firm that assists both U.S. and Mexican companies. Mexico’s current goal, he believes, is to increase commerce with the existing FTA countries and meet the objectives of each
agreement. “Mexico is an example of the success that a country can experience if it adopts a free trade agreements strategy,” he says. “It has also proven that Mexican companies have
Mexico has assumed
the capability to enter into first-world country markets because of the quality and competitive price of their products.” Bremauntz also notes that
a leadership role as an intermediary in multilateral negotiations. Mexico hosted World Trade
Organization meetings in 2003 and organized a summit of the Asia-Pacific Cooperation Forum in 2002.
“All these efforts have meant a very successful decade for Mexico,” he says. “That is why it is expected
that the government will continue making more agreements when it is convenient for the country. In the next
few years, we may see Mexico initiate negotiations with countries of the southern cone, such as Paraguay and
Argentina.”

Mexican economy key to global econ stability
B Net 96 (the go to place for management http://findarticles.com/p/articles/mi_m0365/is_n2_v40/ai_18338853)

In December 1994, Mexico shocked world Financial markets with a sharp devaluation of the peso. Huge
outflows of capital from Mexico before and after the devaluation seriously depleted its international
reserves and threatened default on the country's foreign-held debt. Five years worth of carefully nurtured
international confidence in Mexico's political leadership and economic management was swept away.
Moreover, the Mexican crisis aroused investor concern regarding other emerging markets, raising the
specter of a spreading financial calamity. The Mexican crisis was eventually quelled by a $47.8 billion
rescue package provided by the United States, the International Monetary Fund (IMF), and a group of ten
central banks working through the Bank for International Settlements (BIS). But the rescue package was
arranged only with considerable difficulty, subjecting world financial markets to a six-week period of
uncertainty. Mexico showed improvement in subsequent months as the peso stabilized, the inflation rate
first rose then declined, and trade deficits were corrected. These positive effects were achieved, however,
with an economic austerity program that plunged the country into a severe recession. Should the recession be
prolonged, political and social pressures would mount and raise again the question of Mexico's ability to
meet its external debt service. Against the background of the Mexican crisis and its consequences, on June
26-27, 1995, the Global Interdependence Center (GIC) and the Foreign Policy Research Institute (FPRI),
both headquartered in Philadelphia, jointly sponsored a round-table meeting. Both the GIC and the FPRI concluded that the causes
and consequences of the Mexican crisis pointed to a situation that needed both political and economic analysis. The participants in the meeting, therefore, consisted of twenty-five
economists, political scientists, and business leaders with experience in emerging markets. Lawrence R. Klein, Nobel laureate in economics from the University of Pennsylvania and
vice chairman of the Global Interdependence Center, chaired the meeting. This article draws from information and ideas expressed at those sessions but does not purport to be a
summary of it. Thus, any errors and weaknesses are the responsibilities of the authors.
Mexican economic collapse spills over to global markets
B Net 96 (the go to place for management http://findarticles.com/p/articles/mi_m0365/is_n2_v40/ai_18338853)

Economic Lessons 1. Trouble in one country can easily spread to others. The Mexican crisis was akin to
a run on a large bank that risked involving others. History shows that runs on banks, while starting
with a bad bank, can spread to good banks as well. History also shows that a default of one country can
lead to default of others. This occurred in 1931 when a failure in Austria spread to Germany and other
countries, and again in the early 1980s after Poland and Mexico were the first countries to declare inability to
pay. While in the latter period the problem was limited to other high-debt countries, some of those - for
example, Chile - might well have avoided difficulties if Poland and Mexico had not started a chain
reaction. In 1994-95, Mexico's financial panic transmitted turmoil to emerging markets around the
world. The most lasting effects on others were felt by Argentina. 2. The potential for spreading financial
instability has increased dramatically since the early 1980s. The volume and speed of short-term capital
flows have burgeoned as individuals have employed mutual funds to participate in the expected growth
of developing countries, and as institutional investors have enlarged their foreign stakes. Large inflows
of capital to emerging markets would seem welcome, but this so-called hot money can leave as quickly as it
came if the investor becomes disenchanted with the host country. A mutual-fund holder need only make a
telephone call to withdraw his money. In contrast, the developing country debt crisis of the early 1980s
largely involved bank creditors who could be organized into committees to renegotiate loan terms. In
Mexico, many of the foreign investors were small players looking for a better return than could be found in
well-established financial markets of advanced industrial countries. Some were large investment funds whose
managers controlled the portfolio decisions for thousands of smaller investors. But it was not only foreign
sources that shifted their funds out of Mexico. Many Mexicans, suspecting that devaluation was on the
way, moved their money abroad. This in turn angered foreign investors, who may not be willing to take such
risks again soon.

Mexico ties directly into the global economy
Rubin and Weisberg 3 (Roburt Rubin U.S. Secretary of the Treasury, Jacob Weisberg American political
journalist, currently serving as editor of Slate magazine and a columnist for the Financial Times)
I told the President that the Mexican government faced an imminent threat of default and that, in the hope of
preventing it, we were recommending that he support a massive, potentially unpopular, and risky
intervention: providing billions of dollars to the Mexican government to avoid a collapse in its currency and
economy. Then I asked Larry to explain the situation in more detail. It took him ten minutes to spell out our
essential analysis and recommendation, which we'd finished formulating in a meeting with Fed chairman
Alan Greenspan hours earlier. If our government didn't step in to help, and help quickly, the immediate
and long-term consequences for Mexico could be severe. But the real reason for acting was that critical
American interests were at stake. The alternatives to the massive intervention we were recommending were
not promising. If Mexico defaulted on its foreign obligations, Larry and I went on to explain, the flow of
capital out of Mexico would probably accelerate and the peso would collapse, likely triggering severe
inflation, a deep and prolonged recession, and massive unemployment. And that would surely have a
substantial impact on the United States. Mexico was our third-largest trading partner, which meant
that many American companies and workers would be hurt. We presented estimates that a Mexican
default could increase illegal immigration by 30 percent, a half-million additional refugees a year. The
flow of illegal drugs could intensify as well. A crisis in Mexico might also hurt us indirectly, by affecting
other countries. Fears of a Mexican default were already producing wobbles in developing markets
throughout the hemisphere, a phenomenon that came to be known as the "Tequila Effect." Such a chain
reaction could lead investors to pull back from emerging markets around the world indiscriminately.
That, in turn, could affect economic conditions in the United States-since roughly 40 percent of our
exports went to developing countries. According to an estimate made by the Federal Reserve Board, a
Mexican default and the consequent "contagion" that was possible could, in a worst-case scenario, reduce
growth in the United States by 1/2 to 1 percent a year. We weren't proposing intervention for the sake of
Mexico, despite our special relationship, but to protect ourselves. That was our case for asking Congress
to provide billions of dollars in loan guarantees, as part of a package to be coordinated with the
International Monetary Fund (IMF).
Mexico DA – Impact: Key to World – A/T: 1996

A financial crisis now would be different than in 96
Falk 7 (Rainer, http://www.weltwirtschaft-und-entwicklung.org/cms_en/wearchiv/042ae699af0b75901.php)

Almost exactly ten years after the Asian crisis, the world is again confronted with a veritable financial crisis.
This time the harbingers arise on the other side – the USA rather than East Asia. Whereas ten years ago a
real estate bubble in Thailand burst, triggering the flight of international speculative capital, today it is
the fallout of the real estate crisis in the USA which threatens the financial markets. By Rainer Falk
Every financial crisis has its peculiarities and its similarities with predecessors. The current crisis differs
from the Asian crisis also because the search for its origins is not leading to some form of crony
capitalism in emerging economies but to the centres of the world financial system with all its modern
financial innovations. Some analysts say that this is the first crisis in the modern financial markets
where new “products”, created by debt and asset securitisation, are traded globally. However, already the
1994/95 Mexican crisis was labelled “the first major crisis in our new world of globalised financial markets,”
by former managing director of the IMF, Michel Camdessus.
Current market situations would make a collapse now worse
Falk 7 (Rainer, http://www.weltwirtschaft-und-entwicklung.org/cms_en/wearchiv/042ae699af0b75901.php)

There are good reasons to fear that the current financial crisis will be worse than the burst of the New
Economy bubble at the beginning of this decade or the collapse of the LTCM hedge fund in 1998 in the
USA. There is a much higher risk, e.g. of a chain reaction of collapse and insolvency, whose mechanism
was described by US economist Paul Krugman, recently writing in the New York Times: “Financial
institution A (e.g. a hedge fund; R.F.) can’t sell its mortgage-backed securities, so it can’t raise enough
cash to make the payment it owes to institution B, which then doesn’t have the cash to pay institution
C – and those who do have cash sit on it, because they don’t trust anyone else to repay a loan, which
makes things even worse.” This is the situation that led the central banks — above all the European Central
Bank (ECB) to pump more liquidity into the inter-bank market than in any previous crisis. However, it has
long been clear that this is much more than a liquidity crisis that can be bridged with temporary
injections of money. Today we not only have a liquidity crisis like in 1998, we also have an insolvency
crisis and a debt crisis with a number of debtors who became excessively over-indebted in the boom
phase, says US economist Nouriel Roubini in his blog. “We have a hundred thousand households that can no
longer pay their mortgage. That is not only a problem of the market for sub-prime debt. In some cases these
dubious practices (securitisation) are par for the course… They have a batch of insolvent mortgage banks…
We have insolvent hedge funds and other funds… Some are already bankrupt or close to it…”
Mexico DA – Impact – A2: Mexico Resilient

Mexico’s economy is on the brink
Morley 8 (Robert, Columnist for The Trumpet [http://www.thetrumpet.com/index.php?q=5309.3600.0.0] Disorder

South of the Border/ July 8, 2008)
The world’s second-richest man is Mexican. His estimated net worth is $60 billion. Yet, more than 50
million people living south of the border live on just dollars per day—and the standard of living for many
millions is about to get worse. Over the past few years, Mexico has made big strides in reducing poverty and
increasing the standard of living for many. However, it is becoming increasingly evident that the Mexican
miracle was built on a sand foundation. The economic tide is now turning, and the current pillars of its
economy—oil production, foreign remittances and low inflation—are being undermined. Mexico is
primed to boil, and the spillover could scathe the United States.
***Mexico Answers***
Mexico Answers- No Internal Link- A2: Oil k Econ

Even if prices dropped, Mexico wouldn’t be seriously damaged
MedioVero 4 (July 30, http://apptik.typepad.com/mediovero/2004/07/political_disho.html)

The sad fact is that most of the countries that supply the US with oil rely on that oil revenue to survive
in the world economy. When Kerry says we must become energy independent, how in the world does he
plan to prop up important countries like Saudi Arabia, Mexico, Venezuela and Russia when they can no
longer sell oil? Mexico is probably the best off which is a good thing since its right on our border. Oil
exports to the US make up only about 1/10th of their exports. It would be a hit, but Mexico has
diversified enough that it would not seriously weaken them.
Mexico Answers- Internal Link Turn: Inflation

High energy prices are fueling Mexican Inflation
Lange and O'boyle 8 (Jason, Michael, July 9, http://www.signonsandiego.com/news/mexico/20080709-1502-

mexico-economy-inflation.html)
Mexican inflation jumped in June to its fastest pace in over three years on higher food and energy
prices, increasing pressure on the central bank to raise borrowing costs despite a slowing economy. The
central bank said Wednesday that consumer prices rose 5.26 percent in the 12 months through June – the
highest inflation rate since November 2004. The May rate was 4.95 percent. The reading was in line with
expectations and reinforced bets made by investors in recent weeks that the central bank will raise
interest rates as soon as next week. The peso currency firmed 0.33 percent to 10.304 per dollar. “This kind
of cements expectations that the central bank will hike,” said Bertrand Delgado, an economist at research
firm IDEAglobal in New York. The quickening pace of inflation comes as the economy is starting to
slow, hurt by weaker growth in the United States, Mexico's top trading partner. The economy expanded
at an annual pace of 3.7 percent in the first quarter, discounting the effect of Holy Week holidays, down from
4.2 percent in the fourth quarter of 2007. The central bank increased its benchmark overnight interest rate in
June by 25 basis points to 7.75 percent. Delgado said he sees policy-makers raising interest rates by another
25 basis points next week. Inflation across Latin America has jumped this year, driven by higher demand for
grains in fast-developing countries such as China and by the expansion of the biofuel industry. “It is relevant
to point out that food continues with its upward trend,” the central bank said in its price report. Food prices
have jumped 9.51 percent in the year through June, central bank data showed. ENERGY PRICES The central
bank said government-set prices for energy and energy-related services – like gasoline, electricity and
public transportation – also fueled the rise. The government has been quickening the pace of gasoline
price increases since April despite massive subsidies aimed at shielding consumers from rising international
oil prices. Mexico imports about 40 percent of its gasoline. That has stirred fears among investors that
inflation could quicken.
Inflation is the worst threat to Mexico’s economy
Amaral 8 (Rodrigo, July 14, http://www.fundstrategy.co.uk/cgi-bin/item.cgi?id=168858)

The biggest threat for Latin American bond markets at the moment is an old foe of the region's
economies: inflation. But this time it is not only the locally-brewed variety that causes concern. Raphael
Kassim, the head of Emerging Markets Fixed Income at Crédit Suisse, notes that inflationary expectations
can trigger a flight from stock exchanges. "When investors see exchange indexes coming down, they
may decide to sell emerging market bonds, because everyone wants to keep away from any kind of
risk." For once, in this case, Latin American bonds would suffer despite the efforts of local governments,
and not because of them. "The correlation between the economy of developed countries and emerging
ones is decreasing by the day," Kassim says. "So such a drop in the market wouldn't necessarily reflect
the ability of Latin American countries to pay their debts. It would be much more a matter of people
avoiding to invest in a building, albeit a solid one, because all other buildings around it are tumbling
down." Kassim recommends that investors keep their cool and wait for Latin American bonds to provide the
expected returns in the long term.
Mexico Answers- Internal Link Turn: Reforms

High oil prices offset pressure for economic reforms
Weiner 90 (Lauren, THE WASHINGTON TIMES, August 8, WORLD; CRISIS IN THE PERSIAN GULF; Pg.
A9)
But Mr. Pazos warned against a "wave of false optimism" of permanent gains in oil revenue, saying that
this was the mistake made by Mexican President Jose Lopez Portillo during his spendthrift 1976-1982
administration. He said if Iraq withdraws from Kuwait and normal oil flows resume, then governments like
Venezuela and Mexico would be left out on a limb. A transitory oil boom could tempt these governments
to relax the austerity measures they have imposed to curb runaway inflation and pay their debts, thus
setting back economic reform, Mr. Pazos said.
Economic reform is key to growth
Reiner 8 (Karl, June 26, http://www.azstarnet.com/business/245469)

Infrastructure-poor southern Mexico is stagnating. While the northern part of the country has mostly
benefited from the impact of the North American Free Trade Agreement, the southern part of the country has
not. Nearly 50 percent of the population of Mexico's southern states — Guerrero, Oaxaca and Chiapas —
lives in extreme poverty. In the adjacent Central American countries things are no better, with 30 percent
to 50 percent of the population living in poverty. Mexico's Ministry of Agriculture estimates that only 6
percent of the nation's farms are highly efficient and profitable. When NAFTA began, a program to help
small Mexican farmers switch from growing corn and coffee to more profitable and labor-intensive crops
such as fruits and vegetables was supposed to have been implemented. Nothing materialized; the funds went
to other purposes. The governments of Mexico and the Central American countries rely on a de facto
policy of exporting labor as an economic safety valve and as a national income earner. A review of
Central Intelligence Agency and World Bank data reveals that the remittances workers send back to Mexico
are the country's second-largest source of foreign income. In El Salvador, the remittance inflow nearly equals
the income generated by the nation's exports. In Guatemala and Honduras, remittance income equals two-
thirds and three-fourths of the value of those nations' exports. By uncoupling the need for economic
progress from the issue of border security, we are setting the stage for failure. If migrant workers can't
go north while development at home remains stifled, instability and chaos will eventually result. We
face a stark choice. We can start to push economic reform in the countries south of the border or plan
to deal with more menacing problems.
Mexico Answers- Internal Link Turn: Dutch Disease

Dependence on oil revenue undermines investor confidence
Rota and Rodriguez 7 (Valerie, Carlos Manuel, August 3,

http://www.bloomberg.com/apps/news?pid=20601086&sid=aIHcqnFeHdZg&refer=latin_america)
Mexico's has improved its ability to weather an economic slowdown in the U.S., as decelerating inflation
has generated stronger internal consumer demand, said Joydeep Mukherji, a sovereign ratings director at
Standard & Poor's. ``There's more stability now,'' Mukherji said in an interview from Mexico City. The
country ``can better compensate for a slight downturn in U.S. growth.'' Consumers in Mexico, which
slashed its inflation rate by more than 75 percent over the past decade, are borrowing more money to buy
goods such as houses and cars as a diminishing inflation rate has pushed lending rates lower, Mukherji said.
The growth in domestic consumption will help offset a housing slump in the U.S. that threatens to reduce
demand from U.S. consumers, who buy about 80 percent of Mexican exports, he said. Bank lending to
Mexican consumers has risen more than ten- fold since 1997 to 430 billion pesos ($39.1 billion) in June,
according to the central bank. The country's annual inflation rate has fallen to 4 percent from 20 percent over
the same period. Mexico still has room to grow as domestic demand strengthens, Mukherji said. Approval
of President Felipe Calderon's plan to boost tax collections to wean Mexico off dependence on oil export
revenue will bolster the economy, he said. The government this week reiterated it expects growth to slow
to 3.3 percent this year from 4.8 percent in 2006, the fastest pace in six years. Growth in Latin America's
second- biggest economy last year was less than China's 10 percent expansion and Colombia's 5.1
percent advance. Àbility to Grow' `Ìt's not an impressive achievement,'' Mukherji said. ``Mexico has
the ability to grow at a faster pace.'' S&P, which rates Mexican foreign debt BBB, the second- lowest
investment-grade rating, last month raised its credit rating outlook to positive from stable. The move was
partly driven by expectations legislators will approve Calderon's tax plan. Calderon sent to congress in
June a proposal to raise tax revenue by 3 percent over of gross domestic product by 2012 to avert a
fiscal deficit as oil production declines. The proceeds from oil sales make up more than one-third of
government income. `Ìf Mexico manages to reduce its oil-revenue dependence, this can no doubt help
the country's rating,'' Mukherji said. ``We're still optimistic.''
Mexico Answers- Internal Link Turn: Corruption

Mexican oil industry breeds corruption
Venezuela has been in cyclic turmoil, with oil the trophy. Angola, rich in oil, diamonds, and gold, has just
ended a 30-year war, leaving physical devastation across the land. Its wealth in petrodollars has fanned
skyrocketing corruption, with some news agencies reporting upwards of $2 billion dollars missing from its
treasury over the past 10 years! Graft and corruption have also rocked Mexico's premier oil corporation
PREMEX for years. As for Russia's oil industry, it has become a case study for students of organized
crime!
Mexican oil industry is overrun with Corruption
Business News Americas 2 (October 3, “Shedding light on shady dealings”)

In Mexico President Fox is locked in battle with oil union leaders, who face charges over their alleged
involvement in siphoning off US$160mn from accounts belonging to state oil company Pemex to fund
the presidential campaign of the PRI party, in office prior to Fox's PRD party. In Ecuador workers at state oil company Petroecuador
have asked the country's anticorruption committee to investigate irregularities surrounding the awarding of 40 contracts worth US$320mn. Workers claim
Petroecuador declared tenders null and void due to lack of investor interest only to later award them privately.Meanwhile Eliseo Gomez, the Ecuadorian
representative of Spanish oil company Repsol-YPF, claims he was approached for bribes by officials, and compared the country's courts to auctions where
the highest bidder wins. The anticorruption agency has launched an investigation into the accusations.Then there's the "peddling of influence, fraud and
embezzlement, breach of trust and other evidence of corruption" regarding the sell-off of assets at former Guayaquil distributor Emelec, according to an
anonymous accuser. Authorities will need to resolve the situation before proceeding with a second attempt to sell Emelec assets, valued at some US$130mn.
And don't forget why Emelec assets are being sold in the first place: to reimburse the clients of Banco Progreso, like Emelec owned by businessman
Fernando Aspiazu, now in jail for fraud.
Unfortunately corruption often goes hand in hand with outdated
bureaucracy. The two factors are expected to cost Mexico's public works sector US$7.25bn this year, or
30% of the US$23.6bn the federal government has under contract in this area. Corruption skims some 10% of the funds
authorized for public works in the county, while another 20% is wasted on inefficient practices and red
tape, according to a government report that named construction as the most vulnerable sector.
Mexico Answers- No Impact – Resilient

Mexican economy can withstand market flux
Reuters 8 (Thompson, June 3, http://in.reuters.com/article/oilRpt/idINL0363499720080603)

PARIS, June 3 (Reuters) - Mexico is well positioned to stand up to financial market turmoil but needs to
remain vigilant, Finance Minister Agustin Carstens said on Tuesday. Cloudy prospects for the United States,
Mexico's biggest trading partner, and high food prices had created global uncertainty but had not so far
significantly hurt the overall Mexican economy, he said. "Middle income countries have been resilient so
far," he said in a speech at the Paris-based Organisation for Economic Cooperation and Development. Recent
fiscal and public sector reforms, combined with robust domestic demand, an export sector helped by
the peso's decline in the wake of the weaker dollar and a well-capitalised private sector had all helped,
he said. "With all these elements in place, the Mexican economy is well prepared to maintain a positive
growth path," he said. The government expects full-year growth at 2.8 percent, down from the previous
year's 3.3 percent growth. But he said policymakers had to be on guard and ready to respond "should global
financial conditions deteriorate further and global commodity prices continue to rise". Surging energy
prices have helped Mexico, the world's sixth-largest oil producer. Domestic demand has also been
buoyant, boosted by a strong housing sector and government investment in highways and other
infrastructure. "In previous episodes of global turmoil, the Mexican economy was ill-equipped to sort
it out without much damage," he said. "Today, the Mexican economy has much stronger foundations."
Mexico Answers- No Impact – A2: Key to World

Mexico does not have a drastic effect on the world economy
Smith and Walter 95+ (Roy C. NYU Kenneth Langone Professor of Entrepreneurship and Finance, Seymour
Milstein Professor of Finance, Ingo Corporate Governance and Ethics at the Stern School of Business, New York
University http://books.google.com/books?id=Js1vyvBTLlsC&pg=PA199&lpg=PA199&dq=%22tequila+effect%22,+mexico&source=web&ots=LxDKJg8R3F&sig=q7xbD0BIlT4
gZmHjJY3q6ZQmvA&hl=en&sa= X&oi=book_result&resnum=1&ct=result#PPA199,M1 )
The tequila effect was limited and did not last long, except in Mexico. The paper rightly points out that the
Mexico crisis resulted in an overhang, the tequila effect, in Mexico and many other emerging markets in the
first quarter of 1995. But there has been a substantial correction since then (Figure 1, data from the IFC’s
Emerging Markets Data Base). Stock markets in Argentina, Indonesia, Malaysia, and Thailand, for
example, soon recovered and were at the same level or higher at the end of 1995 compared with January
1994. Since then , equity markets have further recovered in many emerging markets.
***Indonesian Oil DA***

Indonesia DA – 1NC Shell

Indonesian growth up
Mingxin 8 (Bi, China View [http://news.xinhuanet.com/english/2008-07/09/content_8517925.htm] Indonesian

economy forecast to grow by 6.2 % in 1st half /July 9, 2008)
Indonesian economy is predicted to growth by 6.2 percent in the first half of this year, the Finance
Minister Sri Mulyani Indrawati said here Wednesday. Indonesia has trimmed its economic growth target in
2008 from 6.8 to 6.0 percents after the soaring global oil price. The National Statistic Bureau will announce
the economic growth at the first semester at the mid of August. "At the second quarter, we are optimistic
economy will grow by 6.1 percent. So if we combine with the 6.3 percent growth in the first quarter, the
economy will grow at 6.2 percent at the first semester," Mulyani told reporters at finance ministry office.
The minister said that the figure was driven by the growth at the household consumption by around 5 percent,
investment about 2 percent, export and import at the range of 11 and 12 percents.
Oil is key
Rosser 7 (Andrew, political economist, worked for AusAID, consultant to the World Bank, the UK Department for
International Development, the Organisation for Economic Cooperation and Development, Journal of Contemporary
Asia, Vol. 37)
In this context, Indonesia's rapid economic growth during the 1970s and 1980s seems remarkable. The
oil and gas sector accounted for as much as 80% of the country's total annual exports and 70% of the
central government's annual revenues during these decades (Rosser, 2002: 42-3). But, despite this
massive natural resource wealth, the country's economy grew strongly during the 1970s and 1980s. As Figure
1 shows, annual real economic growth was more or less consistently in the 6%-10% range each year
during the 1970s, except for a couple of years during the mid-1970s. During the 1980s, economic growth
was somewhat slower, due mainly to the contracting effects of the two-stage collapse of international oil
prices in 1981-82 and 1985-86, but was still strong overall. So strong was Indonesia's economic growth
during the 1970s and 1980s that by the early 1990s, the country had become widely regarded as one of
East Asia's so-called "miracle" economies (World Bank, 1993)
Indonesian economy key to their democracy
Ghoshal 4 (Baladas former Professor of Southeast Asia and South-West Pacific Studies and Chairman of the Centre for South and Southeast Asian Studies at
Jawaharlal Nehru University, New Delhi “Democratic Transition and Political Development in Post-Soeharto Indonesia” )
Unless democratic processes and institutions quickly take root and deliver results, the pendulum may
swing back the other way. Without economic recovery, there will not be political stability, and some of
the provinces will become more restless. Without unity, the country will plunge into instability with
huge economic costs and this may reverse democratic reform. The challenge of democratic reform in Indonesia is not to
drift from one form of extremism to another, but to find the right balance for the coexistence of democracy with stability, devolution with unity, reform with
prosperity and freedom with peace. Indonesia
needs time to work out this delicate balance, but it is unwise for others
to push Indonesia too hard in this process.
Indonesia is key to global democracy
The Carter Center 4 (“Annual Report 2003-2004”http://cartercenter.com/documents/2087.pdf)

In 2004, Indonesia held three sets of elections, including for the first time a direct election of the
president, demonstrating an impressive strengthening of democracy in the country. The world’s fourth
largest country and home to the world’s largest Muslim population, Indonesia is crucial to democratic
progress throughout Southeast Asia and beyond. “The 2004 elections were a major step forward in
Indonesia’s democratic transition,” said Dr. David Carroll, acting director of the Center’s Democracy
Program. “Voters demonstrated their commitment to democratic principles and to holding leaders
accountable. The presence of our observers helped build confidence in the electoral process.”
Indonesia DA – 1NC Shell

Democracy stops nuclear war
Larry Diamond, Hoover Institution, Stanford University, December, PROMOTING DEMOCRACY IN THE
1990S, 1995, p. http://www.carnegie.org//sub/pubs/deadly/diam_rpt.html //.
Nuclear, chemical and biological weapons continue to proliferate. The very source of life on Earth, the
global ecosystem, appears increasingly endangered. Most of these new and unconventional threats to
security are associated with or aggravated by the weakness or absence of democracy, with its
provisions for legality, accountability, popular sovereignty and openness. The experience of this century
offers important lessons. Countries that govern themselves in a truly democratic fashion do not go to
war with one another. They do not aggress against their neighbors to aggrandize themselves or glorify their
leaders. Democratic governments do not ethnically "cleanse" their own populations, and they are much less
likely to face ethnic insurgency. Democracies do not sponsor terrorism against one another. They do not
build weapons of mass destruction to use on or to threaten one another. Democratic countries form more
reliable, open, and enduring trading partnerships. In the long run they offer better and more stable climates
for investment. They are more environmentally responsible because they must answer to their own
citizens, who organize to protest the destruction of their environments. They are better bets to honor
international treaties since they value legal obligations and because their openness makes it much more
difficult to breach agreements in secret. Precisely because, within their own borders, they respect
competition, civil liberties, property rights, and the rule of law, democracies are the only reliable
foundation on which a new world order of international security and prosperity can be built.
Indonesia DA – UQ – Econ Up
Indonesia economy growing by 6.2%
Indonesian economy is predicted to growth by 6.2 percent in the first half of this year, the Finance
Minister Sri Mulyani Indrawati said here Wednesday. Indonesia has trimmed its economic growth target in
2008 from 6.8 to 6.0 percents after the soaring global oil price. The National Statistic Bureau will announce
the economic growth at the first semester at the mid of August. "At the second quarter, we are optimistic
economy will grow by 6.1 percent. So if we combine with the 6.3 percent growth in the first quarter, the
economy will grow at 6.2 percent at the first semester," Mulyani told reporters at finance ministry office.
The minister said that the figure was driven by the growth at the household consumption by around 5 percent,
investment about 2 percent, export and import at the range of 11 and 12 percents.
Indonesia’s economy growing- multiple reasons

Antara News 8 (National News Agency [http://www.antara.co.id/en/arc/2008/7/9/indonesias-economic-grew-62-
percent-in-2nd-quarter-2008/] Indonesia`s economic grew 6.2 percent in 2nd quarter 2008/ July 9, 2008)
Finance Minister Sri Mulyani Indrawati has estimated Indonesia`s economic growth in the second
quarter of 2008 at 6.1 percent so that the economic growth in the first semester of this year was estimated
at 6.2 percent. The minister told a press conference on Wednesday that the economic growth was fueled by
household consumption, government expenditure, investment, exports, high raw material and capital
good imports. "Household consumption grew 5.2-5.3 percent as spending for motor-vehicles and
electricity remained high," the minister said. She said investment grew 10.4-10.5 percent while in the same
period last year it was only 7-8 percent. "We will continue to boost investment so that it would reach a two-
digit growth at the end of the year," Mulyani said. Indonesia`s exports in the first semester of this year
also booked a growth of 11.9-12.0 percent while imports grew by 11.1-11.2 percent, the minister said.
"Imports of capital goods and raw materials were high while imports of consumption goods fell so that the
economic growth in quarter 3 and 4 possibly dropped," she said.
Indonesia is experiencing economic growth

ALB 8 (Asian Legal News [http://asia.legalbusinessonline.com/news/features/25363/details.aspx] THE ALB 50:
Asia’s Largest Firms/ June 30, 2008)
September’s sale of a 10 per cent stake in Bao Viet, Vietnam’s leading (and state-owned) insurance firm
marked not only the biggest M&A deal in the country’s history but is opening the floodgates to a tranche of
other work. A report released in May by the Australian Strategic Policy Institute noted that while Indonesia
has enjoyed impressive and sustained economic growth over the past several years, that growth is more
impressive in that it takes place against a backdrop of decreasing government debt and relatively
stable inflation.
Indonesia’s economy is growing

Singh 8 (Daljit, Singapore: Insitute of Southeast Asian Studies [www.bookshop.iseas.edu.sg] Indonesia/ 2008)
Not only was the economy sufficiently recovered in 2007 to have made up for much of the impact of the
1997 economic crisis there were once again signs of an economic boom. Building sites that had stood
vacant and decaying for a decade in the nation’s capital began stirring to life. Once again Jakarta’s
skyline was filled with cranes as new office buildings, shopping malls and apartment towers sprang up so
quickly that the satellite imagery from Google Earth failed to keep pace with the changing landscape. The
booming economy was fuelled mostly by consumption but it nevertheless brought with it employment
for millions and restored the nation’s sense of confidence.
Indonesia DA – UQ – Econ Down

Electricity shorts and bad infrastructure are destroying Indonesia’s economy
AFP 8 ([http://afp.google.com/article/ALeqM5irIDhDTPmi8OaCFKgmbG871FVVdQ] Indonesia orders weekend
factory work due to blackouts: report/ July 15, 2008)
The rolling blackouts in Jakarta are officially due to maintenance work that will interrupt gas supplies
to two state-owned generating stations in North Jakarta. Analysts have blamed the country's
crumbling infrastructure and warned electricity shortages could limit economic growth and
discourage investment in Southeast Asia's largest economy. Rising demand for electricity has led to
increasing numbers of blackouts across the country in the past few years despite Indonesia's vast resources of
oil, natural gas, coal and geothermal energy.
Indonesia economy down- consumer confidence

Karunungan 8 (Lilian
[http://www.bloomberg.com/apps/news?pid=20601091&sid=aPEZR3n2oV7M&refer=india] China, Malaysia,
Philippines, Taiwan: Asia Local Bond Preview/ July 15, 2008)
Indonesia: The consumer confidence index fell to a 32-month low in June on concern higher food and
fuel prices will erode incomes, a central bank survey showed. The measure dropped to 79.1 from 82.4 in
May, according to a Bank Indonesia survey released yesterday. A reading below 100 indicates pessimists
outnumber optimists. The yield on the 9 percent bond maturing in September 2018 was little changed at
12.465 percent, according to the Inter Dealer Market Association.
Indonesia’s economy expected to slow down

Reuters 8 ([http://in.reuters.com/article/asiaCompanyAndMarkets/idINJAK4164820080709] UPDATE 1-
Indonesian economy estimated to slow in Q2-fin min/ July 9, 2008)
Indonesia's economic growth is estimated to have slowed to 6.1 percent in the second quarter, from 6.28
percent in the first quarter, partly due to slowing private consumption, the finance minister said on
Wednesday. Sri Mulyani Indrawati said growth is likely to have been supported by strong exports and
imports of capital goods. But private consumption is estimated to have grown at a slower pace. She did
not elaborate, but analysts said soaring inflation, boosted by high food and global oil prices, is likely to
have hurt consumption, the country's main driver of growth.
Indonesia DA – UQ – Oil Up
Indonesia has future supplies of oil
Reuters 8 ([http://uk.reuters.com/article/rbssEnergyNews/idUKJAK17079720080624] Pertamina, Talisman to
cooperate on Indonesia oil/ June 24, 2008)
Most of Pertamina's energy blocks in Indonesia are already mature and need further investment to recover
remaining oil reserves. Pertamina forecasts it will produce 160,000 barrels per day (bpd) of crude oil in
2008, compared with 143,000 bpd last year. Indonesia has said it has 8.6 billion barrels of proven and
potential oil reserves and about 182 trillion cubic feet of natural gas reserves.
Indonesia has future oil reserves

Montlake 8 (Simon, The Christian Science Monitor [http://www.csmonitor.com/2008/0716/p07s01-woap.html]
Indonesia struggles to capitalize on its oil/ July 16, 2008)
In 2007, Indonesia had 4.4 billion barrels in proven reserves, according to the CIA Factbook. That's
more than either Malaysia and Vietnam, its nearest regional rivals, and just below Ecuador. Reserves in
Saudi Arabia, the largest producer, are estimated at 264 billion barrels.
Indonesia DA – UQ – Oil Down

Decline in oil production inevitable- no future oil reserves
Joshi 8 (Vijay, Associated Press
[http://ap.google.com/article/ALeqM5hIdcAiV0_qx0W33u7XUQOpzO_TlAD91PEUA00] Food, oil crises 'grave
threats'/ July 7, 2008)
Although Malaysia, Indonesia, Iran and Nigeria are oil-producing countries, their economies have
been hit hard by rising fuel prices. Oil prices fell by $4 a barrel on Monday, but remain at more than $140
a barrel. Malaysia raised gasoline prices by 41 percent and diesel by 63 percent last month. The government
says inflation is likely to cross 5 percent this year, which has fueled public anger. Indonesia, the region's
biggest oil producer, is also facing public unrest because of escalating food and oil costs. It said it will
quit the Organization of Petroleum Exporting Countries because of declining oil reserves and
investments.
Indonesia oil production down

With crude oil fetching over $140 a barrel, these should be the best of times for resource-rich
Indonesia, the only Asian oil producer in the Organization of Petroleum Exporting Countries (OPEC).
Instead, Indonesia is quitting the cartel at the end of the year. Falling output from aging oil fields and a
paucity of major new finds has left it unable to meet its OPEC production quota. Since 2004, it has been
a net importer of oil.
Risky markets have resulted in a decline of oil production

As long as foreign oil companies, big and small, see risk and uncertainty around every corner, analysts
warn that Indonesia will struggle to pump more oil, even with the lure of sky-high crude prices. Indeed,
these prices may persuade local authorities, whose land and cooperation is required for new oil facilities, to
attempt to extract a greater share of revenues.
Oil investment is down
NYT 5 (8-17)
Pessimists say the bureaucracy is holding up many of the foreign investment pledges being made. "All the
hoopla over F.D.I. coming to Indonesia hasn't come through," said Harry Su, head of research at BNP Paribas
in Jakarta, referring to foreign direct investment. New toll roads and other infrastructure projects, for
example, are being held up as bureaucrats and investors wrangle over terms, analysts say.
Indonesia DA – UQ – Diversification Up
Indonesia expanding its steel and nickel industry
STL 8 (Sify Technologies Limited[http://sify.com/finance/fullstory.php?id=14705901] New seven wonders of the
stock market/July 2, 2008)
Jindal Stainless (JSL) is India's largest stainless steel manufacturer having manufacturing facilities at three
locations - Hisar, Vizag and Orissa.It is the flagship company of the USD 6 billion Jindal Group and
manufactures different ranges of flat steel products to serve the domestic and international markets. The
company recently signed a joint venture agreement with an Indonesian mining company - Antam to
develop a nickel smelting and stainless steel plant in Indonesia from early 2009. JSL already has a
stainless steel cold rolling complex in Indonesia and this project is a step towards becoming a global
industry leader.
Indonesia’s manufacturing industry is increasing

ALB 8 (Asian Legal News [http://asia.legalbusinessonline.com/news/features/25363/details.aspx] THE ALB 50:
Asia’s Largest Firms/ June 30, 2008)
Meanwhile confluence of factors, from continued liberalisation in Vietnam, which has in the very recent past
been the scene of a number of equitisation deals as the government in Hanoi seeks to divest itself of
centralised control and ownership pf the economy, to resource and manufacturing booms (complemented
by increasing political stability) in nations like Indonesia, have become attractive centres for
dealmaking firms from Europe, the UK and Australia.
.
Indonesia DA – UQ – Diversification Down

Indonesia’s economy relies on oil
Abraham 0 (Kurt, Business Net [http://findarticles.com/p/articles/mi_m3159/is_2_221/ai_60499090] Indonesia

poised to lead Asian rebound - Indonesian petroleum industry will play a key role/ February 2000)
Indonesia's strategic position between the Pacific and Indian Oceans has always influenced the
country's cultural, social, political and economic life. The nation is the world's largest archipelago,
consisting of five major islands and about 30 smaller groups. Indonesia's 205 million-plus people compose a
wide array of ethnicities, and speak 583 languages and dialects throughout the archipelago. Oil and gas are
crucial to Indonesia's economy. Together, they account for 36% of government revenue and 22% of
export earnings. They also constitute 86% of primary energy supply.
Indonesia DA – UQ – Inflation Up
Inflation high in Indonesia
Mulyani said that the inflation rate at the first semester was about 11.03 percent, rupiah exchange
rates against one U.S. dollar was at 9,261 and the oil lifting counted from December 2007 to May2008 was
on average of 937, 000 barrel per day. Indonesian Central Bank increased its interest rate by 25 basis point to
8.75 percent last week to cope with the high inflation pressure. The soaring global oil and food prices,
which have started to rise since at the beginning of this year, has put pressure on inflation in Indonesia.
The biggest Southeast Asia economy, Indonesia, revised up inflation target from 6.6 percent to 9.5
percent this year. The government raised oil prices by an average of 27.8 percent in May.
Inflation at a 21 month high

Unditu 8 (Aloysius [http://www.bloomberg.com/apps/news?pid=20601080&sid=auV8HCfKVHto&refer=asia]
Indonesia's Inflation Accelerates to 21-Month High (Update2)/ July 1, 2008)
Indonesia's inflation accelerated to a 21-month high after the government increased fuel prices, stoking
speculation the central bank will raise its benchmark interest rate for a third straight month. Consumer
prices rose 11.03 percent in June from a year earlier, after gaining 10.4 percent in May, the Central
Statistics Bureau said in Jakarta today. The agency changed its base year to 2007 from 2002 for calculating
June's inflation. The increase in prices was less than the median 12.6 percent forecast in a Bloomberg News
survey of 20 economists, who used 2002 as the base year.
Indonesia DA – UQ – Inflation Down

Indonesia fighting inflation now
Goodman 8 (Wes [http://www.bloomberg.com/apps/news?pid=20601091&sid=aUWETdDDd7JI&refer=india]
China, Indonesia, Singapore, Taiwan: Asia Local Bond Preview/ July 10, 2008)
Indonesia: The central bank will use the exchange rate and interest rates to slow inflation that is
running at the fastest pace in 21 months, Governor Boediono said. ``We will use all instruments'' to control
price pressures, Boediono said at the Jakarta Foreign Correspondents Club yesterday. The yield on the 9
percent bond maturing in September 2018 slid 21 basis
Indonesia raising interest rates to fight inflation

Reuters 8 (Gulf News [http://www.gulfnews.com/business/Economy/10225511.html] Inflation puts brakes on
Asia's economic growth/ July 3, 2008)
"In recent times, input costs have gone up, interest rates have gone up and investment demand is expected
to plateau. That's the reason we are seeing growth moderating." The poll showed that central banks in
seven economies, including China, Indonesia, the Philippines, India and Thailand, would raise interest
rates this year to tackle inflation.
Indonesia DA – Oil K/T Economy

Oil is critical to Indonesian exports, which are critical to growth
Asia, Vol. 37)
In this context, Indonesia's rapid economic growth during the 1970s and 1980s seems remarkable. The
oil and gas sector accounted for as much as 80% of the country's total annual exports and 70% of the
central government's annual revenues during these decades (Rosser, 2002: 42-3). But, despite this
massive natural resource wealth, the country's economy grew strongly during the 1970s and 1980s. As Figure
1 shows, annual real economic growth was more or less consistently in the 6%-10% range each year
during the 1970s, except for a couple of years during the mid-1970s. During the 1980s, economic growth
was somewhat slower, due mainly to the contracting effects of the two-stage collapse of international oil
prices in 1981-82 and 1985-86, but was still strong overall. So strong was Indonesia's economic growth
during the 1970s and 1980s that by the early 1990s, the country had become widely regarded as one of
East Asia's so-called "miracle" economies (World Bank, 1993)
Indonesia DA – A2: Dutch Disease

Intense oil revenue spurs private sector development
Asia, Vol. 37)
A second group of scholars has focused on the link between natural resource wealth and state capacity. They
have pointed to the economic problems of so-called "rentier" states--that is, states that receive regular
and substantial amounts of "unearned" income in the form of, for instance, taxes on natural resource
exports or royalties on natural resource production (Mahdavy, 1970; First, 1974; Skocpol, 1982; Beblawi,
1987; Luciani, 1987; Tanrer, 1990; Chaudhry, 1994; Vandewalle, 1998). These states, it is argued, tend to
develop greater capacity in distributive functions such as social welfare, education, and health and
productive functions than in functions related to the regulation and supervision of the economy and
domestic taxation because of the state's domination of the economy (Garaibeh, 1987; Chaudhry, 1994).
This in turn, it is suggested, reduces the potential for economic policy-making geared towards private
sector development. In this perspective, resource abundant countries are only likely to achieve
sustained rapid economic growth when state formation occurs prior to natural resource domination of
the economy. In these cases, it is suggested that state capacity is likely to be less skewed across the
different functions mentioned above, in turn facilitating the promotion of private sector development
(Karl, 1997; Vandewalle, 1998). For example, Karl (1997) has explained Indonesia's economic success
compared to other "petro-states" such as Nigeria and Venezuela in these terms.
Indonesia DA – A2: Inflation

Indonesia can continue to keep inflation steady in the face of rising oil prices
Danareksa Research Institute 8 (Intelligence on the Indonesian economy, January 15,

http://danareksaresearch.wordpress.com/2008/01/15/faster-growth-despite-rising-external-risks/)
International oil prices (US WTI) were on an uptrend since the beginning of 2007, climbing around 52.8
percent during 2007. Indeed, prices soared from US$61/barrel at the beginning of 2007 to US$96/barrel at
the end of December following the disturbances on the Turkey-North Iraq border. Over the year, the oil price
averaged about US$71/barrel. Unlike in 2005, however, the increase in world oil prices in 2007 did not
have a significant impact on the Indonesian inflation figure. This was because the Indonesian
government was able to avoid hiking domestic fuel prices as the impact of high oil prices to the 2007
State Budget is still neutral to positive. Note that given the production of crude oil could be maintained
at around 900,000 barrels/day during 2007, the increase in international oil prices actually benefited
the state budget in 2007. Increases in the prices of some basic foodstuffs such as rice and cooking oil were
actually the main contributors toward the relatively higher than expected inflation in 2007. And inflation in
the foodstuffs component peaked at a rate of 12.99 percent y-o-y in September 2007 on the back of seasonal
price increases during the Idul Fitri holiday season. However, Bank Indonesia’s consistency in carrying
out its monetary policy kept inflationary pressures in check in 2007. As a result, the 2007 inflation rate
was relatively unchanged at 6.6 percent y-o-y, compared to the 2006 inflation rate.
Indonesia DA – A2: Corruption

World Bank anti-corruption efforts are working now
The World Bank 4 (April 8, http://go.worldbank.org/2LWKUZVSV0)

For the past eight months, Joel Hellman, one of the Bank's leading anti-corruption experts, has been in
Jakarta co-ordinating an ambitious program to tackle corruption in Indonesia from the ground up.
The Jakarta team is attempting to recruit local governments to a good governance initiative that may
pave the way for a major improvement in accountability, transparency and participation at the local
level in Indonesia - and it is hoped the economic and poverty reduction performance in the selected
regions. Hellman says there is a strong demand from both the general Indonesian population and
foreign investors to see concrete results in reducing corrupt practices in the country. Corruption is
widely seen as endemic and "extremely difficult to eradicate", Hellman, the senior governance advisor, to the
Bank's Indonesia resident mission says. "Corruption is often said to be ingrained at all levels of the system in
Indonesia. Even Government ministers talk openly to the press of the problem of corruption," Hellman says.
"There has been a general feeling of where do you begin?" The Bank is moving to capitalize on
Indonesia's current program of decentralizing power to the country's more than 400 local
governments. The Jakarta team's anti-corruption campaign has focused on finding local
administrations that are receptive to improving their governance outcomes and tackling systemic
corruption. "We have been concentrating on finding those who are committed to improving
accountability, participation and transparency and finding ways to help them achieve their goals,"
Hellman says. "We hope that a reform-minded group of regions will pull away from the pack and that their
performance will begin to attract investment and other advantages." Hellman says corruption has been one
reason Indonesia has struggled to mobilize domestic investment and attract foreign investment. The country
has not been seen as ready to take the next step in terms of governance.
Corruption is being solved now in Indonesia
ANTARA News 8 (ANTARA is now trusted to be the president of the Organization of Asia-Pacific News
Agency http://www.antara.co.id/en/arc/2008/6/25/indonesian-government-more-efficient-less-corrupt-world-bank/)
A reform push by leaders in Indonesia has substantially improved the performance of government and
cut into corruption in Southeast Asia's largest economy, the World Bank said Wednesday. The bank's
Worldwide Governance Indicators (WGI) report found governance had improved significantly in
Indonesia in the 10 years of "reformasi" since the 1998 ouster of dictator Suharto, a statement said. "The
progress is a reflection of a country whose political leaders, policymakers, civil society and private
sector view good governance and corruption control as crucial for sustained and shared growth," report
co-author Daniel Kaufmann was quoted by AFP as saying in the statement. "A decade into the reform era,
Indonesia bears all the hallmarks of a thriving democracy -- freedom of expression, freedom of
association, freedom of the press, and now freedom of public information," he said.
More ev…
NYT 5 (8-17)
Analysts also say that one of Mr. Yudhoyono's biggest obstacles remains getting the country's lumbering
bureaucracy to enact his policies. Yesterday, he reiterated his pledge to eradicate corruption and shake up the
government machinery. In addition to filing 233 lawsuits charging corruption, he said he would seek changes in
government salaries, professionalism, productivity and "the increase of discipline and work ethos."
Indonesia DA – Impacts: Key Global Economy

Indonesian economic stability is key to the global economy
The Trumpet 98 ( the Philadelphia Trumpet newsmagazine analysis of recent global geopolitical, economic
events and trends http://www.thetrumpet.com/index.php?page=help&q=about )
Indonesia is an oil-rich group of islands stretching across Southeast Asia and Oceania. Notice what the May
18 WSJ reported: “Global commodity markets gyrated last week at the prospect of a top producer of
resources such as coffee and tin shutting down; shaky Korean and Japanese banks trembled at the
thought of further delays in restructuring the massive debts owed them by Indonesian companies; the
Australian dollar sank to a 12-year low, and Thailand’s Finance Minister warned that the unrest in
Indonesia could spark a fresh wave of selling in markets across the region. On Friday [May 15],
Standard & Poor’s downgraded the credit rating on an Indonesian bond rating to triple C-plus, a rating that
implies a default [or failure of the government to pay] is possible, from a more stable single B-minus. “While
the Indonesian unrest rocked global commodities markets, sending prices for resources such as coffee,
tin, palm oil and gold sharply higher on worries that supply from Indonesia would be cut off…a bigger
worry is that the collapse of the nation’s economic infrastructure—and the exodus of the ethnic
Chinese who dominate Southeast Asia’s economies—could make shipment and financing more
difficult.” The May 11 WSJ shed more light on Indonesia’s importance to the world when it reported, “The
stakes are huge, not only for Indonesia, but also for global commodity supplies…. In 1997, Indonesia
was Asia’s largest producer of natural gas, the world’s second-largest producer of crude palm oil, and
among the top five producers of coffee. It is also a major exporter of gold, tin, copper, cocoa and vanilla,
with the world’s largest single copper and gold mine operating on the island of Irian Jaya.”
Indonesia is key to stability and global commerce
The Trumpet 98 (the Philadelphia Trumpet newsmagazine analysis of recent global geopolitical, economic
In a tense reality check for world powers, it cannot help but be noticed that the present unrest in Indonesia
is once again threatening the “life line” of Asian nations: their oil supply. Is it possible that this
seemingly insignificant regional unrest has the potential to turn into another globe-spanning conflict?
Indonesia is a major producer of oil, with an OPEC production quota of 1.456 million barrels per day, a
large percentage of which goes to Japan. If anarchy collapses Indonesia into total chaos, you can bet
that Indonesia’s flow of oil to the world will cease. Of more concern, however, is the potential
disruption of oil from the Middle East brought about by control of the Indonesian shipping lanes.
Admiral Joseph Prueher, commander of the U.S. Pacific Command, said this before a U.S. Senate hearing in
May 1998: “In addition to having a geo-strategic location along the Malacca Straits—through which
about 400 ships a week pass to go up to north Asia—[Indonesia] is the linchpin of…the Southeast
Asian nations.” Bilveer Singh, senior lecturer at the National University of Singapore, said, “In the present
economic circumstances, there’s every temptation to interception [piracy] in the hope of making your
millions. Oil tankers are protectionless. And if there are rogue elements from the [Indonesian] military
involved, then it’s a whole different story.” Indonesian society is in danger of completely unraveling, and
that could potentially mean heavily armed “rogue elements” breaking off from the Indonesian military to
threaten international shipping in the world’s busiest waterway, lying between Malaysia and Indonesia. In
that event, a large portion of world trade is at risk. In fact, over half of all international shipping
travels through Indonesian waters. U.S. warships in the Pacific even needed permission to cross
Indonesian waters to get to the Persian Gulf. Add to that the fact that Indonesia is the world’s largest
Islamic country and the fourth most populated nation.
Indonesia DA – Impacts: Terror
Economic collapse in Indonesia causes a shift in power to radical Islam which escalates
globally
The Trumpet 98 (the Philadelphia Trumpet newsmagazine analysis of recent global geopolitical, economic
Since its independence in 1945, Indonesia has had only one change in leadership: when Suharto wrested control from President Sukarno. That upheaval in
1965 and 1966 claimed as many as 500,000 lives. “The
question now,” the May 19 WSJ asks, “is whether the anti-
Suharto movement, sparked by the discontent caused by the country’s economic crisis, will trigger a
similar convulsion…. The stage is set for a sharp new political confrontation in Indonesia.” Time
magazine of May 25 soberly stated, “It is a sad testament to the nature of power in Indonesia that the country
must again be brought to the brink of disaster before leadership can be transferred.” Even after
Suharto’s resignation, enormous forces of anarchy, especially radical Islam, remain active in the streets of
Indonesia, only awaiting a spark to re-ignite them. As witnessed in the mid-1960s, Indonesian-style
violence can be devastatingly destructive when it occurs. If Islamic fundamentalists succeed in stirring
up more trouble in Indonesia, the present volatility may lead to a global conflagration. Social unrest of
the kind recently incited in Indonesia can quickly lead to a change-over in leadership. The unseating of Suharto
may well have been only the first step in eventually empowering a leader steeped in Islamic fundamentalism. Time will tell if, in the absence of Suharto, a
close relationship forms between Indonesian leaders and Islamic militants. If it does, the world could be in for real trouble! (see sidebar, “King of the
Indonesia is like a ripe plum, just waiting to be picked and added to the radical Islamic
South,” p.23).
camp. The economic problems and social unrest are the perfect vehicle to vault a new leader into power.
The same thing happened to Germany in the 1930s. Hitler came to power through promises of social and economic reform.
Germany of the 1930s and Indonesia of the 1990s have many parallels: high unemployment, a vastly devalued currency and violent social unrest aimed at
wealthy minorities, to name a few. In the case of the king of the south, oil and water do mix: meaning, in part, control of the Indonesian waterways through
which perhaps one-half of the world’s commerce flows, and especially meaning the flow of Middle East oil through those perilous waters! Surely,
Indonesia must have the cross-hairs of radical Islam aimed squarely at it!
Indonesia is key to global terrorism
Howard 5 (The Honorable John Prime Minister of Australia http://www.asiasociety.org/speeches/howard05.html)

As this audience probably appreciates better than most, the world has an enormous stake in encouraging
the development of a secure, prosperous and democratic Indonesia. In the age of terrorism, it is about
the most powerful weapon we can have against Islamic extremism in our part of the world. The success
of Indonesia is crucial to the ongoing fight against terrorism in our region. The world’s largest Muslim
nation and the world’s third largest democracy, Indonesia deserves more credit than it has been given for
the political reforms that have taken root in recent years. It’s a failing sometimes of mature democracies to forget how long it
took their forebears to fashion the secure democracy we now openly enjoy and tend to take for granted. It is important that the
international community, not least the United States, continue to help Indonesia in its efforts to
strengthen democratic institutions, to attract foreign investment, to maintain the pace of economic
reform and to enhance her security.
Indonesia is key to the fight against terrorism
Kern 5 (Soeren Senior Analyst for Transatlantic Relations at the Strategic Studies Group
http://www.realinstitutoelcano.org/wps/portal/rielcano_eng/Content?WCM_GLOBAL_CONTEXT=/Elcano_in/Zon
as_in/Cooperation+Developpment/ARI+8-2005)
Indonesia is also a front-line state in the global war on terrorism. With about 90% of its 240 million
people followers of Islam, Indonesia has more Muslims than all the Middle Eastern Arab states
combined. The vast majority of Indonesia’s Muslims have historically been noted for their moderation, and it is one of the few Muslim-majority
nations in which Islam is not the state religion. But it is also the heartland of the Jemaah Islamiyah terrorist movement, an al-Qaeda affiliate responsible for
the October 2002 bombings in Bali, the August 2003 attack on the J.W. Marriott Hotel in Jakarta’s financial district and the September 2004 car bombing of
the Australian Embassy, also in Jakarta. The US and Australia believe Indonesia
has the potential to be a global beacon of
moderate Islam, democracy and growth. But the country faces major problems: a complicated transition from authoritarian
rule to democracy; complex and politically sensitive economic problems left from the 1997-98 financial crisis; ethnic and sectarian
violence resulting in thousands of deaths and hundreds of thousands of displaced persons; a significant increase in violence by radical
Muslims; and continued armed rebellion in Aceh.
Indonesia DA – Impacts: Democracy

Economic problems cause the rise of an Islamic authoritarian regime
Rabasa and Haseman 2 (Angel Senior Policy Analyst, an expert in Regional security Colombia Latin America
South East Asia Indonesia John served with the US Army in Vietnam as a Military Intelligence Officer and Advisor
“STRATEGIC SCENARIOS FOR INDONESIA AND THEIR IMPLICATIONS”)
The “muddling through” scenario presented in the previous section should be considered to be among the better-case scenarios. The fragile economy and a
breakdown of order could generate more negative scenarios. One such negative scenario would be a
return to authoritarian rule. There are some powerful factors that militate against this outcome, at least in
the short term, including the backlash against Suharto’s 32-year rule, the emergence of new political and
civil society forces, and the discredit suffered by the military and the security services as a result of their association with the Suharto regime. Nevertheless, continued
inability of the new democratic institutions to deliver stability, competent government, and economic
growth could generate a demand for the return of a strong ruler. Any return to authoritarian rule must
have the backing of the military, but the military would prefer to stay in the background. Only a
catastrophic political collapse would compel the military to assume effective control of the government.
If that were to happen, the most likely model would be a military-technocratic government, with economic
policymaking in the hands of nonpolitical technocrats and eventual return to formal civilian control. A
second negative scenario could be an alliance of the military with political sectors, such as one or more
of the Islamic parties. That was the Pakistani model before September 11, when there was considerable
infiltration of the Pakistani government and the military by militant Islamic forces. Some secular
Indonesians are concerned that the “creeping Islamization” that the country is undergoing (see Scenario
4 later in this chapter) over time could make the Islamic parties an acceptable partner for the military or
a military faction. This scenario could precipitate the secession from Indonesia of areas in which Christians
are a majority or a substantial minority, or could result in civil war. A third version of the scenario might
be one that follows the “Burmese model.” As the name of this scenario suggests, it would constitute a
very repressive form of military rule in which the leaders try to isolate the country from Western
influences. This government would try to bring the press, political parties, and independent sectors of
society under its control and repress groups it considers subversive. This model of authoritarian government could come about if the
military were convinced that its institutional integrity or the country’s survival was at stake.
Ghoshal 4 (Baladas former Professor of Southeast Asia and South-West Pacific Studies and Chairman of the Centre for South and Southeast Asian Studies at
Jawaharlal Nehru University, New Delhi “Democratic Transition and Political Development in Post-Soeharto Indonesia” )
huge economic costs and this may reverse democratic reform. The challenge of democratic reform in Indonesia is not to
drift from one form of extremism to another, but to find the right balance for the coexistence of democracy with stability, devolution with unity, reform with
prosperity and freedom with peace. Indonesia
needs time to work out this delicate balance, but it is unwise for others
to push Indonesia too hard in this process.
Ghoshal 4 (Baladas former Professor of Southeast Asia and South-West Pacific Studies and Chairman of the Centre for South and
Southeast Asian Studies at Jawaharlal Nehru University, New Delhi “Democratic Transition and Political Development in Post-Soeharto
Indonesia” )
huge economic costs and this may reverse democratic reform. The challenge of democratic reform in
Indonesia is not to drift from one form of extremism to another, but to find the right balance for the
coexistence of democracy with stability, devolution with unity, reform with prosperity and freedom with
peace. Indonesia needs time to work out this delicate balance, but it is unwise for others to push Indonesia
too hard in this process.
Indonesia DA – Impacts: Democracy

The economy is key to Indonesian democracy
Forrester 99 (Geoff, Asia & Associates Pty Ltd (GFA) is an Australian-based company specialising in political and
economic analysis of Indonesia http://books.google.com/books?id=7gr9Mi4CUAYC&pg=PA11&lpg=PA11&dq=
%22if+indonesia's+economy%22&source=web&ots=9qncEUHIPe&sig=SHlJ69itvpPU11FOQZjq6F8IZEY&hl=en&sa=X&oi=b
ook_result&resnum=4&ct=result)
‘Indonesia instead of becoming a strong sovereign country, will for many years be a beggar among the
nations – a grotesque outcome against what the military once set out to achieve.’ And yet he is optimistic. He
asserts that there is no ‘natural law’, no inexorable Javanese cultural logic that Indonesia can not establish a
genuinely democratic system. He expects democracy to prevail, in part because there is such a strong
yearning for it at all levels of Indonesian society, and in part because ABRI has acknowledged its past errors
and is now behaving with appropriate humility. He also asserts that the period of parliamentary democracy in
the 1950’s was not as bad as predicted by either President Sukarno or President Soeharto’s New Order.
Magnis-Suseno’s optimistic outlook has one proviso. He believes the economy is the deciding factor. … the
next ten months will be decisive. The greatest challenge does not lie in the political field. It is economics.
If Indonesia’s economy really breaks down, the establishment of democracy may remain a short
summer nights dream.
Economic stability is critical to Indonesian political stability and civilian military oversight
In the best-case scenario, Indonesia continues to develop along a secular, democratic trajectory, makes progress
in resolving some of the critical problems in the economy, and satisfies demands for provincial
autonomy without losing central control of its macroeconomic policy. In the area of civil-military
relations, there is more effective civilian control of the military through better oversight of military
affairs by the minister of defense and the parliament. If economic growth resumed and the necessary
resources became available, a greater proportion of the Indonesian military’s expenditures could be
funded from the state budget, rather than from off-budget sources. In the short term, it would be unrealistic to expect the military to
withdraw from its economic activities, but there could be greater transparency in the operation of military businesses. There would also be some movement
away from the territorial structure, beginning in areas where that structure is no longer needed, such as the island of Java.
Indonesian growth is critical to stability
This second scenario builds on trends that are already evident. Indonesia continues on a democratic
path, but fails to make meaningful progress on economic, political, and military reform. The structural
problems in the Indonesian economy are not addressed. Military reform comes to a halt after the
initial impetus for reform, which had been generated by domestic and international public pressure after the
fall of Suharto, slows down. The military is formally under civilian authority, but retains a decisive voice in
national security decision making. In this scenario, the government is not successful in negotiating a
political solution to the problem of separatism in Aceh and Papua and continues to resort to a “security
approach.” Jakarta has the military power to prevent the separatists from seriously threatening its control of
these provinces, but is obliged to mount costly counterinsurgency campaigns that overextend the military’s
resources. The pressure on the military inevitably leads to overreaction and human rights violations
which, in turn, generate criticism by human rights advocates and strain Jakarta’s relationship with the United
States and other Western countries. This scenario reflects the current situation in Indonesia and is
therefore the most relevant to current policymakers.
Indonesia DA – Impacts: Democracy – It’s Up

Indonesia transitioned to a democracy
Even more impressive than the recovery of the economy is the success of Indonesia’s transition to
democracy. The economic recovery has brought Indonesia to a point where for the first time since early
1997 there is a sense of real optimism and vitality, at least in the nation’s capital, but Indonesia is yet to
match the rates of growth that it enjoyed in the 1980s and 90s. The democratic transition, however, is not
taking Indonesia back to a place where it once was but rather it is taking it somewhere it has never been
before. Even in the 1950s democracy was never as firmly rooted and stable as it has now become. In a very
real sense Indonesia has now moved beyond initial democratic transition and is now in a period of
democratic consolidation. It is impossible to conceive of this democratic transition having succeeded
without the withdrawal of the military from politics. Military reform is still very much a work in progress,
but the withdrawal of the military from politics and governance is now complete. The doctrine of
dwifungsi, which only recently seemed destined to prevail for decades more, melted away with
surprising rapidity and lack of contestation.
Indonesian democracy up
Crispin 6 (Shawn, Asia Times Online's Southeast Asia editor

[http://www.atimes.com/atimes/Southeast_Asia/HJ19Ae02.html] Behold Indonesia's democratic beacon/ October
19, 2006)
Breaking with former strongman Suharto's top-down New Order regime, Indonesia's peripheral
populations are now less captive to the interests and abuses of local political heavies, who under Suharto
often inserted themselves as gatekeepers to financial and natural resources through central government
authority. While many attempted to co-opt new democratic institutions to perpetuate their power,
nearly 40% of local level incumbents have in recent years been booted from office at the ballot box. In
certain conflict-plagued regions, local democracy is even having a healing effect. According to a recent
report in the Jakarta-based Van Zorge Report, head and vice head candidates, often representing respectively
localities' Muslim majority and Christian minority populations, have frequently teamed up to beat competing
candidates who ran on a one-religion ticket. That is, local-level democracy is rewarding politicians who
form religiously inclusive, not exclusive, coalitions.
US relations strengthen democratic consolidation
Indonesia’s painful progress toward democracy—and the military’ssupport in this process—has created
opportunities for a closer rela-tionship between the U.S. and Indonesian militaries. This increasedinteraction
provides the United States with a foundation to helpshape the Indonesian military’s capability to deal
constructively withthe challenge of rebuilding civil-military relations based on demo-cratic principles.
Indonesia DA – Impacts: Democracy Good—Heg

A. Global spread of liberal democracy key to check counter-balancing – only way to
preserve primacy.
Owen, Assistant Professor of Government and Foreign Affairs at University of Virginia, 2002
(John M., International Security, 26.3, Lexis)
In this article I argue that the degree to which a state counterbalances U.S. power is a function of how
politically liberal that state is, measured by the degree to which its internal institutions and practices are
liberal and the degree to which liberals influence foreign policy. Political liberalism is an ideology that seeks
to uphold individual autonomy and prescribes a particular set of domestic institutions as means to that end.
n15 No coalition has formed to counterbalance U.S. power because political liberalism constitutes a
transnational movement that has penetrated most potential challenger states at least to some degree.
How liberal a state is affects both how it responds to U.S. power and policy and how the United States treats
it. Liberal elites the world over tend to perceive a relatively broad coincidence of interest between their
country and other liberal countries. They tend to interpret the United States as benign and devote few state
resources to counterbalancing it. In turn, the liberals who govern the United States tend to treat other liberal
countries relatively benignly. But antiliberal elites tend to perceive a more malign United States and
devote relatively more state resources to counterbalancing; the United States meanwhile tends to treat
less benignly countries governed by such elites and their favored institutions. The interactions between
the United States and a given potential challenger are mutually reinforcing, and so each relationship is
on a path that is difficult to abandon. Unilateral moves by the administration of George W. Bush on issues
such as the environment and missile defense may perturb and even anger U.S. allies, but should not drive
them toward military counterbalancing. Similarly, U.S. policies are unlikely to cause China to abandon
counterbalancing. The U.S.-Russian relationship is the least settled, in part because the Russian domestic
regime is itself unsettled. Should Russia end up with an antiliberal regime, it will likely counterbalance the
United States more consistently. U.S. policies toward Russia can have a marginal effect on the fate of
Russian liberalism: The more objectively threatening are U.S. gestures toward Russia, the more Russian
liberals lose domestic credibility and influence. In this way the power of transnational liberal identity is
limited, as is the durability of U.S. primacy. If Americans want to preserve primacy -- and the benefits of
U.S. primacy outweigh the costs for many non-Americans as well as for Americans -- their country must
walk a difficult line, simultaneously preserving not only its power but transnational liberalism where it can,
and yet guarding against actions that appear imperialistic to foreign elites.
B. US leadership is essential to prevent global nuclear exchange.

Zalmay Khalilzad, RAND, The Washington Quarterly, Spring 1995
Under the third option, the United States would seek to retain global leadership and to preclude the rise of a
global rival or a return to multipolarity for the indefinite future. On balance, this is the best long-term guiding
principle and vision. Such a vision is desirable not as an end in itself, but because a world in which the
United States exercises leadership would have tremendous advantages. First, the global environment
would be more open and more receptive to American values -- democracy, free markets, and the rule of law.
Second, such a world would have a better chance of dealing cooperatively with the world's major
problems, such as nuclear proliferation, threats of regional hegemony by renegade states, and low-level
conflicts. Finally, U.S. leadership would help preclude the rise of another hostile global rival, enabling
the United States and the world to avoid another global cold or hot war and all the attendant dangers,
including a global nuclear exchange. U.S. leadership would therefore be more conducive to global stability
than a bipolar or a multipolar balance of power system.
Indonesia DA – Impacts: Democracy Good—Terrorism (1/2)

A. Democracy is the only way to address the root cause of terrorism
Dr. Larry Diamond, Senior Fellow at the Hoover Institution, Stanford University, and founding co-editor of the
Journal of Democracy, “Winning the New Cold War on Terrorism: The Democratic-Governance Imperative,”
Institute for Global Democracy, March 2002
If we are serious about getting at the roots of international terrorism, we must get serious about
fostering development that gives people hope and dignity and improves the quality of their lives. That
requires dramatic improvements in governance, and these will not come without increased international
incentives and assistance. In real terms, levels of U.S. development assistance have fallen dramatically since
the 1970s and especially since the end of the last Cold War. It will not work to just throw money at the
problem in some new "Marshall Plan." No infusion of economic resources, no matter how massive and
sustained, will in itself generate development because the problem (unlike in Europe after World War II) is
not simply a lack of resources or functioning infrastructure. The problem is a more fundamental shortage:
of the institutions and norms of democracy and good governance. Unless we help to develop states that
collect taxes, limit corruption, control crime, enforce laws, secure property rights, provide education,
attract investment and answer to their own people, countries will not develop and the rage against the
West will not subside. This is why we must not only substantially increase our foreign assistance budget, but
also devote a much larger portion of that budget to democracy and good-governance programs (while
deploying more career aid officials with expertise in these fields).
B. Terrorism causes extinction

Pacotti, “Are we doomed yet?” http://www.salon.com/tech/feature/2003/03/31/knowledge/index.html, March 31,
2003
A similar trend has appeared in proposed solutions to high-tech terrorist threats. Advances in biotech,
chemistry, and other fields are expanding the power of individuals to cause harm, and this has many people
worried. Glenn E. Schweitzer and Carole C. Dorsch, writing for The Futurist, gave this warning in 1999:
"Technological advances threaten to outdo anything terrorists have done before; superterrorism has
the potential to eradicate civilization as we know it." Schweitzer and Dorsch are so alarmed that they go
on to say, "Civil liberties are important for a democratic society; the time has arrived, however, to reconfigure
some aspects of democracy, given the violence that is on the doorstep." The Sept. 11 attacks have obviously
added credence to their opinions. In 1999, they recommended an expanded role for the CIA, "greater
government intervention" in Americans' lives, and the "honorable deed" of "whistle-blowing" -- proposals
that went from fringe ideas to policy options and talk-show banter in less than a year. Taken together, their
proposals aim to gather information from companies and individuals and feed that information into
government agencies. A network of cameras positioned on street corners would nicely complement their
vision of America during the 21st century. If after Sept. 11 and the anthrax scare these still sound like wacky
Orwellian ideas to you, imagine how they will sound the day a terrorist opens a jar of Ebola-AIDS spores on
Capitol Hill. As Sun Microsystems' chief scientist, Bill Joy, warned: "We have yet to come to terms with the
fact that the most compelling 21st-century technologies -- robotics, genetic engineering, and
nanotechnology -- pose a different threat than the technologies that have come before. Specifically,
robots, engineered organisms, and nanobots share a dangerous amplifying factor: They can self-replicate. A
bomb is blown up only once -- but one bot can become many, and quickly get out of control." Joy calls the
new threats "knowledge-enabled mass destruction." To cause great harm to millions of people, an extreme
person will need only dangerous knowledge, which itself will move through the biosphere, encoded as
matter, and flit from place to place as easily as dangerous ideas now travel between our minds. In the
information age, dangerous knowledge can be copied and disseminated at light speed, and it threatens
everyone. Therefore, Joy's perfectly reasonable conclusion is that we should relinquish "certain kinds of
knowledge." He says that it is time to reconsider the open, unrestrained pursuit of knowledge that has been
the foundation of science for 300 years. "[D]espite the strong historical precedents, if open access to and
unlimited development of knowledge henceforth puts us all in clear danger of extinction, then common
sense demands that we reexamine even these basic, long-held beliefs."
Indonesia DA – Impacts: Democracy Good—Terrorism (2/2)

The root cause of terrorism is non-democratic states
Dr. Larry Diamond, Senior Fellow at the Hoover Institution, Stanford University, and founding co-editor of the
Journal of Democracy, “Winning the New Cold War on Terrorism: The Democratic-Governance Imperative,”
Institute for Global Democracy, March 2002
This twisted logic resonates emotionally among large numbers of the one billion Muslims who stretch from
Morocco to Indonesia–and even some who live or reside in Europe and the United States. With time, force,
vigilance and some luck, we may substantially destroy and disrupt the existing global infrastructure of
terrorism. But no amount of military force, law enforcement vigilance and operational genius can
contain an army of suicide bombers that stretches endlessly across borders and over time. We must
ultimately undermine their capacity to recruit and indoctrinate new true believers. That requires
getting at the root factors that generate breeding grounds for terrorism. And one of the principal
factors is chronically bad governance.
Indonesia DA – Impacts: Democr K/T US Rel’s

An authoritarian government collapses U.S. Indonesian relations
The policy response by the United States and other Western democracies to this scenario would almost
certainly be a call for a return to democratic rule. U.S. and other Western policymakers would want to
develop a package of incentives and sanctions to bring about a rapid return to civilian rule, but they
would be confronted with a dilemma. While the Indonesian military will have a decisive voice in
determining the pace and timing of a return to democratic government, U.S. domestic and international
pressures will drive the U.S. administration in the direction of sanctions and curtailment of ties with
the TNI.
Maintaining Indonesian security is key to avert a shift to radical Islam and authoritarian
rule which crushes relations with the U.S.
Masters 3 (Edward, U.S. Indonesia Commission Vice Chairmen, http://www.usindo.org/publications/US-

Indonesia_Commission_Report_Oct03.pdf)
Indonesia faces three critical challenges: 1) It is striving to consolidate a fragile democratic system with
little experience and limited resources. If it fails it could revert to authoritarianism or chaos. Some
Indonesians already speak nostalgically of the stability and economic progress of the Suharto era; 2)
Moderate Muslims, still a substantial majority, are under challenge from a radical fringe which has
grown significantly during the past five years. The goal of the radicals is to capitalize on domestic
vulnerabilities and international issues to win over or intimidate the moderate majority; 3) The nation
is striving, in the face of rising economic nationalism, to work its way out of the economic mess left by the
Suharto regime. The outcome of these three contests will be crucial to the future of Southeast Asia and
U.S. relations with the region.
Indonesia DA – Impacts: Relations – Terrorism

US-Indonesian relations key to fighting terrorism in Asia
Huang 2 (Reyko, Center for Defense Information Research Analyst [http://www.cdi.org/terrorism/priority.cfm]

Priority Dilemmas: U.S.-Indonesia Military Relations in the Anti-Terror War/ May 23, 2008)
First, some practical security reasons: full cooperation with Indonesia would facilitate the crackdown on
Southeast Asian terrorist networks. The region was identified as a hotbed of terrorists soon after Sept.
11, when investigations led to fresh discoveries of terrorist evidence in Indonesia, Malaysia and the
Philippines. Had Washington not had the congressional ban on relations with the TNI, Indonesia may
well have joined Yemen, Georgia and the Philippines as recipients of direct U.S. military training and
aid for counterterrorism purposes. Furthermore, the military has not fully handed over internal security
responsibilities to the police and thus still "has the only real database on Islamic extremists." Washington's
limited relations with the TNI may therefore be obstructing deeper intelligence sharing, which is
fundamental for successful counterterrorism.
Indonesia DA – Impacts: Relations – Democracy

US Indonesia relations key to democracy
Huang 2 (Reyko, Center for Defense Information Research Analyst [http://www.cdi.org/terrorism/priority.cfm]

Priority Dilemmas: U.S.-Indonesia Military Relations in the Anti-Terror War/ May 23, 2008)
Second, and more an argument based on values and principles: stronger U.S. ties with the TNI, U.S.
officials claim, is likely the best way to transform the military with a notorious record of human rights
abuses. Since Washington ended Indonesian participation in its International Military and Education
Training (IMET) program in 1991, a generation of TNI officers has missed out on U.S. military and
human rights education, as well as on opportunities to befriend American officers who could have served as
exemplars. A resumption of the IMET for the Indonesian forces would not only help them rebuild its
damaged reputation and credibility, they argue, it would also inculcate values of democracy, human
rights, and the rule of law in the next generation of TNI officials.
Indonesia DA – Impacts: Relations – Asia Stability

US Indonesian relations key to solving conflict in Asia
Perlez 1 (Jane, The New York Times

[http://query.nytimes.com/gst/fullpage.html?res=9805E2D6103FF931A2575BC0A9679C8B63] U.S. to Renew
Relationship With Military In Indonesia/ August 12, 2001)
The Bush administration plans to renew some American ties to the Indonesian military, the most
powerful institution in the sprawling Southeast Asian country but one fraught with human rights abuses.
The decision is part of an effort to cement stronger ties with Indonesia, one of the most important but
unstable countries in the region, after the relatively smooth coming to power of the new president,
Megawati Sukarnoputri, whose ascent was supported by the military. The Pentagon once had longstanding
ties with the Indonesian military, dating back to the early days of the cold war. But relations have been
circumscribed since the early 1990's over human rights abuses. Critics of the plan to revive ties say America's
past training of Indonesian troops did little to prevent the widespread abuses, in particular those that
accompanied the secession of East Timor from the country three years ago. In re-establishing military ties,
the Bush administration says it would like to help ensure the stability of the country, a vast archipelago
that has been riven by separatist movements. Indonesia is seen as pivotal for the stability of Southeast
Asia and, administration officials say, has assumed new significance as the broader region stumbles
through an unexpected period of economic downturn and political uncertainty.
Indonesia DA – Impacts: Democr K/T World Model

Indonesia is key to global democracy
The Carter Center 4 (“Annual Report 2003-2004”http://cartercenter.com/documents/2087.pdf)

In 2004, Indonesia held three sets of elections, including for the first time a direct election of the
president, demonstrating an impressive strengthening of democracy in the country. The world’s fourth
largest country and home to the world’s largest Muslim population, Indonesia is crucial to democratic
progress throughout Southeast Asia and beyond. “The 2004 elections were a major step forward in
Indonesia’s democratic transition,” said Dr. David Carroll, acting director of the Center’s Democracy
Program. “Voters demonstrated their commitment to democratic principles and to holding leaders
accountable. The presence of our observers helped build confidence in the electoral process.”
Indonesia key to democracy
Caragata 3 (Warren, journalist with Maclean's and Asiaweek[http://www.jewishtoronto.net/page.aspx?id=68101]

As the world's largest Muslim nation struggles with democracy, its latest election offers encouraging news/ 2003)
Indonesians, including Muslims, are a generally tolerant people, as I was reminded when I went to a
Jakarta mosque shortly after the terrorist attacks of Sept. 11. The mosque was supposedly one of the most
radical in the city, and I fully expected the men I interviewed after Friday prayers would be uncompromising
in their views. Should women wear headscarves, I asked? Everyone in the small group agreed, but the next
question elicited a more surprising response. Do your wives and daughters wear headscarves? Oh no, they
said. They don't like them. They're too hot. Should sharia be the law of the land? All said no: That would
upset Indonesian Christians. There are fundamentalists, to be sure, but they are on the margins. The firm
establishment of democracy in Indonesia can be a beacon to the rest of the Muslim world,
demonstrating that Islam and democracy are not incompatible. Aid money in great quantities flows to
supposed democratic incubators like Iraq and Afghanistan, but Indonesia's democratic experiment, to
judge by its track record, is far more likely to succeed.
Indonesia key to democracy

IRI 3 (International Republican Institute, nonprofit nonpartisan organization
[http://209.85.141.104/search?q=cache:SIBZnnhBx5EJ:www.iri.org/asia/indonesia.asp+%22indonesia+is+a+model
%22&hl=en&ct=clnk&cd=3&gl=us]
As the world's largest Muslim-majority country, Indonesia is a model for other Muslim countries
undergoing the transition to democracy. The International Republican Institute (IRI) has been working
with the people of Indonesia to advance their country's democratization since the fall of the Haji
Mohammad Suharto regime in 1998. IRI has worked to support the change to popular representation,
strengthen the country's electoral system, and train political parties to address the concerns of voters.
Indonesia DA – Impacts: Stability – It’s Up

Indonesia is stable
By 2007 many of the things that have been so long awaited — democracy, stable and accountable
government, the ending of large-scale conflict, greaterautonomy and a fairer share of resources for the
regions, freedom of the press, legislative reform, and the withdrawal of the military from politics —
had finally come. At the same time Indonesia had finally moved beyond its decade-long,
multidimensional crisis. Economic growth, public expenditure and public investment are back to being
at or near pre-crisis levels. Indonesia is now safely past its crisis in political stability. At the same time
the threat represented by separatist movements to Indonesia’s national integrity — a threat that was never as
large in reality as it was in the imaginations of many — could finally be regarded as having past. And,
although the threat of terrorism will never completely disappear, Indonesia is now no longer facing a
security crisis with respect to terrorism. All of this is good news but the real challenge now for post-crisis
Indonesia is to make steady and sustained improvements in good governance and public sector services.
Indonesia has reached a state of stability

In 2007 the news wires had comparatively little to report from Indonesia. Indonesia, thankfully, had
dropped off the radar screen of breaking news series and live reports from disaster sites. At the same
time, the steady improvement in confidence, the slow recovery of economic growth and the overall
progress of reform finally bought Indonesia to a point where it could be said to be postcrisis. 2007 was
Indonesia’s first year in a decade of being post-crisis. It was also Indonesia’s first year of living
normally.
Indonesia DA – Impacts: Reg’l Stability

Indonesia key to Southeast Asian stability
Sisodia and Naidu 5 (N. S. Sisodia, G. V. C. Naidu, Institute for Defence Studies and Analyses
http://books.google.com/books?id=jSgfLG3Ib9wC&pg=PA58&lpg=PA58&dq=%22indonesia+is+critical%22&sour
ce=web&ots=lsgjv6Ww7j&sig=vfsMAiw_XMmJaNLmZwE9Jb_nFlw&hl=en&sa=X&oi=book_result&resnum=10
&ct=result)
Given South East Asia’s position- straddling the sea lanes through which pass so much of the world’s
trade- the US is increasingly concerned about Maritime security in the region. Seven of the worlds 25
megaports are in Southeast Asia; two-thirds of the worlds liquefied natural gas passes through Southeast
Asian Seas; 600 vessels navigate the Strait of Malacca daily, carrying 25 % of world commerce and half
the worlds oil. The US has developed a range of policies- including the proliferation security initiative (PSI),
the container security initiative (CSI), and the regional Maritime security initiative (RMSI)- to help secure
maritime transit in the region. Success ultimately depends on cooperation and coordination with other
countries in the region. So far, the record is mixed. Indonesia is of particular importance in the region.
For long the anchor of ASEAN, political instability and drift in Jakarta have taken a toll on Indonesia
and all of Southeast Asia. Given its geographic position and stretch, stability in Indonesia is critical to
that of the region as a whole. A corner may have been turned with the election of Susilo Bambang
Yudhoyono as president in 2004, but his plans may yet be frustrated by political inexperience and determined
opposition.
Indonesia is key to world stability
Masters 3 (Edward, U.S. Indonesia Commission Vice Chairmen, http://www.usindo.org/publications/US-

Indonesia_Commission_Report_Oct03.pdf)
Indonesia is the pivotal state in Southeast Asia. The world’s fifteenth largest and fourth most populous
nation, it exercises strong influence in Southeast Asia and plays a constructive international role. It has
huge natural resources and a strategic location astride major sea lines of communication—half of the
world’s merchant fleet capacity passes through the Straits of Malacca, Sunda, and Lombok. Including
the oil and mineral sectors, Indonesia is home to an estimated $25 billion in U.S. investment, with more
than 300 major U.S. firms represented in the country. There are two additional factors of great
importance today:• Indonesia has by far the world’s largest Muslim population, and historically
Indonesia’s Muslims have been noted for their moderation. It has the two largest Muslim social and
educational organizations in the world—the Nahdlatul Ulama and Muhammadiyah—each of which is
moderate and has more than 30 million members. Indonesia is one of the very few Muslim-majority nations
in which Islam is not the state religion. Indonesian Islamic scholars have had a moderating impact on
debate within the Muslim world on the relationship between religion and the state. This influence will be
enhanced if Indonesia succeeds in its efforts to develop a viable and nonsectarian democratic system. • A
stable and responsible Indonesia is critical to regional stability. It is the anchor of the Association of
Southeast Asian Nations (ASEAN) and a key player in the ASEAN Regional Forum (ARF), the only
organization in the Asia-Pacific region that brings the United States together with Japan, China, the
ASEAN nations, and others to discuss security issues. The cohesion and effectiveness of ASEAN have
eroded significantly due to Indonesia’s preoccupation with domestic crises. Instability in Southeast Asia has
already provided openings for Islamic radicalism. In short, an unstable, hostile or unpredictable Indonesia
would adversely affect U.S. interests and objectives, tilt the international balance toward radical Islam,
complicate transit through strategic sea and air routes, hamper efforts to combat piracy and drug
trafficking, and weaken a potentially constructive regional counterpoint to China.
Indonesia DA – Impacts: Reg’l Stability

Indonesia is key to regional stability and strategic U.S. interests
Kern 5 (Soeren Senior Analyst for Transatlantic Relations at the Strategic Studies Group
http://www.realinstitutoelcano.org/wps/portal/rielcano_eng/Content?WCM_GLOBAL_CONTEXT=/Elcano_in/Zon
as_in/Cooperation+Developpment/ARI+8-2005)
Indonesia is the linchpin to stability in South-East Asia. As the world’s fourth most populous nation,
the third largest democracy and the only Asian member of the Organisation of Petroleum Exporting
Countries (OPEC), Indonesia exercises major influence in the region and occupies some of the most
strategic real estate on earth. It has vast natural resources and is strategically located astride major sea
lines of communication (SLOCs) between the Pacific and Indian Oceans. Half of the world’s merchant
fleet capacity passes through the Straits of Malacca, Sunda and Lombok; the straits also enable the US
to send warships from its Pacific Fleet by the shortest routes to the Indian Ocean and the Persian Gulf.
Australia, Japan and the US also view Indonesia as a bulwark against Chinese expansionism in South-
East Asia. For example, Indonesia creates a strategic northern shield for Australia; any attack on the
Australian mainland would have to be staged through the Indonesian archipelago. And in case of a Taiwan
crisis, Indonesia can cut off China’s access to oil from the Persian Gulf, since 80% of China’s imported
oil passes through the Strait of Malacca. Moreover, Indonesia is the anchor of the Association of Southeast
Asian Nations (ASEAN) and a key player in the ASEAN Regional Forum (ARF), the only organisation in
the Asia-Pacific region that brings the US together with China, Japan and others to discuss security
issues. Indonesia also constitutes Australia’s largest and most immediate regional neighbour. Indeed,
Australian Defence Minister Richard Campbell Smith said a stable Indonesia is a ‘top national priority’.
Indonesia is critical to regional stability
Indonesia has been described as the least known of the world’s most important countries. Its
importance derives from well-known geopolitical factors. It is the world’s fourth most populous
country and the largest Muslim-majority country, with a population and a land mass almost as large as
those of the rest of Southeast Asia combined, vast natural resources and economic potential, and a
strategic location straddling critical sea lanes and straits—all of which makes it the key to Southeast
Asia’s security. A stable, strong, and democratic Indonesia could resume its leadership role in the
Association of Southeast Asian Nations (ASEAN), further regional integration based on democratic
principles, contribute to maintaining regional stability, and deter potential Chinese adventurism.
Conversely, an unstable or disintegrating Indonesia would make the regional security environment
more unpredictable and dangerous, create opportunities for forces seeking to subvert the regional
status quo, and generate large-scale humanitarian demands on the international community. Beyond that,
the outcome of Indonesia’s democratic experiment could have a major impact in shaping the political
evolution of Asia and of the larger Muslim world. If Indonesia’s democratic transition holds, it will be the
world’s third-largest democracy as well as the largest secular democracy in the Muslim world. This
transition could have enormously important global consequences. The future of Islam, some argue, will
not be decided in its Arab heartland with its authoritarian and intolerant models of governance, but in
countries such as Indonesia, where Islam has not jelled into a fundamentalist mold and where democracy
remains an attainable prospect.1
Indonesia DA – Impacts: Reg’l Stability – Escalation/NW

Asian war goes global and nuclear
Ogura and Oh 97 (Toshimaru and Ingayu, Professors of Economics, Monthly Review, April)
North Korea, South Korea, and Japan have achieved quasi- or virtual nuclear armament. Although these
countries do not produce or possess actual bombs, they possess sufficient technological know-how to possess
one or several nuclear arsenals. Thus, virtual armament creates a new nightmare in this region – nuclear
annihilation. Given the concentration of economic affluence and military power in this region and its growing
importance in the world system, any hot conflict among these countries would threaten to escalate into a
global conflagration.
Asian war goes nuclear
Michael May, Professor of Engineering-Economic Systems at Stanford, Summer 1997, The Washington Quarterly
The unpalatable facts, to Europeans and North Americans, are that Asia has about half of the world's people,
that it is growing faster than other parts of the world, and that, by mid-century, it will probably have more than
half the population of the developed world and more than half of its money. Energy consumption, economic
influence, and military power will be distributed in proportion. That is the rosy scenario. The dark scenario is
that of a war that would, in all likelihood -- because nuclear weapons can be procured and deployed by any
of these countries at a fraction of the cost of peaceful development --leave most of the civilized world
devastated.
Indonesia DA – Impacts: Hrts

Instability hurts human rights and spills over to the rest of Asia
Brown 3 (Colin, Professor of Asian Studies and Languages A SHORT HISTORY OF INDONESIA: THE
UNLIKELY NATION? p. 246)
The future of Indonesia remains, of course, unknown. The unity of the state is under greater challenge than at
any time since the regional rebellions of the 1950s. The country is clearly not well served by its current
leaders. Yet despite economic and political crises, for most Indonesians life goes on, despite the
maneuverings of those in positions of political leadership. Ultimately the future of the ‘nation’ and the ‘state’
will be determined by whether ordinary Indonesians feel sufficiently committed to the principles these terms
represent to be prepared to work to ensure that they remain alive. For all its faults, Indonesia still offers the
majority of its citizens a better and more enlightened future than any of its potential successor states
could offer. The break-up of the state would not only be a strategic disaster for the country's neighbors
in Southeast Asia, including Australia but, more importantly, it would be a human rights disaster for
its citizens, for no such break-up is likely to occur peacefully. But to survive the nation must adjust and
making those adjustments is the challenge now facing the national leadership. The next few years will show
how successful they are in meeting that challenge.
Indonesia DA – Impacts: Biodiversity T/O

Biodiversity in Indonesia is being solved now
Compton Foundation 4+ (http://www.comptonfoundation.org/scenario/Environment/Indonesia_

Biodiversity_HotSpot.pdf)
Initiatives are also under way to expand existing in-country protected area networks. In 2004, the
Indonesian government made a commitment to create 12 new protected areas. One of these was the
Tesso Nilo/Bukit Tigapuluh landscape in central Sumatra, where the Critical Ecosystem Partnership Fund
(CEPF) is supporting a corridor-level initiative to link four existing protected areas and one new protected
area into a three-million-hectare haven of lowland forest. Such collaborative conservation efforts increase
the effective size of protected areas to a great extent, but can only be effective in the long term if
management strategies deal with the socio-economic and political drivers of land-use change. WWF-
Indonesia is currently implementing two major initiatives within Tesso Nilo National Park with support
from CEPF: the first involves protecting tigers from the wildlife trade, while the second involves
developing and implementing a community based conservation plan. The Indonesian government is
implementing policies to promote conservation. The central government is currently promoting a new
policy to reduce the number of existing logging concessions by half. Some of these cancelled or
abandoned concessions have been converted to protected areas, such as the Sebangau area in Central
Kalimantan, while others will be designated for sustainable forest harvesting programs. In addition, a new
policy allows for protected area creation by local governments rather than just the national
government; this model, which promotes local ownership and stewardship, has already been used to
create protected areas. For example, the 108,000 hectare Batang Gadis National Park, in northern Sumatra,
was established as a locally managed protected area in early 2004. In May of the same year, the Ministry of
Forestry declared the area a national park. Four local NGOs are currently working to develop
biodiversity-friendly economic activities, and to involve communities adjacent to the park in
management and conservation activities. CI is playing a coordinating role in the management of this park.
***Indonesia Answers***
Indonesia Answers- Internal Link Turn: Dutch Disease
Indonesia is oil dependant and vulnerable to price shocks
Syarifuddin 7 (Ferry, Economist, Bank Indonesia, June 15,

http://www.bi.go.id/web/en/Publikasi/Kertas+Kerja+dan+Materi+Seminar/Kertas+Kerja/library7.htm)
Overall, the paper shows that since 2004, Indonesia has been facing a serious oil and refinery product
shortage. The recent domestic oil supply disturbances have reduced production while domestic oil
consumption has been increasing. Consequently, oil import is also raising which making Indonesia as
one of net oil-importing countries since then. The intense of using of only few kind of energy sources
moreover oil and decreasing trend of domestic oil reserve, lead Indonesia to be more dependent on oil
and vulnerable to oil shock. It is confirmed by several oil dependence measurements. In order to
preserve national energy, the government has pursued some efforts to increase energy conservation,
efficiency, and diversification by utilizing alternative energy including renewable energy. With implementing
the policy, it is expected that by 2025, the national energy requirement composition will reduce oil
dependency as well as raising alternative energy including renewable energy used in all sectors.
Indonesia Answers- Internal Link Turn: Inflation

Rising oil prices cause inflation
Arnold 5 (Wayne, August 17,

http://www.nytimes.com/2005/08/17/business/worldbusiness/17indo.html?_r=3&oref=slogin&oref=slogin&oref=slo
gin)
This week, Indonesia reported that its economy slowed to 5.5 percent in the second quarter compared
with the period a year ago, from 6.2 percent in the first quarter. The second-quarter figure was below the
government target of 6 percent for the year, the pace economists and policy makers agree is the minimum
necessary to absorb new entrants into the job market and reduce poverty in the restive archipelago, the
world's most populous Muslim nation. Faltering investment in oil and gas showed up as a 2.9 percent
drop in overall mining output. But optimists were encouraged by the data, noting that other sectors were
performing well. "It's not really a broad-based slowdown," said Chua Hak Bin, senior regional economist at
DBS Bank in Singapore. "I find it difficult to be too alarmist." But pessimists caution that rising fuel prices
are pushing up prices for other goods and services, auguring ill for consumer spending. Inflation in
July rose to 7.8 percent.
Rising oil prices cause inflation
Reuters 5 (Singapore, August 7, http://www.newagebd.com/2005/aug/07/busi.html)

Indonesian inflation hit a two-year high of 8.8 percent in March, after the government raised domestic
fuel prices. In the year through July, inflation was still high at 7.8 percent. Malaysia, which has the region’s
highest subsidies, raised retail petrol and diesel prices last week. Consumer price inflation there is at a six-
year high. Taiwan also has rising inflation. It is only in Singapore and Korea, countries where fuel is not
subsidised, that price pressures remain muted. Economists say consumers should be made to feel the
pinch of $60-a- barrel oil, even if that means they pay more for goods and transport. Subsidies can
have grave side-effects. ‘It leads to a deterioration in the government’s fiscal accounts,’ said Rob
Subbaraman of Lehman Brothers in Tokyo. ‘More importantly, it is not allowing market forces to work.
Asian households and companies are not going to become more efficient in using energy.’
Indonesia Answers- Internal Link Turn: Corruption

Oil abundance creates an elitist and corrupt environment that diverts the revenue
Rosser 7 (Andrew, political economist, worked for AusAID, consultant to the World Bank, the UK Department for International
Development, the Organisation for Economic Cooperation and Development, Journal of Contemporary Asia, Vol. 37)
In explaining economic outcomes in resource abundant countries, many scholars, particularly those
operating from neoclassical/public choice or behaviouralist perspectives, have focused on the extent to
which policy elites in these countries have been guided by economic rationality in their policy-making
decisions. Mitra (1994) and Krause (1995), for instance, have argued that one of the main reasons why
resource abundant countries have performed less well in economic terms than resource poor countries
is that resource booms have often caused policy elites in the former set of countries to become myopic,
slothful, and/or over-exuberant (Ross, 1999: 309). Other scholars have suggested that this difference in
economic performance has stemmed mainly from the effect of resource booms on policy elites'
propensity to engage in rent-seeking behaviour. Ross (2001), for instance, has argued that resource
booms in Indonesia and Malaysia during the 1970s created severe economic problems because they
encouraged political and bureaucratic elites to either directly seize the rents created by these booms or
try to gain control over the right to allocate them rather than invest them productively. Conversely, Prawiro
(1998) has explained Indonesia's success in overcoming the resource curse during the 1970s and early 1980s in terms of the strong influence of technocratic
ministers over economic policy, particularly macroeconomic and fiscal policy. As he puts it, this period saw the "relinquishing of the extreme, emotion-
charged focus on ideology [of the previous regime] for a more detached, analytical, and flexible approach based on pragmatism" (Prawiro, 1998: 87-8).
Oil Revenue disappears due to corruption
Australian Broadcasting Corporation 8 (http://www.radioaustralia.net.au/news/stories/200807/s2300571. htm?tab=latest)

Indonesia's corruption watchdog has opened an investigation into the disappearance of $US22 billion
in state oil and gas revenues. Our Jakarta correspondent, Geoff Thompson, reports ten years after it was set
up, Indonesia's Corruption Eradication Commission or KPK is beginning to cut a swathe through key
Indonesian institutions. The Bank of Indonesia's former Governor is on trial and five parliamentarians
have been recently accused of corruption and often been caught red-handed in sting operations. The
attorney-general's department has been implicated with prosecutors caught taking bribes to drop
embezzlement probes.
Corruption in Indonesia means the country does not benefit form oil revenues
Pesek 6 (William Pesek Jr Asia-Pacific columnist for Bloomberg News http://www.iht.com/article

s/2006/03/26/bloomberg/sxpesek.php )
That would almost be comical, were it not for the fact that more than half of Indonesia's 239 million people
live on less than $2 a day. The country has not benefited from its abundant reserves of oil, a natural resource
that leaders in countries like China spend virtually every waking moment searching for. That neglect might soon be over, now that Indonesia has signed a
deal to extract oil from the $2.6 billion Cepu field, the country's biggest untapped reserve of the resource. The agreement with Exxon Mobil and Pertamina,
Indonesia's state oil company, is expected to provide a huge boost to the economy. Or will it? The project will generate $3.3 billion a year to be shared by
the government, Exxon and Pertamina, in that order. Higher tax revenue will leave more money for job creation, education and health care, as well as better
roads, bridges and ports. During the four-year dispute over the field, Indonesia's fuel-import bill reached as much as $1.6 billion a month. Investors
appreciate the calculated risk that President Susilo Bambang Yudhoyono took by allowing Exxon, a U.S. company, to take charge of the long-delayed plan.
His gutsy move to sideline Pertamina shows that he is putting economic realism ahead of nationalism.That could generate a multiplier effect by encouraging
Is oil a blessing or a
more investors to consider Indonesia anew. Yet Indonesia now faces a sticky question that confronts all oil-rich nations:
curse? Commodity-created wealth rarely trickles down very far into an economy, never mind to those
living in poverty. Economists call this the "paradox of plenty," and Indonesia needs to counter this
aggressively. All too often, inhabitants of resource-rich nations fail to prosper from treasures like oil,
gold or diamonds. Politicians and their cronies get wealthy, while the needs of the struggling masses are
ignored. That has been Indonesia's experience far more often than not. History is littered with examples
of how oil wealth leads to a kind of economic-policy tunnel vision. Awash in oil, governments lose
incentive to create other viable industries. They have little time for agriculture, textiles or manufacturing
industries that could employ much of the population. Why bother when the real money is in oil? "Oil
promises to make you rich, but instead it makes you poor," the Stanford University economist Terry Lynn
Karl wrote in "The Paradox of Plenty: Oil Booms and Petro-States." Her 1997 book, which focuses on
Algeria, Indonesia, Iran, Nigeria and Venezuela, is even more relevant today amid near-record oil prices. The
instant windfall from commodity exports can destroy a nation's competitiveness.
Indonesia Answers- Internal Link Turn: Instability

High prices generate Indonesian instability – Undermine current regime
NYT 5 (8-17)
Indonesia's oil troubles are coming home to roost, posing a growing challenge to President Susilo Bambang
Yudhoyono's ability to maintain economic stability.
A Pertamina oil exploration site in Indonesia. Turmoil and red tape have helped turn the country into a net oil
importer, despite its reserves. Indonesia is a member of the Organization of the Petroleum Exporting
Countries, and oil and natural gas are among the country's largest sources of export revenue. But red tape,
legal uncertainty and past political turmoil have turned Indonesia into a net oil importer, and companies have
shied away from investing in new oil wells or refineries. At $65 a barrel, oil has become as big a threat to
Indonesia's economic health as it is to that of the United States or Europe.
Analysts are increasingly divided as to whether Mr. Yudhoyono will be able to keep Indonesia on course or
whether oil prices will join the list of calamities buffeting the country, including terrorist attacks, the
December tsunami, bird flu, the reappearance of polio and spreading forest fires that have sent a pall of acrid
haze across Southeast Asia in the last two weeks.
Indonesia Answers- Turn: Biodiversity

Increased demand for oil in Indonesia kills biodiversity
Koh and Wilcove 8 (Lian Pin Postdoctoral Research Fellow at ETH Zurich David S. Professor of Ecology and
Evolutionary Biology and Public Affairs Princeton University http://news.mongabay.com/2008/0520-palm_oil.html)
More than half of the oil palm expansion between 1990 and 2005 in Malaysia and Indonesia occurred at
expense of forests, reports a new analysis published in the journal Conservation Letters. The conversion
had a "detrimental" impact on regional biodiversity say the authors. Analyzing data from the United Nations Food and
Agriculture Organization, Lian Pin Koh and David S. Wilcove of Princeton University found that 55-59 percent of oil palm expansion in
Malaysia and at least 56 percent of that in Indonesia occurred at the expense of forests. Given that oil palm plantations are biologically
impoverished relative to primary and secondary forests, the researchers recommend restricting future expansion to pre-existing cropland
and degraded habitats. In recent years Malaysia and Indonesia have rapidly expanded the area of land devoted to oil
palm cultivation: between 1990 and 2005 the area of oil palm plantations in Malaysia more than doubled to
3.6 million ha; in Indonesia the area planted with palm expanded by more than 270 percent to 4.1 million
ha. At the same time Indonesia's forest cover declined by 28 million ha, while Malaysia lost some 1.5 million ha. Koh
and Wilcove calculate that at least 1.704 million ha of forest land in Indonesia and 1.04 million ha in Malaysia were converted for the
oilseed during the period. "Our analysis indicates that oil palm plantations in Malaysia and Indonesia have replaced
forests and, to a lesser extent, pre-existing cropland," the authors write. Using data on birds and butterflies showing that conversion of forest
to oil palm produces steep declines in species richness, Koh and Wilcove say the expansion of the oil palm estate in Malaysia
and Indonesia negatively affected regional biodiversity. Noting that demand for palm oil is expected to
increase dramatically in coming years, the authors suggest future oil palm expansion be limited to lands
that have already been converted for agriculture or are otherwise heavily degraded. Even logged forests — which support considerably higher levels of
biological diversity than plantations — should be off-limits to oil palm development, they conclude.
Indonesia is key to biodiversity
UNCSD 97 (United Nations Commission on Sustainable Development http://www.un.org/esa/agenda21/natlinfo

/countr/indonesa/natur.htm#biodiv)
Indonesia is one of the centers of mega-biodiversity in the world, with 47 ecosystem types ranging from
ice fields and alpine meadows in Irian Jaya, to a wide variety of humid lowland forests, from deep lakes to
shallow swamps, and from spectacular coral reefs to sea-grass meadows and mangrove swamps.
Approximately 17% of the total number of species in the world are found in Indonesia. The country
harbors at least 11% of the world's known flowering plant species, 12% of the world's mammals 15% of all
amphibians and reptiles, 17% of all birds and at least 37% of the world's fish. The diversity of ecosystems
and species naturally leads to genetic diversity. Indonesia is the center of genetic diversity for many
important food and economic crops such as bamboo, orchids, rattan, nutmeg, cloves and tropical fruits.
Genetic diversity is further developed through traditional agroforestry and cultivation systems. This is
reflected in the numerous varieties of rice, taro, bananas and mangoes (not native to Indonesia) and other
cultivated crops in Indonesia. Indonesia also harbors great knowledge on the uses and development of
biodiversity embedded in the cultural forms and knowledge systems of its many and varied traditional
communities. Some 6,000 plants, 1,000 animals and 100 microbe species are used by Indonesian communities in their daily life. Knowledge on
medicinal and food values of wild and cultivated species are interlinked with cultural systems that are fast disappearing in Indonesia. Thus, it is obvious that
the erosion of Indonesia's biodiversity and traditional knowledge on biodiversity is not just a matter of
national concern, but of international concern as well. Opportunities to develop new varieties of food
crops, new medicines and new industrial raw materials will be lost with the erosion of Indonesia's
biological and cultural diversity. With a growing population, a modernizing economy and still marked regional disparities, biodiversity
management issues are bound to be prominent in a biologically diverse region such as the Indonesian archipelago. The biodiversity in
Indonesia is nearly unparalleled worldwide and yet the qualitative and quantitative demands placed on Indonesian terrestrial and
marine ecosystems by the Indonesian population poses many threats at both the species and ecosystem level. This threat is significant for Indonesian society
as well - the degree of Indonesian society's dependence on renewable biodiversity (i.e. natural resources) for economic and social needs is widely
recognized. In order to elaborate contemporary natural resource issues relating to biodiversity, the Indonesian baseline must first be established.
Indonesian biodiversity is among the richest in the world - there are at least 42 distinct natural terrestrial ecosystems
and five marine ecosystems.
Indonesia Answers- Econ Resilient

The Indonesian economy is resilient
The Jakarta Post 7 (http://www.indonesia-ottawa.org/economy/Economicissues/economy-2008-resilient.htm)

The country's economy will remain resilient next year, although it may grow slightly slower than the
government's estimate amid tough challenges on both the external and internal fronts, predicts the Indonesian
Chamber of Commerce and Industry (Kadin). In its year-end economic assessment unveiled Wednesday, the
powerful business grouping predicts economic growth of 6.5 percent next year, as compared to the government's target of
6.8 percent. Kadin said in its report that the global economic slowdown resulting from high oil prices and the U.S. subprime mortgage crisis would affect Indonesia's economy next
private consumption
year, marked by expected declines in domestic consumption and exports, two main drivers of the country's economic engine. "In the past five years,
has contributed a major part of our economic growth. However, we assume that the increasing level of
private consumption has been based on borrowing, which won't last long. "Therefore, we predict that in
2008, private consumption won't contribute that much to the economy," Kadin chairman Muhammad S.
Hidayat said.
Indonesia Answers- Impact T/O: Stability

Instability in Indonesia is inevitable
Although Indonesia’s future is highly uncertain, several conditions can be expected to hold for the next
several years: First, a sustained economic recovery is not on the horizon. Although the economy (i.e., the
GDP) grew at a rate of 3.5 percent in 2001, the underlying causes of the country’s economic weakness—
large private and public debt and the insolvency of much of the corporate and banking sectors—
remain unresolved. Second, the political system will remain under stress. The Megawati government has
been unable to make headway on economic reform or to show much administrative competency, but the
opposition parties have yet to develop any coherent strategies for governing the country. The
decentralization process, if not properly managed, has the potential to be greatly destabilizing. Third, the
issue of the role of Islam in politics—which, as already noted in this report, goes back to the fundamental
question of the nature of the Indonesian state—will continue to be a divisive issue and could have
significant impact on the 2004 and subsequent elections. Will Megawati, if she is reelected, continue to be
dependent on the Muslim political parties for her parliamentary majority? If the Golkar organization (the
political instrument of the New Order, which has been trying to recreate itself as a viable post-Suharto party)
collapses, will Islam form the basis for a new political bloc?
Indonesia Answers- Impact T/O: Democracy

New authoritarianism is low probability
The “muddling through” scenario presented in the previous section should be considered to be among the
better-case scenarios. The fragile economy and a breakdown of order could generate morenegative scenarios.
One such negative scenario would be a return to authoritarian rule. There are some powerful factors that
militate against this outcome, at least in the short term, including the back-lash against Suharto’s 32-
year rule, the emergence of new political and civil society forces, and the discredit suffered by the
military and the security services as a result of their association with the Suharto regime. Nevertheless,
continued inability of the new democratic in-stitutions to deliver stability, competent government, and
economic growth could generate a demand for the return of a strong ruler.
No radical take-over
A radical Islamic takeover is possible, but should be considered a low-probability scenario at this stage. It
would be opposed by secularists in the political establishment and in the military and probably by most
Indonesian Muslims themselves, the vast majority of whom are moderate and do not support the radicals’
agenda. However, progressive Islamization—defined as increased influence of Islam in politics and more
overt manifestations of religiosity in public behavior—would be entirely possible.
Indonesia Answers- Democracy Bad—Terrorism

Democratization causes instability and rollback, spurring war and terrorism
Edward D. Mansfield and Jack Snyder, “Prone to Violence,” The National Interest, Winter 2005/2006
THE BUSH Administration has argued that promoting democracy in the Islamic world, rogue states and
China will enhance America's security, because tyranny breeds violence and democracies co-exist peacefully.
But recent experience in Iraq and elsewhere reveals that the early stages of transitions to electoral
politics have often been rife with violence. These episodes are not just a speed bump on the road to the
democratic peace. Instead, they reflect a fundamental problem with the Bush Administration's strategy
of forced-pace democratization in countries that lack the political institutions needed to manage
political competition. Without a coherent state grounded in a consensus on which citizens will exercise
self-determination, unfettered electoral politics often gives rise to nationalism and violence at home and
abroad. Absent these preconditions, democracy is deformed, and transitions toward democracy revert
to autocracy or generate chaos. Pushing countries too soon into competitive electoral politics not only
risks stoking war, sectarianism and terrorism, but it also makes the future consolidation of democracy
more difficult.
Terrorism causes extinction

Pacotti, “Are we doomed yet?” http://www.salon.com/tech/feature/2003/03/31/knowledge/index.html, March 31,
2003
A similar trend has appeared in proposed solutions to high-tech terrorist threats. Advances in biotech,
chemistry, and other fields are expanding the power of individuals to cause harm, and this has many people
worried. Glenn E. Schweitzer and Carole C. Dorsch, writing for The Futurist, gave this warning in 1999:
"Technological advances threaten to outdo anything terrorists have done before; superterrorism has
the potential to eradicate civilization as we know it." Schweitzer and Dorsch are so alarmed that they go
on to say, "Civil liberties are important for a democratic society; the time has arrived, however, to reconfigure
some aspects of democracy, given the violence that is on the doorstep." The Sept. 11 attacks have obviously
added credence to their opinions. In 1999, they recommended an expanded role for the CIA, "greater
government intervention" in Americans' lives, and the "honorable deed" of "whistle-blowing" -- proposals
that went from fringe ideas to policy options and talk-show banter in less than a year. Taken together, their
proposals aim to gather information from companies and individuals and feed that information into
government agencies. A network of cameras positioned on street corners would nicely complement their
vision of America during the 21st century. If after Sept. 11 and the anthrax scare these still sound like wacky
Orwellian ideas to you, imagine how they will sound the day a terrorist opens a jar of Ebola-AIDS spores on
Capitol Hill. As Sun Microsystems' chief scientist, Bill Joy, warned: "We have yet to come to terms with the
fact that the most compelling 21st-century technologies -- robotics, genetic engineering, and
nanotechnology -- pose a different threat than the technologies that have come before. Specifically,
robots, engineered organisms, and nanobots share a dangerous amplifying factor: They can self-replicate. A
bomb is blown up only once -- but one bot can become many, and quickly get out of control." Joy calls the
new threats "knowledge-enabled mass destruction." To cause great harm to millions of people, an extreme
person will need only dangerous knowledge, which itself will move through the biosphere, encoded as
matter, and flit from place to place as easily as dangerous ideas now travel between our minds. In the
information age, dangerous knowledge can be copied and disseminated at light speed, and it threatens
everyone. Therefore, Joy's perfectly reasonable conclusion is that we should relinquish "certain kinds of
knowledge." He says that it is time to reconsider the open, unrestrained pursuit of knowledge that has been
the foundation of science for 300 years. "[D]espite the strong historical precedents, if open access to and
unlimited development of knowledge henceforth puts us all in clear danger of extinction, then common
sense demands that we reexamine even these basic, long-held beliefs."
Indonesia Answers- AT: Democracy Solves Terrorism

There is no statistical or empirical evidence showing democracy decreases terrorism
F. Gregory Gause III, Associate Professor of Political Science at the University of Vermont and Director of its
Middle East Studies Program, “Can Democracy Stop Terrorism?” Foreign Affairs, September/October 2005
There is, in other words, no solid empirical evidence for a strong link between democracy, or any other
regime type, and terrorism, in either a positive or a negative direction. In her highly praised post-September
11 study of religious militants, Terror in the Name of God, Jessica Stern argues that "democratization is
not necessarily the best way to fight Islamic extremism," because the transition to democracy "has
been found to be an especially vulnerable period for states across the board." Terrorism springs from
sources other than the form of government of a state. There is no reason to believe that a more
democratic Arab world will, simply by virtue of being more democratic, generate fewer terrorists.
Indonesia Answers- Democracy Bad— Conflict

Democratization Fails & Spurs Ethnic Conflict
Eric J. Hobsbawm, meritus professor of economic and social history at Birkbeck, University of London,
“Spreading Democracy: The World's Most Dangerous Ideas,” Foreign Policy, September/October 2004
While threatening the integrity of universal values, the campaign to spread democracy will not succeed.
The 20th century demonstrated that states could not simply remake the world or abbreviate historical
transformations. Nor can they easily effect social change by transferring institutions across borders.
Even within the ranks of territorial nation-states, the conditions for effective democratic government are
rare: an existing state enjoying legitimacy, consent, and the ability to mediate conflicts between domestic
groups. Without such consensus, there is no single sovereign people and therefore no legitimacy for
arithmetical majorities. When this consensus – be it religious, ethnic, or both – is absent, democracy has
been suspended (as is the case with democratic institutions in Northern Ireland), the state has split (as in
Czechoslovakia), or society has descended into permanent civil war (as in Sri Lanka). "Spreading
democracy" aggravated ethnic conflict and produced the disintegration of states in multinational and
multicommunal regions after both 1918 and 1989, a bleak prospect.
Ethnic conflict causes terrorism and genocide that goes global

Rodolfo Stavenhagen, Professor at the United Nations University, “The Ethnic Question,” p.84, 1990
Finally, when ethnic conflict becomes violent, it has a tendency to be particularly destructive, leaving
deep scars in the body politic and the collective psyche. Massive human rights violations have been
associated with ethnic conflicts, ranging all the way from genocide to apartheid to terrorism. The
international community is therefore particularly concerned with the wider implications of ethnic
conflicts around the world.

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Gonzaga Debate Institute 2008 1

Scholars Lab 2nd Wave Oil DA’s

4th Wave Oil DA’s (Venezuela/Nigeria/Indonesia/Mexico)

***General Oil UQ – 4th Wave***

Despite drop, prices remain very high

The Wall Street Journal 7/16 (“Oil Matters” http://online.wsj.com/article/SB121622189274758757.html?mod=googlenews_wsj)

Oil prices , supply concerns prove

AFP 7/15 (“Oil prices near record highs” http://afp.google.com/article/ALeqM5iULbqz7a_RWOvuo-LtKNAkNzTERw)

Oil prices  long term, supply concerns prove

Oil Prices  - AT: Biggest Price Decline in 17 Years

CNN Money 7/15 (“Biggest oil price drop in 17 years” http://money.cnn.com/2008/07/15/markets/oil/?postversion=2008071516)

Oil Prices  - AT: Downward Trend

The drop in prices is temporary, prices will climb again soon

Washington Post 7/16 (“Speculating About an Oil "Bubble"”

Price drop is tempororary trend is still upward

Oil Prices  - AT: Offshore Drilling

Any oil drilled would be sold at current prices

Concord Monitor 7/16 (“Drilling Wont Help Reduce Gas Prices”

Drilling wont decrease prices

Oil Prices , decreased US demand proves

Reuters 7/15 (“Oil plunges $6 on mounting US economic concern” http://africa.reuters.com/wire/news/usnSP264611.html)

Oil prices , decreased US demand proves

CNN Money 7/15 (“Biggest oil price drop in 17 years” http://money.cnn.com/2008/07/15/markets/oil/?postversion=2008071516)

Oil Prices - Offshore Drilling

In Rich 6/17 (“Gilmore backs McCain's stance on offshore drilling” http://www.inrich.com/cva/ric/news.apx.-content-articles-RTD-2008-

Drilling will lower prices

***Russian Oil Updates – 4th Wave***

Russia DA – UQ – Russia Econ 

Russian econ strong

Russian econ strong

Russian econ strong

Russia DA – UQ – Russia Diversification 

Russia DA – Internals – Oil Key to Russian Econ

***Russia Answers – 4th Wave***

Russia Answers – UQ – Russia Econ

PrimeTass 7/17 ([http://www.prime-tass.com/news/show.asp?topicid=50&id=441576] Kudrin: Slower industrial

Russian econ growth slowing

Harrison 7/14 (Jon Harrison is Director of FX Strategy at Dresdner Kleinwort in London

Russian econ overheating, inflation 

Russia Answers – UQ – Russia Infl 

Russia Answers – Internals – AT: Oil Key to Russian Econ

Oil is not the key factor in Russian econ growth

Russia Answers – Internal Link Turn: Inflation K/T Econ

***Saudi Oil Updates – 4th Wave***

Saudi DA – UQ – Saudi Econ 

AME Info 7/13 (“Saudi wealth reaches new heights” http://www.ameinfo.com/163321.html)

Saudi DA – UQ – Saudi Inflation

Ghafour 8 (Abdul, Arab News

Saudi taking measures to control inflation

Gulf Daily News 7/17 ([http://www.gulf-daily-

Saudi DA – UQ – Impact: Coup = US Invasion

Saudi coup would force a US military intervention

***Saudi Answers – 4th Wave***

Saudi Answers – UQ – Saudi Econ

Saudi econ declining, stock markets prove

Saudi Answers – UQ – Saudi Inflation 

Saudi Answers – UQ – Middle East Instability 

Middle east instability now

Barrons 7/14 “You Won't Go Broke Filling Up on the Stock”

Middle east instability now

General Oil UQ – 4th Wave

Russian Oil Updates – 4th Wave

Russia Answers – 4th Wave

Saudi Oil Updates – 4th Wave

Saudi Answers – 4th Wave

Venezuelan Oil DA