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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)
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

Gonzaga Debate Institute 2008 2
Scholars Lab 2nd Wave Oil DA’s
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

Gonzaga Debate Institute 2008 3
Scholars Lab 2nd Wave Oil DA’s
***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...........................................................................................................................158
Mexico DA – Impact: Key to World...........................................................................................................................159
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

Gonzaga Debate Institute 2008 4
Scholars Lab 2nd Wave Oil DA’s
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

Gonzaga Debate Institute 2008 5 Scholars Lab 2nd Wave Oil DA’s ***General Oil UQ – 4th Wave*** .

But economists have been watching intensely for a spillover of that inflation into other categories. strong demand raising oil price: Bush” http://www. And Wednesday's data fed such fears. supply concerns prove AFP 7/15 (“Oil prices near record highs” http://afp. while the "core" rate grew 2. Cheaper oil would certainly serve the goals of price stability and economic growth.com/article/politicsNews/idUSWAT00978920080715) President George W. marking the second-highest increase since 1982 and the highest since 2005. prices remain very high The Wall Street Journal 7/16 (“Oil Matters” http://online.31 dollars. But lest anyone start celebrating. of Global Insight." said Kenneth Beauchemin. Oil prices  long term.50 on Friday.21 dollars to 146. supply concerns prove Reuters 7/15 (“Tight supply. "The fundamentals are what's really driving the long-term price of oil. sweet crude for August delivery dropped $4.html?mod=googlenews_wsj) The Labor Department reported Wednesday that the consumer price index jumped 1. crude and gasoline supplies. 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.Gonzaga Debate Institute 2008 6 Scholars Lab 2nd Wave Oil DA’s Oil Prices  Despite drop. 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. Excluding food and energy.4%.3%.44 Tuesday in the biggest one-day drop in dollar terms since the Gulf War.com/article/SB121622189274758757. well above the Federal Reserve's preferred range.50 to $134. The problem.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. In testimony on Capitol Hill. On Wednesday.39 dollars a barrel.36 dollars to 145. Raising interest rates to stifle inflation runs the risk of braking the economy even more. and amid ongoing supply tensions including a strike in Brazil.27 that was struck last Friday.wsj. That was close to the record high of 147. inflation "is too high" and reiterated that the Fed's aim is to achieve price stability. Fed chief Ben Bernanke said U. Oil prices . "Oil prices were higher (on Tuesday).reuters. gained 1. Prices fell $6.1% in June. And although nobody expects crude to retreat to levels that are now viewed with nostalgia. London's Brent North Sea oil for August gained 1." said Sucden analyst Andrey Kryuchenkov." Bush told reporters at a White House news conference. "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. prices rose 5%. Brent had jumped to an all-time high of 147." . "Demand for oil has increased and supply has not kept up with it.24 a barrel in morning trading in New York on government data showing a surprising spike in U. New York's main oil contract. Bernanke and other policy makers are also contending with an economic slowdown made worse by turmoil in financial markets. The inflationary effect of rising oil prices is certainly no secret. it advanced 0. of course.google.S. is that Mr. light sweet crude for August delivery. prices remain about 80% above where they were a year ago and up about 40% from the start of the year. light.S. its price is dropping. On a year-over-year basis.

17.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. President George H. so the more than $10 slide in dollar terms represented a record 33% drop. Oil fell 4. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War. which does not even crack the top 100 price declines in percentage terms.cnn. On that day. oil was trading at just $32 a barrel. 1991.56. .W.Gonzaga Debate Institute 2008 7 Scholars Lab 2nd Wave Oil DA’s Oil Prices  .4% Tuesday.com/2008/07/15/markets/oil/?postversion=2008071516) The drop in oil was the largest single-day slide in dollar terms since Jan. when oil fell by $10. But in 1991.

S. continuing a trend of gradually declining U.washingtonpost. assuming it comes at all.Gonzaga Debate Institute 2008 8 Scholars Lab 2nd Wave Oil DA’s Oil Prices  . it's unlikely that oil prices are due for a sustained fall. That comes a day after Mastercard reported that last week’s purchases of gasoline fell 5. India.istockanalyst.html) Today prices got another push downward because the Energy Department’s Energy Information Administration reported that U. That doesn’t mean high oil prices are over.2 percent last week compared to a year earlier. has over oil prices these days. and how much influence the U. . commercial oil inventories are still down 55 million barrels from last year this time. One reason: an increase in oil imports. To restate the obvious: demand has risen sharply in recent years while supply growth has lagged. regardless of economic conditions.com/postglobal/energywire/2008/07/speculating_about_an_oil_bubbl. after all. the respite will only be temporary. Perhaps we'll enjoy a break from the trend and see energy prices fall in the wake of economic slowdown or worse.S. Volatility and commodities. prices will climb again soon Washington Post 7/16 (“Speculating About an Oil "Bubble"” http://newsweek. The EIA data also showed that U. economic growth outlook compared with emerging markets. It all depends on how much of a global slowdown we're looking at. Longer term. Maybe. 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). BUT STILL HOPING FOR A BREAK” http://www. Noise may dominate the short term. thanks to the rise of China. U. Rising commodities prices generally. are old friends. however. fuel consumption. That means that while inflation pressures may ebb for a time.S. and the relative maturing of the U.html) But let's not get too giddy. are based on a fundamental shift in the supply/demand equation in the global economy. and oil in particular. commercial inventories of crude oil and petroleum products climbed by 7 million barrels last week.S. gasoline demand was down 375. but supply and demand dictate price trends over time. it wouldn't surprise us to see oil prices drop sharply from current levels.AT: Downward Trend The drop in prices is temporary.000 barrels a day from the same week a year earlier. In any case.com/article/viewarticle+articleid_2403169&title=Price_Troubles_Once. Price drop is tempororary trend is still upward The Capital Spectator 7/16 (“PRICE TROUBLES ONCE MORE. The latter subject is open to debate. It was the twelfth consecutive weekly decline reported by Mastercard. etc.S.S.

US President George W.com/2008/07/15085408/Oil-steady- weighs-demand-fear. On Monday.300 miles east of the Lesser Antilles that could develop into a tropical depression. A congressional ban on offshore drilling also remains in place.google. Drilling wont decrease prices Associated Press 7/15 (“Oil rises. a weakening of the dollar helped to support commodity prices Tuesday.5983.Gonzaga Debate Institute 2008 9 Scholars Lab 2nd Wave Oil DA’s Oil Prices  .livemint.79 yen in Asian currency trade. weighs demand fears vs supply risks” (http://www. On Monday. and their prices tend to rise as the currency declines.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. before settling back at $1. The dollar fell to 105.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB- tAD91UAQMG0) Also. Bush lifted a presidential ban on offshore drilling to boost domestic supplies and combat soaring energy prices. In the long term. 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. we'll need something other than drilled oil to power our transportation. Many investors view oil and other commodities as hedges against inflation and a weakening dollar.6038 in European trading.AT: Offshore Drilling Lifting the ban on offshore drilling wont have any affect on oil prices for years Money Matters 7/15 (“Oil steady. It makes little difference whether we purchase oil from Canada (our leading supplier). driving less frequently and driving at slower speeds. Analysts said the plan would take a decade to bring real results and offer little short-term relief. or nations like Saudi Arabia where the money may filter into the hands of terrorists. Gas prices would still be at the same level.html) Rising fuel costs have sparked global protests and cut US fuel demand during the typical peak summer gasoline season. Any oil drilled would be sold at current prices Concord Monitor 7/16 (“Drilling Wont Help Reduce Gas Prices” http://www. it will be sold at the world price. The only realistic way to contain gasoline prices in the near term is to cut demand. And whether oil is drilled in Saudi Arabia or off the coast of Florida. but back off day's high” http://ap. but robust growth in emerging economies continues to keep their appetite to consume high. 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. If we ceased purchasing from Venezuela tomorrow. Markets were also eyeing a low-pressure system about 1. while the euro rose to an all-time high of $1. and Senate Democratic Leader Harry Reid later on Monday rejected Bush’s call to lift the moratorium. nations with anti-American governments like Venezuela. they would simply sell to someone else for the same price. . That means driving more fuel-efficient vehicles.

S. decreased US demand proves CNN Money 7/15 (“Biggest oil price drop in 17 years” http://money. sweet crude for August delivery fell $4.74 a barrel in trading on the New York Mercantile Exchange.14 to settle at $134.reuters. The session low was notched at $135. crude settled down $6. sweet crude fell $6. The drop follows a $6.Gonzaga Debate Institute 2008 10 Scholars Lab 2nd Wave Oil DA’s Oil Prices Oil prices continuing to decline Associated Press 7/16 (“Oil tumbles again. .44 at $138. London Brent crude fell $5.google. The drop in oil was the largest single-day slide in dollar terms since Jan. prices fall over $10 in 2 days” http://ap. capping a dizzying drop that has left crude more than $10 cheaper in just two days of frenzied trading. when oil fell by $10. as growing concern about the economic health of top energy consumer the United States stirred demand worries.S. economy.44 to settle at $138. demand after hearing comments from Federal Reserve Chairman Ben Bernanke. Light. 1991.html) Oil dropped more than $6 Tuesday. On that day.75. Light. 17.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD91V4HL00) Oil prices have settled sharply lower for the second straight day.56. the biggest one-day drop since 1991. Federal Reserve Chairman Ben Bernanke said financial markets were under "considerable stress.cnn. when prices retreated at the start of Operation Desert Storm.74 a barrel. decreased US demand proves Reuters 7/15 (“Oil plunges $6 on mounting US economic concern” http://africa.44 sell-off Tuesday. Oil Prices .17 to $138. President George H. meaning prices have plummeted over $10 since Monday.com/wire/news/usnSP264611. Bush withdrew oil from the Strategic Petroleum Reserve ahead of the first Gulf War. the largest drop in dollar terms in 17 years.60 a barrel on the New York Mercantile Exchange. Oil prices .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. after earlier sinking as low as $132.W." adding to concerns about the strain of the weak housing market and high energy and food prices on the U.92 earlier. U.

In a speech today. It is time for the federal government to lift these restrictions.html) Former Virginia Gov." . the highest in surveys this decade.S. 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. Drilling will lower prices Washington Post 6/17 (“McCain: End Fed Ban on Offshore Drilling” http://news.apx. In a new Washington Post-ABC News poll.Gonzaga Debate Institute 2008 11 Scholars Lab 2nd Wave Oil DA’s Oil Prices . will discuss his energy policy in an address Wednesday morning at the Science Museum of Virginia. Warner." McCain told reporters yesterday. John McCain's support of lifting the federal ban on offshore drilling. Democrat Mark R.Offshore Drilling Drilling will lower prices In Rich 6/17 (“Gilmore backs McCain's stance on offshore drilling” http://www. drill now and pay less" is "our path to quickly reduce our dependence on foreign oil" and to lower prices. Gilmore said "drill here.-content-articles-RTD-2008- 06-17-0153. But a broad federal moratorium stands in the way of energy exploration and production. Senate.com/cva/ric/news. 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. who is running for the U. Gilmore's opponent in the Senate race. today praised Sen. ." Gilmore said in a statement.inrich. . Jim Gilmore. John McCain called yesterday for an end to the federal ban on offshore oil drilling.aol. he plans to add that "we have untapped oil reserves of at least 21 billion barrels in the United States. 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.com/political- machine/2008/06/17/mccain-end-fed-ban-on-offshore-drilling/) Sen. "As working families across the commonwealth of Virginia and across our country face financial hardship due to soaring gasoline prices. "We must embark on a national mission to eliminate our dependence on foreign oil. nearly 80 percent said soaring prices at the pump are causing them financial hardship. .

Gonzaga Debate Institute 2008 12 Scholars Lab 2nd Wave Oil DA’s ***Russian Oil Updates – 4th Wave*** .

for example. Even with this growth most analysts assert that Russian stocks are still cheap and the cheapest of any emerging market. a Moscow investment house. Europe's finance capital. However. Russian econ strong Speedie 7/14 (David Speedie is Senior Fellow. a professor at Moscow's Higher School of Economics. Market Correspondent. equities. "We are overloaded with money. and China. it reached $1.a red-hot emerging market. Russia's economic growth under Putin has included.S.washingtonpost. Their trade balance shows a big surplus of $72. John F.5 percent per year for the last eight years. with a 13 percent increase so far this year." said Mikhail Bergen. soaring energy revenue has largely insulated Russia. Russian GDP peaked at $200 billion.html) Contrast that with oil-fat Russia -.3 trillion. crazy amounts of money from the energy market. In addition. 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. Three. Its gross domestic product is expected to grow 8 percent this year. . Belfer Center for Science and International Affairs. Options Strategist & Profit Strategies Radio Show.policyinnovations.org/ideas/briefings/data/000066) Two. although this has to be taken in perspective. as said before. Russian econ strong Neal 7/16 (Jeff Neal is Senior Writer. the European Union. a rising entrepreneurial middle class and a robust consumer economy. There is obviously a highly visible Russian commercial presence in London. the United States. from the turbulence in global markets. according to Troika Dialog. Kennedy School of Government. The reason behind this is because Russia is by far the strongest economy. 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. Under Yeltsin. As in many commodity-driven economies in the developing world. and this will be replicated in New York. http://www. and consumer spending continues to boom. This is the new Russian consumer with money to go abroad and be where they feel comfortable.Gonzaga Debate Institute 2008 13 Scholars Lab 2nd Wave Oil DA’s Russia DA – UQ – Russia Econ  Russian econ strong Washington Post 7/17 (“Slowing Economy Gives Way to Global Role Reversals” http://www.com/market/articles/19849) Russia is still the largest market for foreign investments when looking at the Eastern European region.optionetics. the world's second- largest oil exporter. it will still be a mere fraction in terms of global GDP of. Under Putin. Harvard University “The Rise of the Rest: How the Ascent of China and Russia Affects Global Business and Security” http://www. the nation’s once large debts have been replaced with a $150-billion stabilization fund. Russia’s Gross Domestic Product increased an average of 7.5 billion and its benchmark RTS stock index has increased by 1.992 percent since 2000. even if Russia ascends to the top five global economies. realize and accept that Russia is a global economic player.com/wp- dyn/content/article/2008/07/16/AR2008071602732.

' Putin said after visiting the Sevmash shipyard in Severodvinsk where Russia's first Arctic oil rig is under construction. 'Our energy policy will be clear. We do not plan any economic egoism. in the medium-term and in the long- term.' he continued.forbes. The government will also ease bureaucracy for companies opening new oil fields and develop infrastructure in remote areas to encourage investment. .html 'The oil sector has reached a critical juncture.Gonzaga Debate Institute 2008 14 Scholars Lab 2nd Wave Oil DA’s 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.' he added. http://www.com/afxnewslimited/feeds/afx/2008/07/11/afx5205986. We will take into account the legitimate interests of our partners but we will also defend our national interests. we will completely cover the growing demand of the Russian economy and fulfil our obligations to our foreign partners. 'We have no doubt that now. transparent. 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. liberal.

led by Russia. are worthy of taking a closer look at for profitable opportunities. Options Strategist & Profit Strategies Radio Show. However.optionetics. http://www. The bottom line is that these emerging markets in Eastern Europe. . Market Correspondent. They have the world’s largest natural gas reserves.Gonzaga Debate Institute 2008 15 Scholars Lab 2nd Wave Oil DA’s Russia DA – UQ – Russia Diversification  Russia diversification  Neal 7/16 (Jeff Neal is Senior Writer.com/market/articles/19849) Russia has always been known for its abundance of natural resources. the second largest coal reserves and the eighth-largest oil reserves. 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.

As such.92 billion in 2007. who specializes in growth and productivity theory. “Russian Inflation: Is the Boom About To Bust?” http://seekingalpha. Russia also produces the energy equivalent of about 11 million barrels a day of gas. 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. more than Saudi Arabia did. vulnerable to drop in oil prices Hugh 7/9 (Edward Hugh is a macro economist.77 million barrels of oil a day in June. As a result of such factors Russia's trade surplus hit a record $130. 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.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. So what could possibly go wrong? Well. thus becoming the biggest exporter of the fuel. Russia produced 9. compared with $60 a barrel in the same period a year earlier). demographic processes and their impact on macro performance. .Gonzaga Debate Institute 2008 16 Scholars Lab 2nd Wave Oil DA’s Russia DA – Internals – Oil Key to Russian Econ Oil key to Russian econ.

Gonzaga Debate Institute 2008 17 Scholars Lab 2nd Wave Oil DA’s ***Russia Answers – 4th Wave*** .

Russian econ overheating. well above growth in labor productivity (see chart below). inflation  Hugh 7/9 (Edward Hugh is a macro economist. 2) domestic demand is increasing at an annual rate of 15 percent in real terms. and slower economic growth. a rate which is somewhat above the level that can be maintained without causing accelerating inflation. who specializes in growth and productivity theory." said Kudrin.1 percent year-on-year last year. the Middle East and Africa). where shortages are causing real wage increases of about 16 percent annually. slowing down from a 1. 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.com/article/reutersComService4/idUSDIS43812720080714) GDP growth remains among the strongest in the EEMEA region (Eastern Europe. and unit labor costs are now rising steadily.Gonzaga Debate Institute 2008 18 Scholars Lab 2nd Wave Oil DA’s Russia Answers – UQ – Russia Econ Russia’s economy is slowing PrimeTass 7/17 ([http://www.4% growth rate in May. “Russian Inflation: Is the Boom About To Bust?” http://seekingalpha.prime-tass. demographic processes and their impact on macro performance.asp?topicid=50&id=441576] Kudrin: Slower industrial growth in Jun doesn't indicate long-term trend/ July 17. however. Russia's industrial output rose 0. while GDP is growing at 8 percent. 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. Russian econ growth slowing Harrison 7/14 (Jon Harrison is Director of FX Strategy at Dresdner Kleinwort in London http://www. . We forecast GDP growth slowing to 6-7 percent this year and next. 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. Domestic resource constraints are also evident in the rise in import volume growth to almost 30 percent annually. who is also a deputy prime minister. Kudrin said. according to the Federal State Statistics Service. it's difficult to talk about a trend. that he believed Russia's high inflation rate resulted in high interest rates.com/news/show. less investment. delivering 8.3) resource constraints have now become strikingly evident in labor markets.9% in June.com/article/84286-russian-inflation-is-the-boom- about-to-bust) At the same time there is now extensive evidence that the Russian economy is overheating. according to estimates by both Russian and IMF experts.reuters. "For the time being.

with output in the resource sector effectively at or near its peak. As a result. the end product is rising inflation and structural distortions in the development of the manufacturing sector. under unfavourable circumstances. the main drivers of Russian growth are now construction and domestic consumption. and we will see that. Russian consumer prices were up 15.5 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. . be converted into precisely its opposite: an impoverishing bust. 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. inflation  Hugh 7/9 (Edward Hugh is a macro economist. Since long-term labour supply issues mean that Russia is unable to comfortably grow at its current rate of expansion. the living standards improving boom could easily.Gonzaga Debate Institute 2008 19 Scholars Lab 2nd Wave Oil DA’s Russia Answers – UQ – Russia Infl  Russian econ overheating. the Russian government is struggling to bring inflation down towards its 10. 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. “Russian Inflation: Is the Boom About To Bust?” http://seekingalpha. In this post we will look at the general macro economic situation of the Russian economy. As a result.com/article/84286-russian-inflation-is-the-boom- 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.1 percent from a year ago— matching the rate in May—according to data released earlier this week by the Federal Statistics Service. who specializes in growth and productivity theory. demographic processes and their impact on macro performance.

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

Oil is not the key factor in Russian econ growth

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)
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.

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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.

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***Saudi Oil Updates – 4th Wave***

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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.

gulf-daily- news.asp?Article=223290&Sn=BUSI&IssueID=31119] Inflation in Oman 'to stabilise as food crisis eases'/ July 17.” he said. With crude oil selling for prices above $140 a barrel.4pc in May from an at least 30-year high of 10. . 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. Al-Sayari said.arabnews.Gonzaga Debate Institute 2008 24 Scholars Lab 2nd Wave Oil DA’s Saudi DA – UQ – Saudi Inflation Saudi inflation down Ghafour 8 (Abdul. Hamad Al-Sayari.com/?page=6&section=0&article=111329&d=29&m=6&y=2008] Inflation lets up a little in Kingdom/ June 29. and they are taking time to ease.com/Story. As a result the government took a series of measures to curb inflation and rising prices of essential commodities. price rises in Saudi Arabia are likely to ease in the second half of the year. As the impact of such anti-inflation measures kicks in. Oman's central bank has tightened lending curbs three times in less than a year to rein in money supply growth. 2008) Annual inflation in Saudi Arabia hit 10. governor of Saudi Arabian Monetary Agency (SAMA). the forces pushing inflation are still active. its central bank governor has said. “Unfortunately. 2008) Gulf governments have increased price controls. forces pushing inflation in Saudi Arabia include housing and rent. the highest in more than 30 years.5pc a month earlier. Arab News [http://www.5 percent in April this year. boosted subsidies and raised employee wages in response to inflation. has predicted the Kingdom’s inflation rate would come down by the second half of this year. Saudi taking measures to control inflation Gulf Daily News 7/17 ([http://www. Inflation in the world's top oil exporter eased slightly to 10.

who cited a Saudi coup as one of several threats to the United States.-led mission could include up to 300.com/worldtribune/05/front2453676.55 million barrels per day." O'Hanlon envisioned a U.S." .S. 26.000 troops could capture eastern Saudi Arabia.000 military and National Guard troops. and hope that the new regime gradually realized the benefits of reintegrating Saudi Arabia at least partially into the global oil economy. Another prospect was that the new regime would seek to disrupt the oil market. with 200." The response could include the deployment of three U. "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. In his testimony. response during a hearing on Oct. "But in the end the United States and other western countries might consider using force. fears prospect of Saudi coup. overthrows the royal family in Saudi Arabia?" O'Hanlon asked. with more than 1. But more than 100.S. is the largest oil producer and exporter." O'Hanlon said." O'Hanlon said. Saudi Arabia. He said about 10. Army divisions backed by fighter-jets and airborne early-warning and alert aircraft. with an output of nine million barrels of oil per day. In all. a nuclear power since 1998. O'Hanlon said. according to Middle East Newsline. "Indeed. concern of Saudi instability.-led military operation designed to seize Saudi oil wells. a senior fellow of the Brookings Institution. while easier in some ways and perhaps less bloody in the initial phases.000 would be required to secure the entire Saudi Arabia. using standard sizing criteria.worldtribune.Gonzaga Debate Institute 2008 25 Scholars Lab 2nd Wave Oil DA’s Saudi DA – UQ – Impact: Coup = US Invasion Saudi coup would force a US military intervention World Tribune 5 (“U.S. it might be feasible not to do anything at first. A U. concern of a Saudi coup appears greater than ever.S. "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.-led military force of 300.000 troops. 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. "Such a result would raise the specter of major disruption to the oil economy. O'Hanlon said such a coup would also destabilize Pakistan. weighs invasion plans” http://www. the U.html) The United States has raised the prospect of a military invasion of Saudi Arabia. Washington and its allies would place the proceeds from Saudi oil sales into escrow for a future pro-Western government in Riyad. "How should the United States respond if a coup. marked increasing U.S. Congressional sources said the House hearing. could be fully half as large and might last much longer. The scenario was outlined by Michael O'Hanlon. The Arab kingdom is the third largest supplier of oil to the United States.157638889.S. which contains virtually all of the kingdom's oil wells. The House Armed Services Committee considered the possibility of a Saudi coup and U. "So in fact a coastal strategy. which focused on future threats in the Middle East and other regions.S. O'Hanlon envisioned a Saudi coup as resulting in the emergence of what he termed a fundamentalist regime intent on acquiring nuclear weapons. presumably fundamentalist in nature.000 additional troops would be required to protect the wells and other vital infrastructure. Defense Department and National Security Council since 2002." O'Hanlon said. located along the eastern coast. The House committee was told that U.

Gonzaga Debate Institute 2008 26 Scholars Lab 2nd Wave Oil DA’s ***Saudi Answers – 4th Wave*** .

The Tadawul is the only Arab exchange monitored by Bloomberg that's open on Saturdays. dropped 1 per cent to 73.html) Saudi Arabian shares declined for a third day. . led by Banque Saudi Fransi and Samba Financial Group. The Tadawul All Share Index retreated 0.25 riyals.gulfnews. the second-largest bank. Samba.7 per cent during its three-day losing streak. The index has lost 5.3 per cent to 8.com/articles/08/07/13/10228378.971. stock markets prove Bloomberg 7/12 (“Samba and Banque Saudi shares drag Saudi Arabian index down” http://archive.32 at 1.4 per cent to 81 riyals.Gonzaga Debate Institute 2008 27 Scholars Lab 2nd Wave Oil DA’s Saudi Answers – UQ – Saudi Econ Saudi econ declining. slid 2. the Saudi lender partially owned by a unit of Credit Agricole SA. Banque Saudi Fransi.02pm in Riyadh.

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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.

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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.

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***Venezuelan Oil DA***

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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.

2008) Has participatory democracy been good for Venezuela? Since the people gained popular power in 1998.4 percent last year.8 percent and next year only by 3. but is starting to see a slowdown. Increased democratic participation improves Venezuelan economy Jordan 8 (James. its economy expanded by 8.aspx?id=2535] Venezuela: Latin America's Richest?/ June 23. Political Affairs [http://www.politicalaffairs.5 percent.Gonzaga Debate Institute 2008 32 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Econ Up Venezuela’s GDP at record highs Latin Business Chronicle 8 ([http://www. according to a Latin Business Chronicle analysis of data from the International Monetary Fund (IMF). Last year.7 billion this year. half the population is enrolled in free. Venezuela's GDP per capita is estimated to reach $11.latinbusinesschronicle. The IMF estimates also show that Venezuela's GDP is set to reach $334. . public education.latinbusinesschronicle.5%--30% if food and health subsidies are factored in.com/app/article. while that of Argentina will likely end up at $323. the poverty rate has dropped from 54% to 38.933 this year. millions have gained access to free health care. albeit not as marked.7 percent. 2008) Venezuela's economy grew by 8. 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. That's higher than the estimated figure for Chile of $10.aspx?id=2535] Venezuela: Latin America's Richest?/ June 23. This year it should grow by another 7.0 percent before expanding by 4.8 billion. Argentina's economy will see a similar trend.126. The economy has been growing steadily since NED funded attempts to overthrow the government in 2002.com/app/article.5 percent in 2009. Venezuela’s economy is expected to grow Latin Business Chronicle 8 ([http://www. and over 5 million acres of fallow land have been turned over to rural people for agricultural development.net/article/articleview/7046/1/340/] Close the Mis- named National Endowment for Democracy/ June 19. according to IMF forecasts. This year it should expand by 5.

2008) The next several months will bring increased inflation. about half its average for the previous four years. 2008) Boom times are waning in oil-rich Venezuela.com/news/nation/bal-te.N.8 percent at the end of the first quarter from 8. more shortages.3509271. or flour. Inflation is nearing 30 percent. and annual economic growth slowed to 4.story] Venezuela boom deflates/ June 15.latinbusinesschronicle.com/news/nation/bal-te. a four-year low. But as the state budget continues to increase due to a dramatic rise in oil revenues since 2003.8 percent last year. . The basic elements of Venezuelans’ daily diet are missing. according to the U. CARACAS—To any observer walking through the streets of this city. wages have been frozen for years despite the government’s claim to operate on the people’s behalf.venezuela15jun15. Venezuelan economic growth cut in half AP 8 (Associated Press [http://www. even as world crude prices soar. which slowed to 4. Latin Business Chronicle [http://www. it is hard—sometimes impossible—to find milk.baltimoresun.com/app/article.aspx?id=2510] The Absurd Venezuelan Economy/ June 16. and there is a shortage of medicine and other products essential to good health.Gonzaga Debate Institute 2008 33 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Econ Down Venezuela’s economy is down Sabino 8 (Carlos. Economic Commission for Latin America and the Caribbean. 2008) Foreign direct investment fell to $646 million in Venezuela last year. chicken.8 percent in the first quarter.baltimoresun.3509271. the poor performance of the Venezuelan economy is a powerful revelation. Analysts warn that slowing flow of capital is a drag on the country's annual growth rate. Many point to the economy as his Achilles' heel. Venezuela is experiencing inflation and slow growth AP 8 (Associated Press [http://www. and greater internal strife within Chavismo. 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.venezuela15jun15.story] Venezuela boom deflates/ June 15.0. the highest in Latin America.0.

Gonzaga Debate Institute 2008 34 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Oil Up Venezuela has future oil reserves Amaral 8 (Rodrigo.venezuelanalysis.php/Era_of_cheap_oil_is_gone_Venezue lan_expert_says__Roundup_] Era of cheap oil is gone. strengthen its economy. The market doesn't like Venezuela. This way. surpassing those of Saudi Arabia. where Venezuela has some of the world’s largest oil reserves." Kassim says that some market analysts may be moved by other factors than purely economic analysis to have developed such contempt for Venezuelan bonds.” Chávez also proposed that Petrocaribe nations create mixed enterprises with the Venezuelan state oil company PDVSA to extract oil from the Orinoco Oil Belt.co.com/news/3643] Venezuela Increases Oil Financing for Petrocaribe Nations/ July 15. 2008) "Venezuela has a difficult president. whose reserves are the worlds biggest. The most important future OPEC producers will include Venezuela. and be less affected by the soaring oil prices. It doesn't make any sense. 2008) Chávez encouraged countries to pay part of their debt in “goods and services. according to Calderon. the former energy minister said.5-11 percent.com/news/business/news/article_1414579. Venezuelan bonds are delivering yields of 10. Chávez explained. Fund Strategy [http://www." he says. Venezuelan expert says (Roundup)/ July 2.fundstrategy. 2008) Non-OPEC countries are expected to use up their reserves by the late 2020s. But does it want to pay? I think Venezuela does. .uk/cgi-bin/item. and put production at more than 3 million barrels a day.” assuring that “a distinct market will be born in Petrocaribe” which creates “opportunities for integral development.cgi?id=168858] Prepare to Fly/ July 14. Venezuela has the world’s largest oil reserves Sugget 8 (James.4 million barrels.monstersandcritics. but also has lots of oil and will pay its debts. but I do. Calderon denied that Venezuela's oil production had declined. "It raises the classic point: the client has money to pay its debt. "With all the oil they have." Venezuela has larger reserves than Saudi Arabia Business News 8 ([http://www. Venezuela Analysis [http://www. as opposed to other estimates of 2. each country in Petrocaribe would produce its own oil supply.

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. increase income taxes from 34 percent to 50 percent. Council on Foreign Relations. 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. ExxonMobil and Norway’s Statoil chose to sell their minority stakes in smaller fields rather than accept Venezuela’s required changes. Oil industry experts suggest that PDVSA needs to invest at least $3 billion annually into its existing fields just to maintain current production levels. five other fields were turned over to PDVSA after negotiations. Essentially. in May 2006. 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. Venezuelan oil production declining Seeking Alpha 8 (leading provider of stock market opinion and analysis [http://seekingalpha.cfr. the Venezuelan government seized control of their operations in April 2006. More ev… Alvarez & Hanson 6-27 (Cesar & Stephanie. the Venezuelan administration took steps to make private Venezuelan and foreign companies producing crude oil under the 32 operating service agreements renegotiate those agreements. Oxford Analytica notes. Venezuela’s total reserves could rival those of Saudi Arabia. When France’s Total and Italy’s Eni oil companies failed to sign new agreements. pose investment risks and uncertainty for foreign companies because the Venezuelan government has ultimate control in decisionmaking. the extraction tax is 33.33 percent applied to well production. If development in the region can turn this extra-heavy tar-like oil into a more marketable commodity. and give PDVSA at least a 51 percent share of the operations covered by the agreement. 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. Oil industry officials and experts have generally reacted negatively to the changes in the agreements. Mexico. likely leading to future production declines.com/news/2008/jul/05/dont-scapegoat-energy- price-runup/] Don't scapegoat energy price runup/ July 5. such as mandating a majority share of the operation for PDVSA. . reports the New York Times.pdf) Future foreign investment is uncertain given the Venezuelan government’s recent decision to unilaterally change its business dealings with foreign companies. Many oil industry officials and experts told us that the changes in the foreign company participation structure. the new agreements increase the maximum royalty from 16-2/3 percent to 30 percent.gao.Gonzaga Debate Institute 2008 35 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Oil Down (1/2) Oil revenue and investment are down GAO 6 (June.items/d06668. Also.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. the Venezuelan Congress approved a new oil extraction tax.has recently slipped. As Reason magazine science correspondent Ronald Bailey has noted. Recent political instability in the Middle East has also contributed to the oil price rise.org/publication/12089/venezuelas_oilbased_economy. however. oil production from several of the world's largest suppliers - Iran. Nigeria and Venezuela . 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. Furthermore. Venezuela and Iran are two countries that fit into this category. http://www. Venezuelan oil production down Rocky Mountain News 8 ([http://www. http://www. according to the Venezuelan spokesperson. Corruption is sometimes to blame.rockymountainnews.com/article/81979- oil-s-supply-and-demand] Oil's Supply and Demand/ June 19. but the greater problem is that the state companies are inefficient and they haven't reinvested enough oil profits in infrastructure and technology. with royalty fees deducted from this tax. According to the Venezuelan spokesperson. Beginning in 2005.gov/new.

Mexico's oil output fell to a nine-year low of 2. including fire fighters. mostly because of a decline in the Cantarell field. dropped by 414. Despite recent high oil prices that have provided a fresh infusion of cash.org/Research/LatinAmerica/bg1787.co. is hemorrhaging oil production due to the slipshod management by its deluded president.6 billion and $3. Hugo Chavez.000 skilled managers and workers. Moreover.5 mbd. and maybe sooner. PDVSA built a reputation for smooth operation and competence. Production capacity dropped from three mbd to 600. Venezuelan economist Gustavo García calculates that this year's internal investment fell from $5 billion to $4. PDVSA will not be able to maintain current production levels. but the 2002-2003 national strike devastated the oil giant. according to Mexico's Energy Ministry! And it's not just Mexico. walked out while spillage and fires ensued. Chávez has reportedly channeled between $1.17 To regain and maintain pumping capacity at an estimated 2. another big supplier of U.000 barrels.cfm) During its 20-year history before Chávez.html] China Raises Fuel Prices: Is this the End of the Oil boom?/ June 23. Mexico will become a net oil importer by 2016. http://www. Heritage Foundation.S. Chávez fired 18. PDVSA engineers reportedly "goose" wells by pumping air and water into them to coax Venezuela's viscous petroleum to the surface. Venezuela. That's an astounding annual decline rate of 32% a year! Venezuelan oil revenue is down Johnson & Cohen 4 (8-12. Stephen & Ariel.uk/Article5187.000 skilled workers. endangering the long-term viability of existing fields. imported oil.000 bpd in just five months recently. Some 35. Think that's scary? Consider this: At current rates of decline.marketoracle.8 million barrels a day.18 Without reinvestment in equipment and maintenance. 2008) Worst of all.S.heritage. further undermining PDVSA's precarious situation.3 billion while salaries went up 60 percent despite no apparent increase in productivity or number of employees.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. PDVSA remains in disarray. . Result: The combined net oil exports from Venezuela and Mexico to the U. Mexico's production crisis is deepening: In April.Gonzaga Debate Institute 2008 36 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Oil Down (2/2) Venezuela’s oil production decreasing The Market Oracle 8 (Financial Markets Analysis & Forecasting online publication [http://www.000-40.

Since then. Venezuela’s economy has remained squarely centered on oil production. that economic growth efforts are not solely focused on oil.html) Hugo Chavez took office in 1999. In 2006.” Yet even if the country is working to diversify. “indicating an important diversification of the country's economy.Gonzaga Debate Institute 2008 37 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Diversification Up Venezuela’s economic diversification up Alvarez & Hanson 6-27 (Cesar & Stephanie. manufacturing.6 percent in 2005. .” says Miguel Tinker-Salas. wrote in a 2006 Foreign Affairs essay that the non-oil sector. Venezuela’s ambassador to the United States. which includes mining.org/publication/12089/venezuelas_oilbased_economy. a professor of Latin American history at Pomona College. Government officials argue. http://www.cfr.“oil still predominates. Chavez announced a nationalization of oil fields managed by foreign companies. grew 10. however. and agriculture. which resulted in an increase of the government’s shares in these projects from 40 percent to 60 percent. Bernardo Alvarez Herrera. Council on Foreign Relations.

http://www.focal. take part in these decisions. Political Affairs [http://www. March. half of the government's revenue. In fact. with a research focus on the economics of Latin America. 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. http://findarticles. Mexico. The threat is currently greatest in Venezuela and Bolivia. Atlanta Fed's Latin America Research Group.Gonzaga Debate Institute 2008 38 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Diversification Down Diversification in Venezuela is down Berry 8 (Albert. and probably also because their decision-makers will have a better handle on how to deal with the problem. and 86 percent of exports. and the resulting high levels of “informalization” and inequality. Ecuador. Bolivia.net/article/articleview/7046/1/340/] Close the Mis- named National Endowment for Democracy/ June 19.com/p/articles/mi_m0KXG/is_3_4/ai_93610810) Venezuela. Colombia and Brazil. 2008) While Venezuela is engaged in a massive effort to diversify its economy. the Venezuelan economy undergoes cycles of expansion and contraction associated with the price of oil. more diversified countries. Bolivia’s level of inequality still shows Dutch disease’s impact on tin from earlier times. 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. support social spending. The economic swings are exacerbated by the fact that fiscal policy has traditionally been procyclical. Diversification low. under participatory democracy. indigenous nations most affected by oil development. Kay & Quispe-Agnoli 2 (Stephen J. for the first time in Venezuelan history. Community members are involved in decisions about whether or not to develop oil resources and.Venezuela dependent on oil profits Jordan 8 (James. it still remains dependent on oil profits which. with government spending rising during the boom years and shrinking when revenues fall. Myriam. low employment creation in productive sectors.ca/publications/focalpoint/fp0308se/?article=article4&lang=f) Dutch disease constitutes at least some degree of threat in Venezuela. 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. for example.politicalaffairs. Professor Emeritus of Economics at the University of Toronto. 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. Consequently. .

in Argentina.canada.7%.com/windsorstar/news/editorial/story. 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. Mr Chávez's main constituency.cfm?story_id=11585215] A funny way to beat inflation/ June 19. Inflation in Venezuela at 29% The Vancouver Sun 8 ([http://www.Gonzaga Debate Institute 2008 39 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Inflation Up Inflation skyrocketing Cancel 7/8 (Daniel [http://www. Inflation in Venezuela high The Economist 8 ([http://www. Consumer prices rose 32. Monthly inflation was 2. the government's inflation forecast of 12% for this year has proved even more wildly optimistic. inflation has jumped to a 10-year high of 8.3 percent.economist. even though this was recently increased.2 percent from a year earlier.html?id=1dc006ab-b7f1- 4699-b015-768b1de09f99] Renewed inflation looms for Canadians/ July 14. inflation is running at more than 14 per cent.com/world/la/displaystory. in Venezuela. That came as a surprise to the planning ministry. According to the Centre for Documentation and Analysis (CENDA). In Russia. the living standards of ordinary Venezuelans are declining. 2008) In Thailand. and in Indonesia.com/apps/news?pid=20601086&sid=a_s9FFSShDfI&refer=news] Venezuelan Inflation Surges to Five-Year High in June/ July 8. 2008) Nevertheless. To make matters worse.bloomberg. 29 per cent. a group linked to the trade unions.9 per cent. 23 per cent (unofficially). exceeding the 31. nine per cent (with analysts predicting 12 per cent next year). which had forecast growth of 6. The price of food is rising faster than the overall index. . For the first time in the past three years.4 percent median forecast of 12 analysts surveyed by Bloomberg. the cost of feeding a family of five rose by 2.4% in May and stands some 60% higher than the minimum wage. the economy slowed sharply in the first quarter of this year (see chart). This is particularly bad news for the poor. according to the central bank's benchmark index of prices in Caracas.

Ali Rodríguez. 2008) President Hugo Chavez's government has been battling South America's highest inflation rate.com/news/3584] New Venezuelan Finance Minister Presents Plan to Fight Inflation/ June 23. we must carry out a very prudent moderation of consumption. partly due to an increased supply of agricultural products . on the other hand. the new Venezuelan Finance Minister.” Rodríguez recommended that inflation “be combated in two directions. 2008) On Sunday.1 percent in first six months/ July 8.com/articles/ap/2008/07/08/business/LA-GEN-Venezuela-Inflation. The Central Bank says monthly inflation has slowed to 2. The Central Bank said Tuesday that price increases have slowed primarily in the food sector. on the one hand.venezuelanalysis.iht. the stimulation of production principally in the food sector and.Gonzaga Debate Institute 2008 40 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – UQ – Inflation Down Venezuela taking steps to decrease inflation Sugget 8 (James.” Inflation down in Venezuela Herald Tribune 8 ([http://www. 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.2 percent a month earlier. Venezuela Analysis [http://www.php] Venezuela inflation reaches 15.4 percent in June — down from 3.

Oil key to Venezuelan Economy Cibils and Scott 1 (Vicente Fretes Lead Specialist.S. Chávez has been able to increase government expenditures on anti-poverty and other social programs associated with his populist agenda.1 billion. and the impact of the overvaluation of the domestic currency on the external competitiveness over time. highlighting the dependency of Venezuela on the U. the share of non–oil exports to total exports remained.106 The December 2002 strike orchestrated by the opposition reduced Venezuela’s oil exports. PdVSA.cfr. . and analysts draw links between PDVSA's profitability and the political stability of the country. Oil generates about 80 percent of the country’s total export revenue. Venezuela’s total exports destined for the United States amounted to $37. or 94% of the total. reflecting the failure of exports to diversify away from the oil sector. after Canada.S. Council on Foreign Relations. experts say a significant short-term shift in oil relations between Venezuela and the United States is unlikely. which operates three crude oil refineries and a network of some 14. More ev… Sullivan & Olhero 8 (1-11. its biggest oil-trading partner. and is responsible for about one-third of the country’s gross domestic product (GDP). Finally.S.3 At the same time. Specialist in Latin American Affairs.nsf/e9dd232c66d43b6b852567d 2005ca3c5/fe8ed dae8d8fdec985256b0b005a28b9/$FILE/C-II. Washington. Venezuelan officials maintained that overall oil production returned to the pre-strike level. below 25 percent.2 billion. http://www.000 retail gasoline stations in the United States. commerce and other services) remained at about 47 percent of real GDP. and boost his own international profile. Mexico.pdf) Since Venezuela is a major supplier of foreign oil to the United States (the fourth major foreign supplier in 2006. 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. and oil exports account for the overwhelming majority of Venezuela’s exports to the United States. bolster commercial ties with other countries. a key U. The medium-term outlook for state oil company PDVSA is questionable. Increases in world oil prices in recent years have allowed Venezuelan President Hugo Chavez to expand social program spending. on average.org/publication/12089/venezuelas_oilbased_economy. CRS Report. contributes about half of the central government’s income. Though Chavez has threatened to stop exporting Venezuelan oil and refined petroleum products to the United States. 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. crude oil imports. The Chávez government has benefitted from the rise in world oil prices.fas. however. In 2006. http://www.C http://wbln0018.html) Venezuela's proven oil reserves are among the top ten in the world.4 The service sector (including government.org/LAC/lacinfoclient. Venezuela’s state-run oil company. and Saudi Arabia). owns CITGO. interest has been ensuring the continued flow of oil exports. with oil products accounting for $35.worldbank. LAC. As a result.org/sgp/crs/row/RL32488. providing about 11% of U. but by May 2003. The World Bankand Kinnon World Bank.pdf) Over the last ten years. D.Gonzaga Debate Institute 2008 41 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Oil K/T Economy (1/2) Oil key to Venezuelan economy Alvarez & Hanson 6-27 (Cesar & Stephanie. market. which has increased government revenues and sparked an economic boom. Some 68% of Venezuela’s oil exports are destined for the United States.

Venezuela’s failure to diversify its economy and invest sufficiently in its hydrocarbons industry has made shortterm growth dependent on oil prices. Threats by Caracas to divert energy exports to China are not credible in the short term. the government is unlikely to be able to attract adequate quantities of foreign capital. Policy Toward Hugo Chávez’s Venezuela/ November 2006) Yet.org/content/publications/attachments/VenezuelaCSR.Gonzaga Debate Institute 2008 42 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Oil K/T Economy (2/2) Low oil prices would devastate Venezuela’s economy Lapper 6 (Richard.S.S.cfr. Even if oil prices remain high. the United States and Venezuela remain mutually dependent.pdf] Living with Hugo U. US demand is key Lapper 6 (Richard.S. may face tough economic challenges. Council on Foreign Relations [http://www. oil demand to sustain the Venezuelan economy. despite Chávez’s tendency to publicly insult American leaders and whip up anti-American sentiment.pdf] Living with Hugo U. given the tremendous infrastructure and transportation costs such a shift would involve. further investment is necessary to create enough jobs for a growing workforce and make recent improvements in living standards sustainable. Venezuela. Chávez relies on U. Yet. Policy Toward Hugo Chávez’s Venezuela/ November 2006) But Venezuela also suffers from considerable weaknesses. Should prices decline.org/content/publications/attachments/VenezuelaCSR. along with countries that rely on Chávez’s financial support. Council on Foreign Relations [http://www.cfr. roughly 60 percent of Venezuelan oil exports are destined for the United States. unless Venezuela is able to make its public sector more transparent. .

According to the EIA. without agreements.gov/new. . about 50 percent of the government’s revenue. establish new wells for crude oil production.pdf) The oil industry is capital-intensive and heavily dependent on continuous investment to maintain existing wells. and 80 percent of Venezuela’s export earnings.items/d06668. experts told us that. at best. as of late 2005. and develop and maintain the infrastructure supporting the production network.items/d06668.gao.8 million barrels per day by 2012. Foreign investment is critical GAO 6 (June. Venezuela needs willing foreign oil company partnership to maintain its current level of oil production.gao. given that PDVSA’s own production is in decline. the plan will face significant delays.pdf) According to Venezuelan officials. The absence of such deals increases the likelihood that Venezuelan oil production will continue to fall because.gov/new. PDVSA stated in 2005 that it plans to invest $26 billion to expand its oil production to 5.Gonzaga Debate Institute 2008 43 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Investment K/T Oil Investment critical to Venezuelan oil GAO 6 (June. http://www. no agreements had been signed or investments made to start implementing the major oil production expansions detailed in the plan. PDVSA is Venezuela’s largest employer and accounts for about one-third of the country’s GDP. http://www.

The cheap food and other programs funded by Venezuela's oil wealth haven't lifted her family out of poverty. It's a view often echoed in the poor barrios of Venezuela. ." said Oliveros. Chavez has started a long list of social programs. who struggles to raise two children on her husband's salary of $230 a month at a car wash. You can see it.com/wp-dyn/content/article/2006/11/22/AR2006112200 252." which offer everything from job training to cash assistance for single mothers. 3 elections. called "missions. Drawing on billions of dollars in oil revenues. "He has done many things. but she says getting by is easier today than when Chavez was elected in 1998.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.Gonzaga Debate Institute 2008 44 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – A2: Oil Causes Poverty Oil is lifting Venezuela out of poverty Washington Post 6 (http://www. He has pledged to eliminate poverty completely by 2021. when he hopes to be in office still.washingtonpost. where Chavez remains popular as he seeks another six-year term.

4 percent a year ago. It appears the government is committed to maintaining a high rate of growth.32 are an example of the government using bond sales for this purpose. Although much of the public does not understand this. As can be seen in Table 6. http://www. and could it lead to an economic crisis and/or the end of the current economic expansion? First.com/indicators) 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. In the last year it has risen to about half of its peak in February 2003. before climbing again to its present rate (see Figure 3). and low foreign debt.5 billion in 2003 to $32. But exports. Inflation in Venezuela was much higher in the pre-Chávez years. 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. in an effort that probably contributed to stabilizing the inflation rate. it has a number of tools to fight inflation without necessarily sacrificing economic growth. More ev… Weisbrot & Sandoval 7 (Mark & Luis. large reserves.4 percent. Beginning in February of this year.2 billion.venezuelanalysis.4 percent. at present it does not appear that the current economic expansion is about to end any time in the near future. grew much faster.31 Second. running at 36 percent in 1998 and 100 percent in 1996. Because of its large current account surplus.venezuelanalysis. when inflation was falling despite very rapid growth – excess domestic currency was converted into dollars and spent on imports. Therefore.com/indicators) Furthermore. Over the last three months it appears to have stabilized at 19.2 billion. This is what happened through most of the current economic recovery. More ev… Weisbrot & Sandoval 7 (Mark & Luis. So far. and the government is taking in more revenue that it can spend. http://www. from $27. it is real (after-inflation) growth in incomes— and employment – that affects people's living standards. How serious of a problem is this increased inflation.Gonzaga Debate Institute 2008 45 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – A2: Inflation (1/2) No inflation risks in Venezuela – Tools check it Weisbrot & Sandoval 7 (Mark & Luis.venezuelanalysis. Inflation in Venezuela was much higher in the pre-Chávez years. The recent sale of $7. Center for Econ Policy Res. It is also worth noting that inflation has fallen sharply through most of the current economic recovery. it does not appear that inflation in Venezuela is getting out of control. running at 36 percent in 1998 and 100 percent in 1996. fueled by rising oil prices and the recovery of oil production from the strike.4 percent. not the rate of inflation per se.2 billion in 2003 to $65. in addition to its other goals. As a result. Center for Econ Policy Res. but is still about 8 percent of GDP. Center for Econ Policy Res.com/indicators) Inflation itself is a problem. imports tripled from their depressed level of $10. http://www. the government reduced the value added tax. This is true so long as inflation does not spiral to the point where it actually reduces real growth. It has fallen through most of the current recovery. year-over-year) at the peak of the oil strike in February 2003 to 10. 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. 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. In the last 3 months it has stabilized at about 19. Venezuela's current account surplus also gives it the leeway to defuse inflation through imports. . since the country is running such a large current account surplus. or 17. the country is running a huge current account surplus: it was 15 percent of GDP for 2006.5 billion worth of bonds by PDVSA in April. now running at 19. 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.8 percent of GDP in 2006. In the last 2 quarters this surplus has shrunk considerably. with some studies finding a threshold of 20 percent or more – a threshold that Venezuela is just now approaching. which were snapped up by a large number of investors. whereby the government takes excess domestic currency out of circulation by issuing bonds. One has been sterilization. and has only risen over the last year. from a 40 percent annual rate (monthly. which was driven by the oil strike of that year. or 36 percent of GDP.

. inflation has been rising over most of the last year but it is not an imminent threat to the current expansion. Nonetheless.Gonzaga Debate Institute 2008 46 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – A2: Inflation (2/2) Inflation isn’t a threat and the gov’t can cushion it Weisbrot & Sandoval 7 (Mark & Luis. Center for Econ Policy Res. http://www. This is likely to remain the case so long as Venezuela maintains a large current account surplus. Fortunately. international reserves and borrowing capacity. given the government's favorable current account. it has the ability to bring down inflation without a sharp slowdown in economic growth.venezuelanalysis.com/indicators) In sum. 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.

Chavez warned opposition leaders that they better “get an army” if they plan on trying to break away from the country.Gonzaga Debate Institute 2008 47 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – Stability/War Collapse of Chavez government causes war Carlson 8 (5-12. In light of the recent proposal for autonomy in the oil-rich state of Zulia. Chris. http://www.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.venezuelanalysis. Staff – Venezuela Analysis. . “It would be a cause for war if someone came here and tried to divide up Venezuela. state capital of Zulia.” he said from Maracaibo. 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.

Chavez is building up a massive civilian militia answerable directly. to him. such as the Cuban Revolution. Given the world’s dependence on Venezuelan oil. 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. or used to prolong a struggle. A civil war in Venezuela would be intense.isn. also referred to as fourth-generation warfare. it is quite possible that a total of two million Chavez supporters will have been trained and reinserted back into their normal lives.ethz.cfm?id=15232) For years. and spell doom for the future of Venezuela’s economy. More ev… Logan 6 (Int’l Security Network. represented by the Venezuelan political opposition. As such. By the end of 2007. 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. Investigative journalist “Invasion or civil war for Venezuela?” http://www. the FAN. Considering the many rumors of a palace coup and the shuffling of military commanders in Chavez’s top brass. such a possibility would have serious international repercussions. Chavez is in a position to take advantage of this history to promote his ideology of a region-wide resistance against US imperialism. Investigative journalist “Invasion or civil war for Venezuela?” http://www.cfm?id=15232) What military analysts call asymmetrical warfare. . and only. it would be nearly impossible to completely eradicate a group of dedicated and trained Chavez supporters. 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. Due to the nature of asymmetrical warfare. Riding on the rhetoric of an eventual US invasion. After the 2002 attempt to overthrow his government. Rather. If Chavez manages to survive such a coup attempt. taking on a larger role as protector of his people from the US. Latin America’s history is riddled with examples of how asymmetrical warfare has been used to overthrow a government. is characterized by war between a nation-state and a non-state actor. extremely destructive. Venezuelan President Hugo Chavez has claimed to be protecting his people from the corrupt and greedy Venezuelan elite class. however. and oil output. The FAN is believed to have at least 80. The formation of a civilian militia gives physical presence and weight to Chavez's rhetoric that the US will one day invade.isn. two million hardcore supporters with military training could be ordered to drag the country into a civil war.Gonzaga Debate Institute 2008 48 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – Instability Bad: Kills Millions Venezuela war risks millions while threatening the world’s oil supply Logan 6 (Int’l Security Network. In the event of a successful FAN-orchestrated coup. It is convenient rhetoric that veils what many believe are his intentions to deter a military coup. the formation of a civilian militia looks more like another bulwark intended to protect himself against a military- led coup d’etat. such as the Revolutionary Armed Forces of Colombia (FARC).ch/news/sw/details. the US.ch/news/sw/details. That militia. such as the FMLN in El Salvador. Now he is protecting them from an external foe. ready to resist at a moment’s notice. which he has accused of intending to invade Venezuela. Sam.ethz. is more likely intended to deter a military coup than a US invasion. who could be forced to face two-million urban guerrillas. The only conventional army likely to threaten Chavez is Venezuela’s own military forces. society. In some cases. It is highly unlikely that this militia will be called to protect Venezuela from an outside invader.000 professional soldiers. these non-state actors have been integrated into politics. however. Sam. Chavez changed tactics.

Plasmodium falciparum is the most dangerous. 2. health. are at risk from the malaria. and has developed resistance to most anti-malarial drugs. Thirty thousand Cuban health professionals were brought over to take posts across the country. stock and staff the clinics. is a Professor of Anthropology at UC Berkeley and Venezuelan public health physician and Associate Researcher. social and cultural programs visible in Venezuela today.html) A research paper published in Nature estimated that there were around 515 million cases of malaria worldwide in 2002. 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. most of them children under 5 years old.berkeley.e. which is prevalent throughout the tropics (including Southeast Asia). The disease claims 1 million lives a year in sub-Saharan Africa alone. “Get me that program!” Misión Barrio Adentro was nationalized. 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 experts worry about the situation in Southeast Asia. Although Chávez did not initiate the Barrio Adentro movement. Of the 4 malaria parasites. his leadership proved instrumental and led to a rollout of resources to build. Emily is a master’s student in the Schools of Public Health and Social Welfare. One third of the population in the world i. There are many more malaria cases in Southeast Asia than recognised before.gov.edu:7001/Events/spring2007/02-05-07-briggs/index. health education.Gonzaga Debate Institute 2008 49 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact Module – Health Oil revenue is invested in Venezuela’s health care infrastructure Briggs and Roberts 7 (Charles L.hk/english/outbreaknews/2005/ond13march2005. nearly double previous estimates in 1998 by the World Health Organization.html) Three weeks after Chávez told the health minister. provision of bed-nets and effective drugs to persons needed. http://socrates.2 billion people. . Many people with malaria do not go to clinics and many clinics do not submit disease figures. Global control of malaria relies on efficient public health measures.travelhealth.

Political legitimacy and trust in the leadership dissolved.gr/kousis/KOIN1/Health/NeoLiberalismHealth/NeolibHealthVenezuela. Policy decisions have traditionally come from the top down. in the late 1990s. as president. Collapsing public health helped shape the popular perception that the democratic system was using a collective resource – oil – for the privileged few. the election of Hugo Chávez. leading to attempted golpes and.uoc.Gonzaga Debate Institute 2008 50 Scholars Lab 2nd Wave Oil DA’s 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. Venezuela’s democratic governance has been highly centralized with great inequality and little effective participation at the grassroots. a former coup leader. poor Venezuelans participated even less in the health care system. When oil income and social spending dropped sharply in the 1980s and 1990s.pdf) Popular participation played a key role in the adjustment processes of both Venezuela and Cuba.

org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/VENEZUELAEXTN/0.Gonzaga Debate Institute 2008 51 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – Health – Health Care Up Venezuela’s national healthcare program solves World Development Indicators 0 ([http://www. Modern technology is improving Venezuela’s healthcare The World Bank 4 ([http://web..07 life expectancy). Treatment at the country's clinics is free. leprosy. and field support facilities.html] Venezuela Country Brief/ August 2004) The Endemic Disease Control Project helped to control malaria and other endemic diseases such as Chagas. The institute finances its activities by a mandatory payment of 12 percent of the salaries of all Venezuelan workers.worldbank. according to Pan American Health Organization standards. Strengthened control activities also moved Venezuela into the elimination phase of leprosy. and a small fee is charged to those who can afford to pay it. By 1999. and eliminating diseases. Between 1996 and 2000. though there is a small charge for prescription drugs. . There is also a public welfare program that provides survivor and old-age pensions. the time from onset of symptoms to treatment was cut by 33 percent. and strengthened the institutions that are responsible for their control. the project saved an estimated 11.com/economies/Americas/Venezuela- POVERTY-AND-WEALTH. improving water and sanitary conditions.00. diagnostic. prevented 500.056 to 21.500 lives. yellow fever.602. A significant decline in mortality due to dengue was also achieved between 1995 and 1999. while the number of cases decreased from 22. maternity benefits. Much of this was made possible by government intervention. dengue. At the public hospitals. diminishing the prevalence and possibility of transmission.280 to 26.000 illnesses.685. The government has had great success in implementing programs of prenatal care and children's immunization.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. and the number of cases decreased from 32. and payment for work-related accidents and illnesses.menuPK:3317 77~pagePK:141132~piPK:141107~theSitePK:331767. dengue took the lives of 65 people. The number of deaths due to malaria dropped from 25 per year in 1995 to 7 in 1999. 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. the poor receive treatment for free.nationsencyclopedia. Under the project. and leishmaniasis. In 1995. the number of deaths dropped to 15. The project lowered the incidence and impact of endemic diseases.000 population) and longevity (73.4 per 1. Currently. Improvements in detection and treatment decreased the number of children affected and people incapacitated by the ailment. In the state of Bolívar. the Malaria Directorate was able to control malaria in approximately 408 square kilometers where the disease is endemic.5 million non-lethal infections. and treated about 3. Much of the population gets its medical care from facilities and hospitals operated by the Venezuelan Social Security Institute.

In 1993. WHO estimated 14. Venezuela. Brazil. 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. Diptheria has reemerged as a major killer of adults in Russia. The spread of the HIV virus. In the US. One third of the world’s population is said to be carrying the infection. Yellow fever is on the increase in Africa. India and Australia the first time ever. .phmovement. Longterm studies in Colombia. Additionally. which destroys the immune cells that keep the TB germ under control in the body. It has led to new emerging diseases and old diseases have staged a comeback. With several strains of the TB bacterium now resistant to all anti-TB drugs. Plague has resurfaced in India. A malaria outbreak will happen in Venezuela Hong 00 (Evelyn Third World Network Prepared for the Peoples Health Assembly http://www. Epidemics of dengue fever transmitted by the Aedes Aegypti mosquito have swept parts of Venezuela.4 million people died of infectious diseases.org /pdf/pubs/phm-pubs-hong. TB rose by 18 percent between 1985 and 1992. especially in areas hit by floods or droughts.org /pdf/pubs/phm-pubs-hong.pdf) The incidence of vector borne and water borne diseases climbs during El Nino and La Nina years. while malaria has returned to regions which it had been eliminated and is spreading to previously unaffected areas. fires raged out of control. the WHO admits that the disease ‘is out of control in many parts of the world’. Cholera has re-emerged as a major killer in South America. India and Pakistan reveal. rodents and water. polluting the air for miles around.Gonzaga Debate Institute 2008 52 Scholars Lab 2nd Wave Oil DA’s 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. in many dry areas.phmovement.pdf) Global economic forces have given rise to a situation where exposure to pathogenic microorganisms has increased and human resistance has been weakened. will cause many to die of the disease.

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 has the equipment to be a threat but. so far it has only been talk." she says.Gonzaga Debate Institute 2008 53 Scholars Lab 2nd Wave Oil DA’s 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. for the purchase of Russian Mi-28 Night Hunter combat helicopters. Particularly disturbing for the US government. Latin America analyst with Forecast International. for Hugo Chavez. In 2006. is receiving a total of 53 Mil Mi-17V5 transport. The Venezuela army. "This is not to say that Venezuelan procurement activity is not extravagant.pdf 3/19/08) "While some might see this as a potential arms race. meanwhile.forecastinternational. Venezuela has plans with Belarus to develop an integrated air-defence and electronic-warfare system. the last of which will be delivered to the air force this year.pdf 3/19/08) Venezuela . But Barrett believes continued bilateral talks between nations will prevent Latin America's long pent-up military modernisation escalating into a regional arms race.com/notable/flightglobal. Venezuela also planning to buy 12 more Russian-built aircraft. "There has been an application. but no contract yet. with a mix of Ilyushin Il-76 transports and Il-78 tankers likely to be procured to replace the ageing Lockheed C-130s.com/notable/flightglobal. which keeps up a war of words with leftist Chavez. Mi-26T heavylift and Mi-35M2 combat helicopters." says Rebecca Barrett. or necessary to the extent to which President Chavez has brought it. says Barrett. as well as to purchase diesel- electric submarines from Russia.forecastinternational." she says. "He remains the region's hot- headed leader who will continue to incite non-allying nations until the end of his term. No arms race – Just normal modernization Flight International 8 (“Latin America: military modernisation or arms race?” http://www. the Chavez administration purchased 24 Sukhoi Su- 30MK2 fighters." . I believe that it is more nations' attempts to meet a pent- up demand for modernisation of their armed forces." she says.

heritage. it is over. prodded by Chavez's petrodollars. military power. Even if Venezuela acquires a Russian submarine.org/am/5362) Analysts continue to debate on how to measure military power in Latin America. http://americas. Oddly enough.S. neither of these countries can present a military threat to the United States.S. navy’s recent decisions demonstrate. Free markets are also on the march. Senior fellow. it continues to favor the United States.irc-online. now the two are growing closer. with some notable exceptions.69 million in military aid. Congress appropriated $921. but all agree that if a "strategic imbalance" exists in the hemisphere. The Council on Foreign Relations recently released a report saying the United States is losing hegemony in the region and new direction is needed. “Uncle Sam’s Latin challenge” http://www.irc-online.venezuelanalysis. or Brazil wants to develop a nuclear submarine.cfm) Another positive note: Democratic politics. the U. Center for Intl Policy Staff.5 The Council's Task Force on Latin America bluntly states this new reality: "If there was an era of U. have moved left and become less democratic. have become entrenched in the Latin psyche since the end of the Cold War.org/am/5362) South America's relationship with the rest of the world has changed substantially in recent years. that “no matter which Latin American country is in an arms race. More ev… BBC 5-10 (http://www.S.07 million in economic aid and at least $859. http://americas. fostered by regional free trade agreements. While some nations.” From the analyst’s perspective. among other things.17 This amount does not include military aid. that trend is balanced by positive developments in democracy and free markets. Center for Intl Policy Staff.S. military challenges in the region. since the end of the Cold War when U. . Peter. economic aid was more than the amount of military aid. South America has increased its trade relations with the rising economies of Asia.” Democracy and free markets make influence resilient Brookes 8 (Heritage Foundation. they cannot compare to U.Gonzaga Debate Institute 2008 54 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Heg (1/2) US leadership is Latin America is done Flynn 7-11 (Mathew.org/Press/Commentary/ed013108a. 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." Military deterrence checks Flynn 7-11 (Mathew. While the United States has been preoccupied with the War on Terrorism and focusing its attention mainly in the Middle East. has the United States "lost" Latin America? Nah. So. hegemony in Latin America.S. In 2005.com/news/3427) With regard to the supposed U. Sánchez added: “Let’s be honest.

President Alan García’s aggressive stance toward Caracas proved to be a vote winner in Peru.pdf] Living with Hugo U.S. Similarly. U. however.Gonzaga Debate Institute 2008 55 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Heg (2/2) Latin America is not influenced by Chavez Lapper 6 (Richard.S.S. attempts to intervene in Venezuelan domestic politics with equal suspicion. For the same reasons. Chile. many Latin Americans view U.cfr. Bolivian government officials have expressed a desire to act independently of Venezuela. and Uruguay. 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. it would be a mistake to exaggerate Chávez’s ability to influence regional political dynamics. Policy Toward Hugo Chávez’s Venezuela/ November 2006) Despite these noteworthy trends. are generally resistant to the crude populist appeal and interventionist tactics of Chávez. 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. denunciations of Chávez’s own regional activities will ring hollow. Council on Foreign Relations [http://www. Argentina. Latin American electorates have resisted the prospect of Venezuelan interference in their countries’ internal affairs. More consolidated democratic and nationalist political cultures in Latin America.org/content/publications/attachments/VenezuelaCSR. . As long as the United States is seen to covertly support opposition groups and promote regime change in Venezuela. On numerous occasions. especially in countries such as Brazil.

who was targeted Wednesday in a U.com/domino/tn/NewsDesk. saying "it's not my business. Foreign Minister Nicolas Maduro did not specifically refer to Ghazi Nasr al Din. they automatically become national laws of obligatory enforcement. President George Bush.S.Gonzaga Debate Institute 2008 56 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Terrorism Venezuela has no terrorist affiliations AP 8 ([http://www. 2003) In the face of the recent bomb attacks against government buildings in Venezuela. the country has confirmed its strong commitment to fight terrorism. Treasury Department action ordering any assets he controls in the United States to be frozen and forbidding U. and its commitment to fight against this threat to peace and international security. The International Convention for the Suppression of Terrorist Bombings. citizens from doing business with him. Action Against Alleged Hizbullah Supporters/ June 20. 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. government accusations that a Venezuelan diplomat helped finance Hizbullah in Lebanon. look for them in the White House.S. . But Maduro told reporters that "there are no terrorists here. approved in December of 1999." and said officials should be going after the assets of U.nsf/0/BE358F609E1E6A16C225746E0025780C?OpenDocument] Venezuela Says 'No Terrorists Here' After U. were the instruments ratified at the United Nations. and claims by the U.naharnet. By ratifying these treaties.S. 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. a 42-year-old Lebanese immigrant who helps manage the small mosque and community center in a two-story house." he said.venezuelanalysis. Washington considers the Iranian. the Terrorist Financing Convention and the Convention on the Rights of the Child on the involvement of children in armed conflicts. News and World Report of possible Venezuelan support for terrorists.com/news/142] Venezuela Ratifies its Commitment to Fight Terrorism/ October 5. 2008) Venezuela's foreign minister on Thursday rejected U." Venezuela opposes terrorism Venezuela Analysis 3 [http://www.S. "If they want to search for terrorists. Mtayrek said the center has no link to Hizbullah and dismissed Washington's allegations as "politics. during the 58th Ordinary Session of the General Assembly of the UN. said Mohamad Mtayrek. according to the Bolivarian Constitution of Venezuela. 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." He said he knows Nasr al Din but declined to speak about him. The main Shiite Muslim center in Caracas is the Imam al Hadi Venezuelan Islamic Center.S.and Syrian-backed Hizbullah a terrorist group.S.

Chávez's announcement should not have come as a surprise.. for example.venezuelanalysis. possibly in an exaggerated way.S. http://www. and to treat unsubstantiated allegations the same way they would treat such allegations if they were made against the United States government -. "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. media -. On January 13.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.dismissed as a terrorist organization by the U.S. Forrest New York University - Department of History http://www. Even if the documents were indeed produced by the FARC. For the FARC." .com/analysis/3440) We once again appeal to the media for objectivity. As Adam Isacson of the Center for International Policy. the Colombian government's strategy has involved a media campaign with timed leaks of new documents to the New York Times. A comparison: former President Jimmy Carter has recently called upon the United States to negotiate with Hamas . D.C. and its allies in Israel and Europe. getting material support from Caracas was probably the main benefit they hoped to win from these contacts. Over the last month." No war – Columbia wont fight Reuters 3-6-8 (http://www. noted.com/analysis/3554 ) Washington's foreign policy establishment . this does not mean that the information is accurate. policy and media circles is a result of a misconception of Chávez's recent role in Colombia's conflict. Documents saying Chavez wants to attack Colombia can not be verified Grandin and Hylton 8 (Greg New York University . 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." Santos told Reuters in an interview during a visit to Brussels for talks with EU officials.venezuelanalysis. in Washington.i. "I don't think there is a risk of war.S. the Wall Street Journal. Chávez had also explained previously that the armed struggle was not necessary because left movements could now come to power through elections. so anything that even appeared to hint at progress toward getting arms or cash was prominently reported. and has made numerous public appeals for the FARC to release their hostages. The FARC is a guerrilla group that has been fighting to overthrow the Colombian government for more than four decades. He has met with Hamas and called for negotiations because he is trying to promote a peace settlement. many of whom relied on the Colombian interpretation of their meaning. to have some standards of evidence." Chávez also stated his opposition to kidnapping. because he had already said the same things several months ago. "It won't fall into the game of provocation. There are as yet no allegations that would hold up in a court of law.Professor of History. something that was often difficult or impossible in the past because of political repression.reuters. Interpol cannot and will not verify the validity of any charges made against the Venezuelan government. who has analyzed the documents.e.Gonzaga Debate Institute 2008 57 Scholars Lab 2nd Wave Oil DA’s 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. and with little acknowledgement of the deep controversy surrounding them. Carter is not an advocate of Hamas nor of armed struggle.and much of the U. The surprise in U. The Colombian government has been very clear it won't use force.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. the Miami Herald and other outlets.

Venezuela. in particular because the far more experienced Colombian army would dismantle any forces the Ecuadorians sent against it in a matter of days. About a year later (May 2004).venezuelanalysis. however. following a two-hour private meeting on Friday. the war provides a pretext for attacking all social movements and resistance. Venezuela and Colombia are more evenly matched.venezuelanalysis. and a cover for displacing peasants from resource rich territories that end up in the hands of multinationals and landowners. not Chavez Podur 8 (Josh. and its revolutionary process (4). but also touched on the various agriculture and energy cooperation agreements between the two countries. dozens of Colombian paramilitaries were arrested on a ranch near Caracas on a terrorist plot (6). http://www. In March 2003. Some later confessed and were charged.” said Chavez in a press conference following the meeting. as well as tensions between Chavez and Uribe. have shown that Colombia is a base for attacks on Venezuela.venezuelanalysis. Journalist. however.com/news/3639) Venezuela’s President Hugo Chavez and Colombia’s President Alvaro Uribe reconciled and said they “moved on” to overcome differences. while others were returned to Colombia. as described above. Colombia made a high-profile announcement that it was going to acquire several dozen tanks.com/analysis/3112) Plan Colombia and Uribe's rule were enough to kill the last attempt at a political solution to the conflict.com/opinions/10013876. The deal had been made under Spanish Prime Minister Jose Maria Aznar. and attack.yobserver. . a major oil producer with an independent political project of its own. http://www. Columbia is the aggressor. Chavez said the meeting. More than this. its oil. would they? It still seems very unlikely. “With the force with which we began this new phase.com/analysis/3112) Throughout those years. for posting on the Venezuelan border (7). “started and ended well. And indeed. Yemen Observer.Gonzaga Debate Institute 2008 58 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Colombian War (2/3) Newest evidence proves no war Venezuela Analysis 7-12 (http://www. from Spain. border incidents and troubles over the past several years. analysts have argued that one of the true targets of Plan Colombia was in fact Venezuela. Around the same time as the paramilitaries were infiltrating Venezuela (March 2004). 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. http://www. writer & activist. This outcome has served US interests in the region in several ways.html But they’d never actually go to war. which took place in the Venezuelan peninsula of Paraguaná. adding.” The meeting covered not only the recent differences between the two presidents over Venezuela’s supposed support for the Colombian guerilla group the FARC. Marcia. writer & activist.” Neither side has a motive Dyer 8 (3-8. I am sure we will recover lost time and confront the common challenges. and for that very reason it would not be in either government’s interest to have a war: neither side would win. Within Colombia. More ev… Podur 8 (Josh. Colombian 'irregulars' raided across the Venezuelan border and were answered by bombing from the Venezuelan air force (5). “We had a frank and warm conversation where we completely moved on [past the earlier differences].

. Even though Uribe counts on some 5-6 million voters who believe strongly in his anti-guerrilla politics. Peace would give Venezuela's process time to develop and Colombia's movements room to breathe. If Uribe and the US win. destroy the Bolivarian project. and despite all US efforts to the contrary. Colombia has 44 million people and most want peace despite Plan Colombia.venezuelanalysis. and strengthen control of the region. Chavez's government responded politically. but it also seems to be very intelligent and principled diplomacy. taking advantage of the popular desire for peace in Colombia and throughout Latin America. The stakes are high for everyone involved. Venezuela could have responded to US and Colombian provocations militarily. writer & activist. Or it could have capitulated to a show of force. a pretext to attack Venezuela. http://www.com/analysis/3112) Entering the Colombian conflict on this basis has been risky for Venezuela. diverting resources and political capital from social programs and social change to war preparations and militarism. despite Uribe's tenure as President. getting sucked into an arms race and militarization. Instead.Gonzaga Debate Institute 2008 59 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Colombian War (3/3) Venezuela is peaceful – No war risk Podur 8 (Josh. they will paint Venezuela as a supporter of terrorist crimes and achieve what they sought. perhaps supporting FARC militarily.

from 17. or about 14 percent of GDP.venezuelanalysis. it could lead to reduced government spending from current levels. The government also budgets conservatively for oil prices that are far below current prices: for 2006. http://www. which would increase prices.venezuelanalysis. 52 percent under the average $60. and the general risk of widening war. For 2007. This could slow the economy from its present very rapid pace. Critics also point to the run-up in government spending as an unsustainable trend. Thus. there is always the risk of an unexpected downturn in oil prices.56 per barrel for 2007 and $66. terrorism. where the Bush Administration has threatened to bomb Iran if the standoff over that country's nuclear program cannot be resolved. the country also has relatively low levels of public and foreign public debt.20 dollars per barrel that Venezuelan crude sold for last year. Most importantly. The government has about $25 billion.com/indicators) Oil prices collapsed beginning in 1981. the government has once again budgeted very conservatively for oil at $29 per barrel. and the prospect of a collapse in oil prices in the foreseeable future seems unlikely – as described above.6 Is this sort of unraveling ahead in Venezuela. and the Venezuelan economy went down with them. leaving the central government with a balanced budget for 2006. Center for Econ Policy Res. while a fall in oil prices will not cause a budgetary crisis. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65. More ev… Weisbrot & Sandoval 7 (Mark & Luis. If such an unanticipated reduction in oil prices is temporary. However. As can be seen.4 percent of GDP in 1998 to 30 percent in 2006. However. or rebellion there carries an unknown risk for other major world suppliers in the region. in international reserves.20 (see below).Gonzaga Debate Institute 2008 60 Scholars Lab 2nd Wave Oil DA’s 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 Weisbrot & Sandoval 7 (Mark & Luis. whereas the average price of Venezuelan crude oil was $60. http://www. the government budgeted for oil at $26 per barrel.4 to 30 percent of GDP over the same period. but it is unlikely to cause a downturn. as many analysts predict? Of course. and if necessary could borrow rather than cut government spending or public investment enough to seriously slow the domestic economy. there has indeed been a very large increase in central government spending. Center for Econ Policy Res. . However. what the government generally does as oil revenue far exceeds the budgeted price. This is much more than is needed maintain a safe level of reserves for imports or other needs.7 The risks of unanticipated supply shocks seem to be mostly on the downside.92 for 2008. Venezuela would seem well-prepared to withstand it.com/indicators) Venezuela has budgeted conservatively with respect to the price of oil. from 21. The probability of an economic collapse brought on by falling oil prices therefore appears to be very small. Table 5 shows the government's finances since 1998. there is the potential for adverse supply shocks from the Middle East. revenues increased even more. because Venezuela has a considerable cushion to deal with a decline in oil prices. As discussed below. the future of oil prices is difficult to project. is to spend beyond budgeted expenditures.

these actions do not represent any economic trend that would be expected to further deplete reserves.e.e. if we add the offshore accounts of the FONDEN and the National Treasury to the current level of international reserves.4 billion last year. Also. despite their projection of a growth slowdown (from 10. .1 percent of GDP in 2006. For example. if necessary. money raised in bolivares and sold to the Central Bank in order to absorb liquidity). Venezuela has taken advantage of the current expansion and increased oil revenues to reduce its public debt. which would otherwise be expected to grow over the next year. but it is still much larger than the country's needs.7 percent of GDP. the government could therefore draw on reserves and borrowing from financial markets for some time before any serious budget cuts would be necessary.9 billion. But before having to borrow. enough to pay off almost its entire foreign public debt.3 to 7 percent of GDP). if oil revenue were to decline by as much as 20 percent. the creation of an offshore account by the National Treasury for PDVSA’s tax payments in order to manage monetary liquidity (i. The recent depletion of reserves was the result of a $6. the government's foreign exchange reserves. The government also transitioned away from foreign financing. Goldman-Sachs projects a further decline of total debt to 20 percent of GDP.27 Total interest payments on the public debt. and especially foreign public debt. summed to a relatively small 2. if Venezuela were to face an unexpected decline in oil revenues. foreign and domestic. the total is in excess of $40 billion29– with some estimates of these total effective international reserves as high as $45 billion. this could be absorbed from reserves.2 billion. as of June 30 were $25. the government could dip into its international reserves. and the recent purchase of dollars from the Central Bank by PDVSA as a result of placing $7. As can be seen in Table 6.7 percent of GDP in 2003. This has dropped sharply from its peak of $37. In the face of an unanticipated decline in oil prices.8 percent of GDP. Total public debt increased quite substantially through the crisis of 2002-2003.5 billion in international bonds (i.Gonzaga Debate Institute 2008 61 Scholars Lab 2nd Wave Oil DA’s 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. But by 2006 it was down to a modest 23. leaving the external component of the foreign debt at just 14.77 billion transfer to the National Development Fund (FONDEN).30 The government's revenue from oil last year was $28. or about 14 percent of GDP. Thus there is plenty of room to borrow. a significant increase in the volume of currency transactions to finance imports approved by CADIVI28. Therefore. reaching a peak of 47. this is central government tax revenue held in dollars and not being spent).

elites -. and experiences of those living on the margins of what Americans have incorrectly assumed to be a universal phenomenon of political. and the private sector -. Latin America scholar Julia Sweig writes. . 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.Gonzaga Debate Institute 2008 62 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – Indict Their sources are biased Herrera 6 (Bernardo. "When U. it seems that there is much work left to be done. in Washington today. Given the generally hostile attitudes toward Venezuela and its president. Ambassador to US.get their information mainly from their counterparts in other societies. the United States becomes disconnected from the conditions. July/Aug.in government." As Venezuela's ambassador to the United States. Friendly fire: Losing Friends and Making Enemies in the Anti-American Century. Hugo Chávez. and economic progress promised by democracy and globalization. Foreign Affairs) In her recently released book. media. social. preferences. feelings.S.

in effect.com/analysis/3385) With Colombia as its front line. He ran against Chavez in 2006 and lost big. Above all. did support a military attempt to overthrow his democratically elected government in 2002. .which after all. It dissolved the National Assembly and Supreme Court. and the United States foreign policy establishment. One of Chávez's first acts was to revitalise the oil producers' organisation Opec and force the oil price to record levels. New Statesman.venezuelanalysis.C. 6-2. The stakes for humanity are incalculable.venezuelanalysis. The Bush administration's tenure is short.while GDP has risen dramatically. Staff. Chavez is good for Latin American democracy and stability Weisbrot 8 (Mark Co-Director of the Center for Economic and Policy Research. They condemn the idea and will fight it. and signed the infamous "Carmona Decree" after the April 2002 coup. expelled the International Monetary Fund from a continent over which it once ruled. He has cut poverty by half . An inert public needs arousing.Gonzaga Debate Institute 2008 63 Scholars Lab 2nd Wave Oil DA’s 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. D.a decidedly unradical notion once embraced by the British Labour Party. he presented no real threat to the well-off. even helping some to deliver on their electoral promises. and without the extremes of "neo liberalism" . It's oil-rich Zulia state has similar secessionist ideas. in Washington. He has been democratically elected repeatedly. He has shared a good part of Venezuela's oil wealth with his neighbors. Chávez is a friend and important ally who has promoted regional economic integration and growth . For now. erased the Constitution. and. who have grown richer under his presidency. The irony is that. more autonomy is enough for Rosales but unthinkable if Chavistas can help it. For Latin America. is close to the Bush administration. 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. What he has demonstrated is that a social democracy can prosper and reach out to its poor with genuine welfare." It's part of a "war and globalization" process. But it's got plenty of time left to incinerate two continents and end the republic if that's its plan. http://www. which now has left- of-center governments. Michel Chossudovsy says we're "at the crossroads of the most serious crisis in modern history. and to the region his government is as legitimate as any in the world. He backs the idea. he gave poor people the confidence to believe that their lives would improve. For Latin America's leaders. thereby contributing to democratization in the region. http://www.com/analysis/3554 ) The whole controversy is an illustration of the vast gulf between most of Latin America. At the same time he reduced the price of oil for the poorest countries in the Caribbean region and central America. It is not difficult to understand why. http://www. Chavez is critical to regional democracy Pilger 8 (John. and their local allies in the past supported a referendum to choose independence from Caracas. Big Oil exploits them. Ctr for Research on Globalization. Stay tuned. notably Argentina's.even helping to create new institutions for this purpose such as the Bank of the South and UNASUR. and ended Bolivarianism for the people. unlike Fidel Castro in Cuba. but rogue states don't weigh them.com/analysis/3516) It's vital because Venezuela is also threatened.venezuelanalysis. November approaches in both countries. and used Venezuela's new wealth to pay off debt. He has tried to promote a peaceful settlement to the conflict in Colombia. Its governor is Manuel Rosales. World communities better while there's time. the war on democracy in Latin America has Chávez as its main target. these considerations far outweigh any differences they may have with his rhetoric or confrontational style vis-à-vis the United States .

Ambassador to US. the survey found that of the populations of the 18 Latin American countries studied. and it remained so even during 2003. . Venezuela came in second in terms of citizens' satisfaction with their system of democracy.in this case. None of this should be surprising: the 1999 constitution broadened the definition of rights and responsibilities. the president himself. Conducted by Latinobarómetro. expanded political participation. a well-respected independent Chilean polling firm.Gonzaga Debate Institute 2008 64 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – Turn: Democracy/Stability (2/2) Venezuelan democracy is up – Self-reports prove Herrera 6 (Bernardo. Venezuelans have participated in numerous elections since President Chávez took office. July/Aug. including one specifically designed to allow citizens to cut short the tenure of an elected official -. and encouraged Venezuelans to become more active stakeholders in the country's political. In fact. economic. Foreign Affairs) A recent survey on democracy in Latin America sheds some light on contemporary Venezuela. and social development. when an opposition-led oil sabotage heightened a sense of political crisis. satisfaction with the government in Venezuela has been higher during President Chávez's tenure than ever before. Venezuelans were the most likely to describe their government as "totally democratic." Similarly. ranking behind only Uruguay.

CRS Report. at this juncture. The defeat of the referendum. http://www.fas. Democratic governance and free markets are making slow strides in Latin American countries formerly ruled by dictators. and ensure his popular support.cfm) There is no silver bullet. Such a strategy of continued polarization. . and more open trading account for more than 85 percent of the gross domestic product of Central and South America. Specialist in Latin American Affairs.heritage.org/sgp/crs/row/RL32488. countries can buy oil from other vendors. Such an approach might enable the President to regain strong popular support. Democracy is resilient in Latin America Walser 8 (Ray. Opponents have succeeded in petitioning for a referendum to recall him from office on August 15.heritage.org/Research/LatinAmerica/hl1079. however. could be a sign that such hardline tactics may no longer be as successful. Moreover. Other observers contend that it is unlikely that Chávez will refrain from hardline tactics to enact his radical agenda. with one glaring exception. or enough support to again attempt efforts to achieve passage of constitutional reforms in the future. Some "carnivores" may face extinction quicker than we imagine. Checks prevent Chavez from threatening democracy and fomenting anti-American regimes Johnson & Cohen 4 (8-12. particularly the elimination of presidential term limits. could be counterproductive for the President at the ballot box if it alienates moderate Chavistas. especially given now that he is term limited until early 2013. free markets. The Western Hemisphere. the President has resorted to harsh political rhetoric and polarization to win at the ballot box. 3-11. Stephen & Ariel.Gonzaga Debate Institute 2008 65 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Democracy Checks in place prevent Chavez’s concentration of power Sullivan & Olhero 8 (1-11. In the past.pdf) A key decision for President Chávez will be how he proceeds politically in the aftermath of the defeat of the constitutional reform.org/Research/LatinAmerica/bg1787. Heritage Foundation. Nations committed to democracy. 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. While oil resources give him power. 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. however. Heritage Foundation. http://www. http://www. no quick solution to creating greater energy security in the Western Hemisphere. is made up of 35 sovereign states committed to democratic governance.cfm) The good news is that the majority of Venezuelans do not support Chávez's evolving dictatorship.

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.2 percent of Venezuelans could afford to buy the basic supply of food deemed necessary for adequate nutrition and health. This culminated in a military coup that temporarily toppled the constitutional government in April 2002.4 percent of GDP in 1998 to 30 percent in 2006.soc. Real short-term interest rates have been negative throughout all or most of the recovery (depending on the measure—see Figure 4). Department of History University of Central Arkansas [http://www. PDVSA “spent just $60 million on exploration in 2004.19 The Venezuelan economy has grown under Chavez Weisbrot & Sandoval 7 (Mark & Luis.venezuelanalysis. The oil strike sent the economy into a severe recession. Central government spending has increased from 21. 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.gr/kousis/KOIN1/Health/NeoLiberalismHealth/NeolibHealthVenezuela. which since 1980 has suffered its worst long-term growth performance in more than a century.org/publication/12089/venezuelas_oilbased_economy. According to the Wall Street Journal. rising debt and lagging foreign investment drove Venezuela into an economic crisis. By 1989. Venezuela transformed its development strategy from state-led industrialization to neoliberalism: open markets. In the 1980s. Pressured by the International Monetary Fund and advised by neoliberal gurus such as the Harvard economist Jeffrey Sachs. Council on Foreign Relations. per capita gross domestic product fell by 20 percent or more. to their 1964 level. (See Figure 2).pdf] Healltth and Neolliiberralliism:: Venezuella and Cuba/ 2000) During the last two decades. But in the second quarter of 2003. as well as exchange controls. and it has continued to stabilize throughout the current economic expansion. and the first four years of his administration were plagued by political instability that had a large adverse impact on the economy. exports. Real (inflation-adjusted) GDP has grown by 76 percent since the bottom of the recession in 2003. have contributed to the current economic upswing. http://www. The economy has had continuous rapid growth since the onset of political stability. Venezuela suffered a severe economic growth collapse in the 1980s and 1990s. .html) 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. the political situation began to stabilize. privatization and limited government spending and involvement in the economy. Center for Econ Policy Res. during which Venezuela lost 24 percent of GDP.18 Unemployment and underemployment rose steadily. the lead economist for Venezuela at the World Bank. Hugo Chávez Frias was elected in 1998 and took office in 1999.com/indicators) There is much evidence to contradict this conventional wisdom. High oil prices solves poverty. low oil prices.uoc. real wages dropped by one-third. In this regard it is similar to the region as a whole. inflation soared and income inequality widened. By 1988. compared with $174 million in 2001. free trade.” But Vicente Frepes-Cibils.cfr. followed by a devastating oil strike from December 2002-February 2003. It is likely that the government's expansionary fiscal and monetary policies.Gonzaga Debate Institute 2008 66 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty/Econ (1/2) Oil revenue isn’t diverted – Investments are productive Alvarez & Hanson 6-27 (Cesar & Stephanie. health care and unemployment in Venezuela Schuyler 0 (George. with its real GDP peaking in 1977. http://www.

And in a gamble that turns part of his own government's power structure on its head.menuPK:3317 77~pagePK:141132~piPK:141107~theSitePK:331767.000 in 2002." said Leomar Aquino. Another initiative that could change the lives of millions of poor Venezuelans is a new program aimed at increasing land ownership. although many experts view that figure as a guesstimate of money being spent on the fly. with extreme poverty falling from 22. the only relationship with the state was the police. has been completely eliminated. nobody seemed to know exactly how much their neighborhood would receive. that's your problem. http://www..000 in 1990 to 22 per 1. Oil profits are spent on improving public services Collier 6 (Robert. with only 330 of the neighborhood's 916 eligible adult residents casting ballots. As a result of the booming economy and increased social spending. He is spending billions of dollars on anti-poverty programs. and infant mortality has been cut from 21 deaths per 1.9% over the same period. Culture. More ev… Sullivan & Olhero 8 (1-11.commondreams. is that Venezuela's petroleum export earnings are rising rapidly. They came here and put everyone against the wall.are within reach of almost everyone in this nation of 25 million people. The communal councils are a very serious attempt at grassroots organizing. decent housing.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/VENEZUELAEXTN/0. about 80 percent of exports and approximately 50 percent of fiscal revenues. Nonprofit Organization [http://www. It now stands at $7 billion. Petroleum accounts for about 25 percent of gross domestic product (GDP). one of a half-dozen such panels on the council. "We like Chavez because he's giving us control.00.6% in 2002 to 30. and the government is spending the money with abandon. the electorate seems divided between a strongly pro-Chavez minority and an apathetic majority.although as is true elsewhere around the country.pdf) Venezuela is using windfall oil profits to boost social spending and programs to fight poverty. Nor. "For many years. Recreation and Sports Committee. But as oil money floods in. the Chávez government began implementing an array of social programs and services known as misiones. Beginning in 2003.2% to 9. ranging from subway lines in Caracas and Valencia to bridges over the Orinoco River.N. CRS Report.org/headlines06/1002-06. Specialist in Latin American Affairs.2% in 2006." Antillano said. in what experts say may amount to the largest such effort in a developing nation. Illiteracy. San Juan's new council was chosen in local voting a week previously. or missions. hey papito. formerly at 10 percent of the population.org/sgp/crs/row/RL32488.4 percent of the country’s children are enrolled in primary school.worldbank. • 83 percent of the population has access to an improved water source.fas. "The issues in these neighborhoods are very old fights -- water. and • Child mortality decreased from 27 per 1." The policy appears especially popular in the hard-bitten slums of Caracas -.000 births to 16 per 1.000. he is handing a large degree of authority over these spending programs to thousands of these elected local councils. however.htm] Venezuela's Oil Wealth Funds Gusher of Anti-Poverty Projects/ October 2. What is certain. The government initially budgeted $857 million for social spending in 2006. land. 2006) While the Venezuelan president has caused international controversy with his angry denunciations of the Bush administration.mostly staffed by Cuban doctors provided under Chavez's oil aid program to Fidel Castro -. A windfall from Venezuela’s natural resource wealth has bolstered development progress in some areas: • 92. a professor of social psychology and criminology at the Central University of Venezuela in Caracas who has been an adviser to many neighborhood groups. poverty rates in Venezuela have declined. New medical clinics -. Economic Commission for Latin America and the Caribbean reports that poverty fell from 48. "Chavez has chosen to gamble on legitimizing these issues. The U. officials keep increasing the amount. . the next day. who had just been chosen head of the Education. did anyone at the offices of the local district government or in the central government buildings downtown." On this night. "If you don't want to participate in it.Gonzaga Debate Institute 2008 67 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty/Econ (2/2) Oil profits improve the quality of life in Venezuela The World Bank 4 ([http://web." said Andres Antillano.html] Venezuela Country Brief/ August 2004) Oil confers a competitive advantage in international trade. this is where the rubber meets the road for Chavez's radical rhetoric. Public works projects are everywhere. but also creates an imbalance in the domestic economy.

1 percent in 2003 to 30.9 percent) with end of 2006 (30.9 percent) with the end of 2006 (30.4 percent of the labor force. and lower life expectancy. The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate.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. lower income. which is substantial. Table 3 shows the poverty rate since 1997. However this poverty rate does not take into account the increased access to health care or education that poor people have experienced. and therefore suffer from worse health. (See Table 3). http://www. which measures only cash income. Formal employment has also increased significantly since 1998.4 percent) this is a 31 percent drop in the rate of poverty. its lowest level in more than a decade.4 percent) this is a 31 percent drop in the rate of poverty. this is a very conservative estimate of the value of just the increased health care benefits to the poor.venezuelanalysis. as would be expected in the face of the very rapid economic growth during these last three years. as compared to 15 percent in June 1999 and 18. Measured unemployment has also dropped substantially to 8. If we compare the pre-Chávez poverty rate (43.4 percent at end of 2006. Center for Econ Policy Res. as would be expected in the face of the very rapid economic growth during these last three years.1 percent in 2003 to 30.3 percent for June 2007. More ev… Weisbrot & Sandoval 7 (Mark & Luis. Center for Econ Policy Res.23 The situation of the poor has therefore improved significantly beyond even the substantial poverty reduction that is visible in the official poverty rate. 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. which measures only cash income.5 to 49. http://www. from 44.Gonzaga Debate Institute 2008 68 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Poverty – It’s Down Poverty down Weisbrot & Sandoval 7 (Mark & Luis. 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.com/indicators) The poverty rate has decreased rapidly from its peak of 55. 22 Of course. by household and population.4 percent at end of 2006.venezuelanalysis. .com/indicators) The poverty rate has decreased rapidly from its peak of 55. If we compare the pre-Chávez poverty rate (43.4 percent in June 2003 (coming out of the recession). As we have shown previously. most poor people would simply have gone without health care. since in the absence of these benefits.

Bolivia and Colombia) the elected regimes propose to privatize public petroleum companies. Professor of Sociology at Binghamton University [http://www. Peru. 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. In effect there is a bloc of neo-liberal regimes arrayed against Chavez's anti-imperialist policies and mass social movements. 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.com/analysis/682] Myths and Realities: Venezuela's Chavez and the Referendum/ September 2. Professor of Sociology at Binghamton University [http://www. and the defeat of the referendum--Chavez offered to dialogue and reach a consensus with the media barons. While Chavez promotes the regional trading bloc MERCOSUR. Chile etc) to Haiti to stabilize Washington's puppet regime imposed through the kidnapping of President-elect Aristide.Gonzaga Debate Institute 2008 69 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Heg Chavez doesn’t undermine US hegemony. urban and rural poor to a program of welfare capitalism. To the extent that Chavez continues his independent foreign policy his principle allies are the mass social movements and Cuba. media ownership and expanded relations with Washington. He is closer to Franklin Roosevelt's New Deal than Castro's socialist revolution. 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. 2004) But a defeat of imperialism does not necessarily mean or lead to a revolutionary transformation. the major members Brazil and Argentina are increasing their trade relations outside the region.Latin American countries are not influenced Petras 4 (James. big business plutocrats and US government. support ALCA and Plan Colombia and pay their foreign debts. The Broad Front in Uruguay promises to follow Brazil's neo-liberal policies. Brazil under Lula has sold oil exploration rights to US and European multinational corporations. on the basis of the existing property relations.com/analysis/682] Myths and Realities: Venezuela's Chavez and the Referendum/ September 2. provides a contingent of 1500 troops (along with Argentina. Chavez isn’t looking undermine US influence in Latin America Petras 4 (James.venezuelanalysis. 2004) Evidence to the contrary is abundant.venezuelanalysis. . Likewise in the other Andean countries (Ecuador. as post-Chavez post-election appeals to Washington and big business demonstrate. the debacle of the oil executives lock out. In the aftermath of the three political crises--the failed civil-military coup.

Staff http://osdir. We are not the ones who launch atomic bombs. raising questions in Washington about his atomic ambitions. "Nuclear energy is for peaceful purposes. There is currently little guarantee that he can stay in power that long. .discuss. Producing nuclear power would allow Venezuela to export more oil and generate additional revenues for the state treasury.isn.Gonzaga Debate Institute 2008 70 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Bomb (1/4) Chavez can’t possess nuclear capabilities for 10 years at least Logan 5 (Sam. And his neighbors in the region.com/ml/culture. he is likely to use the extra energy to alleviate domestic need for oil he would rather export. Argentina and Brazil have tacitly agreed. a self-described socialist revolutionary fiercely opposed to the U. if not closer to 20. We are just evaluating where we could put one. But Energy Minister Rafael Ramirez said the program is still in its infancy.html Venezuelan officials have given mixed signals about what they want and initially suggested they could use nuclear energy to power oil operations.ethz.com/ml/culture. “Venezuelan nuclear technology is a long shot” http://www. he would need at least ten years. The reality that Chavez does not have a group of Venezuelan nuclear scientists cannot be ignored. Staff http://osdir. training and investment to develop a sustainable nuclear energy project in Venezuela. He does not know how to build a reactor. while having demonstrated an ability to build and operate nuclear reactors. are still subject to international pressure in the form of the IAEA. No real plans yet and it would be for power generation Markey 5 (Patrick 10-1. Canada or Europe. Writer for ISN. Staff http://osdir. We are not the ones developing atomic bombs.discuss. He has engaged Argentina and Brazil for assistance in developing so-called peaceful nuclear technology.000 megawatts of power Venezuela would have to go beyond Argentina and bring in other commercial partners from the United States. He needs to borrow the expertise from elsewhere.cia-drugs/2005-10/msg00392. If Chavez is serious about bringing nuclear power to Venezuela." Chavez told a Brazilian newspaper this week. dismissing fears over his proposal.html 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.com/ml/culture. If Chavez manages to stay in power long enough to take advantage of nuclear technology in Venezuela.cfm?ID=13286) Chavez has a strong track record. No nuclear program for 5 yrs and it would be peaceful Markey 5 (Patrick 10-1. Chavez. says he wants to cooperate with Argentina.S.cia-drugs/2005-10/msg00392. the countries in the region that do have nuclear energy required no less than ten years to build a reactor. "We don‘t have any plans to buy a nuclear reactor. to realize the first kilowatt of nuclear power output." he told reporters this week. But to build a reactor with the average of around 700 megawatts to 1. Additionally. Herein lies the strongest chord of truth. it‘s others who do that. "We would use it for electricity generation.html Venezuela‘s President Hugo Chavez is approaching his wary South American neighbors about developing a nuclear energy program.discuss. or operate one. Brazil and possibly Iran to develop nuclear energy as part of his drive for regional integration. effectively giving him the regional support he covets.ch/news/sw/details. 5 oil exporter.cia-drugs/2005-10/msg00392." Can’t obtain materials – US and EU check Markey 5 (Patrick 10-1. the world‘s No. experts said. administration. But energy experts estimate it will take his government at least five years of studies.

“There is nothing concrete. which is exactly what would happen if the two countries announced a deal to share nuclear fuel enrichment facilities. however. as to whether the transfer of the technology required to operate a mid-sized nuclear reactor would constitute a “dual-use” situation. which means it would register its intent with the IAEA. It is difficult to see how Argentina would benefit from transferring technology necessary to operate a dual-use nuclear reactor.Gonzaga Debate Institute 2008 71 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Bomb (2/4) Argentina and Brazil will not transfer nuke tech Logan & Cirino 5 (1-26. Argentina would provide the reactor while Brazil would provide the enriched uranium. ISN Security Watch Staff. He believes that neither country would provide enough technology transfer to allow the Venezuelans to take complete control of the process. http://www. But these alliances are trumped by sovereignty and national security considerations.ch/news/sw/details.ethz. Neither Brazil nor Argentina would benefit from a nuclear weapons program in Venezuela.ch/news/sw/details. ISN Security Watch Staff. Regional alliances are stronger than the fear of upsetting an international regime perceived to be largely controlled by the US.ethz. But the Brazilian government is hesitant to bring more attention from the IAEA to this continent.” insists Brazilian presidential foreign policy advisor Marco Aurelio Garcia. He argues that Brazil’s nuclear program is transparent and protected from any military use. “There is nothing concrete. Sam & Julio. ISN Security Watch Staff. however. He argues that Brazil’s nuclear program is transparent and protected from any military use. but is adamant about meeting international standards and expectations for transparency.isn. The international pressure would be fierce. Aurelio Garcia goes further to speculate that in any initial phase of a nuclear program in Venezuela.ethz. in turn. Argentina would provide the reactor while Brazil would provide the enriched uranium. More ev… Logan & Cirino 5 (1-26. There is no guarantee. . Sam & Julio. Aurelio Garcia goes further to speculate that in any initial phase of a nuclear program in Venezuela. Regional alliances are stronger than the fear of upsetting an international regime perceived to be largely controlled by the US. 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. which is exactly what would happen if the two countries announced a deal to share nuclear fuel enrichment facilities.isn. But the Brazilian government is hesitant to bring more attention from the IAEA to this continent.” insists Brazilian presidential foreign policy advisor Marco Aurelio Garcia.isn. much less one that has been ignored and badgered by countries around the world since its inception. http://www. He believes that neither country would provide enough technology transfer to allow the Venezuelans to take complete control of the process. But these alliances are trumped by sovereignty and national security considerations. The IAEA. Sam & Julio. There are questions in Argentina. that Venezuela will yield to the will of an international agency. Neither Brazil nor Argentina would benefit from a nuclear weapons program in Venezuela.cfm?ID=13286) Brazil’s capacity to enrich uranium is certainly attractive for Venezuela. No tech transfer – Int’l pressure Logan & Cirino 5 (1-26.cfm?ID=13286) Argentina is interested in completing the sale.cfm?ID=13286) Brazil’s capacity to enrich uranium is certainly attractive for Venezuela. http://www.ch/news/sw/details. This is a touchy subject.

if at all.ch/news/sw/details. Sam & Julio. he would need at least ten years. There is currently little guarantee that he can stay in power that long.cfm?ID=13286) Additionally. the countries in the region that do have nuclear energy required no less than ten years to build a reactor.” said Argentine scientist Elias Palacios. If Chavez is serious about bringing nuclear power to Venezuela. “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. Herein lies the strongest chord of truth.isn. More ev… Logan & Cirino 5 (1-26.shtml) Chavez in August made a formal offer to purchase a nuclear reactor from Argentina. adding.com/archives/ic/2005/11/28/173737. Malaver argues that Chavez has embarked on a strategy similar to that of the North Koreans. http://www. Manuel Malaver told ISN Security Watch. and another reliable source of energy. he will need more money.ethz. If Chavez manages to stay in power long enough to take advantage of nuclear technology in Venezuela. to realize the first kilowatt of nuclear power output. considering Venezuela does not have nuclear scientists.ethz. "there is no way to divert it” into weapons programs.ch/news/sw/details. “I don’t believe Chavez has an interest in developing nuclear [technology]. Sam & Julio. Sam & Julio. This prospect is something to watch out for. http://www.ethz. .newsmax.” Reactor safety prevents diversion Newsmax 5 (10-28. Chavez’s intention to pull together the region with the carrot of generous oil export contracts and other financial incentives suggests that over time. The program would be peaceful.” Venezuelan journalist and political observer.isn. Many suggest the country's oil output has declined and will continue to do so. "The technology is quite advanced.cfm?ID=13286) Yet sources within Venezuela are convinced that Chavez’s nuclear announcement is more political than actual.ch/news/sw/details. "Because of the system of safeguards and inspections. ISN Security Watch Staff.isn. ISN Security Watch Staff. if not closer to 20.cfm?ID=13286) Producing nuclear power would allow Venezuela to export more oil and generate additional revenues for the state treasury. Venezuelan oil output is limited.ch/news/sw/details. http://archive. which would take years.ethz. “The nuclear plan is [hollow].” Malaver said. he is likely to use the extra energy to alleviate domestic need for oil he would rather export. dedicated to energy production Logan & Cirino 5 (1-26. more oil.isn. Chavez is bluffing – No interest in nukes Logan & Cirino 5 (1-26.Gonzaga Debate Institute 2008 72 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Bomb (3/4) 10 years from Chavez bomb Logan & Cirino 5 (1-26. an ace up Chavez' sleeve.” Palacios told the New York Times. but nothing more than that. ISN Security Watch Staff. http://www.cfm?ID=13286) Any use of a peaceful nuclear program to conceal or hint at a nuclear weapons program would come as a fringe benefit. co-secretary to the Brazilian- Argentine Agency for Accounting and Control of Nuclear Materials. ISN Security Watch Staff. but will not be a threat to regional security for at least a decade. 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. Sam & Julio. threatening the use of nuclear technology and leveraging heightened international tensions to ensure access to resources and technology that he could not obtain otherwise. http://www.

" The US will pressure Argentina and Brazil NYT 5 (10-27) With relations between the Bush administration and Mr. Chávez so hostile. "It's a way of challenging Bush. Shannon. "This is braggadocio. But that is not the case with Brazil and Argentina.Gonzaga Debate Institute 2008 73 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Bomb (4/4) 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. an Argentine scientist who is co-secretary of the Brazilian-Argentine Agency for Accounting and Control of Nuclear Materials. 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. and the United States seems to have decided to focus its efforts there. there's no reason why it shouldn't be done. the assistant secretary of state for hemispheric affairs. and because of the system of safeguards and inspections." . Chávez's campaign. there is no way to divert it" into weapons programs. said Elías Palacios." said Thomas A." he said. "If it's economically profitable for Argentina. Washington has little leverage over Venezuela. "We fully expect them to act in a responsible fashion. "We consider partners like Brazil and Argentina to be responsible partners on issues like nuclear power and proliferation. of making themselves feel important and forcing the United States to pay attention. which have extensive ties." Safeguards prevent diversion NYT 5 (10-27) The technology is quite advanced.

corruption. http://www. . U.S.heritage. In the long run. success in Iraq and Afghanistan against Islamist terrorism will curb or contain its expansionary ways.cfm Latin America cannot afford to be seen as half terrorist-friendly and half terrorist-hostile. 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. Heritage Foundation. and the strengthening democracies of the region can prevail. In the long run. the U. Even in Iran.org/Research/LatinAmerica/bg2152. and inefficiency. spawning the sorts of popular backlashes that ended previous efforts to construct populist paradises.S.Gonzaga Debate Institute 2008 74 Scholars Lab 2nd Wave Oil DA’s Venezuela DA – Impact – A2: Chavez Bad – A2: Terrorism No risk of Latin American terrorism Walser 8 (6-30. radical populist regimes will likely run out of steam as they are consumed by non-competitiveness. shifts in leadership among the mullahs could easily undo Iran's inroads into the Western Hemisphere. Ray.

Gonzaga Debate Institute 2008 75 Scholars Lab 2nd Wave Oil DA’s ***Venezuela Answers*** .

Poverty and inequality have. poverty is unambiguously higher in the late 1990s than in the early 1980s. The World Bankand Kinnon World Bank.org/LAC/lacinfoclient. Other composite welfare indexes and social indicators also show that the living standards in Venezuela deteriorated significantly during the 1990s. Indeed.nsf/e9dd232c66d43b6b852567d 2005ca3c5/fe8ed dae8d8fdec985256b0b005a28b9/$FILE/C-II. Washington. employment and labor productivity—despite the problems and limitations with the data and the methodologies—indicate that poverty in Venezuela has increased. despite changes in computational methods. real wages and employment opportunities have decreased significantly over the last decade.Gonzaga Debate Institute 2008 76 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – No Internal Link – A2: Oil K/T Econ (1/2) Oil dependency causes widespread poverty in Venezuela Cibils and Scott 1 (Vicente Fretes Lead Specialist. remained below the average for the LAC region throughout the 1990s. with high dependency on the oil sector and inconsistent economic policies. inequality increased between the early 1980s and late 1990s. while there is no consensus on the level of poverty.C http://wbln0018.pdf) In the environment provided by the low and unstable real income growth. D. The deterioration in real per capita income. Moreover. however. . LAC. This finding is statistically robust.worldbank.

as has the government's expansionary fiscal and monetary policy. http://www. the large current account surplus. However. employment. at present it does not appear that the current economic expansion is about to end any time in the near future. High oil prices have certainly contributed to this growth. and the accumulation of reserves have given the government considerable insurance against a decline in oil prices. diversifying the economy away from its dependence on oil is also a major challenge. The gains in poverty reduction. as well as realigning the domestic currency. This is especially true since it has not exhausted other alternatives. it does not seem likely that it would sharply curtail economic growth in order to bring down inflation. Therefore. the performance of the Venezuelan economy during the Chávez years does not fit the mold of an "oil boom headed for a bust.venezuelanalysis.com/indicators) In sum. This favorable macroeconomic situation has also left the government with much flexibility in dealing with inflation and the related imbalance in the exchange rate." Rather it appears that the economy was hit hard for the first few years by political instability. . Center for Econ Policy Res.Gonzaga Debate Institute 2008 77 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – No Internal Link – A2: Oil K/T Econ (1/2) Venezuela is insulated against oil price declines Weisbrot & Sandoval 7 (Mark & Luis. the declining public debt (as a percentage of GDP). as is often done. and has grown rapidly since the political situation stabilized in the first quarter of 2003. Containing and reducing inflation. education and health care that have occurred in the last few years are likely to continue along with the expansion. in the long run. appear to be the most important challenges in the intermediate run. Since the government is committed to maintaining solid growth.

without major social disruptions. LAC.org/LAC/lacinfoclient. D.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. the external position should be strengthened through a combination of exchange and monetary policies.C http://wbln0018. Moreover. real GDP per capita growth averaged –1. the main challenges for the Government remain to sustain stability and growth. as high real interest rates will delay economic recovery and growth. To complement these policies. to ensure external competitiveness of non–oil exports.nsf/e9dd232c66d43b6b852567d 2005ca3c5/fe8ed dae8d8fdec985256b0b005a28b9/$FILE/C-II. the non– oil fiscal deficit must be reduced through the adoption of measures to enhance non–oil revenues and control expenditures.org/LAC/lacinfoclient.pdf) The performance of the Venezuelan economy over the last decade has been dismal.pdf) While the economic plan includes important initiatives. and to improve the living standards of the population. With regard to the exchange rate. to diversify the economic structure over the longer term.Gonzaga Debate Institute 2008 78 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Internal Link Turn: Dutch Disease (1/2) Oil fuels a lack of diversification that dooms the Venezuelan economy Cibils and Scott 1 (Vicente Fretes Lead Specialist. thereby avoiding the full adjustment through real wages. a restricted monetary policy of high interest rates cannot be used as a substitute for non–oil fiscal adjustment and a mis–aligned real exchange rate.1 This has resulted in low economic growth with bursts of inflation and recurrent recessions.8 . and economic policy makers have been unable to cope with the oil cycles and the general decline in real oil prices (and real oil revenues) over the long–term. LAC.nsf/e9dd232c66d43b6b852567d 2005ca3c5/fe8ed dae8d8fdec985256b0b005a28b9/$FILE/C-II. The World Bankand Kinnon World Bank. To restore and sustain stability over the long term. Lack of diversification kills the Venezuelan economy Cibils and Scott 1 (Vicente Fretes Lead Specialist. it became more vulnerable to the boom and bust cycles generated by the oil sector (see Graph 1). At the same time. 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).worldbank.C http://wbln0018.worldbank. real non–oil GDP per capita growth average about –2 percent per year. as the economy failed to diversify. D. Washington. a more flexible exchange rate regime could be adopted to adjust prices to significant and protracted changes in the terms of trade. Washington. The World Bankand Kinnon World Bank. Over the last ten years. In turn.

Whether and how Venezuela will recover from its crisis still remains to be seen.ualberta. In this sense Venezuela was escaping Dutch Disease. “Dutch Disease. While North America. An eventual return to market value caused the sharp decrease in prices and Venezuela lost its bet. Hugo Chavez. The IMF had to impose the increases in domestic prices necessary to complete the cycle that played out. As soon as those avenues shut down so did the government’s ability to control domestic prices. high tariffs on imports and exchange rate manipulation had protected the domestic market. The development of a domestic traded manufacturing sector simply did not occur. creating Dutch Disease – empirically proven St. Thus. This was risky bet even with the trends of the seventies. iron. Because of the increase in the price of oil the government relied completely on oil revenue and like Mexico. Venezuela is currently suffering from a 27% drop in real GDP between 1998 and 2003. was reluctant to take steps to prevent a crisis. the price of oil was so high because of the decisions made be OPEC not because of true market value. Traditional exports of oil. 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. Essentially. . The sudden jump in prices imposed by the IMF caused recession so severe that rioting was induced. However. It seems that developing countries do not have the capacity to deal properly with the large inflow of resources. and cocoa made 95% of the exported commodities in the early 1980s. The closed economy. 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.Gonzaga Debate Institute 2008 79 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Internal Link Turn: Dutch Disease (2/2) Venezuela cannot deal with large influxes of oil revenue. Because nearly all industry was supported through subsidies the country was unattractive to foreign investment. coffee. while initially protecting against the lower prices of imports could not sustain this position. the revenue from oil was spent primarily on imports. 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. The Venezuelan government bet that the price of oil would continue to rise. Oil and Developing Countries. seems to be stretching for a solution. these prices were supported not through true market value but through borrowing and extra revenue. 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. Chavez is a politically controversial figure and he has been unable to turn the country around. The first is a reflection of the oil price increase in the 1970s.85.business. and doubtless the rest of the world. %2520oil%2520and%2520developing%2520countries. According to the Economist. 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. Combine this fact with the lack of wise government in both places and economic ruin results. in both cases.104/search?q=cache:- hwrE75a6uYJ:www. The increase in the price of oil. Protectionism through government subsides and spending held domestic prices low enough to remain competitive imports. caused an unprecedented increase in revenue for these countries.pdf+Mexico+%22Dutch+Disease%22&hl=en&ct=clnk&cd= 5&gl=us&client=firefox-a) However. Two patterns have emerged through the discussion of these two countries. suffered through the temporary increase in oil prices the developing countries with oil seem to have fared much worse in the long run. the government had relied completely on revenue from oil because these revenues were so large. This has created a poor majority in Venezuela and with little real recovery since the economic crisis their current president. His main focus is on attracting foreign direct investments in the oil industry. Hilaire 4 (12.ca/cabree/pdf/2004%2520Fall%2520UG%2520Projects/Dutch%2520disease. Another case of the lack of value-added industry creation led to the eventual downfall of an economy given the opportunity to grow.” http://209. 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. Also. Therefore. Venezuela had avoided Dutch Disease only temporarily and as a factor of having little traded manufacturing that was truly competitive to begin with. 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.141.

The TI report says these are among most corrupt in the world at positions 96. Iran. Saudi Arabia and the United Arab Emirates -. the finance minister of Venezuela once said to me many years ago. co-author of the CRS report says in a telephone interview. and weak rule of law. 'People rob'.Gonzaga Debate Institute 2008 80 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Internal Link Turn: Corruption Oil fuels corruption which hurts growth IPS 3 (Inter Press Service." Terry Karl. August 20.. Libya. Kuwait. 'because there is no reason not to." Of the eleven members of the Organization of the Petroleum Exporting Countries (OPEC). 101 and 81 respectively. The other OPEC members are Algeria. “Industry: The Murky Business of Oil”) "The reason corruption is so rampant in oil-exporting countries is not difficult to see. . very weak bureaucracies. Big oil names are also directly linked with corruption. Indonesia. Nigeria and Venezuela are listed in the TI Index. Iraq. Qatar. "There is no other commodity that produces such great profit -- and this is generally in the context of highly concentrated power.hardly examples of transparency.

the highest in Latin America. Venezuela.cms) Boom times are waning in oil-rich Venezuela. where he had enjoyed four straight electoral and referendum wins. It introduced a new monetary unit in January to boost confidence in its sagging ``bolivar. The Central Bank embraced a more traditional anti-inflationary measure in March. 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. Venezuela inflation rises” http://economictimes. As prices now climb again. . Inflation has been a familiar problem. enforcing price controls on basic foods and holding the currency to a fixed exchange rate.6 billion) in bonds in April to absorb excess cash. with rates of roughly 30 percent after running at nearly 20 percent a year earlier. Already complaining of inflation and food shortages. Venezuela has a history of inflation. the world's 10th-largest producer of crude. Stanford University political scientist Terry Karl says oil booms always send growth soaring until an economy reaches what she calls an ``absorption crunch. Many point to the economy as his Achilles' heel.'' Like many oil-producing nations. but a newly slowing growth rate is making it a more urgent concern. and annual economic growth slowed to 4. driving them to buy the US currency on the black market. even as world crude prices soar.indiatimes.9 billion (euro41 billion) since 2004 as oil prices soared.'' ``You just can't absorb that huge influx of money properly. you get problems of supply.. flooding the economy with cash and fueling a consumer spending boom while banks increased lending.com/articleshow/msid-3111726.. more profitable work. .8 percent in the first quarter. All those bottlenecks slow down growth and eventually create inflation. State oil monopoly Petroleos de Venezuela SA provides about half of the government's income.prtpage-1. 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. Price caps have caused sporadic shortages. But inflation is galloping. two years before Chavez was first elected. “Despite oil wealth. Chavez pumped huge amounts of that revenue into social programs for the poor.Gonzaga Debate Institute 2008 81 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Internal Link Turn: Inflation (1/2) Oil fuels inflation Economic Times 8 (June 8. raising interest rates on credit cards to 32 percent and on savings deposits to 10 percent to slow consumer spending. Chavez's government has tried to tame the trend issuing US$4 billion (euro2. has seen its annual budget triple to US$63. And some of Chavez's tactics have backfired. which reached 103 percent in 1996. as some food producers sought other. voters last December rejected constitutional changes that would have allowed Chavez to run for re-election indefinitely his first blow at the ballot box. Information Minister Andres Izarra said. And foreign exchange controls make it harder for businesses to get dollars to buy imports.'' Karl said. ``You get problems with your prices. Inflation is nearing 30 percent.'' and changed the way inflation is measured. where it has sold at times for twice the official rate further inflating prices. incorporating data from smaller cities with less cash on hand. a four-year low.

causing demand to outpace supply. Bloomberg News. He was named finance minister June 15. Inflation in Iran has aggravated a devaluation of the currency. brain drain and dearth of foreign investment have badly hurt Iran's potential output because of a lack of modern techniques. He said yesterday that controlling inflation is his biggest challenge. Los Angeles Times Staff Writers. July 17. ``On one hand. is the ninth finance minister under President Hugo Chavez since 1999. nearly $33 billion more than originally projected.com/news/printedition/front/la-fg-oil17-2008jul17. The International Monetary Fund.sun-sentinel.'' Rodriguez said.latimes. all three are riding high on oil revenue.4 percent from a year earlier. which in May accelerated to 31. All three countries are struggling with inflation. according to a statement on the Information Ministry's Web site. Analysts say sanctions. eggs and chicken that had become scarce. Borzou. Oil and gas revenues are expected to surpass $178 billion in 2008. Rodriguez said inflation. Rodriguez.story) But vast oil wealth comes with risks. results from increased spending power among Venezuelans. 70.1492641.Gonzaga Debate Institute 2008 82 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Internal Link Turn: Inflation (2/2) High oil prices mean inflation for Venezuela Stack and Daragahi 8 (Megan K. http://www. public spending doubled from 2004 to 2007.0. production needs to be stimulated.1 percent in May after the government eased price restrictions on basics such as milk.6710073. More ev… Cancel 8 (Daniel.story) Venezuela Finance Minister Ali Rodriguez said higher consumer prices are being driven by a greater distribution of oil wealth to the population. .'' Venezuela has the fastest inflation of 79 countries tracked by Bloomberg. In Russia.0. consumption needs to be moderated by restructuring measures that don't improve the general well. ``The inflation phenomenon should be combated in two ways. which might slowly erode popular support. a former president of OPEC. Venezuela's output is declining in part because skilled engineers and foreign companies are fleeing. and on the other. For now. however.being in the population. has warned Russia against rampant spending. http://www. Political changes wrought by the oil windfall also may backfire.. Food costs surged 6.com/news/local/caribbean/sfl- 0624venoil. wary of inflation.

.4 percent in the same period this year.8 percent in the first quarter. manufacturing decreased from 6. Such slowdown hits some areas that are vital for job creation and production.8 percent in the first three months of 2007 to 1. On the other hand.8 increase in the same period in 2007. the economic growth was 4. Venezuelans have associated increases in oil prices with wealth and economic growth. the economic growth was 4.8 increase in the same period in 2007. According to the data provided by the Central Bank of Venezuela. The construction sector was down from a 27 percent growth in the first quarter of 2007 to just 2.shtml) Historically.eluniversal. This is the lowest growth since 2003.8 percent in the first quarter. This is the lowest growth since 2003.6 percent during the same period in 2008. This represents a sharp fall with respect to an 8.6 percent during the same period in 2008. which averaged USD 100 per barrel by the end of the first half this year.com/2008/07/14/en_eco_art_less-growth-and- high_14A1795039. However.Gonzaga Debate Institute 2008 83 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Internal Link Turn: Inflation K/T Econ Inflation is a threat to critical sectors of Venezuela’s economy El Universal 8 (July 14.8 percent in the first three months of 2007 to 1. manufacturing decreased from 6. On the other hand. According to the data provided by the Central Bank of Venezuela. This represents a sharp fall with respect to an 8. Such slowdown hits some areas that are vital for job creation and production. the Venezuelan economy has lost momentum and skyrocketing inflation is deeply hurting consumers' purchasing power. the first semester of 2008 shows an unusual result: in spite of an unexpected jump in the oil prices. The construction sector was down from a 27 percent growth in the first quarter of 2007 to just 2.4 percent in the same period this year. http://english.

This does not include other government offshore accounts. http://www. Chavez's social programs have not had a significant impact on infant mortality rate or literacy rates among Venezuelans. . formal employment has increased significantly (PDF) since Chavez took office. its lowest level in more than a decade.7 percent in 2008 and 31. Council on Foreign Relations. With its low foreign debt (14. and further. Some economists say the tremendous rise in social spending under Chavez has greatly reduced poverty and pushed unemployment below 10 percent. The July 10 short-term outlook of the US Energy Information Agency projects oil prices at $65. former chief economist of the Venezuelan National Assembly.cfr. The IMF has forecast inflation of 25. not only has unemployment dropped.56 per barrel for 2007 and $66. But other economists express concerns about the country's high inflation levels.com/indicators) However.0 percent in 2009—among the highest rates for any country in the world—and according to news reports. Furthermore. Center for Econ Policy Res. which at $25. The risks of unanticipated supply shocks – especially in the volatile Middle East − seem to be mostly on the downside. writes in a 2008 Foreign Affairs article that income inequality has increased during Chavez's tenure. Social programs aren’t improving mortality Alvarez & Hanson 6-27 (Cesar & Stephanie.Gonzaga Debate Institute 2008 84 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact T/O – A2: Health Care Decrease oil prices wont decrease Venezuelan social spending Weisbrot & Sandoval 7 (Mark & Luis.6 percent of GDP). the country is already experiencing food shortages of goods such as sugar and milk. A decline in oil prices of 20 percent or more could be absorbed from official international reserves. http://www. which are estimated to be in the range of an additional $14-$19 billion. the government could also tap international credit markets in the event of an oil price decline. Francisco Rodriguez.html) Opinion is divided over the effect of Chavez's policies on Venezuela's economy.92 for 2008.2 billion are enough to pay off almost all of Venezuela's foreign debt. which would increase prices. a collapse of oil prices does not appear to be likely in the foreseeable future. According to a February 2008 report from the Washington-based Center for Economic and Policy Research. Venezuela has a large cushion of reserves to draw upon before an oil price decline would begin to squeeze its finances.venezuelanalysis.org/publication/12089/venezuelas_oilbased_economy.

all these subsidies are awarded off the books. the country's stock market plunged 20 percent in a single day. His quixotic rule continues to generate damage that his ministers must scramble to minimize. and the real figure might be closer to 35 percent. the reality may be much worse. In addition. Petrobras (Brazil).com/articles/2007/11/hugo_chavezs_most_dangerous_en. NIOC (Iran). including the vast majority of the company's most talented and experienced engineers. PDVSA hoped that joint development projects with foreign firms would lift production to 6. including the United States. Chavez remains popular at home. The most optimistic estimates put core inflation at 20 percent. Convinced that oil production will rise and that high prices are here to stay. but if Venezuela's economy turns south and state spending on popular social programs is substantially cut. the company took on $12 billion in new debt. Informed of this by his ministers. during a power struggle with Chavez in 2003. and Repsol YPF (Spain). If the economy slows further and Chavez needs more cash. Some argue that this is a worthy undertaking. his best oil customer. These are official figures. Second. Chavez can't simply redirect that much oil toward China and India. 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. LUKoil (Russia). for goods and services vital to the country's economy.6 million. The new prominence of foreign state-owned energy companies comes at the expense of multinationals like ExxonMobil and ConocoPhillips. Venezuela has no direct access to the Pacific Ocean. the source of Venezuela's future income. First. 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. In addition. the company has yet to recover from the loss of expertise. Venezuela is a net importer of virtually everything except oil and remains deeply dependent on its neighbors. He has repeatedly threatened to divert oil exports now destined for the United States toward consumers in Asia. the company produced about 2. Venezuela is believed to control some 270 billion barrels of oil. institutions he considers appendages of an "evil empire" based in Washington.realclearpolitics. he'll find it a lot tougher to push around the state-owned firms of would-be allies.S. But a close look at how his government milks the country's cash cow suggests he has serious cause for concern. His finance minister was among those taken by surprise by the announcement. As recently as the mid- 1990s. 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. Venezuela needs access to U.html) In proven and unproven reserves. The company's profit margins fell by about 25 percent in 2006. 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. Its rusting tanker fleet must pay transit fees to use the Panama Canal. Chavez is bleeding the company of the revenue that might be reinvested in aging infrastructure and new equipment. “Hugo Chavez's Most Dangerous Enemy?” It's Chavez Himself http://www. Hugo Chavez's most dangerous enemy is Chavez himself. In the first quarter of 2007. Output has since fallen to around 1.Oil = Chavez US oil consumption fuels Chavez –No revenue goes to productive economic purposes Bremmer 7 (Ian. he may not be popular for long.9 million bpd. but this spending represents three times the amount devoted to oil exploration and the maintenance of PDVSA's existing assets. because the government's cash comes almost exclusively from the country's state-run energy giant. to CNPC (China). despite the surge in oil prices. Herein lies the shortsightedness of Chavez's plans. neither China nor India will have the capacity to refine that much of Venezuela's heavy crude oil anytime soon. energy markets. There are two main reasons. creating product shortages across the board. The president retaliated by firing 18. PDVSA's workers went on strike.Gonzaga Debate Institute 2008 85 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn -. 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. the Venezuelan president proudly pledged that his country would withdraw from the International Monetary Fund and World Bank. As crude prices lurch toward $100 per barrel. Foreign investment in the country is severely limited by Chavez's habit of voiding contracts with international firms. Nearly five years later. . In response. It's impossible to know exactly how all that money is really being spent. On May 1. More to the point. He has diverted $12 billion into a fund meant to subsidize health and education projects. because crude oil shipments to America represent more than half of the country's total exports. In 1998. His fortunes increasingly depend on the future of Venezuela's oil production. Gazprom (Russia).5 million barrels per day (bpd). Chavez has aggressively antagonized the United States. Chavez has now begun to hint that the time might not be ripe for such a bold move. President of Eurasia Group. and it takes a Venezuelan tanker seven weeks to reach East Asia. The broader economy is already in rough shape. Petróleos de Venezuela (PDVSA). the deepest supply in the world.000 of them. ONGC (India).

8 billion in aid. the difference in aid is striking. 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. financing.6 billion of U. For example. a Colombian guerrilla group. Adjunct Professor of Latin American Studies at Georgetown University's School of Foreign Service [http://www. PDVSA must now spend at least 10 percent of its annual investment budget on social programs. Oil revenue funds Chavez’s agenda Alvarez & Hanson 6-27 (Cesar & Stephanie.html#2] Venezuela’s Oil-Based Economy/ June 27.cfr. Mounting inflation.org/publication/12089/venezuelas_oilbased_economy. Council on Foreign Relations [http://www.cfr. http://www. There are credible reports of large- scale corruption within the regime and.Gonzaga Debate Institute 2008 86 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Oil = Chavez Oil revenue key to Chavez Walser 8 (Ray.org/Research/LatinAmerica/hl1079. he provides oil at a preferential price to many countries in the Caribbean through the Petrocaribe initiative. an investment fund set up in 2005 that is not included in the government's budget.html) Under Chavez. major inefficiencies in the economy and the public sector. Incipient splits within Chávez's amorphous coalition could become more pronounced and create problems for governance. In August 2007. although unlikely in the near term. and violent crime have lessened Chávez's approval ratings. president of the Inter-American Dialogue. the result of prolonged price controls. 3-11.org/publication/12089/venezuelas_oilbased_economy. severely undercutting Chávez and his ability to govern. polls indicate that the population is becoming increasingly dissatisfied over a variety of key issues. Heritage Foundation. . or Fonden. would prove highly problematic for his plans. the company's mandate has drastically expanded. the Associated Press calculated that Chavez had promised $8.foreignaffairs. 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. a Washington-based center for policy analysis. A drop in oil prices. and energy funding to Latin America and the Caribbean between January and August 2007. And although Chávez remains personally popular. as evidenced by infrastructure problems.html] In Search of Hugo Chávez/ June 2006) To be sure.cfm) While Chávez pursues his aggressive agenda and erodes the efficiency and long-term viability of his energy sector. Chávez's capacity to govern the country is not unlimited. http://www. Chavez uses oil revenues to increase his influence in Latin America and fund guerrilla groups Hanson 8 (Stephanie. Chavez is also suspected of funneling money to the FARC.heritage. Washington understands that a sudden reduction in the price of oil would ripple through PdVSA and Venezuela. Though it is impossible to determine how much of that funding was actually dispersed. This money is funneled through the National Development Fund. and his domestic grip appears to have slipped. 2008) Increased oil revenues have also given Chavez the ability to extend assistance programs outside Venezuela’s borders. assistance for the entire year. widespread food shortages. Peter Hakim. as well as providing funds to Argentine President Cristina Kirchner’s election campaign in 2007—though he denies both charges. Chavez redefined PDVSA’s role to include the government’s social priorities. a figure far higher than the $1. Shortages in basic commodities have begun to appear sporadically.org/20060501faessay85303-p0/michael-shifter/in-search-of-hugo-ch-vez. Council on Foreign Relations. however. In 2002.S.

The most urgent task of the next decade is to shore up democracy in these countries.html //. and the rule of law. and virtually all of the democracies in Africa.cfm) Hugo Chávez is no democrat. The experience of this century offers important lessons.heritage. To avoid needless conflict as well as a possible energy crisis. Heritage Foundation. develop alternate sources of petroleum. all of the post-Soviet democracies that do not belong to the European Union. Council on Foreign Relations [http://www. 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. accountability.23 Abroad. who organize to protest the destruction of their environments. PROMOTING DEMOCRACY IN THE 1990S. he has concentrated the powers of the state in his presidency. The very source of life on Earth. 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. property rights. A list of such democracies would encompass more than 50 states. including most countries in Latin America and the Caribbean. expropriating budgets from municipal governments. Democracy stops nuclear war Larry Diamond. Most of these new and unconventional threats to security are associated with or aggravated by the weakness or absence of democracy. Precisely because. Stephen & Ariel.org//sub/pubs/deadly/diam_rpt. At home.Gonzaga Debate Institute 2008 87 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: War/Lead/Democr 2AC Venezuelan oil revenue finances anti-American dictatorships in Latin America causing regional war Johnson & Cohen 4 (8-12. A bloc of states united in leftist authoritarianism and oil extortion could ignite the flames of armed confrontation again in the Western Hemisphere. with its provisions for legality. Stanford University.foreignaffairs. Nuclear. and engage Latin America more effectively to help allies strengthen democratic institutions and market economies. December. the global ecosystem. Democratic governments do not ethnically "cleanse" their own populations. Latin America key to worldwide democracy Diamond 8 (Larry. democracies are the only reliable foundation on which a new world order of international security and prosperity can be built. open.html] The Resurgence of the Predatory State/ April 2008) In the coming decade. appears increasingly endangered. strengthening the national police. They do not aggress against their neighbors to aggrandize themselves or glorify their leaders. and packing the Supreme Court with cronies. In the long run they offer better and more stable climates for investment. p. four of the eight democracies in Asia. both for those under his rule and for all those who are allied with him. Countries that govern themselves in a truly democratic fashion do not go to war with one another. within their own borders. the United States should help direct Venezuela back toward democracy. Hoover Institution. http://www. they respect competition. They do not build weapons of mass destruction to use on or to threaten one another. . and they are much less likely to face ethnic insurgency. History suggests a future of conflict and poverty. 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. Democracies do not sponsor terrorism against one another. 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. 95. and enduring trading partnerships. Democratic countries form more reliable. http://www.carnegie.org/20080301faessay87204-p0/larry- diamond/the-democratic-rollback.org/Research/LatinAmerica/bg1787. They are more environmentally responsible because they must answer to their own citizens. civil liberties. chemical and biological weapons continue to proliferate. popular sovereignty and openness.

5% in 2000. 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. and declines in GDP.cfm) 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). These are allowing sharp increases in public spending. the country’s political instability and polarization between the government and the opposition contributed to a poor investment climate. above the 9. 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). to purchase influence with smaller. 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.3% recorded in the first half of 2005 (see Venezuela: 19 August 2005: Oil Industry Underpins Double-Digit GDP Growth in Venezuela). Specialist in Latin American Affairs. 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. Significance: As ever. capital flight.51 In 2002-2003. the administration of President Hugo Chavez is cranking up social spending at a remarkable pace.pdf) Despite the country’s oil wealth. the price of Venezuelan crude has averaged US$43. the performance of the Venezuelan economy remains heavily dependent on the trajectory of oil prices.8% in 1990 to 23.Gonzaga Debate Institute 2008 88 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Econ (1/3) All oil revenue is diverted to Chavez.org/sgp/crs/row/RL32488. well above the official forecast of 5%. World markets Analysis. and submarines. The percentage of Venezuelans living in poverty (income of less than $2 a day) increased from 32. September 14. helicopters. CRS Report. “GDP May Reach Double Digits in 2005.fas. The enormous costs of these undertakings draw away from productive investments in energy and other sectors of productive growth. Heritage Foundation. economic conditions in the country deteriorated in the 1990s.heritage.2% to 48. The chief factor behind Venezuela's stronger-than-expected performance is high oil prices.7% in 2003. Oil prices drive fuel Chavez’s inefficient spending which hurts Venezuela’s economy Ashwell 5 (Nick. Zavala forecast GDP growth in the third quarter of 10% year-on-year.well above the US$23 assumed in the 2005 budget. jets. Rather than taking advantage of bumper revenues to strengthen the public finances and diversify the economy.5% of the population between 1991 and 2000. Oil wealth doesn’t solve poverty Sullivan & Olhero 8 (1-11. . energy- dependent Caribbean and Central American nations via PetroCaribe. according to Zavala. and to spend billions on the purchase of Russian small arms. while undermining investor confidence by embarking on an expropriation campaign of 'unused and under-used' land and corporate plants. http://www.35 per barrel so far this year . 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. http://www. killing the economy Walser 8 (Ray.org/Research/LatinAmerica/hl1079. 3-11. while the percentage of the population in extreme poverty (income of less than $1 a day) increased from 11.

2006) Biographers tell us that Hugo Chávez trained for a radical career ever since childhood. but beginning in the mid-1970s corruption increased. In the background. but the house of cards is about to collapse.” The public brushed it off as rhetoric. Rahn. and may ultimately even exceed the U. a project of the FreedomWorks Foundation. but he came back a crusader. Venezuela has had a rapidly growing economy for the last few years.N. Instead of governing by consensus. people saw Chávez as a reformer. More ev… Washington Times 7 (Richard W. Released from jail in 1994. though no one guessed he would be president.com/news/2007/jan/21/20070121-102603-4793r/) If Venezuelan President Hugo Chavez deliberately intended to sabotage his nation's economy. calling themselves Bolivarians after the Venezuelan patriot Simón Bolívar.cfm May 1.heritage. The former Venezuelan representative to Transparency International. . Director general of the Center for Global Economic Growth. “Collapsing Venezuela” http://www.org/Research/LatinAmerica/hl938. and the commercial sector fell into paralysis. successfully linking his cause with the state. In the Venezuelan Army. He learned Marx and Machiavelli from a neighborhood historian but seemed disinterested.washingtontimes. Chávez threatens non-leftist states. They got little notice. When Chávez and a handful of fellow officers attempted to overthrow President Carlos Andrés Pérez in 1992. When Pérez got impeached a year later on corruption charges. telecommunications and energy sectors. Chávez called his predecessors “squalids” and referred to the capitalism they espoused as “savage. an uprising took him temporarily from office. He enacted a “social responsibility” law permitting the government to close radio and TV stations for airing content that “causes anxiety. In August 2004. "oil-for-food" scandal. Hertiage Foundation. What has not been reported is the full extent of the corruption in Venezuela and how this ultimately will destroy the economy. Gustavo Coronel. In the years since. handpicked judges. 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. He had the constitution rewritten to consolidate his powers and extend his mandate. Since 1980. prosecutors began rounding up opposition leaders for show trials conducted by provisional. few took him seriously. the biggest financial disgrace of all time. Chávez in Power Opinions changed after he was elected in 1998. despite having extensive and growing foreign exchange reserves. he joined a group of left-leaning officers that secretly advocated Marxism and military rule. Partially as a result. due to high oil prices. he attacked opponents with a vengeance. The mainstream daily newspaper El Nacional and TV networks Venevisión and Televén even supported Chávez’s candidacy. Its caretaker state. He has also stripped the Central Bank of its independence and misappropriated much of its reserves. Financed by the national oil industry he directly controls. It has been widely reported that Mr.Gonzaga Debate Institute 2008 89 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Econ (2/3) Chavez hurts the Venezuelan economy and causes regional instability Johnson 6 (Stephen. to buy influence in Argentina. Chavez has been increasingly taking control of the oil. Thereafter. 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. Now politicians from opposition parties seem increasingly unwilling to run against him or his candidates. based on exploiting natural resources and distributing profits through social spending Venezuelans living under the poverty line had gone from 27 percent programs. In 2002. had become sluggish and inefficient. civil society. he formed his own Fifth Republic Movement and promised to clean up government and relieve poverty. The financial scandal taking place is far bigger than Enron. Venezuela had become a functioning democracy and was experiencing solid economic growth. Hugo Chavez was elected president in December 1998 on an anti- corruption platform. he led by confrontation. which was what Venezuelans had become accustomed to. Outside his borders. as well as the media. “Is Hugo Chávez a threat?” http://www. the president survived a recall vote by padding electoral rolls and intimidating opponents. Politicians. 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. Mr. Some of the funds have been used to buy billions of dollars of Argentine bonds. Forty years ago. of the population to more than 50 percent. Venezuela’s political parties were running on empty. Chavez has been dismantling the independent political institutions and sharply reducing transparency. he would be hard-pressed to do anything different from what he is now doing to his country.” Another imposed jail terms for even mildly criticizing the government.

Chavez and his cronies had already been spending far more than they were taking in before the recent drop in oil prices. Chavez uses the massive oil revenues the country receives.washingtontimes. Venezuela no longer has an independent central bank. Director general of the Center for Global Economic Growth. “Collapsing Venezuela” http://www. The Venezuelan economy will collapse.washingtontimes. Director general of the Center for Global Economic Growth. and about $12 billion of that remains unaccounted for. despite massive oil revenues because we know socialist economies perform poorly. endearing those countries to Mr. Mr. It has also been reported that the gold reserves have been removed from the Central Bank. The money has gone to buy weapons from Russia.S. it also ceases reporting on the financial results of those industries. Mr. which immediately resulted in a parallel (black or free market) market. As the Chavez government takes over more and more of private industry. More ev… Washington Times 7 (Richard W. giving Venezuela two different exchange rates (the official and the black or free market rate). We know countries thrive with economic freedom but decline without it. Since 2004. as his own private piggy bank. 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. “Collapsing Venezuela” http://www. Increasingly. Without a big jump back up to $70 a barrel or more for oil. Venezuela is becoming socialist. Mr. Chavez has also set up a "development bank. a project of the FreedomWorks Foundation. And. Chavez announced this month he will take over the privately owned telecommunications and power companies. the Venezuelan Central Bank has transferred about $22. Spain and elsewhere. the Venezuelans will be increasingly squeezed. Chavez. The government uses the existence of these two rates to reward "friendly" banks and "intermediaries" (some of whom are known terrorists).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. and inflation is already up to 17 percent and rapidly rising. we know that when a state becomes totally corrupt an economic collapse always follows. Mr. finally. including judges.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. While the rest of the world has been moving away from socialism for the last quarter-century for good reason. which operates Citgo in the U. 75). We know governmental use of central banks to basically print money to cover expenditures results in rising inflation and eventually monetary meltdown. 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 local cronies for inflated infrastructure and economic development projects and to buy the loyalty of government officials and supporters. Bolivia. and you can bet the blood from the innocent Venezuelan people will be drained long before those on the take from Mr." which operates without transparency. Rahn.5 billion to accounts abroad by the Chavez government.Gonzaga Debate Institute 2008 90 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Econ (3/3) Chavez diverts oil funding to unproductive sources Washington Times 7 (Richard W. a project of the FreedomWorks Foundation. Rahn. such as the state-owned oil company. Venezuela established exchange controls several years ago to try to reduce capital flight. and we can expect that shortly after he does so his government will also stop reporting their finances. . Chavez agree to have their looting stopped. as well as other government revenues.

This increased poverty is accompanied by a widening inequality gap. Most observers agree that the biggest obstacle to stable growth in Venezuela is the country’s polarized political climate. while extreme poverty jumped from 2% to 10% (WB).8 percent to 23. In all four cases. .. As a group.00. 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. Poverty rates rapidly increasing in Venezuela The World Bank 4 ([http://web.menuPK:3317 77~pagePK:141132~piPK:141107~theSitePK:331767.5 percent in 2000. the data are incomplete and sometimes inconsistent. Peru. 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.tufts.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. the richest 20 percent of Venezuelans receives 53 percent of all income.edu/gdae/Pubs/wp/07-02LatinAmPoverty. Likewise.ase. they’ve seen moderate poverty balloon from 11% to 25%.5 percent. Colombia.html] Venezuela Country Brief/ August 2004) Despite the country’s progress. Currently. but the extent of problems in these relatively large countries raises doubts about prospects for halving poverty by 2015. the proportion of those living in extreme poverty —below $1 a day— rose from 11.worldbank. while the poorest 20 percent accounts for only a three percent share of the country’s total income. and Venezuela – have shown the worst performance.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/VENEZUELAEXTN/0. GLOBAL DEVELOPMENT AND ENVIRONMENT INSTITUTE [http://www.Gonzaga Debate Institute 2008 91 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Econ – Poverty Up Poverty high in Venezuela Helwege 7 (Ann.

Beyond trade. He hopes to link Latin American radicals with Middle Eastern jihadists and exploit nuclear technology with Iran.cfm Loosely networked and filled with a variety of left sympathizers.cfm In fact. it hides its dangerous tendencies behind a smokescreen of unabashed apologetics. Increased trade helps established industries and contributes to economic growth but fails to create enough jobs to keep up with population growth. simplify business licensing for small enterprises. strengthening citizen control of political parties now dominated by founder/owners. Since childhood. Today. One should not take that lightly. Nicaragua. El Salvador. But his menace could also serve as a wake-up call.” More to the point. As an antidote. and promoting equal treatment of all citizens before the law. The region cries for change. Still. and Mexico. but whose vision will prevail? To guard against Chávez-style authoritarianism spreading throughout the rest of Latin America. encourage banking competition to make credit more affordable. More ev… Walser 8 (6-30. diplomats should avoid responding to Hugo Chávez’s provocations—a device he uses to show followers that he can taunt world powers. Today. powerful presidencies still impose agendas out of touch with public desires while subservient legislatures and judiciaries fail to curb their excesses. if not a threat. He has successfully corralled opponents at home and has targeted the democratic. His diplomats actively support radical parties in such countries as Bolivia. not stifle it. to Latin America’s fragile democracies and to the United States. indigenous leaders. Assisted by Venezuelan financial aid.heritage. bolstering homegrown efforts to improve governance.org/Research/LatinAmerica/bg2152. and provide models for privatization that enhance competition. http://www. diplomacy and assistance should help strengthen property rights.S. which have increased under his rule. The groups that make up this movement aspire to become catalysts for the destabilization of democratic. U. Washington can help by engaging more vigorously with our neighbors to: Promote deeper political reforms. and anti-Americans who travel freely from Havana to Caracas to La Paz and other locations. not voters. . allies to join in denouncing Chávez’s dictatorial policies. free-market West. which will increase by 200 million in 20 years. free-market. he is becoming a major irritant. Chávez has made good on all his promises except to curb poverty and corruption. Ray. and lagging opportunity for social advancement must undertake reforms to become “opportunity societies. http://www. Heritage Foundation. poor social integration. Elsewhere in the region. establishing links between legislators and constituent districts. Heritage Foundation. Foster freer markets by concluding pending bilateral free trade accords with Panama and the Andean countries of South America. 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. In most countries.S. U. Most of those economies are still manipulated to shield state or family-owned monopolies while placating the middle class and poor with social programs.Gonzaga Debate Institute 2008 92 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Democracy Chavez undermines Latin American democracy Johnson 6 (Stephen. party leaders. and help democracy and markets fulfill their promise in the rest of the hemisphere. pro-U. radicals. enhancing separation of powers. Hugo Chávez has been underestimated. but stand by Venezuela’s democrats. 5-1. 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. Ecuador. Panama. the Chávez left draws from a collection of old-line Communists. countries with “at-risk” profiles of high poverty.org/Research/LatinAmerica/hl938.heritage. half the countries in Latin America have poverty levels at about the 50 percent mark. Peru. governments and do not play by normal rules of the political game. choose candidates who are placed on lists and elected according to the proportion of votes collected by each party.S. Toward Venezuela. the United States and its allies should ignore verbal provoca- tions.S. high unemployment. Washington should support Venezuelan democrats by urging continued international scrutiny of human rights under Venezuela’s emerging police state and pressing U.

html] The Resurgence of the Predatory State/ April 2008) In the coming decade.foreignaffairs. all of the post-Soviet democracies that do not belong to the European Union. including most countries in Latin America and the Caribbean.Gonzaga Debate Institute 2008 93 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Democracy – Model Latin America key to worldwide democracy Diamond 8 (Larry.org/20080301faessay87204-p0/larry- diamond/the-democratic-rollback. . Council on Foreign Relations [http://www. A list of such democracies would encompass more than 50 states. four of the eight democracies in Asia. 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. The most urgent task of the next decade is to shore up democracy in these countries. and virtually all of the democracies in Africa.

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. "If [Venezuela] truly becomes a military power.org/publication/12089/venezuelas_oilbased_economy. the Bush Administration has expressed concerns about Venezuela’s purchases of military equipment.3 billion on weapons. Former Brazilian President Jose Sarney and other regional leaders warn about Venezuela increasing its military strength. Defense Intelligence Agency Director Lt. Venezuela spent roughly $4.S.irc-online.Gonzaga Debate Institute 2008 94 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Arms Race Chavez uses oil profits to buy weapons Shifter 6 (Michael. twenty-four Sukhoi-30 fighter planes.000 AK-47s from Russia and has struck a deal with Spain for some $2 billion in military equipment.html] In Search of Hugo Chávez/ June 2006) Chávez has also used oil money to buy weapons.org/20060501faessay85303-p0/michael-shifter/in-search-of-hugo-ch-vez.122 State Department officials maintain that Venezuela’s military purchases from Russia go far beyond what the country needs for self-defense. Gen. In January 11.org/sgp/crs/row/RL32488.S. invasion. according to a January 2007 Defense Intelligence Agency report. 2007 testimony before the Senate Select Committee on Intelligence." Senator Sarney cautioned.cfr. and fifty-three Russian helicopters.123 President Chávez criticized Secretary Rumsfeld for suggesting that countries such as Colombia are concerned about Venezuela’s military purchases. and could fuel an arms race in the region.000 Kalashnikov rifles. In March 2008. He has purchased combat helicopters and 100. bases surrounding Venezuela and U. 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). An arms race causes conflict due to strategic imbalances Flynn 7-11 (Mathew.15 .org/am/5362) The Chavez government has reacted angrily to the U. Council on Foreign Relations [http://www. it hired Belarus to build an air defense system. CRS Report. an arms race in Latin America will ensue.pdf) As noted above. Chavez fuels a regional arms race Sullivan & Olhero 8 (1-11. It will lead to a strategic disequilibrium on the continent. maintaining that Venezuela was seeking to increase their capability for their own defense and to operate elsewhere in Latin America and the Gulf area. Between 2004 and 2006. generals listing "radical populism" a major new security threat.S. 2008) Military expenditures are also funded by the government's flush coffers.foreignaffairs. As part of deals signed with Russia in 2006.fas. Center for Intl Policy Staff.html#2] Venezuela’s Oil-Based Economy/ June 27. 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. Specialist in Latin American Affairs. http://www. Venezuela purchased 100. http://americas. Venezuela’s oil revenues go to purchasing weapons Hanson 8 (Stephanie. 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.14 One dangerous scenario (outright war would be worse) is an acceleration of the alleged arms race occurring in South America. Adjunct Professor of Latin American Studies at Georgetown University's School of Foreign Service [http://www. which he justifies by invoking the threat of a U. Michael Maples expressed concern in February 2006 congressional testimony about Venezuela’s arms purchases.

heritage. internal politics.) Happily. to integrate Latin America’s state hydrocarbon industries under one roof minus the participation of private U. which Americans see him more as a disruptive hothead than the model statesman he fancies himself. but the real worry is the prospect of Iranian missile or even nuclear (weapon) proliferation to Venezuela. Peter. narco-gunslingers and corrupt cops. too . Congressmen to sell small amounts of discount heating oil to poor neighborhoods in northern U. But Chavez is using to consolidate power at home. a public relations firm operating under the Foreign Agents Registration Act.S. The two nations have signed a number of joint-venture deals. Congress. Although the highway from Caracas to its international airport lies in disrepair. In the United States. Washington could theoretically send his neighbors F-16s.if he can find a new customer base. “Uncle Sam’s Latin challenge” http://www.cfm) Fortunately.S. such as a UN speech where he referred to President Bush as "the devil. too. Today. But US- Mexico relations are a mixed bag . he has committed more than $3 billion a year in aid to Latin American neighbors and has bought up Argentine and Ecuadoran debt. He has announced plans to buy more than a million rifles and acquire armored vehicles and new attack aircraft from Russia. bankroll Leftist pols across the region. but whose vision will prevail? Chavez will use oil funds to acquire a nuke and go to war w/Columbia Brookes 8 (Heritage Foundation. buy billions in Russian weaponry and back guerillas in Colombia. especially as indigenous peoples are politically mobilized. common enemies. party leaders. forgave Nicaraguan debt and provides aid. Ortega has supported Iran's nuclear ambitions at the United Nations. despite controlling the seventh largest oil and tenth largest natural gas reserves in the world. he called for Britain to leave the Falkland Islands. The region cries for change. One should not take that lightly.S. while Ahmadinejad has promised Ortega hundreds of millions in public-works projects. His government granted FARC commander Rodrigo Granda Venezuelan citizenship before he was captured on a bounty and sent back to Colombia. Hertiage Foundation. which have increased under his rule. Most of those economies are still manipulated to shield state or family-owned monopolies while placating the middle class and poor with social programs. how much trouble can Venezuela cause with an annual gross domestic product comparable to that of St. and the preferred transit route for more." On an earlier visit. He is friendly with the Revolutionary Armed Forces of Colombia (FARC) guerrillas and allowed FARC units to camp out in Venezuelan territory. an important US trading partner. Bloodshed and civil strife can't be ruled out. Although they claim no direct link to the Venezuelan state. and other cities. Some worry Ortega still longs for the bad ol' Sandinista days. cities. Nicaragua. too. “Is Hugo Chávez a threat?” http://www. he's even asked the United States to help fight gangs.heritage. A Call to Action Whether Venezuela’s President Chávez is a serious threat or a threatening buffoon depends on your point of view. and Mexico. choose candidates who are placed on lists and elected according to the proportion of votes collected by each party. fueling fears that he may try to develop a bomb. not voters. Chicago. the Iranian leader claimed he and Ortega "have common interests.[2] After years of persuading fellow OPEC (Organization of Petroleum Exporting Countries) members to suppress petroleum production to raise prices. Peru. Chávez has made good on all his promises except to curb poverty and corruption. to help these lawmakers to gain political clout. his government has paid lobbyists up to $100.org/Research/LatinAmerica/hl938. Chavez backed his campaign. Chavez supports terrorism and intends to acquire nuclear weapons from Iran Johnson 6 (Stephen. half the countries in Latin America have poverty levels at about the 50 percent mark. which is passed on to international financial markets. He hopes to link Latin American radicals with Middle Eastern jihadists and exploit nuclear technology with Iran. . Calderon has felt obliged to call in the army to deal with the drug lords. free-market West.and take many political cues from him. He has successfully corralled opponents at home and has targeted the democratic. Chávez has negotiated with selected U. Hertiage Foundation.S. But his menace could also serve as a wake-up call. other suppliers can step in. His diplomats actively support radical parties in such countries as Bolivia. El Salvador. (Venezuela produces 15 percent of our imported oil.Gonzaga Debate Institute 2008 95 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Bomb Chavez will obtain a nuke and fuel a regional arms race Johnson 6 (Stephen.cfm May 1. Missouri? In fact. 2006) Moreover.org/Research/LatinAmerica/hl938. And. and common goals. Recently. such as PetroCaribe and PetroSur.cfm May 1. 2006) He has proposed energy cartels. Ortega and Ahmadinejad are buds. Chavez's outlandish antics. 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. companies. Senior fellow. Elsewhere in the region. It reportedly funds the Venezuela Information Office. Ecuador. Castro's Mini-Yo also hopes to squeeze the United States by cutting off oil shipments." undermine his appeal. which will increase by 200 million in 20 years. two populist leftist leaders who've gotten financial support from him .heritage. Chávez has embarked on an arms buildup to scare Brazil and Colombia. Increased trade helps established industries and contributes to economic growth but fails to create enough jobs to keep up with population growth. Then there's Nicaragua's President Daniel Ortega. Many Latin Venezuela is awash in oil profits.000 a month to polish his image before the public and U. powerful presidencies still impose agendas out of touch with public desires while subservient legislatures and judiciaries fail to curb their excesses. pro-Chávez activist groups called “Bolivarian Circles” have surfaced in Miami. Chávez announced last May plans to acquire nuclear technology from Iran. Chavez gets along far better with Bolivia's Evo Morales and Ecuador's Rafael Correa. “Is Hugo Chávez a threat?” http://www.complicated by thorny issues such as Mexico being a prime source of illegal immigrants to the US. Another problem: narcotics trafficking. 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 hoped to drive a wedge between the American people and their government.S.org/Press/Commentary/ed013108a. Chavez failed to win a key ally when Felipe Calderon won the 2006 presidential election in Mexico. Panama. In most countries. Ortega honored his Iranian guest with two of Nicaragua's highest medals of national honor. On a recent visit. Louis. provide cut-rate oil to amigos like Cuba.[3] By meddling in U. He's also chummy with Iran's President Mahmoud Ahmadinejad. If he buys Russian MiGs. If he cuts off oil shipments to the United States. Each is looking at rewriting his nation's constitution (as Chavez has tried to do) to consolidate power and nationalize energy resources.

if Venezuela acquired the technology to produce nuclear energy. There is reason to be vigilant. Considering their antagonistic stance vis-à-vis the US. Chávez. Neither country would suffer adverse effects from a nuclear weapons program in Venezuela.” he warned.ch/news/sw/details.newsmax. Scheinman told the Times. is not Brazilian or Argentine intentions .but rather Chavez’s constant communication with Iran and North Korea. who was assistant secretary of state for nonproliferation and disarmament in the Clinton administration. http://www.isn. it is possible that both Iran and North Korea will be more accomodating - especially North Korea. http://www. 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. he would have the material necessary to build a nuclear bomb. Chávez says now. and prestige has always interested Mr. "We do have a problem here of a country that’s very antagonistic toward the United States and linking itself with Cuba. however. Both North Korea and Iran are relatively advanced in the field of nuclear technology. http://archive. It is plausible that Chavez has already invited scientists from both countries to Venezuela.ch/news/sw/details. it is more plausible that North Korea and Iran would support Venezuela’s intention to at least threaten to acquire a nuclear weapons program. an area where Venezuela has literally no experience or technological know-how. ISN Security Watch Staff. Though this is not alarming at present. . Chavez says. North Korea or Iran could feasibly give Chavez a bomb Logan & Cirino 5 (1-26. If Brazil and Argentina are not willing to provide the technology transfer required for an independent Venezuelan nuclear program. Investigative Journalist & Historian. The confirmed installation of a North Korean embassy in Caracas reinforces the possibility of North Korean scientists in Venezuela.cfm?ID=13286) Argentina and Brazil have the capability and technology to deliver all of Chavez' requirements to effectively execute a nuclear energy program.cfm?ID=13286) What worries observers in Washington.ethz. notes there is "a prestige factor involved" in having nuclear reactors. No matter what Mr. he would have uranium and fuel that could be used to build a bomb. considering its need for fuel and Venezuela’s abundance of oil. if Venezuela acquired the technology to produce nuclear energy.Gonzaga Debate Institute 2008 96 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Bomb – Feasibility Chavez bomb entirely feasible w/o US Logan & Cirino 5 (1-26. They would build a bomb – They have the motive Newsmax 5 (10-28. Sam & Julio. it is worth careful consideration.shtml) No matter what Mr.ethz.” Chavez has a “prestige” motive for nuclear weapons NYT 5 (10-27) But Lawrence Scheinman. Sam & Julio.which many consider to be carefully thought out and to have benign motivations .com/archives/ic/2005/11/28/173737.isn. ISN Security Watch Staff. "One has to contemplate that possibility.

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. It is upsetting and almost incomprehensible to conceive of the Venezuelan government developing nuclear weapons. Chile. it should not be taken lightly. but considering Mackinnon’s source is a high ranking official for a Latin American government.Gonzaga Debate Institute 2008 97 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Bomb – NW Venezuelan proliferation guarantees Latin American arms race which escalates to nuclear war Zulauga 5 (Felipe. If nuclear technology is developed in Venezuela for the purpose of acquiring nuclear arms.such as Mexico. Brazil and Argentina – will follow suit. . “Venezuela…A Good Neighbor?” http://www. wrier for visions of South America. it is probable that other countries with previous intentions to develop military nuclear capacity . 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. but it also has the potential to cause a nuclear crisis at the global level.edu/clas/publications/Visions_vol1_issue1. This not only poses a threat to the stability and security of the Latin American region. According to Douglas Mackinnon in an article from the Houston Chronicle. which prohibits nuclear weapons in Latin America.pdf) Although Chavez indicates that the development of nuclear power is to be for peaceful purposes only. if Venezuela officially decides to break the treaty by achieving nuclear power. 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. 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. This treaty.pitt. the country will violate the Treaty of Tlatelcol. as Venezuela is seeking a more secure position in the global context. signed by 23 Latin American states. However.ucis.

who'll join other communist cronies in the dustbin of history any time now. While his political fortunes have been on a rollercoaster. Mr. 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. which already has a uranium-mining operation. The perceptions are especially grim these days. Chavez intends to wield this influence in more strategic ways -. One serious question that needs to be posed is why would Iran. according to press reports. Venezuela voted in January against referring the Iranian nuclear program to the U. like many other countries have done. 2006 http://www.N. one of which could lead to the mining of Chavez has also expressed interest in nuclear technology.America's influence in our own neighborhood will be a key challenge for the next US president.cfm) Maintaining . which have continued to strengthen relations between the second.or regaining . Chavez's outlandish antics. “Uncle Sam’s Latin challenge” http://www." During a visit to Caracas in February by the speaker of the Iranian parliament. To what extent Mr. Oil money allows Chavez to check US influence in Latin America and acquire nuclear capability The Washington Times 6 (“Chavez and Tehran” April 5.and over how much broader of a geographical scope -. "Iran has every right. Fidel has turned running the government over to his "First Brother. He'd like to place a kindred anti-US spirit at the helm of every Latin or Caribbean nation. Mexico and Nicaragua. Senior fellow. On death's door for months.Fidel Castro. Chavez has made a sport of taunting the United States in both word and deed. that the technology is only for civilian uses. Colombia. Hugo Chavez. The two leaders also used that meeting to build their economic ties.Gonzaga Debate Institute 2008 98 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Heg (1/4) Chavez undermines U. Meanwhile. Bolivia.heritage. Chavez of inserting himself and his leftist influence into politics in Bolivia.org/Press/Commentary/ed013108a. often manifest in foreign aid. though Venezuelan uranium for Iranian use. Many Latin Americans see him more as a disruptive hothead than the model statesman he fancies himself. Sadly. It's clear that both his influence and his propensity to exert that influence have increased substantially in recent years. Senior fellow. leadership Brookes 8 (Heritage Foundation.cfm) Fortunately. But Venezuela is awash in oil profits. Chavez uses oil money to foment anti-Americanism Brookes 8 (Heritage Foundation. Chavez and his brand of authoritarianism." undermine his appeal. But it needs to be watched carefully. Latinoamericanos accuse Uncle Sam of neglecting their needs at the same time they chastise us for unwelcome meddling.S. One anti-American is on his way out. Havana's communist cadre will likely retain their nearly 50-year death grip on the Cuban people. 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.and third- leading oil exporters of the Organization of the Petroleum Exporting Countries.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." Raul. Peter. intends to replace Castro as leader of the Latin Left. Allying himself with countries that share his dislike of the United States is nothing new for the oil-rich Mr. such as a UN speech where he referred to President Bush as "the devil. helped along by increasing oil prices. Chavez claimed that "it's absolutely false that the Iranian government is developing an atomic bomb. but any movement toward a joint nuclear effort with Iran is alarming.is yet to be fully determined. which Chavez is using to consolidate power at home. Mr. Chavez urged countries in the region to form an alliance against the United States . Chavez said in March 2005. Ecuador. including infrastructure projects in Venezuela. Critics accuse Mr. Venezuela's caudillo president. to influence his Latin American neighbors. Peter. provide cut-rate oil to amigos like Cuba. Chavez has found that heading the world's fifth-largest oil exporter has given him sufficient resources.heritage. Along with Cuba and Syria. bankroll Leftist pols across the region. to develop its atomic energy and continue its research in this field. be interested in uranium deposits in Venezuela? Potential answers all smack of nuclear proliferation. Just last week.org/Press/Commentary/ed013108a. after meeting with Iranian President Mohammad Khatami.proposing that Nicaragua. “Uncle Sam’s Latin challenge” http://www. Last month. Caracas claims. Security Council. . Mr. however. buy billions in Russian weaponry and back guerillas in Colombia.washtimes." Mr. like Tehran. several agreements were announced. though: the "Bearded One" . Cuba and Dominica become a unified military force.

org/Research/LatinAmerica/em1010. Stephen Johnson & William Schirano. http://www. imports at a critical moment. military mission to leave Venezuela’s armed forces headquarters in Caracas. Though freely elected. Venezuelan Kalashnikovs could help them go from street marches to armed attacks. Cohen et al. By politicizing and mismanaging the state petroleum industry. he has replaced Venezuela’s checks and balances with a crony congress. silenced critics with draconian media laws. in 2004. Increasing global demand for petroleum has given him an international power base.heritage. Shortly thereafter. and Spain and Sweden are withholding weapons with U.-style democracy.S.cfm) The bad news is that Chávez has consolidated his hold over Venezuela's public institutions and is manipulating the electoral system in his favor. and placed the state oil company under his thumb as head of the National Oil Council. The Su-30 will be Latin America’s most advanced attack aircraft. Courting Outside Partners. . Heritage Foundation. Finally. http://www. influence and become a power unto himself— picking up where Castro left off.S. Ariel.S. http://www. Iranian President Ahmadinejad awarded him a medal and promised collaboration on developing new oil fields.org/Research/LatinAmerica/bg1787.000 Kalashnikov assault rifles to arm a new reserve force. Venezuela is replacing some military equipment that has fallen into disrepair. Chávez is keenly aware of prior defeats and how to avoid them. Venezuela could threaten neighbors and the United States.S. has agreed to buy some 100. In China. and North Korea) is alarming. Anti-drug operations and training of Venezuelan pilots in U. but setting up a Russian weapons plant and striking alliances with state sponsors of terrorism (Iran. Beyond Venezuela. Heritage Foundation. he sees himself replacing Fidel Castro as the leader of Latin America's radical left--uniting the region against U. he was in Moscow to finalize the purchase of the Su-30 supersonic fighter-bombers and Mi-35 assault helicopters.cfm) Mentored by Castro.– Venezuelan military cooperation.S.S. Heritage Foundation. Chávez began to curtail 50 years of U. components. The Bush Administration suspended arms sales in May 2006.-supplied F-16 fighters ceased. and reportedly is seeking short-range surface-to-air missiles. More ev… Johnson & Cohen 4 (8-12. Chávez is jeopardizing vital U. During the last week of July 2006. More ev… Johnson & Cohen 4 (8-12. He also signed an agreement to purchase a Kalashnikov weapons and munitions plant. ties with North Korean leader Kim Jong-Il could facilitate the acquisition of intermediate-range missiles.heritage. Venezuela began to seek arms from Russia.cfm) Venezuelan President Hugo Chávez is systematically leading his country into dictatorship by provoking internal conflict and characterizing his internal opponents as traitors. Unbridled by popular will or economic sense. and his anti-American political agenda--fueled by petrodollars--could threaten nearby fledgling democracies and flourishing markets. Soon after his election in 1998. and a gelling global oil alliance could limit U. Chávez wants to block U. Stephen & Ariel. Chávez announced a strategic alliance with President Alexander Lukashenko to keep “hands at the ready on the sword” against imperialism. interests in the Western Hemisphere. and American influence. Cuba. Meanwhile. free markets. 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. Chávez has signed contracts worth $3 billion for 24–30 military airplanes and more than 50 helicopters. Chávez already allows Colombian rebels to resupply in Venezuela and funds like-minded Bolivarian movements in neighboring countries. Stephen & Ariel.org/Research/LatinAmerica/bg1787. his government asked the U. Chávez derives popular support from fellow ideologues and a small but committed segment of Venezuela's largely poor population.S.heritage. In Belarus. 6 (9-6. Chávez pledged to shift more petroleum exports to Beijing.S. With North Korean ballistic missiles.Gonzaga Debate Institute 2008 99 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Heg (2/4) Chavez will use oil revenue to undermine US influence Dr.

Gonzaga Debate Institute 2008 100 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Heg (3/4) Chavez can undermine US influence in Latin America Johnson & Cohen 4 (8-12. conspiratorial. Heritage Foundation.S. .16 Chávez would thus have the luxury of cutting deliveries to those who opposed him. http://www. In the Andes. By destabilizing and replacing democratic governments in hydrocarbon-rich Bolivia. dedication to the armed path to power. Not surprisingly. Mao. it seriously threatens to dismantle progress achieved in counterdrug cooperation. Chavez promotes regional anti-Americanism and nationalism which crush international coop. Extreme anti-Americanism leads entire nations to opt out of cooperative international arrangements and programs to combat terrorism and trafficking in drugs and arms. South America's great Liberator.S. it draws substantial guidance from 20th century models of social revolution and violent political change. http://www. While it is fashionable to attribute this attitude to the past sins of American interventionism. especially on drugs and terrorism Walser 8 (6-30. but the distrust that it creates between the U.heritage. Fidel Castro. forcing them to seek other sources at greater cost. 2004.[7] It is reflected in continued glorification of arch-guerrilla icon 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. but it would enable Venezuela to ship petroleum to China without using the Panama Canal.S. and infatuation with the FARC's terrorist bravado. and Ecuador. Central to radical populism is strident anti-Americanism. making Venezuela less dependent on petroleum sales to immediate neighbors. U. Chávez is preparing to shift PDVSA's customer base toward Asia and an increasingly oil-thirsty China. or even the missteps of the Bush Administration in Iraq. the amount of cocaine transiting Venezuela has risen from an estimated 57 metric tons in 2004 to 250 metric tons in 2007.cfm While radical populism claims to respond to economic and social demands of the excluded and impoverished. he also could achieve a regional energy monopoly that could support rogue regimes and frustrate U. it also fosters an aggressive.heritage. politicians. interests in the hemisphere. Colombia. and embracing anti-Americanism is a powerful demagogic tool for winning the public's attention and mobilizing popular support. to build oil and gas pipelines between the Maracaibo Basin in Venezuela and the Caribbean and Pacific coasts in Colombia may seem innocuous. 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. hegemony. A deal signed on July 14.cfm) Beyond the hemisphere. Heritage Foundation.org/Research/LatinAmerica/bg1787. and Ernesto "Che" Guevara. and its practitioners. journalists. radical populists often seek guidance from the ideas and deeds of Lenin. dependency. while drug seizures have fallen by half. radical populists long ago learned from Juan Perón and Fidel Castro that demonizing the U. In addition to revering the memory of Simón Bolívar.org/Research/LatinAmerica/bg2152. Ray. and would-be revolutionaries.S. The chief danger of anti-Americanism is not the harm that it does to the American psyche.[8] While radical populism wins legitimacy by mobilizing dissatisfaction at the ballot box. Stephen & Ariel. nationalistic worldview.

cfr. which are central to his plan to launch Petrosur. More and more. He has bought $2. power." they now mean the Cuban. The United States has remained quiet in the run-up to Venezuela’s elections but U. . especially Argentina and Brazil. Castro probably also provides Chávez with strategic advice. Chávez furnishes the financially strapped island some 90. When Venezuelans mention "the embassy. Chávez has taken full advantage of a confluence of favorable factors -. in keeping with his declared intention to eventually direct Venezuelan oil away from its current principal market -.html] In Search of Hugo Chávez/ June 2006) From the outset.to construct alliances throughout the Western Hemisphere and beyond. a Latin American alternative to CNN. 2006) The opposition’s momentum appears of little concern to Chavez. not the U. He has skillfully managed to establish himself as a global and regional leader.org/20060501faessay85303-p0/michael-shifter/in-search-of-hugo-ch-vez. along with some military support and intelligence. Chávez's close friendship with Castro has been integral to this project.S.html] Six More Years of Chavez/ December 4. Latin America's political disarray.S. who continues to direct his rhetorical fire at the United States.Gonzaga Debate Institute 2008 101 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Heg (4/4) Chavez is undermining US influence in Latin America Hanson 6 (Stephanie. Council of Foreign Relations [http://www.8 billion in Argentine bonds and $25 million in Ecuadorian bonds and has substantially underwritten Telesur. using oil money and brash anti- Americanism to attempt to construct a counterweight to U. He defended his visits with Saddam Hussein and Qaddafi on grounds of Venezuela's membership in OPEC. a reference to President Bush.000 barrels of oil a day to 13 Caribbean nations with "soft" financing for up to 40 percent of the bill. it has been clear that Venezuela. disengagement from the region. aid to Venezuelan organizations. 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.foreignaffairs.the United States. with a population of 26 million.html] In Search of Hugo Chávez/ June 2006) The primacy of petroleum has also given Chávez leverage beyond Latin America. Cuba and Venezuela are important referents for each other. another regional energy initiative that he has pledged to largely bankroll. some of which are critical of Chavez and the government. He has also worked to forge stronger ties with key countries such as India and China. Chávez has also given high priority to the countries of the continent's southern cone. In exchange for Cuban teachers and doctors. Chavez undermines US influence around the world Shifter 6 (Michael.org/20060501faessay85303-p0/michael-shifter/in-search-of-hugo-ch-vez. “We are confronting the devil. Last year. U. He has vowed to build a pipeline through Panama for trans-Pacific shipments. Adjunct Professor of Latin American Studies at Georgetown University's School of Foreign Service [http://www.lots of money. has irked Venezuelan officials (NYT). Adjunct Professor of Latin American Studies at Georgetown University's School of Foreign Service [http://www. embassy in Caracas. At his final election rally he cried.S.000 barrels of oil a day.org/publication/12086/six_more_years_of_chavez." (BBC).S.foreignaffairs. and PDVSA opened an office in Beijing last year. under which Venezuela will provide 198. Chavez undermines US influence in Latin America Shifter 6 (Michael. is too small a stage for Chávez's ambitions. widespread hostility to the Bush administration -. Chávez's aggressive oil diplomacy has also enhanced his influence. he inaugurated Petrocaribe..

brookings.S. "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. We must enhance our partnership with Latin America if we are to resolve global challenges. security and energy. poverty alleviation. including trade.S. “The change in the U.S. It is one of the first steps in a major new Brookings’ Latin America Initiative that will seek to sustain U. political leadership provides a critical opportunity to engage with our neighbors in Latin America constructively and cooperatively across a range of important issues. .” added Pickering. focus on a common agenda. immigration. and deliver solutions. we believe it is an opportune time to take stock of the U.Gonzaga Debate Institute 2008 102 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Heg – K/T World Latin America is key to US leadership The Brookings Institute 8 ([http://www.- Latin American relationship and stimulate new partnerships across a host of critical issues. 2008) “As we prepare for a new U.S. “The Commission will advance recommendations and new solutions for the hemisphere." Zedillo said.” said Strobe Talbott.aspx] Brookings Latin America Initiative/ May 14. Under Secretary of State Thomas R. administration.-Latin American engagement on the critical challenges for the hemisphere.S.edu/projects/latin-america/about. president of Brookings and a member of the Partnership for the Americas Commission. Pickering.” The Partnership for the Americas Commission is co-chaired by former Mexican President Ernesto Zedillo and former U.

S.heritage.S. In addition. More ev… Walser 8 (6-30. Ecuador. regional policies against the interconnected challenges of terrorism. needs to explore ways to strengthen vigilance and to prevent Iran from exploiting this potential conduit to the homeland.cfm Radical populist Hugo Chávez and his network of allies—Bolivia.S. Heritage Foundation. The revelations from the FARC files have prompted several Members of Congress to call for the U.cfm 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.Gonzaga Debate Institute 2008 103 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Terrorism Chavez foments anti-American terrorism Walser 8 (6-30.org/Research/LatinAmerica/bg2152. and drug violence in the Western Hemisphere.[4] In their anti-American zeal. Ray. However. It would also likely spark a nationalist backlash in Venezuela and more anti-Americanism throughout Latin America. 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. insurgency. The FARC files are essentially a smoking gun that proves that Venezuelan President Hugo Chávez is supporting the FARC. Chávez and company are demonstrating a tendency to make common strategic cause with Iran. Cuba (a state sponsor of terrorism). Heritage Foundation. doing so could jeopardize economic and commercial ties with the fifth-largest supplier of crude oil to the U. potentially opening the Western Hemisphere to exploitation and infiltration by Islamist terrorists.heritage.S. . http://www.org/Research/LatinAmerica/bg2152. The U. Ray. has done enough since 9/11 to protect against backdoor terrorist threats originating in the Western Hemisphere. Chávez's growing ties with Iran appear to open a door for Islamist terrorism and raise the question of whether the U. http://www. A more prudent policy would be a course of targeted sanctions against individuals who are illegally supporting the FARC. to place Venezuela on its list of state sponsors of terrorism. and an important U.S. trading partner.

The raid. who maintains relations with FARC.com/story/16574.pdf 3/19/08) Military procurements in Latin America have sparked fears of a new arms race. and Colombia is rife with war-on-drugs firepower. Chile has also invested in weapons recently. Some later confessed and were charged. and protect newfound oil wealth. Colombia/Venezuela war leads to a Latin American arms race Flight International 8 (“Latin America: military modernisation or arms race?” http://www." 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 Christian Science Monitor reports. seeking to restore and enhance their decrepit military inventories. keep out Colombian guerillas.” “Brazil won’t say it. as he has drastically increased the country's defence procurement levels. I believe that it is more nations' attempts to meet a pent-up demand for modernisation of their armed forces. as well as tensions between Chavez and Uribe. immediately warned Colombia that any similar raid into Venezuela would be a cause for war. "He remains the region's hot-headed leader who will continue to incite non-allying nations until the end of his term." says Rebecca Barrett. however.com/notable/flightglobal. dozens of Colombian paramilitaries were arrested on a ranch near Caracas on a terrorist plot (6). deadpanned one analyst. which involved the Colombian air force's Embraer Super Tucanos. And indeed. wants to shut down drug traffickers. have shown that Colombia is a base for attacks on Venezuela. Venezuelan president Hugo Chavez is usually viewed as the instigator of the race. its oil. “There is tremendous mistrust between countries. Colombia made a high-profile announcement that it was going to acquire several dozen tanks. and then through the years of Uribe's rule in Colombia. This escalates to full-scale regional war CSM 8 (Newser. from Spain. Around the same time as the paramilitaries were infiltrating Venezuela (March 2004).newser. About a year later (May 2004). Brazil. In March 2003. “Venezuela comes fairly low down the list” of enemies. “There is a real risk of it escalating.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.” one expert said. border incidents and troubles over the past several years. But each country also has internal reasons for bulking up. and its revolutionary process (4). while others were returned to Colombia. Tensions between the two countries have been high for months. Chavez. But is it really a build-up or more a need to modernise ageing hardware? Now defused. The deal had been made under Spanish Prime Minister Jose Maria Aznar.com/analysis/3112) Chavez's rule in Venezuela coincides with the rise and fall of the last peace process in Colombia. or necessary to the extent to which President Chavez has brought it. "While some might see this as a potential arms race. analysts have argued that one of the true targets of Plan Colombia was in fact Venezuela. . killed a senior commander of the insurgent Revolutionary Armed Forces of Colombia. Latin America analyst with Forecast International.Gonzaga Debate Institute 2008 104 Scholars Lab 2nd Wave Oil DA’s Venezuela Answers – Impact Turn – Chavez Bad: Columbia War (1/2) Chavez undermines regional stability and intends to make war on Columbia Podur 8 (Justin. Throughout those years. He came to power in 1998.com “Mistrust' Fueling Latin American Arms Race” http://www. 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. but appeared to ease after the exchange of rhetoric following the border incident. 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.venezuelanalysis. led by Venezuela. Several other Latin American nations have followed suit. but Chavez’s buildup is what made it invest in its military.” said one analyst of Venezuela's combative president. for posting on the Venezuelan border (7). Writer and activist.forecastinternational. “Colombia’s war and Venezuela’s foreign policy” http://www. for example." she says. buying front-line fighters and other equipment from Russia. "This is not to say that Venezuelan procurement activity is not extravagant. Colombian 'irregulars' raided across the Venezuelan border and were answered by bombing from the Venezuelan air force (5).

“Chávez is using this incident to divert public attention from his internal problems. http://www.newyorker. Staff. “And I think he is also trying to demonstrate that he is the leader of the region’s popular forces.com/reporting/2008/06/23/080623fa_fact_anderson/?currentPage=all) Suddenly. and diplomats were expelled. One Latin-American diplomat told me he feared that the situation could easily escalate into a larger armed conflict.Gonzaga Debate Institute 2008 105 Scholars Lab 2nd Wave Oil DA’s 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.” . It is a very risky calculation. trade between the two countries ground to a halt. New Yorker.” he said. there was talk of regional war. Television broadcasts showed Venezuelan tanks moving toward Colombia’s borders.

Gonzaga Debate Institute 2008 106 Scholars Lab 2nd Wave Oil DA’s ***Nigerian Oil DA*** .

an African war can attract outside involvement very quickly.htm] ICAN boss predicts increase in FDI/ July 16. Proven reserves are estimated at 25 billion barrels. Economic decline causes regional war and terrorism Brown 7 (Michael A.internationalrelations. By the end of 2005.” April 1. http://www. Council on Foreign Relations. pointing out that it was indicative of the growing confidence of the international community in the Nigeria economy. peace and prosperity in the fragile ECOWAS region would be jeopardized. If the Nigerian economy became afflicted with a cold because of the chilling effects on investment occasioned by political instability.html) The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa. But an African nuclear strike can ignite a much broader conflagration.” thank you. Rwanda. such a strike .house. Sudan and other countries. Nigeria’s vast oil and gas resources would also be targeted. Nigeria. Albeit With A Greater Emphasis On In- house Refining. say. outside powers can more easily find client states there than. is that the Nigerian business environment or landscape has assumed a different outlook. natural gas reserves exceed 100 million cubic feet.. PhD and political risk consultant and Founder. India. Soaring oil prices over recent years have seen the Nigerian government reap a revenue windfall. or Asia where many of the countries (China. Nigeria's oil and gas industry has grown to become the single largest contributor to Nigeria's economy. 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. up two. African conflict escalates to nuclear war Deutsch 2. Geopolitically speaking. enabling the government to pay down Nigeria's huge foreign debt and invest in some strategic infrastructure improvements.Fuel Injection . “Nigeria . and become a promising target for Al Qaeda penetration or recruitment. South Africa is a major exception in this respect . Crude oil production averages 2. Civil wars in the Congo (the country formerly known as Zaire). We’ve got all too many rabid tigers and potential rabid tigers. John McCarthy Reports.High Prices And New Finds Mean Nigeria's Dependence On Hydrocarbon Exports Will Go On.rabidtigers. high oil prices had propelled Nigeria's foreign exchange reserves to $28bn. as the fifth largest exporter to the United States. Very few countries in Africa are beholden to any particular power. Rabid Tiger Project. Africa is open range.com/rtn/newsletterv2n9.” Oil is key Financial Times. 2008) According to the ICAN boss the quantum of foreign direct investment grew from and average of $1.gov/110/35872.not to mention in that she also probably already has the Bomb. 2007. if the other powers are interested in a fight.2 million barrels per day. Jeffrey (http://www. lexis Since the oil crisis of the mid-1970s. supplies it with approximately 11% of its aggregate oil imports. Thus. a proxy war alone may not induce the Great Powers to fight each other. Of course. 11/18/. and domestic instability in Zimbabwe. 6-7.477billion between 1990 and 2000 to $5. Thus. “What has become evident with this massive inflow of investible funds. The Banker.thirds from the $17bn recorded a year earlier. who are willing to push the button rather than risk being seen as wishy-washy in the face of a mortal threat and overthrown. The Daily Sun [http://www. Certainly.Gonzaga Debate Institute 2008 107 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – 1NC Nigerian growth is up Ogbonna 8 (Amechi. He remarked. Somalia and Sierra Leone.445billion in 2006. in Europe where the political lines have long since been drawn.sunnewsonline. Japan) are powers unto themselves and don’t need any “help.pdf) The United States must pay close attention to Nigeria for its own national security interests.com/webpages/news/businessnews/2008/jul/16/bussines-16-07-2008-002. turning over about $25bn annually and accounting for more than one-fifth of gross domestic product (GDP).

etc.Gonzaga Debate Institute 2008 108 Scholars Lab 2nd Wave Oil DA’s would in the first place have been facilitated by outside help . Africa is an ocean of troubled waters.financial. . and some people love to go fishing. scientific. engineering.

445billion in 2006. 2008) According to the ICAN boss the quantum of foreign direct investment grew from and average of $1. the central bank said on Monday.477billion between 1990 and 2000 to $5. Nigeria’s economy is strong BusinessWire 8 [http://www. it needs to be remembered that all three of the ratios are rising from very low levels. 39th and 53rd respectively.central bank/ June 23.Gonzaga Debate Institute 2008 109 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Econ Up Nigeria’s economy has a positive outlook Ogbonna 8 (Amechi. Of the 59 countries surveyed. 96% and 60% respectively.reuters.com/webpages/news/businessnews/2008/jul/16/bussines-16-07-2008-002. “What has become evident with this massive inflow of investible funds. is that the Nigerian business environment or landscape has assumed a different outlook. these achievements are even more impressive. loan/asset and loan/GDP ratios all rose.htm] ICAN boss predicts increase in FDI/ July 16.com/portal/site/google/?ndmViewId=news_view&newsId=20080703005146&newsLang= en] Nigeria Commercial Banking Report Q2 2008 Available Now/ July 3. However. total assets. In local currency terms.64 percent for the final quarter of last year. Nigeria ranks second in terms of local currency asset growth.businesswire. . pointing out that it was indicative of the growing confidence of the international community in the Nigeria economy. total loans and total deposits increased by 58%. deposits per capita are just US$334. Nigeria had originally reported a GDP growth rate of 7.114. Relative to other countries surveyed by BMI. 2008) In absolute terms. The loan/deposit. third in terms of both local currency loan growth and local currency deposit growth.sunnewsonline.82 percent in the last quarter of 2007. The Daily Sun [http://www.67 percent growth in the non-oil sector of sub-Saharan Africa's second biggest economy. compared with a revised figure of 7.49 percent year-on-year in the first quarter of 2008. He remarked. 2008) Nigeria's economy grew by 6. Nigeria’s banking sector enjoyed very good growth through the year to December 31 2007.html] Nigerian economy growth slows in Q1 . loan/asset and loan/GDP ratios are 36th.” Nigeria’s economy growing Reuters 8 ([http://africa. Nigeria’s rankings in terms of its loan/deposit.com/business/news/usnBAN347656. The bank said overall GDP growth was driven by a 9. In a country with per capita GDP of US$1.

5 percent from 7.Gonzaga Debate Institute 2008 110 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Econ Down Nigeria’s economy down Okolo 8 (Paul [http://www. government had. 2008) Forecast revenue is at risk because planned production levels may not be attained. And because our refining capacity is short handed. Business Daily [http://www. Industry insiders say it may be lower.7 billion in 2006.000 from Bonga (which brings Shell’s total to 400. the Abuja-based Central Bank of Nigeria said today in a quarterly report published on its Web site.businessdayonline. which is put at over 10 percent by government and 6. the central bank said.1 percent by the Economist Intelligence Unit. For contributing 30 percent to Nigeria’s Gross Domestic Product (GDP). said the country was producing 1.8 percent in the previous three months. The inflation fears of the Central Bank may now be confirmed as the shut in triggers further rise in the international price of crude. Before the attack.bloomberg.com/energy/11846. current production would be as low as 1. the nation would import fuel at higher prices with the full inflation implications.8 million barrels per day. It was 2. Oil production slid to 2. GDP Growth Slows/ July 23. through the minister of finance. the thought of meeting the Millennium Development Goal of halving poverty becomes mere conjecture.6 million barrels per day. . while economic growth slowed to 6. Shamsudeen Usman. 2008) Nigeria's crude oil production fell almost 4 percent in the first quarter following the sabotage of oil facilities.000). crimping economic growth. the drop in production has implications also for projected GDP.html] News Analysis: What the attack on Bonga might unleash/ June 24. These projects may be revised further down. With the shut in of an extra 200.05 million barrels per day. With further inflation.com/apps/news?pid=20601116&sid=awebvCIXTbCo&refer=Africa] Nigerian Oil Output Fell 4% in First Quarter. Nigeria’s GDP projected to fall Kirk 8 (Leigha.

guardian. decided São Tomé might have its own deep-water deposits. The most promising area was north of Príncipe.internationalaidanddevelopment] 'The best thing that could happen to the country is if no oil is found'/ July 14. The deal was signed. heavily in debt and reliant on donors to fund most of its $30m budget.Gonzaga Debate Institute 2008 111 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Oil Up Nigeria has vast future oil reserves Rice 8 (Xian. 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). Vanguard Online [http://www.com/index. And ERHC's gamble paid off. The Guardian [http://www. 2008) The twin islands of São Tomé and Príncipe squat in the Gulf of Guinea. Nigeria has 33 billion barrels of oil reserves Adeoye 8 (Yemie. much of it offshore. ERHC offered São Tomé $5m and its marketing services. Industry watchers such as Mohamed Yahya. In 1997. Their nearest neighbours are Nigeria.co. would later describe the contract as "one of the worst in the history of oil". Seismic data showed there could be up to 11bn barrels of oil under the sea around the islands. All have found significant reserves of oil. São Tomé. 2008) We shall begin this discussion by reviewing the available gas resource.while our gas reserves is about 187 Tcf (27 Tcf in the Deepwater and 160 Tcf in the Niger-Delta). In return for near-exclusive mineral exploration and exploitation rights for 25 years and a half share of profits. which had no history of oil finds or production. was desperate for cash. .uk/business/2008/jul/14/oil. of the UK-based peacebuilding NGO International Alert. Equatorial Guinea and Gabon. in waters also claimed by Nigeria. a tiny Houston-based company called Environmental Remediation Holding Corporation (ERHC).php?option=com_content&task=view&id=11825&Itemid=0] FG moves to separate gas business from oil/ July 8.vanguardngr. Cameroon.

Arguments continued to rage on the root of the price gains.com/economic-watch/13006. 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. unrest in the Gulf and activities of militants in Nigeria 's Delta region.5% drop in crude on Thursday.June 23. 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. and prices again headed higher. with producers claiming speculators at fault and others pointing to burgeoning demand from developing countries.businessdayonline.000 b/d Saudi production increase. 2008) A hastily-called oil summit ended in the expected 200. pushing Saudi production to its highest in 30 years.Gonzaga Debate Institute 2008 112 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Oil Down Nigeria’s oil production at a 25 year low Chip 8 (Brian. Nigeria’s oil production slowing Leigh 8 (Kirk. Nigeria's production is now at its lowest in 25 years. on Sunday Niger militants announced a ceasefire.6 million barrels a day two years ago to about 1. Business Day [http://www.foxbusiness. 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 2.3 million barrels. 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. before analysts dispelled expectations for a demand drop.com/story/markets/industries/energy/comtex-smartrendr- morning----june/-1756064925] Comtex SmarTrend(R) Morning Call -. Cuts in gasoline and diesel prices in China led to a 3. although still remaining unwilling to participate in upcoming peace talks.html] Falling oil production: The good news/ July 8. However. Fox Business [http://www. This should bring down revenue but not so since the price of crude keeps rocketing from pent up demand by China and India .

services.56K breasted the tape ahead of more robust GSM mobile operators — MTN Nigeria.35 billion through a private placement offer.27 p. The private placement beefed up the company capital base. Starcomms Plc had successfully raised N64.vanguardngr. Reacting to the development Mr. Celtel Nigeria and Globacom — to become the first telecom operator to be listed on the Exchange. and at Starcomms. This is a promise. Chief Executive Officer said: “At Starcomms. We want to become the 3rd. telecommunications and agriculture have shown remarkable improvements. 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. if not 2nd biggest telecom operator in Nigeria by 2010.punchng. However two institutional investor Actis. 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. The shares of the company which were listed at 12.php?option=com_content&task=view&id=12392&Itemid=0] The Starcomms stocks challenge and expectations of the telecom industry/ July 16.m made significant gain immediately. He said.33k. We operate as a transparent company and today’s history making event is meant to drive our growth. Vanguard Online Edition [http://www. . we do not just cook up figures. Nigeria’s telecoms sector is growing Senge 8 (Miebe. 096 ordinary shares of 50 Kobo at N13. as it went up five per cent after only five minutes of listing/trading to close at N14.com/Articl. Before Monday’s listing on the floor of the Nigerian Stock Exchange.com/index. “The Nigerian economy is rapidly transforming. the contribution of non-oil sectors such as real estate. “Currently growing above six per cent GDP rate.aspx?theartic=Art200807083205446] Nigeria loses 30% of budget revenue to N’Delta crisis/ July 8. and Emerging Capital Partners LLC. (ECP) divested some of their holdings from the company thus widening the shareholder base. Nigeria’s fourth largest telecommunications by last Monday’s listing of its 6. we keep our promise”.Gonzaga Debate Institute 2008 113 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Diversification Up Nigeria’s economy is diversifying Amaefule 8 (Everest [http://www. Maher Qubain. but listed it did last Monday and in the process made history as the first company in highly lucrative sector. the economy is set to depart from the six per cent group to an economy with superior GDP growth rate. 878. 2008) IT was the most unlikely telecommunications company in Nigeria expected to get listed on the Nigerian Stock Exchange. 478. Starcomms Plc.

and about half of GDP. It has also been wasted.Gonzaga Debate Institute 2008 114 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Diversification Down Oil is the keystone of Nigeria’s economy Thill 8 (Scott [http://www. 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. The country is a classical petro-state dependent upon one resource. Since that time. This is a stunning indictment. The International Monetary Fund says that oil has probably not added to the standard of living of average Nigerians.alternet. perhaps $600 billion in oil revenues have been accrued by the Nigerian government. The book shows how this vast wealth has been stolen: Estimates from the World Bank vary from $100 (billion) to $200 billion.org/audits/89692/?ses=6e1c01335219ab1b41c846a850bedd38] Africa: The Next Victim in Our Quest for Cheap Oil/ July 14. . 2008) Commercial oil production began in 1956. Since oil accounts for 90 percent of all Nigerian exports and 80 percent of government revenue. and the first exports in 1958. oil is the Nigerian economy.

2008) Nigeria has is oil and tampering with the resources makes the country run at risk. 2008) Inflation which reached a new height of 18.php?storyid=6197] Business : Prime Rate Rises Again?/ July 15. ``Inflationary pressures are here to stay'' as prices of food and fuel continue to rise. 2008) Nigeria's inflation rate rose to 9.5 per cent in December 2007 to 10 per cent in April 2008 and also 10.7% in May on Food (Update1)/ June 23.2 percent in April 2008 to 9.7 percent in May..the rate at which the Central Bank does its overnight lending to universal. 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.41 percent last Friday as predicated by Databank Research Department was the main factor that led to the increase in the prime rate. commercial and merchant banks in order to check the supply of money in circulation.com/portal/modules/news/article.Gonzaga Debate Institute 2008 115 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Inflation Up Inflation high in Nigeria Akpe 8 (Ameto. the highest in two years.2 percent in April. Prices rose 1. the National Bureau of Statistics.com/energy/12322.html] Soludo warns danger ahead over government expenditure/ July 2. Rising price levels has also brought about hikes in the Monetary Policy Rate (MPR) by the CBN from 9. Inflation high in Nigeria Okolo 8 (Paul [http://www. Inflation accelerated from 8. Soludo explains that any amplification in the oil benchmark would crowd-out the private sector because of the peculiar source of government revenue. based in the capital Abuja. we're likely to see a more restrictive response from the central bank. Nigerian inflation hitting double digits Daily Guide 8 ([http://dailyguideghana. Nigeria's inflation rate (year-on-year) rose from 8.businessdayonline. heightening worries over the return of double-digit inflation rates in the country.com/apps/news?pid=20601116&sid=axUjEXUV1Kew&refer=Africa] Nigerian Inflation Accelerated to 9.'' .bloomberg.9 percent in the month. said today in a statement on its Web site. Business Day [http://www. said Bismarck Rewane. a Lagos-based fund manager. Chief Executive Officer of Financial Derivatives Ltd. ``The moment it goes into double digit. as the cost of food.25 per cent in June. energy and building materials increased.7 percent in May.

April 2008 and June 2008. The first increase was a 100 basis point upward review to 9. a 200 basis point reduction from 10.25 from 10.0 per cent.term interest rate at which banks can predictably borrow from the apex bank. Overall. but at the upper region of the single digit range.vanguardngr. The bank's projections show that the year-on-year (headline) inflation could remain single-digit in the first quarter of 2008. the second increase was a 50 basis points upward review to 9.com/stories/200806230179.html] Nigeria: Interest Rate - a Slide to the Ugly Past?/ June 23.e.php?option=com_content&task=view&id=11439&Itemid=43] N563bn excess crude fund crashes inter-bank interest rate/ July 2. the MPR was further increased by 50 basis points to 10.0 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. Thus. 2008) On the 2nd of June. the MPR is a short. For example. 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. 300 basis points above and 300 basis points below.Gonzaga Debate Institute 2008 116 Scholars Lab 2nd Wave Oil DA’s Nigeria DA – UQ – Inflation Down Nigeria keeping inflation to single digits Komolafe 8 (Babajide. 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.0 per cent. the Central Bank of Nigeria (CBN) increased the Monetary Policy Rate (MPR) by 25 basis points to 10. The first movement in the MPR was announced on June 5. a combination of stable food prices and a restrictive monetary policy stance is expected to help sustain the headline inflation within single digit. provided CBN continues to take proactive steps to manage the liquidity surfeit. the CBN stated: "The MPC noted that year-on-year headline inflation would continue to remain single-digit in the rest of 2007. the CBN stated. Later on. Also pertinent is the fact that the increases in the MPR were occasioned by one major factor. Vanguard News [http://www. the Committee also noted the high possibility of substantial fiscal injections in the fourth quarter. 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. which is the need to forestall upward movement in the inflation rate. .0 per cent in October 2007. Similarly. Vanguard News [http://allafrica. at the beginning of 2008. While the MRR represents the minimum interest rate banks can borrow from the CBN.0 per cent to 8. This translates into an upper limit of 13 per cent and a lower limit of 7 per cent. just as the prospects for the first quarter 2008 appear good. "The Monetary Policy Committee (MPC) noted that the overall macroeconomic picture in 2007 has reflected improved stability.0 per cent with spread of 600 basis points around the rate. 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. In addition. in announcing the increases in December 2007.com/index. arising from the supplementary budget at the federal and state levels. as the bench mark for interest rate in the economy. But that was the last reduction as subsequent movements were increases. in the communiqué that announced the first increase in October 2007. Nigeria fighting inflation Komolafe 8 (Babjide.5 per cent in December 2007. 2007. i. 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).

Fuel Injection . The Banker. Soaring oil prices over recent years have seen the Nigerian government reap a revenue windfall. 2007. Albeit With A Greater Emphasis On In- house Refining.Oil K/T Economy The oil industry is key to the Nigerian economy Financial Times. .thirds from the $17bn recorded a year earlier. John McCarthy Reports. high oil prices had propelled Nigeria's foreign exchange reserves to $28bn. 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). up two.High Prices And New Finds Mean Nigeria's Dependence On Hydrocarbon Exports Will Go On.Gonzaga Debate Institute 2008 117 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. By the end of 2005. “Nigeria . lexis Since the oil crisis of the mid-1970s.” April 1. enabling the government to pay down Nigeria's huge foreign debt and invest in some strategic infrastructure improvements.

dividends. (Deduction of any taxes net of subsidies paid. In the light of the study. In Nigeria. regional and religious tensions. Section four includes data analysis and interpretation of results. vehicle licenses. not all of the industry's value added is retained in the country. These could be partly attributed to affected by economic and social components.ogbus.. the revenue has not been properly used. the wages and salaries of employees paid locally. while the third section focuses on the research methodology. Since the attainment of independence in 1960 it has experienced ethnic. gross domestic product less factor payments made abroad. this can be considered with respect to the surrounding communities within which the oil wells are exploited. http://www. Crude oil discovery has had certain impacts on the Nigeria economy both positively and adversely. The gross output of the petroleum sector consists of the proceeds from oil exports.Gonzaga Debate Institute 2008 118 Scholars Lab 2nd Wave Oil DA’s Nigeria DA.ru/eng/) 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. on the level of output and employment in other related sectors of the economy. Department of Economics and Development Studies Covenant University. Section two presents the background of the study. Although large proceeds are obtained from the domestic sales and export of petroleum products. and the final section presents and policy proposal and study conclusions. local sales of crude oil for local refining. local rents. Department of Economics and Development Studies Covenant University. 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. Apart from the direct stimulation given to the producers of these goods and services such injections also exert secondary influences. through the multiplier process.ru/eng/) In general. gives the gross domestic product at market prices). http://www. hence. Some of these communities still suffer environmental degradation. purchased from other industries or branches of activity. This study comprises of five sections. it was not until the end of the Nigeria civil war (1967 . magnified by the significant disparities in economic. at the moment a substantial proportion is sent out in the form of factor payments profits. etc. and wages and salaries paid abroad. educational grants and scholarship awards. and any net retained earnings. donations and subventions. local purchases of goods and services. Department of Economics and Development Studies Covenant University. Given the fact that the oil sector is a very crucial sector in the Nigeria economy.ru/eng/) Oil is a major source of energy in Nigeria and the world in general. interest. the excess revenue made from the oil sector can be invested in them to diversify and also increase the total GDP of the economy. On the negative side. royalties. Apart from direct payments to the government. services. It is therefore more realistic to consider the industry's contribution to gross national product i.ogbus. fees. Considering the fact that there are other sectors in the economy.e. harbor dues. Nigeria can be categorized as a country that is primarily rural. its effect on the growth of the Nigerian economy as regards returns and productivity is still questionable. oil industry expenditure in Nigeria takes the form of payments of wages and salaries. telephone and postal charges. the need t evaluate the relative impacts of crude oil on the economy. harbor dues. But because of the massive involvement of foreign operators in the Nigerian petroleum industry. Although Nigeria’s oil industry was founded at the beginning of the century.ogbus. 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. educational and environmental development in the the major discovery of oil in the country which affects and is south and the north. The Oil industry stimulates local economic growth Olusegun 8 (Gbadebo. and local sales of natural gas. profit taxes. Oil being the mainstay of the Nigerian economy plays a vital role in shaping the economic and political destiny of the country. etc. The oil industry directly increases Nigeria’s GDP Olusegun 8 (Gbadebo. which depends on primary product exports (especially oil products). The industry's value added can also be obtained by adding together the various payments to the government in the form of rents. .1970) that the oil industry began to play a prominent role in the economic life of the country. http://www.. there is the dire need for an appropriate and desirable production and export policy for the sector. which leads to deprivation of means of livelihood and other economic and social factors. and other minor social charges Cumulative expenditure on these items totaled about 950 million by the end of 1974. equipment. payments to local contractors.Oil K/T Economy Oil is vital to Nigeria’s economy Olusegun 8 (Gbadebo. though crude oil has contributed largely to the economy. the main objective is to assess the impact of crude oil on the Nigerian economy.

as is illustrated by the size of the capital-labour ratio in the industry.Gonzaga Debate Institute 2008 119 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. At the moment total oil industry employment in Nigeria (including employment by ancillary firms) represents only 1. However. direct oil industry employment in Nigeria is not likely to expand significantly in the future because the industry is very highly capital intensive. with the passage of time and increased extraction. not in the relative expansion of employment. Department of Economics and Development Studies Covenant University. Nigerians were employed in a variety of non-basic activities such as the building of roads and bridges. .3 per cent of total modern sector employment in the country.Oil K/T Economy. From the start. The very high capital- labour ratio in the oil industry means that growth in oil operations is generally reflected. the need arises for increased investment in costly techniques of secondary recovery. As time went on and as the industry's training programme progressed.ogbus. they began to be employed in seismic and drilling operations. the clearing of drilling sites. and in supervisory and managerial functions.ru/eng/) One of the first contributions of the oil industry to the Nigerian economy was the creation of employment opportunities. http://www.Employment The oil industry directly increases employment and capital investment Olusegun 8 (Gbadebo. compared with other industries. transportation of materials and equipment. and the building of staff housing and recreational facilities. This will be particularly the case when. but in the expansion of capital investment.

a 50150 profit-sharing formula based on realized prices.Gov’t Revenue Oil revenue directly increases Nigerian economic growth Olusegun 8 (Gbadebo. and large capital allowances. 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. a 12. Department of Economics and Development Studies Covenant University. and the speed of development of substitute fuels in consuming. these terms were progressively revised to take account of the changed conditions. http://www. 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. a large part of the increase in oil revenues was accounted for by the huge increase in crude oil prices during 1973-74. the government was in a weak bargaining position via the oil companies.ru/eng/) The payment of substantial revenues to the government is another important aspect of the contribution of the oil industry to the Nigerian economy. particularly in 1973 and 1974.5 per cent royalty rate. Consequently.Gonzaga Debate Institute 2008 120 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. As noted above. on the level of economy in energy consumption. The significant increase in government receipts in recent years is a reflection of three factors: increased crude oil production in Nigeria.ogbus. At the early stages of oil operations when the prospects of establishing a viable oil industry in Nigeria were rather uncertain. 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.Oil K/T Economy. and included relatively low concession rents. These changes resulted in a significant increase in government oil revenues. the terms negotiated at that time with the Shell-BP Petroleum Company of Nigeria were favorable to the Company.

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.Foreign Exchange Reserves The oil industry allows Nigeria to amass foreign exchange reserves. http://www. and to remit to the producing country only the amount needed to sustain their local operations. often exacerbated by massive declines in world commodity prices. acute shortages of foreign exchange. In many underdeveloped countries.ogbus.Oil K/T Economy. constitute a major obstacle to effective economic development.ru/eng/) 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. especially those that depend heavily on a narrow range of primary commodities. 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. increasing development Olusegun 8 (Gbadebo.Gonzaga Debate Institute 2008 121 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. . Department of Economics and Development Studies Covenant University.

Department of Economics and Development Studies Covenant University. to the Nigerian Petroleum Refining Company for use as fuel in petroleum refining at Elesa Eleme. near Port Harcourt.000 tonnes per annum. Total consumption of natural gas in Nigeria. Already. and lubricating oils.916 million cubic feet in 1973. 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. with the exception of bitumen.ogbus.100 million cubic feet in 1963 to 6. and was designed to meet the country's main product requirements at that time. was added in 1966. is much less than available productive capacity.75 million tonnes.ru/eng/) 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. The refinery was damaged during the civil war but has since been rebuilt and expanded to a capacity of about 2. The objective is to eliminate the scandalous shortage of petroleum products in a country that is currently swimming in oil. through the operations of the local refinery and the utilization of locally discovered natural gas. annual consumption is still a tiny proportion of total production and the latter.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 . A liquefied petroleum gas plant. aviation gasoline. with a capacity of 15. http://www. The Elesa Eleme refinery. which at the moment comes wholly from oilfields. excluding the amount used as fuel at the oilfields by the producing companies has increased from 1. had an initial capacity of 1. It is planned further to expand the capacity of the refinery to 3.1980).A2: Dutch Disease Stable oil is key to a transition and diversification of Nigeria’s energy sector Olusegun 8 (Gbadebo.9 million tonnes per annum. and to a number of industrial undertakings around the centres of oil operations. However. which came into operation in November 1965. The availability of huge reserves of natural gas provides a good opportunity for the supply of cheap energy to industry and commerce. .Gonzaga Debate Institute 2008 122 Scholars Lab 2nd Wave Oil DA’s Nigeria DA.

http://www. 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.com/webpages/features/ceomagazine/2007/aug/06/ceomagazine-06-08-2007-001.Gonzaga Debate Institute 2008 123 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. Core inflation stabilized and actually dipped below the single digit levels for the first time since the 80s. . August 6. a number of achievements were made on the economic front.A2: Inflation Nigeria is able to curb inflation in the face of economic struggle Adesida 7 (Seun.sunnewsonline.htm) Despite the disappointments in the areas of poverty reduction. Chief Executive Officer of Intercontinental Bank Plc. tackling unemployment and weak consumer purchasing power.

worldbank. and corruption. and accountability. boost non-energy exports. however.Gonzaga Debate Institute 2008 124 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. Executive Chair. privatization. Economic & Financial Crimes Commission.ogbus. outside observers say much of the credit is due to the work of the Economic & Financial Crimes Commission. including a syndicate with highly placed government officials who were defrauding the Federal Inland Revenue Service (FIRS). Nuhu Ribadu. http://www1. The government hope that NEEDS will create 7 million new jobs. Formed in April 2003. The purpose of NEEDS is to raise the country’s standard of living through a variety of reforms. and state governors all took advantage of their position to steal literally billions of dollars of the national patrimony. a former police officer and prosecutor. military dictators. http://www. have been arrested and are currently awaiting trial. But things are beginning to change. impediments to private enterprise. Three of the Commission's investigator's have been assassinated this year alone and many more have received death threats. increase industrial capacity utilization. has headed the commission since its inception.A2: Corruption Reforms solve corruption Olusegun 8 (Gbadebo. Department of Economics and Development Studies Covenant University. parliamentarians. Corrupt proceeds secreted abroad are being returned and senior officials prosecuted for wrongdoing. deregulation. May 19.ru/eng/) During 2003–2007 Nigeria has attempted to implement an economic reform program called the National Economic Empowerment Development Strategy (NEEDS). such as the lack of freshwater for household use and irrigation. . NEEDS addresses basic deficiencies. Presidents.org/publicsector/anticorrupt/bbagdetails. including macroeconomic stability. Corruption solved – New commission Ribadu 6 (Nuhu. This success has come at a price. transparency. it has recovered or seized assets from various people guilty of fraud inside and outside of Nigeria. He will review the commission's record and discuss the factors that help explain its success. diversify the economy. liberalization.cfm?ID=267) For years Nigeria has suffered a string of rulers bent on looting the national treasury. and improve agricultural productivity. unreliable power supplies. While these successes represent the coordinated response of many agencies in Nigeria and reflect the strong support of its President. Several influential individuals. including the governors of two states. decaying infrastructure. A related initiative on the state level is the State Economic Empowerment Development Strategy (SEEDS).

we had a ‘super Tuesday. and then the third in line of succession.Gonzaga Debate Institute 2008 125 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. we would have had a power vacuum and a constitutional crisis. the vice president. “This is a huge sign that Nigeria is on the step towards stability. which was widely condemned as flawed. would also appear to help President Yar’Adua. VOA News [http://www.voanews. if the courts had kicked them all out. In March.Impact: Stability Up Instability in Nigeria low Lesser 8 (Howard. 2008) Attorney and legal consultant Emmanuel Ogebe is a managing partner in the Washington office of the US – Nigeria law group. who is a member of the ruling People’s Democratic Party (PDP). So the fate of the senate president is actually almost as decisive as the fate of the president and the vice president. who faces an appeals ruling later this year from his two opponents in last year’s presidential vote. .com/english/Africa/2008-07-16-voa4. the senate president.” he said. So in essence.’ where the courts decided in the space of 48 hours on the validity of the elections of the president.cfm] Court Upholds Election of Nigeria's Senate President/ July 16. He says that yesterday’s decision favoring Mark.

If Nigeria were to become a failed state. 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. it could drag down a large part of the West African region.gov/nic/confreports_africa_future.' said the report. If millions were to flee a collapsed Nigeria.Africa-CIA/ May 25.Impact: Spillover A Nigerian coup overthrow would spill over into other regions of Africa NIC 5 (National Intelligence Council [http://www. there are possibilities that could disrupt the precarious equilibrium in Abuja.Gonzaga Debate Institute 2008 126 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. Further. the CIA's National Intelligence Council said in a long-term outlook released in Nigeria on Wednesday.html] Nigeria could collapse and bring down W.signonsandiego. 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. The most important would be the outright collapse of Nigeria. the surrounding countries. Even state failure in small countries such as Liberia has the effect of destabilizing entire neighborhoods. a failed Nigeria probably could not be reconstituted for many years—if ever—and not without massive international assistance. it could drag down a large part of the West African region. 'While Nigeria's leaders are locked in a bad marriage that all dislike but dare not leave.html] Mapping Sub- Saharan Africa's Future/ March 2005) Other potential developments might accelerate decline in Africa and reduce even our limited optimism. which was given to the press by Nigerian lawmakers. 2008) A coup in Nigeria could cause the oil exporting country to collapse and bring down much of West Africa with it. While currently Nigeria's leaders are locked in a bad marriage that all dislike but dare not leave.com/news/world/20050525-0956-nigeria- collapse.dni. there are possibilities that could disrupt the precarious equilibrium in Abuja. The Union Tribune [http://www. would be destabilized. A coup overthrow in Nigeria would collapse West Africa Eboh 5 (Camilius. 'If Nigeria were to become a failed state. '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.' . up to and including Ghana.

Today. first and foremost for its people but also for the continent.org/publication/8136/electoral_reform. Nigeria key to solving conflict in the region Lymen 5 (Princeton. Senegal’s President Wade.org/publication/8136/electoral_reform. Now these principles are a part of reality. In Guinea-Bissau.html] ELECTORAL REFORM: THE NEXT MILESTONE IN NIGERIA’S DEMOCRACY/ March 19. and time to end the terrible conflicts that have afflicted those countries. money. 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. and most recently in the Darfur region of Sudan. Because of NEPAD. aid and security. in the many lives lost and in the treasure expended in the peacekeeping operations of Sierra Leone and Liberia.cfr. Nigeria has been playing a central role in resolving conflicts. should the worst happen. It was President Obasanjo. unsettling the region and weakening one of the most important forces for peace and progress on the continent. Nigeria is a leader in much of what is happening throughout the continent. Adjunct Senior Fellow for Africa Policy Studies [http://www. and Algerian President Bouteflika. Adjunct Senior Fellow for Africa Policy Studies [http://www. should problems in the elections in 2007 lead to unrest and instability in Nigeria. Sao Tome and Principe. Nigerians have not flinched from this responsibility. along with South Africa’s President Thabo Mbeki. Nigeria together with its allies in the Economic Commission for West Africa (ECOWAS) forced reversal of coups and the undermining of constitutional processes. 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. 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. Beyond just words and principles.Gonzaga Debate Institute 2008 127 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. the impact would be even greater. Had these actions not been taken.cfr. Nigeria is very much a bellwether for the progress of democracy in Africa. NEPAD would have been only words on a page. Nigeria dedicates peacekeepers. that would be serious enough. NEPAD has also become the foundation for the evolving new partnership between Africa and the industrialized countries of the world.html] ELECTORAL REFORM: THE NEXT MILESTONE IN NIGERIA’S DEMOCRACY/ March 19. in Congo.Impact: Regional Stability Nigeria is key to stability in the region Lymen 5 (Princeton. 2005) If it were only Nigeria’s democracy at stake in the effectiveness of its electoral process. there now exists an Africa Action Plan that charts the future relationship between the G8 and Africa in terms of trade. it is Nigeria that is providing the leadership and the venue for the political talks that are critical to ending the tragedy in Darfur. 2005) Finally. In Burundi. Moreover. Nigeria thus carries a heavy responsibility. But the truth is that Nigeria’s importance runs far beyond its borders. Nigeria has become the key actor in pushing back efforts to undermine democratic progress in West Africa. Nigerians have paid a heavy price for peace. . This is not new for Nigeria. and most recently in Togo.

gov/110/35872. natural gas reserves exceed 100 million cubic feet. Thus. We’ve got all too many rabid tigers and potential rabid tigers.house. The country generates over $47 billion a year in oil and gas revenues. Certainly. an African war can attract outside involvement very quickly. Nigeria has provided peacekeeping troops for missions that western governments are unwilling to do. as the fifth largest exporter to the United States. and continues to play.Impact: Regional Stability Economic decline causes regional war and terrorism Brown 7 (Michael A. such a strike would in the first place have been facilitated by outside help . investment on the continent. Of course. Africa is open range. 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. . If Nigeria had not sent troops to those countries. Geopolitically speaking. Proven reserves are estimated at 25 billion barrels. Council on Foreign Relations. peace and prosperity in the fragile ECOWAS region would be jeopardized.internationalrelations.financial. Sudan and other countries.com/rtn/newsletterv2n9.Gonzaga Debate Institute 2008 128 Scholars Lab 2nd Wave Oil DA’s Nigeria DA.rabidtigers.gov/110/35872. and become a promising target for Al Qaeda penetration or recruitment. scientific. and they deployed to Liberia during the last days of the Charles Taylor regime.pdf) Nigeria has played. in Europe where the political lines have long since been drawn. outside powers can more easily find client states there than. Rabid Tiger Project. PhD and political risk consultant and Founder. a critical role in the region and subregion and it is an important partner to the United States. India.internationalrelations . say. Jeffrey (http://www. http://www.2 million barrels per day. If the Nigerian economy became afflicted with a cold because of the chilling effects on investment occasioned by political instability. therefore. Through the Economic Community of West African States and the African Union. Africa is an ocean of troubled waters. South Africa is a major exception in this respect . and domestic instability in Zimbabwe. Civil wars in the Congo (the country formerly known as Zaire). Nigeria.not to mention in that she also probably already has the Bomb. it is doubtful that those conflicts there would have ended when they did. African conflict escalates to nuclear war Deutsch 2. It has the second-largest economy in Africa and is the continent’s largest producer of oil. etc. Nigeria is key to African stability Committee On Foreign Affairs 7 (house of representatives http://www. Somalia and Sierra Leone. But an African nuclear strike can ignite a much broader conflagration.S. avoided a coup d’etat.html) The Rabid Tiger Project believes that a nuclear war is most likely to start in Africa. 11/18/. Nigeria’s vast oil and gas resources would also be targeted. Thus. who are willing to push the button rather than risk being seen as wishy-washy in the face of a mortal threat and overthrown. 6-7. engineering. It is the third-largest oil supplier to the United States and the largest beneficiary of U. supplies it with approximately 11% of its aggregate oil imports. Nigeria sent troops to Sierra Leone while the Revolutionary United Front was still wreaking havoc in that country..” thank you. Japan) are powers unto themselves and don’t need any “help. Crude oil production averages 2. and some people love to go fishing.pdf) The United States must pay close attention to Nigeria for its own national security interests. Rwanda. a proxy war alone may not induce the Great Powers to fight each other. They also sent a strong message to Sao Tome and Principe to tell the troops there to stay in the barracks and.house. Very few countries in Africa are beholden to any particular power. if the other powers are interested in a fight. or Asia where many of the countries (China.

pluralism. It is a vital player in the War on Terror.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. It is Africa's most populous state as well as its second-largest economy.S. promote a more market-led economy. and a growing key oil supplier to the United States.Impact: Heg Nigeria is key to Africa’s growth and stability and to US heg in the region U. Nigeria is our largest African trading partner.Gonzaga Debate Institute 2008 129 Scholars Lab 2nd Wave Oil DA’s Nigeria DA. strengthen democracy. States News Service. and reform of. Nigeria exerts great influence on African political. influence as a strategic partner. ASSISTANCE TO NIGERIA. and to enhance Nigeria's capacity as a responsible regional and trade partner. U. It is a crucial continental power broker in dealing with African institutions and in resolving armed conflict. and socio-cultural trends. economic. the security services is integral to this strategy.” October 30. Department of State. and to projecting U. and good governance.S. we are trying to focus on the impoverished Muslim North and on the oil-rich and unstable Niger River Delta. 2006. Support for professionalism in. lexis Nigeria is arguably our most important strategic partner in Africa. .S. A prosperous Nigeria is vital to Africa's growth and stability. Located along the Sahel. Given Nigeria's size and our limited resources. “REMARKS ON U.

Gonzaga Debate Institute 2008 130 Scholars Lab 2nd Wave Oil DA’s ***Nigeria Answers*** .

Daily Champion. During 2005 Nigeria achieved a milestone agreement with the Paris Club of lending nations to eliminate all of its bilateral external debt. The Federal Government’s delays in the payment of cash calls for its JV operations in the upstream sub-sector. Nigeria’s economy is highly inefficient.ogbus. Restrictions imposed by crises and production disruptions caused by host communities. fish nibbling near drilling sites get their fill of mercury and other toxins and pass it on to birds. as a result of which decision taking is often bureaucratic and unnecessarily delayed.ogbus.ru/eng/) 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. Others are Relatively low level of investments in the sector. High technical cost of production. focusing more on maintenance rather than growth. Under the agreement. due to low level of domestic technological development. and smog and causes acid rain . 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. The Nigerian oil industry is too flawed to be the economic keystone Olusegun 8 (Gbadebo.No Internal Link. the World Bank has estimated that as a result of corruption 80 percent of energy revenues benefit only one percent of the population. the lenders will forgive most of the debt. distribution and marketing. and burning pollutes the air and water with mercury. Reportedly. and humans who eat them. the operation of the NNPC is characterized by ineffiiency. Fraudulent domestic marketing practices Some marketers hoard products in periods of scarcity in order to sell in the black market at higher prices. 80 percent of Nigeria’s energy revenues flow to the government. 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. http://www. discharges from 333 wells despoil Indian homelands and contaminate the headwaters of the Amazon.A2: Oil K/T Economy Oil revenue doesn’t help Nigerian economy – only 1% goes to population Olusegun 8 (Gbadebo. In Africa's most populous nation. In the Gulf of Mexico. and Nigeria will pay off the remainder with a portion of its energy revenues. Outside of the energy sector. marine mammals. particles.ru/eng/) The oil sector has been plagued by various problems which undermined it’s optimal development over the years. 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. which causes cancer. Department of Economics and Development Studies Covenant University.Gonzaga Debate Institute 2008 131 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers. Communal Disturbances There had been frequent communal disturbances which disrupts crude production as oil communities’ clamour for higher stake in oil operations. Products adulteration This is encouraged largely by price differential of some products and the proliferation of illegal sales outlets where some adulterations occur. and the remaining 4 percent go to investors. Environmental degradation due to the flaring of associated gas. especially in refinery operations. It lacks autonomy. 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. However. the Niger River Delta. 16 percent covers operational costs. http://www. Insufficiency of funds has also constrained adequate equipment maintenance and efficient refinery operations by the NNPC. In general terms. deep in the Ecuadorian forest. Therefore. 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. Moreover. Economists refer to the coexistence of vast natural resources wealth and extreme personal poverty in developing countries like Nigeria as the “resource curse”. sludge sickens communities as slicks bathe Niger River banks. The oil industry only serves to hurt the population of Nigeria Africa News 4 (July 12. “Nigeria: Oil: Prize or Curse?”) Meanwhile. Department of Economics and Development Studies Covenant University. and the Persian Gulf. Refining emits benzene. compared to its potentials.

since the left-oriented scholars had made a point of exposing labor relations in the colonial era. 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. The plan could include contract or employment setasides for qualified local businesses or employees and job training opportunities. and class conflict [OPEC annual report 1983]. Regarding the latter.house. http://www. would turn Nigeria into an industrial power and a prosperous country based on a large middle class. the impact. President Yar’ Adua.internationalrelations. using different models and theories. labor issues were not new in the 1980s. they were to be disappointed when a formally rich country became a debtor nation by the 1980s.ru/eng/) Petroleum production and export play a dominant role in Nigeria's economy and account for about 90 % of her gross earnings." Starting in 1973 the world experienced an oil shock that rippled through Nigeria until the mid . from the early fifties and sixties. The literature of the postwar years shifted to the analysis of the world oil boom and bust. As if to capture the labor crisis. Indeed. What was new after 1980 was the focus on oil workers. Nigeria survived the war. collectively known as the "oil shock. To be sure. A chronic militancy and worrisome violence has arisen.Gonzaga Debate Institute 2008 132 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers. 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.1980s. For some three years an oil boom followed.pdf) Nigeria is beset by perhaps the most unequal distribution of wealth in the world. writings on oil workers during this period covered many interrelated issues.1990s). . the literature reflected the hostility. the traditional mainstay of the economy. The enormous impact of the oil shock could not escape scholarly attention. and rebellious in the 1990s. As the war commenced. however. giving them an early indication soon after independent economic development was within reach. 6-7. and state labor relations.. the emphasis was on OPEC.No Internal Link.A2: Oil K/T Economy Oil turns Nigeria toward economic disaster Olusegun 8 (Gbadebo. Oil money doesn’t solve instability from inequality Brown 7 (Michael A. notably working conditions. the virtual obsession was to analyze the consequences of oil on Nigeria. Department of Economics and Development Studies Covenant University. there was money for virtually all the items in its developmental plan. unions. the indigenous population barely subsists. has pledged in his first hundred days to fashion a plan for catalyzing economic and social development in the Niger Delta. and the country was awash with money. strikes. and the If many had hoped that oil country's attempts to use oil as a political weapon. The infrastructure is either ramshackle or non-existent. This oil shock was initially positive for the country. but with mismanagement and military rule. The Niger Delta is emblematic. to the background. This dominant role has pushed agriculture. 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.gov/110/35872. http://www. it became all economic disaster. and fate of the oil industry. and was able to recover mainly of the huge revenues from oil in the 1970s. Nigeria's strategic alliance formation within Africa. While the discovery of oil in the eastern and mid-western regions of the Niger Delta pleased hopeful Nigerians. Council on Foreign Relations. The larger middle class produced by the oil boom of the 1970s gradually became disenchanted in the 1980s. For almost twenty years (1970s . Despite its lucrative oil and gas resources.ogbus. the vigorous efforts to establish the Economic Community of West African States (ECOWAS). This tension reached its peak with the civil war that lasted from 1967 to 1970. Oil and gas production has been periodically interrupted. especially in the liberation of South Africa from apartheid.

in theory.Internal Link Turn: Dutch Disease Dependence on oil creates systemic impacts on Nigerian economy Olusegun 8 (Gbadebo. accounting for 40% of the country's total oil exports. the Niger Delta Development Commission (NDDC). Efforts are underway to reverse these troubles. The U.with large reserves meaning the country has. hopes are high that the NDDC can reverse the impoverishment of local communities.ru/eng/) 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. the concurrent decline of other economic sectors. oil imports and ranks as the fifth-largest source for U. Many more Nigerian factories would have closed except for relatively low labor costs (10 % . spawned other economic distortions. have pushed down industrial capacity utilization to less than 30 %. Department of Economics and Development Studies Covenant University. The export of crude oil accounts for almost 85% of Nigeria’s Federal Government revenue.15 %).S.2 million barrels (350. estimated by some to be as high as 75 % of the total economy. and personal security problems throughout the Niger Delta oil- producing region continue to plague Nigeria's oil sector. Poor corporate relations with indigenous communities. Nigeria’s oil sales “account for 40% of its GDP. and the allure it generated of great wealth through government contracts. the major multinational oil companies have launched their own community development programs. Nigeria's proven oil reserves are estimated to be 35 billion barrels. Nigeria provides about 10% of overall U.800 kmі).ogbus. Along with the endemic malaise of Nigeria's non-oil sectors. the economy continues to witness massive growth of "informal sector" economic activities. This organization has actually wasted more money then helping out with Nigeria’s economic downfall. http://internationalbusiness. resulting from a chronically overvalued Naira. Although it has yet to launch its programs. This careless spending has been going on since the 1980’s. Nigeria is a member of the Organization of Petroleum Exporting Countries (OPEC). . a “new entity. A new entity. has been created to help catalyze economic and social development in the region” (Economy Nigeria).ru/eng/) Oil dependency. While. 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. severe ecological damage. http://www. there are signs that some manufacturers have begun to address their competitiveness. Domestic manufacturers. especially pharmaceuticals and textiles.S. and in mid-2001 its crude oil production was averaging around 2. the potential to build a very prosperous economy” (Hale.Gonzaga Debate Institute 2008 133 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers.com/wiki/Nigerian_Economic_Markets_and_Structures) “Nigeria's entire economy revolves around oil . The country's high propensity to import means roughly 80 % of government expenditures is recycled into foreign exchange. By 2000 Nigeria's per capita income had plunged to about one-quarter of its mid-1970s high. especially in rural areas.wikia. however.000 mі) per day. In 2000 oil and gas exports accounted for more than 98 % of export earnings and about 83 % of federal government revenue. Christopher Charles. vandalism of oil infrastructure. have lost their ability to compete in traditional regional markets. Cheap consumer imports. http://www. Oil revenue isn’t used productively Blocher 7 (10-31. natural gas reserves are well over 100 trillion ftі (2. 2002). coupled with excessively high domestic production costs due in part to erratic electricity and fuel supply. It is the 12th largest producer of petroleum in the world and the 8th largest exporter. has been created to help catalyze economic and social development in the region. The needless spending of the government dwarfs this revenue. below the level at independence. A collapse of basic infrastructure and social services since the early 1980s accompanied this trend. the organization has shown little or no progress. the Niger Delta Development Commission (NDDC). and has the 10th largest proven reserves” (Economy of Nigeria). Oil dependency takes out all local efforts at economic success Olusegun 8 (Gbadebo. In the absence of government programs. Department of Economics and Development Studies Covenant University.ogbus.S. The dilapidated equipment places production way under normal capacity. New oil wealth. imported oil. remains Nigeria's largest customer for crude oil. 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. and a lurch toward a statist economic model fueled massive migration to the cities and led to increasingly widespread poverty.

ogbus.Internal Link Turn: Inflation More oil revenue translates to increased inflation Olusegun 8 (Gbadebo. Such excesses have always been monetized. . http://www. the floodgates were opened. The greatest challenge is when Nigeria generates more revenue from crude oil sales than it budgeted. In 2000 high world oil prices resulted in government revenue of over $16 billion..Gonzaga Debate Institute 2008 134 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers. about double the 1999 level. creating a tug-of-war between the federal government. interest rate. the early 1990s saw increases that were dampened by 1995 up until the civilian administration came on board in 1999. like now. in order to ensure that it does not create adverse effects on the three key macroeconomic prices (i. which seeks to control spending.ru/eng/) The monetization of oil revenue has been a major factor in liquidity management in Nigeria.7 % in August 2001.ogbus. 5% by the end of the year and 18. Department of Economics and Development Studies Covenant University. creating market distortions and inflationary pressure [Biodun Adedipe 2004]. Department of Economics and Development Studies Covenant University. the CBN has been battling to keep liquidity in check. and state governments desirous of augmented budgets preventing the government from making provision for periods of lower oil prices.ru/eng/) Expanded government spending also has led to upward pressure on consumer prices. State and local governmental bodies demand access to this "windfall" revenue.e. Since then. Measuring liquidity as the narrow and broad money definitions by the CBN. Inflation which had fallen to 0 % in April 2000 reached 14. The new Government maintained disciplined fiscal operations for about one year and thereafter. http://www. Increased oil revenue creates market distortions and inflation Olusegun 8 (Gbadebo. exchange rate and inflation rate).

Nigeria has suffered profoundly from political unrest fueled by oil and from reprisals in which thousands have been killed.ogbus. 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. and develop a global development partnership. which covers the years from 2000 to 2015. the environment. Venezuela and Sudan. a. the country lagged behind on the goals of eliminating extreme poverty and hunger. http://www. Daily Champion. Nigeria is committed to achieve a wide range of ambitious objectives involving poverty reduction. which seeks to extort money from foreign recipients of letters and emails with the promise to transfer a nonexistent windfall sum of money. Specifically.ru/eng/) A long-term economic development program is the United Nations (UN) sponsored National Millennium Goals for Nigeria. protect the environment.k. reducing child and maternal mortality. and combating diseases such as human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS) and malaria. . However.a the "419" scam or the Nigerian scam. Nigeria had advanced efforts to provide universal primary education. and international development cooperation. Corruption disrupts any attempts at improving Nigerian well being Olusegun 8 (Gbadebo. Ecuador. education. Department of Economics and Development Studies Covenant University. In an update released in 2004. oil has widened economic divides and the wealth generated engenders conflicts. health.Internal Link Turn: Corruption Oil has fueled corruption in Nigeria Africa News 4 (July 12. Under the program. gender equality. the UN found that Nigeria was making progress toward achieving several goals but was falling short on others.Gonzaga Debate Institute 2008 135 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers. “Nigeria: Oil: Prize or Curse?”) In Nigeria. A prerequisite for achieving many of these worthwhile objectives is curtailing endemic corruption. The corruption spawned by oil casts a vast net of social pain that has not abated with the transition to democracy.

both of which are vital to the expansion of organized crime. Further.Internal Link Turn: Organized Crime Oil increases Nigerian organized crime Arvantides and Butcher 8 (Chip.” . which include narcotics trafficking activities. Jamey.htm) Nigerian organized crime has become influential in transnational illegal activities only recently. gambling. 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. July. http://www. This resulted in a number of well- educated Nigerians. in Africa or elsewhere. http://www.edu/ted/hpages/crime/Nigeria. despite a membership that has a generally high level of education. Crime and Development in Africa. This has been facilitated by a relatively secure home base. many living in other countries.Gonzaga Debate Institute 2008 136 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers. Nigerian organizations have engaged in extensive fraud and extortion activities. suggest that Africa may have become the continent most targeted by organized crime.org/ecosocdev/geninfo/afrec//vol21no2/212-organized-crime. as well as international crime intelligence and seizures of contraband.un.american. corruption and few sources to devote to fighting organized crime. including credit card fraud. 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. characterized by lack of legislation and law enforcement capacity. “Lack of official controls makes the continent vulnerable to money laundering and corruption activities. These groups also have little problem accepting menial jobs. to be deprived of their primary source of income. loan-sharking and official corruption are illegal and many transactions are consensual. This in turn created a wave of individuals turning to crime as a means of supplementing their income. as well as political instability. prostitution. Nigerian Criminal Enterprises are difficult to infiltrate due to the fact that they operate in a tribal structure. experts note that the extent of organized crime is hard to establish on the basis of official data. “But perception surveys.html) Because drug trafficking.” UNODC states in a 2005 report. and fraudulent activities through commercial banks and government assistance programs. Organized crime funnels money out of Nigeria Mutume 7 (Gumisia.

Impact T/O: Stability Down Rebel attacks are increasing in Nigeria Fletcher 8 (Sam. security forces said gunmen kidnapped employees of a German construction firm in Port Harcourt. Nigeria. The abductees work for Julius Berger Nigeria PLC. 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. Oil & Gas Journal [http://www. 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.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. on July 11.ogj. Germany's second-largest builder. In the interim.Gonzaga Debate Institute 2008 137 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers. a unit of Bilfinger Berger AG. .

Research Professor of History at the State University of New York. be the preference of most Nigerians -. but if nothing is done to redress the 2007 electoral travesty. which is also a home for militant groups like the Movement for the Emancipation of the Niger Delta (MEND) [5]. Nigerians have again shown their commitment to democracy. 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. many Nigerians would welcome a short-lived military regime whose goal was to arrange legitimate elections. blunting any appeals they might make to militant groups which kidnap civilians. But the flagrantly rigged elections were not either. government. of course.com/wiki/Nigerian_Economic_Markets_and_Structures) Perhaps the most explosive threat facing future Nigerian economic growth lies with internal conflict and unrest. . Due to the impoverished nature of the region.Gonzaga Debate Institute 2008 138 Scholars Lab 2nd Wave Oil DA’s Nigeria Answers.wikia. “Nigeria's Rigged Democracy. Although coups are said to be out of fashion in much of Africa.” Foreign Affairs. The notion that a coup could lead to democracy may seem counterintuitive. 10-31. however they can. Such military intervention would not.S. which then disrupt oil production and oil profits[6]. Critical oil production occurs along the Niger Delta. and in the event of a coup carried out by leaders committed to returning the country to democracy within months. July/August 2007 Many Nigerians say that in the wake of the discredited elections. A government position is often a path to wealth. nothing is off the table. and nothing should be done by people far away to further dim their prospects for eventually achieving it. and many government officials have been known to enrich themselves with money appropriated for economic development. Western governments should pause before imposing sanctions. Oil revenue causes inequality which generates Nigerian instability Blocher 7 (Christopher Charles.or of the U. in Nigeria they have repeatedly been used against a misbehaving political class. http://internationalbusiness.Impact Turn: Coup Good A coup to overthrow the illegitimately elected president in Nigeria would ultimately strengthen democracy Jean Herskovits.

Gonzaga Debate Institute 2008 139 Scholars Lab 2nd Wave Oil DA’s ***Mexican Oil DA*** .

But the real reason for acting was that critical American interests were at stake. as part of a package to be coordinated with the International Monetary Fund (IMF). but to protect ourselves. and massive unemployment. If Mexico defaulted on its foreign obligations. This is not because of some dark conspiracy to use them. The flow of illegal drugs could intensify as well. It took him ten minutes to spell out our essential analysis and recommendation. In fact. which meant that many American companies and workers would be hurt. mainly on account of the nuclear “balance of terror. however. The alternatives to the massive intervention we were recommending were not promising. in a worst-case scenario.S.com/news/nationworld/world/la-fi-mexgdp23- 2008may23. Everyone knows that war plans were drawn up in Washington and Moscow long ago. drivers. We can see these reasons falling from the lips of al Qaeda spokesmen. Larry and I went on to explain. despite our special relationship. And that would surely have a substantial impact on the United States. do not last forever." Such a chain reaction could lead investors to pull back from emerging markets around the world indiscriminately. That.” http://www. which we'd finished formulating in a meeting with Fed chairman Alan Greenspan hours earlier. accessed 7-6-07] The world is made up of armed nation states. to blame somebody. The petroleum windfall is bankrolling a slew of government spending and investment.story] Mexico prospering despite U. “The Path of Dissolution. slowdown/ May 23. Secretary of the Treasury.S. Then I asked Larry to explain the situation in more detail.6979146. Fears of a Mexican default were already producing wobbles in developing markets throughout the hemisphere. could affect economic conditions in the United States-since roughly 40 percent of our exports went to developing countries. the immediate and long-term consequences for Mexico could be severe. and some of those states have nuclear and biological weapons that could easily kill several hundred million people. According to an estimate made by the Federal Reserve Board. a phenomenon that came to be known as the "Tequila Effect. and help quickly. which is helping to keep the economy rolling. Las Angeles Times [http://www. in turn.financialsense. and risky intervention: providing billions of dollars to the Mexican government to avoid a collapse in its currency and economy. and to unleash destruction on somebody.html. in the hope of preventing it.5% in the first three months of the year compared with the same period last year. the world's sixth-largest oil producer. a half-million additional refugees a year.Gonzaga Debate Institute 2008 140 Scholars Lab 2nd Wave Oil DA’s Mexican Oil DA – 1NC Mexican econ strong – Oil is key Dickerson 8 (Marla. reduce growth in the United States by 1/2 to 1 percent a year. The reasons for hatred may be ethnic. economic expert. Econ collapse leads to nuke war Nyquist. R.latimes. a major economic disruption might overthrow the “balance of terror. a deep and prolonged recession. We weren't proposing intervention for the sake of Mexico. and the occasion for using them – though unwelcome by most of us – nonetheless recurs through time. religious or ideological.J. They are used because they exist to be used. Weapons are always used. Jacob Weisberg American political journalist. likely triggering severe inflation. from Latin American dictators and Chinese generals. We presented estimates that a Mexican default could increase illegal immigration by 30 percent. we were recommending that he support a massive.” Such balances. but they've meant record oil revenue for Mexico. by affecting other countries. Mexico is critical to the world Rubin and Weisberg 3 (Roburt Rubin U. We don’t like to think that these weapons would ever be used. People always seem ready to hate somebody. 07[7-6-07.” .1. Nyquist. the flow of capital out of Mexico would probably accelerate and the peso would collapse. But war did not come when the two sides were carefully watching one another. Mexico was our third-largest trading partner. A crisis in Mexico might also hurt us indirectly.S. That was our case for asking Congress to provide billions of dollars in loan guarantees. but it’s safe to say they’ll be used all the same. 2008) Skyrocketing crude prices might be pinching U. a Mexican default and the consequent "contagion" that was possible could. 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. Total public spending increased 9.com/stormwatch/geo/pastanalysis/2007/0706. potentially unpopular. If our government didn't step in to help.

latimes. . 2008) A sizzling stock market.8% Dickerson 8 (Marla. Someone forgot to tell Mexico that the U.S. A strengthening peso.story] Mexico prospering despite U.8%.1.Gonzaga Debate Institute 2008 141 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Econ Up Mexico is experiencing economic growth Dickerson 8 (Marla.S. according to government figures released Thursday.com/news/nationworld/world/la-fi-mexgdp23- 2008may23. slowdown/ May 23. Total public spending increased 9. Adjusting for those factors.6979146. Mexico's gross domestic product expanded at an annualized rate of 2. drivers. the world's sixth-largest oil producer.6979146. 2008) The growth appeared muted compared with the fourth quarter of 2007.7%. which is helping to keep the economy rolling. Mexico’s GDP up by 3. has been flirting with recession. .latimes. Las Angeles Times [http://www.1. slowdown/ May 23. according to the Treasury secretariat. 2008) Skyrocketing crude prices might be pinching U.6979146. The government this year adopted a new international standard for calculating GDP.S. but they've meant record oil revenue for Mexico.S.com/news/nationworld/world/la-fi-mexgdp23- 2008may23.story] Mexico prospering despite U. But there was statistical noise in the first-quarter numbers.story] Mexico prospering despite U. when Mexico's GDP expanded by 3. Good economic growth. which resulted in fewer working days compared with the first three months of last year.1. Las Angeles Times [http://www.S.com/news/nationworld/world/la-fi-mexgdp23- 2008may23.6% in the first three months of the year compared with a year earlier. which is the value of all goods and services produced in the economy. first-quarter GDP growth was a solid 3. Mexican econ strong because of high oil prices Dickerson 8 (Marla.latimes. And the January-to-March period was hobbled by this year's early Easter week holiday. The petroleum windfall is bankrolling a slew of government spending and investment. It's a respectable performance that highlights the nation's surprising resilience in the face of a U. Las Angeles Times [http://www.5% in the first three months of the year compared with the same period last year. slowdown/ May 23. slowdown.S.

5% annually.3%. as economic activity declined 0. the services sector expanded 6.2% over the same month last year.8% in the fourth quarter to 5.7% (April: +1. The acceleration over the previous month was broad-based.2% yoy). while investment expanded 2. Agriculture experienced the sharpest rebound and expanded 7. the economy increased 6.7% year-on-year (Q4 2007: +4.17% over the previous month in seasonally adjusted terms.6%. as a result of the strong April reading. A month-on-month comparison does not corroborate the acceleration suggested by the annual figures.2% growth observed in the fourth quarter.01% expansion recorded in March.Gonzaga Debate Institute 2008 142 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Econ Up Mexico’s economy is in an upward trend Focus Economics 8 (June 30. as exports decelerated from 7.4%.8% over the same quarter last year (Q4 2007: +8. the annual average growth rate stepped up from 3. which contrasted the 1. and also came in ahead of market expectations. Total consumption slowed from 4. According to the global indicator for economic activity (IGAE. Meanwhile.9% yoy).1% yoy).htm) A more complete set of data for first quarter gross domestic product (GDP) confirms the 2.5% contraction registered in March. Global economic insight with a regional focus http://www. which had anticipated economic activity expanding 4.latin-focus.5% year-on-year (March: -4.2% in April over the same month last year. Finally. .3% in March. The reading constituted a strong rebound compared to the 1.8% yoy). as both domestic demand and the external sector decelerated over the fourth quarter. which had been negatively affected by the Easter holidays. The deterioration over the previous quarter was broad-based. The first quarter reading represented a notable deceleration compared with the 4.6% expansion reported earlier. as all three main economic sectors registered higher growth rates. The industrial sector also bounced back and increased 5.3% in March to 3.com/focus- economics/indicators/080630_mexico_economic_activity. after having contracted 5. the net contribution of the external sector to overall growth deteriorated. Nevertheless.0% growth in the fourth quarter to 3. More recent data point to a while imports picked up the pace and increased 8. Indicador Global de la Actividad Económica). recovery in economic activity.

down from 4. the unemployment rate of Hispanic immigrants rose to 7. Mexican economy down Lang 8 (Jason.signonsandiego.html] Mexico inflation jumps to highest since late 2004/ July 9. Economic Policy Institute [http://www. Mexico's top trading partner. hurt by weaker growth in the United States. . With the deflating housing bubble and the decline of construction jobs in the first quarter of 2008. The economy expanded at an annual pace of 3.org/content.2 percent in the fourth quarter of 2007. 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.5%. construction slows.S. discounting the effect of Holy Week holidays.epi.cfm/webfeatures_snapshots_20080709] As U.US downturn spilling over Garr 8 (Emily.7 percent in the first quarter.1 The continuing economic slowdown in the United States will undoubtedly affect Mexicans on both sides of the border. remittances to families in Mexico decline/ July 9.Gonzaga Debate Institute 2008 143 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Econ Down Mexican economy slowing. and Hispanic construction workers now earn less than they did in the first quarter of 2006.com/news/mexico/20080709-1502-mexico- economy-inflation. The Union Tribune [http://www. 2008) The quickening pace of inflation comes as the economy is starting to slow.

which must be extracted from the oil before sale.” and “charcoal.”) But Ku- Maloob-Zaap. 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.htm] Mexico/ July 9. Ku-Maloob-Zaap. there are scores of nearby towns that may take a dim view of oil production in their backyard. Pockets of Oil That leaves Chicontepec. 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. (Its Mayan names translate to “nest. a collection of three fields within eyeshot of Cantarell’s platform. The Wall Street Journal [http://rastrup.Gonzaga Debate Institute 2008 144 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Oil Up Mexico is using technology and future reserves to keep oil production high Luhnow 8 (David. Pemex is doing what it can to keep Cantarell going as long as possible. will start its own decline in 2011. which is less valuable than oil. Wells that are too deep hit greater amounts of water. according to Pemex. 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. .eu/verdens-n%C3%A6stst%C3%B8rste-oliefelt- udt%C3%B8rer-1269. which is also ranked in the world’s top 20 fields. a massive onshore field in eastern Mexico that was discovered in the 1920s. For now. A narrowing band of oil means that wells that are drilled at lesser depths have started to hit gas. Developing Chicontepec is also difficult politically.000 wells since it was formed in 1938.” “good.

a heavy reliance on PEMEX has powered Mexico's development. with little ability to replace them. Today. The Mexican oil industry was nationalized under former President Lázaro Cárdenas in 1938. 2008) Mexico has less of a currency conundrum than the Canadian exploration companies. Its population already consumes 60% of its crude.Gonzaga Debate Institute 2008 145 Scholars Lab 2nd Wave Oil DA’s 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. is in serious trouble.8 million barrels a day. That's an astounding annual decline rate of 32% a year! Mexico’s future reserves are dwindling Katusa 8 (Marin. say most oil experts. (Jeffery Brown’s Export Land Model estimates that this reversal will occur no later than 2014… six short years from now.S.S. A majority of Mexicans continue to oppose opening PEMEX to private and foreign investment. Heritage Foundation.resourceinvestor. 2008. The Canterell field once produced 60 percent of Mexico's petroleum. The Resource Investor [http://www. and its rapidly dwindling resources. and maybe sooner.co. as is much of Mexico's natural gas. Canterell. Production difficulties continue as a result of under-investment.7 percent in 2007. PEMEX. Venezuela. Mexico will become a net oil importer by 2016. one of the world’s largest oil fields. according to Mexico's Energy Ministry! And it's not just Mexico. Oil Imports/ July 10. . inefficient bureaucrats.com/pebble.heritage. http://www. Think that's scary? Consider this: At current rates of decline. March 18. Four of every 10 gallons of gasoline consumed in Mexico are imported from abroad. For example. and state and national politicians. Mexicans may have little real reason to be jubilant at this time.marketoracle. imported oil. is hemorrhaging oil production due to the slipshod management by its deluded president.S.000 bpd in just five months recently. Mexico's production crisis is deepening: In April. but the petroleum monopoly has also served as a huge fount of corruption to sustain workers' unions. Yet in many respects Mexico is paying the price for its past bout with resource nationalism. It is the world's most indebted oil company. peaked in 2004. dropping by 5. 3-11. Mexico. The field now yields 42 percent of national output. Since 1938. State ownership of subsoil wealth and hydrocarbons remains firmly embedded in the Mexican psyche and political ethos. Mexico is the world's fifth-largest oil producer and in 2007 the second-largest supplier to the U.S. Result: The combined net oil exports from Venezuela and Mexico to the U. Output from Mexico's flagship oil field. Yet overall. This problem is exacerbated by Mexico's increasing domestic consumption. production at Cantarell. dropped by 414.html] China Raises Fuel Prices: Is this the End of the Oil boom?/ June 23. could become a net importer of crude oil in the near future.cfm) The petroleum situation in Mexico is less rosy. Mexico's oil output fell to a nine-year low of 2. marks the 70th anniversary of oil nationalization in Mexico and will be celebrated widely in Mexico. is conservatively estimated to fall to half of its 2003 peak by the end of 2008. earnings from PEMEX cover 42 percent of Mexico's national budget. mostly because of a decline in the Cantarell field.) Oil revenue is limited – Bureaucracy and corruption Walser 8 (Ray.org/Research/LatinAmerica/hl1079. which is located in the Gulf of Mexico.asp?relid=44271] Securing the Insecure: U. but they face a much larger problem – their reserves are dropping quickly. which led to the creation of Petróleos Mexicanos (PEMEX). Hugo Chavez. another big supplier of U.uk/Article5187. 2008) Worst of all.

benefits from NAFTA. which continues to build a footprint in Latin America. which is expanding globally. taking market share and even buying companies in Europe.thestreet.S. and cement giant Cemex(CX .Cramer's Take . the eleventh-largest country in terms of population. Mexico is producing industry leaders like America Movil(AMX .com/story/10426035/1/emerge-richer-with-six-sizzling- markets.Cramer's Take .html] Emerge Richer With 'Six Sizzling Markets'/ July 14. The Street Journal [http://www.Gonzaga Debate Institute 2008 146 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Diversification Up Mexico is diversifying its market Tiku 8 (Pran. by diversifying exports. but it has also been decreasing its reliance on the U.Stockpickr).Stockpickr). . 2008) Mexico.

Oil money is crucial for Mexico since it accounts for 40 percent of the federal budget. if often overlooked impact. 2008) When it comes to remittances.dollar hurts some.com/business/content/business/epaper/2008/07/06/sunbiz_mexicodollars_0706.S.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. the weak dollar has had a powerful.Gonzaga Debate Institute 2008 147 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Diversification Down Oil makes up 40% of Mexico’s economy Schwartz 8 (Jeremy. The Palm Beach Post [http://www. . The strengthening peso means that the $7. But the dollar's biggest impact in Mexico may be on Pemex's oil profits. though.html] Plunging U.palmbeachpost. helps some in Mexico/ July 6.

lending rates to 5. the biggest since September 2005.bloomberg. drawing investors to the nation's higher-yielding securities. 2008) Mexican inflation jumped in June to its fastest pace in over three years on higher food and energy prices.26 percent in the 12 months through June – the highest inflation rate since November 2004. . The May rate was 4.S.signonsandiego. The central bank said Wednesday that consumer prices rose 5. Mexican central bankers will raise the key rate by a quarter-percentage point to 8 percent when they meet on July 18. Inflation high in Mexico Lang 8 (Jason.html] Mexico inflation jumps to highest since late 2004/ July 9. according to the median estimate of 20 analysts surveyed by Bloomberg.rate increases by Banco de Mexico since October have swelled the spread between Mexican and U.75 percentage points. 2008) Mexico's peso held near a five-year high on mounting speculation the difference between Mexican and U. The peso has risen 5.S. increasing pressure on the central bank to raise borrowing costs despite a slowing economy.com/news/mexico/20080709-1502-mexico- economy-inflation.com/apps/news?pid=20601086&sid=aIDSsULInmG0&refer=news] Mexico's Peso Holds Near Five-Year High on Interest-Rate Spread/ July 14.8 percent this year as two interest.Gonzaga Debate Institute 2008 148 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Inflation Up Inflation in Mexico has hit a 5 year high Rota 8 (Valerie [http://www.95 percent. benchmark lending rates will continue to widen. The Union Tribune [http://www.

Banco de Mexico policy makers will increase the rate at least a quarter percentage point to 8 percent on July 18. 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.com/apps/news?pid=20601086&sid=aqrSSajQI8wg&refer=news] Mexico May Raise Benchmark Rate to Tame Inflation: Week Ahead/ July 14. The four other analysts forecast no change. Mexico increasing rates to fight inflation Rota 8 (Valerie [http://www.bloomberg. 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.bloomberg.75 percent to slow the fastest inflation in 3 1/2 years.com/apps/news?pid=20601086&sid=auyorqUBhLKA&refer=latin_america] Mexican Bonds Rise on Bets Central Bank to Keep Rates Unchanged/ July 15. according to 12 of 16 economists surveyed by Bloomberg.Gonzaga Debate Institute 2008 149 Scholars Lab 2nd Wave Oil DA’s Mexico DA – UQ – Inflation Down Mexico fighting inflation Gould 8 (Erik [http://www. .

the additional funds from crude oil would represent 2.416bn dollars].1 per cent increase so far this year. So far in 2008. With that price. Based on these figures. mainly China.18 dollars. Government spending depends to a great extent on funds from oil sales.655bn dollars] are expected to be collected in that area this year.Gonzaga Debate Institute 2008 150 Scholars Lab 2nd Wave Oil DA’s Mexico DA.1 per cent of GDP.06 per cent of GDP.264bn dollars] over the last six years. Oil revenue has exceeded the government's forecasts since 2002.559bn pesos [82. if the average price of the Mexican oil blend stays at its current level. since the price of crude oil has been greater than the price set for drawing up the budget. the government would obtain an additional 50. Various factors. resulting in a 15. the SHCP adjusted the average price of crude oil for 2008 to 59 dollars. or around 220bn pesos [21.615bn pesos [10. have meant additional revenue totaling 474bn pesos [45. 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. Nevertheless. http://www. have pushed prices of the hydrocarbon to record levels.008bn dollars] in additional oil revenue.008bn dollars]. . such as greater demand by developing countries. as well as climate change and conflicts in the geopolitical arena. funds from this source represented 35 per cent of budget revenue. 865. For 2008. the price of Mexican oil has averaged 84 dollars. the price of a barrel of the Mexican export blend reached a record level of 94. In 2007. 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 0.424 trillion pesos [995.563bn dollars]. Pemex [Mexican Petroleum] estimates that this month the price of a barrel of Mexican crude oil will be 90. Yesterday.255bn pesos [597. So. which totals 110. This amount is equivalent to double the revenue estimated for this year from the collection of the Single Business Tax (IETU).803bn dollars] in oil revenue.3bn pesos [4. compared to the estimates.3 per cent greater than the price observed in April of last year and 2. which is 65.com/article/3084378/Mexican+oil+revenue+exceeds+forecasts?expired=2586195) This year Mexico could obtain around 220bn pesos [21.5 per cent greater than the March figure. which is 35 dollars above the 49 dollars set for this year in the Revenue Law.zibb. The changes in the prices observed. April 17. In the Revenue Law.Oil K/T Economy The plan decreases oil prices which are up and critical to Mexican economic growth Jardon 8 (Eduardo. the Finance and Public Credit Secretariat (SHCP) has predicted that the nominal value of the economy will be 10.90 dollars.307m dollars].

A surge in manufacturing that began late last year and increased construction spending was behind the growth. an economist with J. The rest of the region. analysts said. In 2001 Mexico and Venezuela were respectively the second. Some countries. Ecuador and Colombia — are large net oil exporters. .org/invoke. however. Economists pointed to the data as evidence that Mexican industry was recovering from the shock of Chinese competition. Alfredo Thorne. Myriam. like Argentina.Gonzaga Debate Institute 2008 151 Scholars Lab 2nd Wave Oil DA’s Mexico DA. third quarter. the fastest growth since 2000. http://www. At the same time. The bottom line is that oil has a significant effect on the economy of every Latin American country. P. have become self-sufficient and have begun to export oil while others.. the federal government is flush with additional revenue from the soaring price of Mexican oil exports. Morgan Chase in Mexico City. the Finance Ministry said Wednesday. the economy grew 1. remarked.html?_r=1&fta=y&pagewanted=print&oref=sl ogin) Mexico's economy expanded 5. Mexico’s economy is dependent on oil Kay and Quispe-Agnoli 2 (Stephen J. http://www.5 percent in the first quarter over the similar period last year.nytimes. "The truth is that all the stars are aligned in favor of Mexico.cfm?objectid=1B0BDCE0-904D-43E4-BF7E42DC3F12D06F&method=display) The United States depends on Latin America for a significant portion of its oil. both the federal and state governments are hurrying to make those investments. including Brazil.frbatlanta.S. oil imports. Yet only a few Latin American countries — Venezuela. May 17. By law. and for the month of May 2002.54 percent over the preceding quarter. seek self-sufficiency in the coming decade.Oil K/T Economy Oil key to Mexican growth Malkin 6 (Elisabeth." On a seasonally adjusted basis. resembles the United States in its dependency on oil imports.com/2006/05/18/business/worldbusiness/18peso. much of that money must go toward spending on infrastructure. Mexico surpassed Saudi Arabia as the largest single supplier of crude oil to the United States. Atlanta Fed’s Latin America Research Group. 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. the ministry said. Mexico. With an eye to presidential elections on July 2. and that's what the numbers are showing.and fourth-largest suppliers of U.

. * 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.html) Mexico has gained a solid reputation for fiscal rectitude.00.org/document/61/0. * Establishing an institutional structure that guarantees more efficient and transparent spending at the three levels of government. Aware that the current fiscal settings fall short of what is needed to support the growth process. http://www. * that allows the substitution of oil revenues with more stable sources of income. 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. on which the government managed to build a consensus and which was approved in March 2007.oecd. PEMEX Investment Stabilization Fund and the Oil Stabilization Fund). Other key reforms are needed to reduce the dependence of the budget on oil revenue and address fundamental weaknesses in public finances.3343.A2: Reforms Turn Oil funding supports reform OECD 7 (Organisation For Economic Co-operation. The reform substantially reduces the government’s pension liabilities and allows portability of pension rights between the government and the private sector. the government should now reform the other social security sub-systems of government agencies and state-owned companies. Also important to improving the soundness of public finances has been the reform of the federal government employees’ pension system (ISSSTE). the government submitted to Congress in June 2007 a wide-ranging public finance reform.en_2649_34569_39415037_1_1_1_1.Gonzaga Debate Institute 2008 152 Scholars Lab 2nd Wave Oil DA’s Mexico DA. Building on it. 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.

Gonzaga Debate Institute 2008 153 Scholars Lab 2nd Wave Oil DA’s Mexico DA. Unlike many oil states.com/id/55642/output/print) The paradox is a result of Mexico's unique place in the global economy. even as oil prices continue to go up. And there. at the going prices. http://www.A2: Dutch Disease Mexico’s economy is diversified now—only 10% of exports are oil Johnson 7 (Scott. which has siphoned off thousands of Mexican manufacturing jobs. What's more. meaning that Mexico must buy refined petroleum from the United States. go almost wholly to the United States. Newsweek. high oil prices are beginning to have a dampening effect on the economy. The result. non-oil exports are facing increasing competition from China. Mexico has a relatively diversified economy--only 10 percent of its exports come from oil." . is a situation in which "the Mexican economy may slow down. The problem is that the other 90 percent. including things like electronics. textiles and medical supplies. a senior adviser at the Finance Ministry. October 17.newsweek. says Alejandro Werner. And a sclerotic state-controlled oil sector hasn't invested enough in homegrown refineries.

Global Insight.18% at the end of June to 3. “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. . practically on the targeted rate.06% at the end of July..A2: Inflation Mexico is successful at managing inflation Amiel 6 (Rafael. Annual inflation has been within the targeted band since August 2005.e. i. August 10.Gonzaga Debate Institute 2008 154 Scholars Lab 2nd Wave Oil DA’s Mexico DA. Banxico targets inflation at 3% plus/minus one percentage point.

Calderón has also stepped up cooperation with the United States. .cfm Mexican President Felipe Calderón inherited from President Vicente Fox a crisis of public insecurity. Mexican authorities extradited 80 criminal suspects to the U. Calderón's administration has developed a seven-point strategy that includes creating a professional and corruption-free national federal police.org/Research/LatinAmerica/bg2152. including 65 Mexicans. After assuming office.A2: Corruption Mexican corruption is down Walser 8 (6-30. In 2007. and heroin in U.heritage.Gonzaga Debate Institute 2008 155 Scholars Lab 2nd Wave Oil DA’s Mexico DA. marijuana.S.. overhauling the judicial process. developing community policing. Ray. While largely a stopgap measure. Calderón called in the Mexican military to fight the cartels in several Mexican states. For the longer term. markets. and adding new crime-fighting technologies and training facilities. Violent drug cartels were working as a conduit for Andean cocaine and were deeply involved in the production and distribution of methamphetamines.S. http://www. Heritage Foundation. the move demonstrated Calderón's commitment to restoring public security.

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.Gonzaga Debate Institute 2008 156 Scholars Lab 2nd Wave Oil DA’s Mexico DA. known as the Merida Initiative. May 15. information sharing. respect for human rights. and the fight against corruption. Dick. Sen. enhanced border security and support for judicial reform. “Hands across the border” Politico. This commitment. This represents the possibility for a sea change in US-Mexico relations and the way both our nations fight organized crime.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. . It was born from a proposal formulated by Mexican President Felipe Calderon. At a March 2007 meeting in Merida. Mexico.A2: Organized Crime Mexico and the US are working now to eradicate organized crime Sarukhan and Lugar 8 (Ambassador Arturo. who has changed Mexico's traditional approach to bilateral cooperation by seeking deeper security ties with the United States. our two leaders agreed to take a decisive step toward significantly enhanced cooperation.

Argentina. LLP and part of the firm’s international business unit for Mexico and Latin America. he believes. with a particular focus on Japan. Within Latin America.” he says. Mexico’s trade fortunes lie with the U. “Mexico is also working on increased trade linkages with Asia bi-laterally and through APEC. we may see Mexico initiate negotiations with countries of the southern cone. of which Mexico is part and parcel. Within the next decade. 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.html) Although trade with the U. Greater global integration offers Mexico the opportunity to accelerate economic growth and develop trade beyond NAFTA and the cyclical movements of the U. the Mexican economic minister announced that Mexico would temporarily halt negotiations for new free trade agreements. “The most notable agreements have facilitated trade with Europe and Central America where future trade prospects are the brightest. but Mexico’s foreign trade is greater than the combined trade of Brazil.S. Mexico has pursued free trade agreements (FTAs) around the world.S. including the 25 members of the European Union.. a principal in the Phoenix-based law firm of Lewis and Roca.workforce. Since the signing of NAFTA a decade ago. Mexico’s current goal. however. Mexico may be able to build significant trade and investment relationships with European and Asian nations and with other Latin countries. Nonetheless. is critical. “Mexico has enough free trade agreements for the development stage that the country is confronting at this moment. Ramirez Thomas.” says Luis E. Workforce Management contributing editor http://www. is to increase commerce with the existing FTA countries and meet the objectives of each agreement. economy.S. “Mexico is an example of the success that a country can experience if it adopts a free trade agreements strategy. he notes.workforce.” After the recent signing of a FTA with Japan. In the next few years. Mexico has moved rapidly in recent years to expand its role in the world economy.” notes Joey Bremauntz.Gonzaga Debate Institute 2008 157 Scholars Lab 2nd Wave Oil DA’s Mexico DA – Impact: Key to World Mexico is key to the world’s economy Hansen 4 (Fay. such as Paraguay and Argentina. Chile and Colombia.. Workforce Management contributing editor http://www. “That is why it is expected that the government will continue making more agreements when it is convenient for the country.html) Mexico’s economy and business environment remain closely tied to the United States. business cycle and establish itself as a major trading nation in the world market. Mexico hosted World Trade Organization meetings in 2003 and organized a summit of the Asia-Pacific Cooperation Forum in 2002. “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. Mexico’s economy is second in size only to the Brazilian economy. and with these other trade partners it may only hope to help smooth out the North American business cycle. “All these efforts have meant a very successful decade for Mexico. “Mexico is intricately tied into the U.” he says. a business continuity advisory firm that assists both U. and Mexican companies. Vice President of Sherwood Partners. but signs are emerging that Mexico is succeeding in its attempt to break away from the U.S.S. and partial scope agreements with three others.com /section/06/feature/24/78/99/index.” says Pisani. but it is also a key player in Latin America. For the immediate future.com /section/06/feature/24/78/99/index.S.” Bremauntz also notes that a leadership role as an intermediary in multilateral negotiations. resulting in FTAs with 41 nations.” .

This article draws from information and ideas expressed at those sessions but does not purport to be a summary of it. Should the recession be prolonged. the inflation rate first rose then declined. political scientists. Against the background of the Mexican crisis and its consequences. 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. 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. Klein.com/p/articles/mi_m0365/is_n2_v40/ai_18338853) In December 1994. The Mexican crisis was akin to a run on a large bank that risked involving others. political and social pressures would mount and raise again the question of Mexico's ability to meet its external debt service. with an economic austerity program that plunged the country into a severe recession.Gonzaga Debate Institute 2008 158 Scholars Lab 2nd Wave Oil DA’s Mexico DA – Impact: Key to World Mexican economy key to global econ stability B Net 96 (the go to place for management http://findarticles. Moreover. Trouble in one country can easily spread to others. the Mexican crisis aroused investor concern regarding other emerging markets. Mexico showed improvement in subsequent months as the peso stabilized. Mexico's financial panic transmitted turmoil to emerging markets around the world. This in turn angered foreign investors. and business leaders with experience in emerging markets. Five years worth of carefully nurtured international confidence in Mexico's political leadership and economic management was swept away. both headquartered in Philadelphia. These positive effects were achieved. chaired the meeting. History also shows that a default of one country can lead to default of others. But it was not only foreign sources that shifted their funds out of Mexico. History shows that runs on banks. The potential for spreading financial instability has increased dramatically since the early 1980s. 1995.might well have avoided difficulties if Poland and Mexico had not started a chain reaction. and as institutional investors have enlarged their foreign stakes. While in the latter period the problem was limited to other high-debt countries. In Mexico. moved their money abroad. any errors and weaknesses are the responsibilities of the authors. 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. therefore. the Global Interdependence Center (GIC) and the Foreign Policy Research Institute (FPRI). on June 26-27. and trade deficits were corrected. The most lasting effects on others were felt by Argentina. can spread to good banks as well. The participants in the meeting. while starting with a bad bank. 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. consisted of twenty-five economists. In contrast. Lawrence R.for example. Mexico shocked world Financial markets with a sharp devaluation of the peso. Chile . raising the specter of a spreading financial calamity. who may not be willing to take such risks again soon. and again in the early 1980s after Poland and Mexico were the first countries to declare inability to pay. Many Mexicans. suspecting that devaluation was on the way. The Mexican crisis was eventually quelled by a $47. the International Monetary Fund (IMF).8 billion rescue package provided by the United States. In 1994-95. the developing country debt crisis of the early 1980s largely involved bank creditors who could be organized into committees to renegotiate loan terms.com/p/articles/mi_m0365/is_n2_v40/ai_18338853) Economic Lessons 1. jointly sponsored a round-table meeting. A mutual-fund holder need only make a telephone call to withdraw his money. . Thus. 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. Mexican economic collapse spills over to global markets B Net 96 (the go to place for management http://findarticles. Nobel laureate in economics from the University of Pennsylvania and vice chairman of the Global Interdependence Center. however. some of those . 2. 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. This occurred in 1931 when a failure in Austria spread to Germany and other countries. Some were large investment funds whose managers controlled the portfolio decisions for thousands of smaller investors.

According to an estimate made by the Federal Reserve Board." Such a chain reaction could lead investors to pull back from emerging markets around the world indiscriminately. and help quickly. the flow of capital out of Mexico would probably accelerate and the peso would collapse. And that would surely have a substantial impact on the United States. Fears of a Mexican default were already producing wobbles in developing markets throughout the hemisphere. and risky intervention: providing billions of dollars to the Mexican government to avoid a collapse in its currency and economy. If Mexico defaulted on its foreign obligations. despite our special relationship. A crisis in Mexico might also hurt us indirectly. a half-million additional refugees a year. We weren't proposing intervention for the sake of Mexico. but to protect ourselves. If our government didn't step in to help. a deep and prolonged recession. could affect economic conditions in the United States-since roughly 40 percent of our exports went to developing countries. as part of a package to be coordinated with the International Monetary Fund (IMF). in the hope of preventing it. The flow of illegal drugs could intensify as well. That. and massive unemployment. in a worst-case scenario. a phenomenon that came to be known as the "Tequila Effect. Larry and I went on to explain. which we'd finished formulating in a meeting with Fed chairman Alan Greenspan hours earlier. It took him ten minutes to spell out our essential analysis and recommendation. That was our case for asking Congress to provide billions of dollars in loan guarantees. likely triggering severe inflation. Then I asked Larry to explain the situation in more detail. Secretary of the Treasury. 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. Jacob Weisberg American political journalist. a Mexican default and the consequent "contagion" that was possible could.S. which meant that many American companies and workers would be hurt. we were recommending that he support a massive. potentially unpopular. The alternatives to the massive intervention we were recommending were not promising. But the real reason for acting was that critical American interests were at stake. the immediate and long-term consequences for Mexico could be severe.Gonzaga Debate Institute 2008 159 Scholars Lab 2nd Wave Oil DA’s Mexico DA – Impact: Key to World Mexico ties directly into the global economy Rubin and Weisberg 3 (Roburt Rubin U. We presented estimates that a Mexican default could increase illegal immigration by 30 percent. Mexico was our third-largest trading partner. . in turn. reduce growth in the United States by 1/2 to 1 percent a year. by affecting other countries.

Today we not only have a liquidity crisis like in 1998.php) Almost exactly ten years after the Asian crisis. so it can’t raise enough cash to make the payment it owes to institution B. “We have a hundred thousand households that can no longer pay their mortgage. which then doesn’t have the cash to pay institution C – and those who do have cash sit on it. whose mechanism was described by US economist Paul Krugman.weltwirtschaft-und-entwicklung. There is a much higher risk. http://www. created by debt and asset securitisation. 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…” . triggering the flight of international speculative capital. This time the harbingers arise on the other side – the USA rather than East Asia. are traded globally. http://www. That is not only a problem of the market for sub-prime debt.org/cms_en/wearchiv/042ae699af0b75901. says US economist Nouriel Roubini in his blog.” 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.org/cms_en/wearchiv/042ae699af0b75901. which makes things even worse. Whereas ten years ago a real estate bubble in Thailand burst. 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.g. By Rainer Falk Every financial crisis has its peculiarities and its similarities with predecessors. Current market situations would make a collapse now worse Falk 7 (Rainer. Some analysts say that this is the first crisis in the modern financial markets where new “products”.F. R. of a chain reaction of collapse and insolvency.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.” by former managing director of the IMF. e. However. Michel Camdessus. today it is the fallout of the real estate crisis in the USA which threatens the financial markets.weltwirtschaft-und-entwicklung. we also have an insolvency crisis and a debt crisis with a number of debtors who became excessively over-indebted in the boom phase. a hedge fund.g. recently writing in the New York Times: “Financial institution A (e. already the 1994/95 Mexican crisis was labelled “the first major crisis in our new world of globalised financial markets.Gonzaga Debate Institute 2008 160 Scholars Lab 2nd Wave Oil DA’s Mexico DA – Impact: Key to World – A/T: 1996 A financial crisis now would be different than in 96 Falk 7 (Rainer. However. because they don’t trust anyone else to repay a loan.) can’t sell its mortgage-backed securities. the world is again confronted with a veritable financial crisis. it has long been clear that this is much more than a liquidity crisis that can be bridged with temporary injections of money.

The economic tide is now turning. Mexico is primed to boil.0.0] Disorder South of the Border/ July 8. . 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. Yet.Gonzaga Debate Institute 2008 161 Scholars Lab 2nd Wave Oil DA’s Mexico DA – Impact – A2: Mexico Resilient Mexico’s economy is on the brink Morley 8 (Robert.php?q=5309. His estimated net worth is $60 billion. foreign remittances and low inflation—are being undermined. Columnist for The Trumpet [http://www. However. and the spillover could scathe the United States. and the current pillars of its economy—oil production.3600.thetrumpet. Mexico has made big strides in reducing poverty and increasing the standard of living for many. it is becoming increasingly evident that the Mexican miracle was built on a sand foundation. 2008) The world’s second-richest man is Mexican.com/index. Over the past few years.

Gonzaga Debate Institute 2008 162 Scholars Lab 2nd Wave Oil DA’s ***Mexico Answers*** .

Oil exports to the US make up only about 1/10th of their exports. how in the world does he plan to prop up important countries like Saudi Arabia. It would be a hit. but Mexico has diversified enough that it would not seriously weaken them.A2: Oil k Econ Even if prices dropped.typepad.No Internal Link. When Kerry says we must become energy independent.com/mediovero/2004/07/political_disho. 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.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. Mexico.Gonzaga Debate Institute 2008 163 Scholars Lab 2nd Wave Oil DA’s Mexico Answers. Mexico wouldn’t be seriously damaged MedioVero 4 (July 30. http://apptik. .

down from 4. “This kind of cements expectations that the central bank will hike.26 percent in the 12 months through June – the highest inflation rate since November 2004.com/news/mexico/20080709-1502- mexico-economy-inflation. Inflation is the worst threat to Mexico’s economy Amaral 8 (Rodrigo. discounting the effect of Holy Week holidays. That has stirred fears among investors that inflation could quicken. Mexico's top trading partner. Raphael Kassim.304 per dollar.Gonzaga Debate Institute 2008 164 Scholars Lab 2nd Wave Oil DA’s Mexico Answers. Inflation across Latin America has jumped this year. But this time it is not only the locally-brewed variety that causes concern. ENERGY PRICES The central bank said government-set prices for energy and energy-related services – like gasoline.cgi?id=168858) The biggest threat for Latin American bond markets at the moment is an old foe of the region's economies: inflation.51 percent in the year through June. increasing pressure on the central bank to raise borrowing costs despite a slowing economy. notes that inflationary expectations can trigger a flight from stock exchanges." For once. “It is relevant to point out that food continues with its upward trend.33 percent to 10.95 percent.html) Mexican inflation jumped in June to its fastest pace in over three years on higher food and energy prices. "The correlation between the economy of developed countries and emerging ones is decreasing by the day. hurt by weaker growth in the United States. "So such a drop in the market wouldn't necessarily reflect the ability of Latin American countries to pay their debts. http://www. It would be much more a matter of people avoiding to invest in a building. in this case. The peso currency firmed 0. July 14. the head of Emerging Markets Fixed Income at Crédit Suisse. they may decide to sell emerging market bonds.” said Bertrand Delgado.75 percent.fundstrategy. 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. because all other buildings around it are tumbling down. albeit a solid one. driven by higher demand for grains in fast-developing countries such as China and by the expansion of the biofuel industry. The May rate was 4. The central bank increased its benchmark overnight interest rate in June by 25 basis points to 7. electricity and public transportation – also fueled the rise. "When investors see exchange indexes coming down. . Mexico imports about 40 percent of its gasoline. central bank data showed. The central bank said Wednesday that consumer prices rose 5.co. an economist at research firm IDEAglobal in New York.Internal Link Turn: Inflation High energy prices are fueling Mexican Inflation Lange and O'boyle 8 (Jason.2 percent in the fourth quarter of 2007. The economy expanded at an annual pace of 3. because everyone wants to keep away from any kind of risk. The quickening pace of inflation comes as the economy is starting to slow.” the central bank said in its price report.7 percent in the first quarter." Kassim recommends that investors keep their cool and wait for Latin American bonds to provide the expected returns in the long term. Delgado said he sees policy-makers raising interest rates by another 25 basis points next week. Food prices have jumped 9.uk/cgi-bin/item. http://www. July 9. Latin American bonds would suffer despite the efforts of local governments. 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." Kassim says.signonsandiego. and not because of them. Michael.

Pazos said. June 26. http://www. When NAFTA began. If migrant workers can't go north while development at home remains stifled. Pg. Economic reform is key to growth Reiner 8 (Karl. thus setting back economic reform. instability and chaos will eventually result. Oaxaca and Chiapas — lives in extreme poverty. saying that this was the mistake made by Mexican President Jose Lopez Portillo during his spendthrift 1976-1982 administration. Nearly 50 percent of the population of Mexico's southern states — Guerrero. Nothing materialized. A9) But Mr. we are setting the stage for failure. Mexico's Ministry of Agriculture estimates that only 6 percent of the nation's farms are highly efficient and profitable. WORLD. the remittance inflow nearly equals the income generated by the nation's exports. He said if Iraq withdraws from Kuwait and normal oil flows resume. In the adjacent Central American countries things are no better. the southern part of the country has not. Pazos warned against a "wave of false optimism" of permanent gains in oil revenue.azstarnet.com/business/245469) Infrastructure-poor southern Mexico is stagnating. We can start to push economic reform in the countries south of the border or plan to deal with more menacing problems. A transitory oil boom could tempt these governments to relax the austerity measures they have imposed to curb runaway inflation and pay their debts. 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. While the northern part of the country has mostly benefited from the impact of the North American Free Trade Agreement. 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. THE WASHINGTON TIMES. CRISIS IN THE PERSIAN GULF. In Guatemala and Honduras. We face a stark choice. By uncoupling the need for economic progress from the issue of border security. with 30 percent to 50 percent of the population living in poverty. Mr. then governments like Venezuela and Mexico would be left out on a limb.Gonzaga Debate Institute 2008 165 Scholars Lab 2nd Wave Oil DA’s Mexico Answers.Internal Link Turn: Reforms High oil prices offset pressure for economic reforms Weiner 90 (Lauren. the funds went to other purposes. In El Salvador. August 8. 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. . remittance income equals two- thirds and three-fourths of the value of those nations' exports.

the fastest pace in six years.'' 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. August 3. which slashed its inflation rate by more than 75 percent over the past decade.S. he said. The government this week reiterated it expects growth to slow to 3. Mexico still has room to grow as domestic demand strengthens. as decelerating inflation has generated stronger internal consumer demand. The country ``can better compensate for a slight downturn in U.biggest economy last year was less than China's 10 percent expansion and Colombia's 5. Bank lending to Mexican consumers has risen more than ten. Carlos Manuel.1 percent advance. `Ability to Grow' ``It's not an impressive achievement. according to the central bank. which rates Mexican foreign debt BBB.'' Consumers in Mexico.. this can no doubt help the country's rating.Gonzaga Debate Institute 2008 166 Scholars Lab 2nd Wave Oil DA’s Mexico Answers.'' Mukherji said. The proceeds from oil sales make up more than one-third of government income. ``We're still optimistic.S.S.'' .com/apps/news?pid=20601086&sid=aIHcqnFeHdZg&refer=latin_america) Mexico's has improved its ability to weather an economic slowdown in the U. who buy about 80 percent of Mexican exports. The growth in domestic consumption will help offset a housing slump in the U.bloomberg. ``If Mexico manages to reduce its oil-revenue dependence.'' Mukherji said in an interview from Mexico City. ``Mexico has the ability to grow at a faster pace.S. Growth in Latin America's second. The move was partly driven by expectations legislators will approve Calderon's tax plan. last month raised its credit rating outlook to positive from stable. growth. a sovereign ratings director at Standard & Poor's.8 percent in 2006. 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 second. Mukherji said. he said. are borrowing more money to buy goods such as houses and cars as a diminishing inflation rate has pushed lending rates lower.fold since 1997 to 430 billion pesos ($39.Internal Link Turn: Dutch Disease Dependence on oil revenue undermines investor confidence Rota and Rodriguez 7 (Valerie.3 percent this year from 4.1 billion) in June. that threatens to reduce demand from U. The country's annual inflation rate has fallen to 4 percent from 20 percent over the same period.'' S&P. consumers. ``There's more stability now.lowest investment-grade rating. http://www. Mukherji said. said Joydeep Mukherji.

Workers claim Petroecuador declared tenders null and void due to lack of investor interest only to later award them privately.6bn the federal government has under contract in this area. 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. Authorities will need to resolve the situation before proceeding with a second attempt to sell Emelec assets. claims he was approached for bribes by officials.25bn this year. “Shedding light on shady dealings”) In Mexico President Fox is locked in battle with oil union leaders. Daily Champion. according to an anonymous accuser. now in jail for fraud. has just ended a 30-year war. Corruption skims some 10% of the funds authorized for public works in the county. in office prior to Fox's PRD party. “Nigeria: Oil: Prize or Curse?”) Venezuela has been in cyclic turmoil. and compared the country's courts to auctions where the highest bidder wins.Then there's the "peddling of influence. The anticorruption agency has launched an investigation into the accusations. with oil the trophy. valued at some US$130mn. As for Russia's oil industry. Angola. or 30% of the US$23.Gonzaga Debate Institute 2008 167 Scholars Lab 2nd Wave Oil DA’s Mexico Answers. fraud and embezzlement. Unfortunately corruption often goes hand in hand with outdated bureaucracy. according to a government report that named construction as the most vulnerable sector. rich in oil. diamonds. The two factors are expected to cost Mexico's public works sector US$7. 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. leaving physical devastation across the land. . 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. And don't forget why Emelec assets are being sold in the first place: to reimburse the clients of Banco Progreso. Its wealth in petrodollars has fanned skyrocketing corruption. while another 20% is wasted on inefficient practices and red tape.Internal Link Turn: Corruption Mexican oil industry breeds corruption Africa News 4 (July 12. and gold. the Ecuadorian representative of Spanish oil company Repsol-YPF. like Emelec owned by businessman Fernando Aspiazu. breach of trust and other evidence of corruption" regarding the sell-off of assets at former Guayaquil distributor Emelec.Meanwhile Eliseo Gomez. it has become a case study for students of organized crime! Mexican oil industry is overrun with Corruption Business News Americas 2 (October 3.

Recent fiscal and public sector reforms. "With all these elements in place. "In previous episodes of global turmoil. The government expects full-year growth at 2.Mexico is well positioned to stand up to financial market turmoil but needs to remain vigilant. 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 in a speech at the Paris-based Organisation for Economic Cooperation and Development. http://in. Mexico's biggest trading partner. Finance Minister Agustin Carstens said on Tuesday. the Mexican economy was ill-equipped to sort it out without much damage.Gonzaga Debate Institute 2008 168 Scholars Lab 2nd Wave Oil DA’s Mexico Answers." he said. the Mexican economy has much stronger foundations. he said. boosted by a strong housing sector and government investment in highways and other infrastructure. "Middle income countries have been resilient so far.8 percent." ." he said. 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". the world's sixth-largest oil producer. down from the previous year's 3. "Today.No Impact – Resilient Mexican economy can withstand market flux Reuters 8 (Thompson.reuters.3 percent growth.com/article/oilRpt/idINL0363499720080603) PARIS. combined with robust domestic demand. he said. and high food prices had created global uncertainty but had not so far significantly hurt the overall Mexican economy. Cloudy prospects for the United States. June 3 (Reuters) . June 3. Surging energy prices have helped Mexico. the Mexican economy is well prepared to maintain a positive growth path. Domestic demand has also been buoyant.

The paper rightly points out that the Mexico crisis resulted in an overhang. Indonesia. Stock markets in Argentina.No Impact – A2: Key to World Mexico does not have a drastic effect on the world economy Smith and Walter 95+ (Roy C.M1 ) The tequila effect was limited and did not last long. But there has been a substantial correction since then (Figure 1. for example. Malaysia.com/books?id=Js1vyvBTLlsC&pg=PA199&lpg=PA199&dq=%22tequila+effect%22. soon recovered and were at the same level or higher at the end of 1995 compared with January 1994. .+mexico&source=web&ots=LxDKJg8R3F&sig=q7xbD0BIlT4 gZmHjJY3q6ZQmvA&hl=en&sa= X&oi=book_result&resnum=1&ct=result#PPA199. Since then . Ingo Corporate Governance and Ethics at the Stern School of Business.google. Seymour Milstein Professor of Finance. data from the IFC’s Emerging Markets Data Base).Gonzaga Debate Institute 2008 169 Scholars Lab 2nd Wave Oil DA’s Mexico Answers. and Thailand. except in Mexico. in Mexico and many other emerging markets in the first quarter of 1995. equity markets have further recovered in many emerging markets. New York University http://books. the tequila effect. NYU Kenneth Langone Professor of Entrepreneurship and Finance.

Gonzaga Debate Institute 2008 170 Scholars Lab 2nd Wave Oil DA’s ***Indonesian Oil DA*** .

annual real economic growth was more or less consistently in the 6%-10% range each year during the 1970s. The world’s fourth largest country and home to the world’s largest Muslim population. despite this massive natural resource wealth. China View [http://news. As Figure 1 shows.2 % in 1st half /July 9.” . “Voters demonstrated their commitment to democratic principles and to holding leaders accountable. So strong was Indonesia's economic growth during the 1970s and 1980s that by the early 1990s.2 percent at the first semester. So if we combine with the 6. 2002: 42-3). "At the second quarter.xinhuanet. investment about 2 percent. the country will plunge into instability with huge economic costs and this may reverse democratic reform.8 to 6. the economy will grow at 6. including for the first time a direct election of the president. 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. 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. there will not be political stability. export and import at the range of 11 and 12 percents." Mulyani told reporters at finance ministry office. Journal of Contemporary Asia. political economist.1 percent. Indonesia has trimmed its economic growth target in 2008 from 6. except for a couple of years during the mid-1970s. the Organisation for Economic Cooperation and Development. The minister said that the figure was driven by the growth at the household consumption by around 5 percent. the Finance Minister Sri Mulyani Indrawati said here Wednesday. the country had become widely regarded as one of East Asia's so-called "miracle" economies (World Bank. Indonesia needs time to work out this delicate balance.” said Dr. consultant to the World Bank. 2008) Indonesian economy is predicted to growth by 6. devolution with unity. Indonesia is crucial to democratic progress throughout Southeast Asia and beyond. Vol. “The 2004 elections were a major step forward in Indonesia’s democratic transition. the country's economy grew strongly during the 1970s and 1980s. But. New Delhi “Democratic Transition and Political Development in Post-Soeharto Indonesia” ) Unless democratic processes and institutions quickly take root and deliver results. acting director of the Center’s Democracy Program. we are optimistic economy will grow by 6.Gonzaga Debate Institute 2008 171 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – 1NC Shell Indonesian growth up Mingxin 8 (Bi. The National Statistic Bureau will announce the economic growth at the first semester at the mid of August. but to find the right balance for the coexistence of democracy with stability. Indonesia held three sets of elections. 37) In this context. but it is unwise for others to push Indonesia too hard in this process. Without economic recovery.0 percents after the soaring global oil price. the UK Department for International Development. but was still strong overall.pdf) In 2004. due mainly to the contracting effects of the two-stage collapse of international oil prices in 1981-82 and 1985-86. Oil is key Rosser 7 (Andrew. Indonesia is key to global democracy The Carter Center 4 (“Annual Report 2003-2004”http://cartercenter.2 percent in the first half of this year. The challenge of democratic reform in Indonesia is not to drift from one form of extremism to another.com/english/2008-07/09/content_8517925.com/documents/2087. reform with prosperity and freedom with peace. During the 1980s. worked for AusAID. and some of the provinces will become more restless.3 percent growth in the first quarter. demonstrating an impressive strengthening of democracy in the country. David Carroll.htm] Indonesian economy forecast to grow by 6. economic growth was somewhat slower. Indonesia's rapid economic growth during the 1970s and 1980s seems remarkable. Without unity. The presence of our observers helped build confidence in the electoral process. the pendulum may swing back the other way.

within their own borders. and they are much less likely to face ethnic insurgency. In the long run they offer better and more stable climates for investment. p. Countries that govern themselves in a truly democratic fashion do not go to war with one another. popular sovereignty and openness. They do not build weapons of mass destruction to use on or to threaten one another. The experience of this century offers important lessons. They do not aggress against their neighbors to aggrandize themselves or glorify their leaders.carnegie. civil liberties. who organize to protest the destruction of their environments. chemical and biological weapons continue to proliferate. Precisely because. the global ecosystem.html //. December.Gonzaga Debate Institute 2008 172 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – 1NC Shell Democracy stops nuclear war Larry Diamond. Democratic countries form more reliable. democracies are the only reliable foundation on which a new world order of international security and prosperity can be built. 1995. Democratic governments do not ethnically "cleanse" their own populations. they respect competition. Democracies do not sponsor terrorism against one another. with its provisions for legality. The very source of life on Earth. property rights. and the rule of law. Nuclear. appears increasingly endangered. Stanford University. accountability. PROMOTING DEMOCRACY IN THE 1990S. .org//sub/pubs/deadly/diam_rpt. Hoover Institution. open. 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. and enduring trading partnerships. Most of these new and unconventional threats to security are associated with or aggravated by the weakness or absence of democracy. http://www. They are more environmentally responsible because they must answer to their own citizens.

antara. Building sites that had stood vacant and decaying for a decade in the nation’s capital began stirring to life. The minister told a press conference on Wednesday that the economic growth was fueled by household consumption. investment about 2 percent. "Household consumption grew 5.bookshop. 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.2 percent at the first semester.3 percent growth in the first quarter." Mulyani told reporters at finance ministry office.2% Mingxin 8 (Bi. investment. Indonesia has trimmed its economic growth target in 2008 from 6. we are optimistic economy will grow by 6.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.2 percent in the first half of this year. high raw material and capital good imports.5 percent while in the same period last year it was only 7-8 percent.Gonzaga Debate Institute 2008 173 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Econ Up Indonesia economy growing by 6.8 to 6.2 percent. The National Statistic Bureau will announce the economic growth at the first semester at the mid of August. 2008) Indonesian economy is predicted to growth by 6.com/english/2008-07/09/content_8517925. government expenditure. "At the second quarter.2 percent in 2nd quarter 2008/ July 9. Once again Jakarta’s skyline was filled with cranes as new office buildings. export and import at the range of 11 and 12 percents.9-12.1 percent so that the economic growth in the first semester of this year was estimated at 6.edu." she said.2 % in 1st half /July 9. China View [http://news.2 percent. Indonesia’s economy is growing Singh 8 (Daljit." Mulyani said.id/en/arc/2008/7/9/indonesias-economic-grew-62- percent-in-2nd-quarter-2008/] Indonesia`s economic grew 6. 2008) Finance Minister Sri Mulyani Indrawati has estimated Indonesia`s economic growth in the second quarter of 2008 at 6. the minister said." the minister said. Singapore: Insitute of Southeast Asian Studies [www. .com/news/features/25363/details. Indonesia is experiencing economic growth ALB 8 (Asian Legal News [http://asia. Indonesia’s economy growing.co.iseas.3 percent as spending for motor-vehicles and electricity remained high. the economy will grow at 6. The minister said that the figure was driven by the growth at the household consumption by around 5 percent. the Finance Minister Sri Mulyani Indrawati said here Wednesday.2-5.aspx] THE ALB 50: Asia’s Largest Firms/ June 30.0 percent while imports grew by 11. She said investment grew 10.4-10. "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. that growth is more impressive in that it takes place against a backdrop of decreasing government debt and relatively stable inflation. exports. So if we combine with the 6.xinhuanet. Indonesia`s exports in the first semester of this year also booked a growth of 11.htm] Indonesian economy forecast to grow by 6.0 percents after the soaring global oil price. 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.1-11. "We will continue to boost investment so that it would reach a two- digit growth at the end of the year.multiple reasons Antara News 8 (National News Agency [http://www. 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. 2008) September’s sale of a 10 per cent stake in Bao Viet.legalbusinessonline.1 percent. shopping malls and apartment towers sprang up so quickly that the satellite imagery from Google Earth failed to keep pace with the changing landscape.

Gonzaga Debate Institute 2008 174 Scholars Lab 2nd Wave Oil DA’s .

Gonzaga Debate Institute 2008 175 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Econ Down Electricity shorts and bad infrastructure are destroying Indonesia’s economy AFP 8 ([http://afp. is likely to have hurt consumption. natural gas. the country's main driver of growth. 2008) Indonesia's economic growth is estimated to have slowed to 6. but analysts said soaring inflation.4 in May.com/apps/news?pid=20601091&sid=aPEZR3n2oV7M&refer=india] China.28 percent in the first quarter. 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.bloomberg. .1 percent in the second quarter.google. Indonesia’s economy expected to slow down Reuters 8 ([http://in. But private consumption is estimated to have grown at a slower pace.465 percent. partly due to slowing private consumption. boosted by high food and global oil prices. the finance minister said on Wednesday. coal and geothermal energy. The yield on the 9 percent bond maturing in September 2018 was little changed at 12. 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. Indonesia economy down. The measure dropped to 79.com/article/asiaCompanyAndMarkets/idINJAK4164820080709] UPDATE 1- Indonesian economy estimated to slow in Q2-fin min/ July 9. from 6.reuters. Philippines.com/article/ALeqM5irIDhDTPmi8OaCFKgmbG871FVVdQ] Indonesia orders weekend factory work due to blackouts: report/ July 15. Taiwan: Asia Local Bond Preview/ July 15. according to a Bank Indonesia survey released yesterday.1 from 82. Malaysia. according to the Inter Dealer Market Association. Sri Mulyani Indrawati said growth is likely to have been supported by strong exports and imports of capital goods. A reading below 100 indicates pessimists outnumber optimists. 2008) Indonesia: The consumer confidence index fell to a 32-month low in June on concern higher food and fuel prices will erode incomes. She did not elaborate. a central bank survey showed.consumer confidence Karunungan 8 (Lilian [http://www. 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.

2008) In 2007. The Christian Science Monitor [http://www.csmonitor. Indonesia had 4.4 billion barrels in proven reserves. the largest producer.html] Indonesia struggles to capitalize on its oil/ July 16. are estimated at 264 billion barrels.Gonzaga Debate Institute 2008 176 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Oil Up Indonesia has future supplies of oil Reuters 8 ([http://uk. Pertamina forecasts it will produce 160.000 bpd last year.reuters.000 barrels per day (bpd) of crude oil in 2008. and just below Ecuador. according to the CIA Factbook. Reserves in Saudi Arabia. Talisman to cooperate on Indonesia oil/ June 24. its nearest regional rivals. Indonesia has said it has 8. compared with 143.com/2008/0716/p07s01-woap.com/article/rbssEnergyNews/idUKJAK17079720080624] Pertamina. 2008) Most of Pertamina's energy blocks in Indonesia are already mature and need further investment to recover remaining oil reserves. Indonesia has future oil reserves Montlake 8 (Simon. That's more than either Malaysia and Vietnam.6 billion barrels of proven and potential oil reserves and about 182 trillion cubic feet of natural gas reserves. .

analysts say. . big and small. The Christian Science Monitor [http://www. these should be the best of times for resource-rich Indonesia.no future oil reserves Joshi 8 (Vijay." said Harry Su. Associated Press [http://ap.google. It said it will quit the Organization of Petroleum Exporting Countries because of declining oil reserves and investments. Indeed. whose land and cooperation is required for new oil facilities. Indonesia oil production down Montlake 8 (Simon. which has fueled public anger. are being held up as bureaucrats and investors wrangle over terms. Indonesia. "All the hoopla over F. Since 2004. see risk and uncertainty around every corner.D. Risky markets have resulted in a decline of oil production Montlake 8 (Simon. 2008) As long as foreign oil companies. the region's biggest oil producer. oil crises 'grave threats'/ July 7. head of research at BNP Paribas in Jakarta. 2008) With crude oil fetching over $140 a barrel. New toll roads and other infrastructure projects. Instead. The Christian Science Monitor [http://www.html] Indonesia struggles to capitalize on its oil/ July 16. even with the lure of sky-high crude prices.html] Indonesia struggles to capitalize on its oil/ July 16. Malaysia raised gasoline prices by 41 percent and diesel by 63 percent last month.I.com/2008/0716/p07s01-woap. Oil prices fell by $4 a barrel on Monday. The government says inflation is likely to cross 5 percent this year.Gonzaga Debate Institute 2008 177 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Oil Down Decline in oil production inevitable. it has been a net importer of oil. Falling output from aging oil fields and a paucity of major new finds has left it unable to meet its OPEC production quota. their economies have been hit hard by rising fuel prices. Indonesia.com/article/ALeqM5hIdcAiV0_qx0W33u7XUQOpzO_TlAD91PEUA00] Food.com/2008/0716/p07s01-woap. to attempt to extract a greater share of revenues. coming to Indonesia hasn't come through.csmonitor. referring to foreign direct investment. 2008) Although Malaysia. is also facing public unrest because of escalating food and oil costs. Oil investment is down NYT 5 (8-17) Pessimists say the bureaucracy is holding up many of the foreign investment pledges being made. these prices may persuade local authorities. analysts warn that Indonesia will struggle to pump more oil.csmonitor. the only Asian oil producer in the Organization of Petroleum Exporting Countries (OPEC). but remain at more than $140 a barrel. Iran and Nigeria are oil-producing countries. for example. Indonesia is quitting the cartel at the end of the year.

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.aspx] THE ALB 50: Asia’s Largest Firms/ June 30.com/news/features/25363/details. 2008) Jindal Stainless (JSL) is India's largest stainless steel manufacturer having manufacturing facilities at three locations . have become attractive centres for dealmaking firms from Europe. The company recently signed a joint venture agreement with an Indonesian mining company . JSL already has a stainless steel cold rolling complex in Indonesia and this project is a step towards becoming a global industry leader.Hisar. from continued liberalisation in Vietnam. . the UK and Australia. 2008) Meanwhile confluence of factors.Antam to develop a nickel smelting and stainless steel plant in Indonesia from early 2009. .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.legalbusinessonline.php?id=14705901] New seven wonders of the stock market/July 2. to resource and manufacturing booms (complemented by increasing political stability) in nations like Indonesia.com/finance/fullstory. Indonesia’s manufacturing industry is increasing ALB 8 (Asian Legal News [http://asia. Vizag and Orissa.Gonzaga Debate Institute 2008 178 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Diversification Up Indonesia expanding its steel and nickel industry STL 8 (Sify Technologies Limited[http://sify.

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. Oil and gas are crucial to Indonesia's economy. and speak 583 languages and dialects throughout the archipelago.Gonzaga Debate Institute 2008 179 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Diversification Down Indonesia’s economy relies on oil Abraham 0 (Kurt. social. political and economic life. they account for 36% of government revenue and 22% of export earnings. consisting of five major islands and about 30 smaller groups. . Indonesia's 205 million-plus people compose a wide array of ethnicities. Together. They also constitute 86% of primary energy supply. The nation is the world's largest archipelago.com/p/articles/mi_m3159/is_2_221/ai_60499090] Indonesia poised to lead Asian rebound . Business Net [http://findarticles.

75 percent last week to cope with the high inflation pressure. 2008) Indonesia's inflation accelerated to a 21-month high after the government increased fuel prices. The soaring global oil and food prices.Gonzaga Debate Institute 2008 180 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Inflation Up Inflation high in Indonesia Mingxin 8 (Bi. revised up inflation target from 6. 2008) Mulyani said that the inflation rate at the first semester was about 11. dollar was at 9. The increase in prices was less than the median 12.htm] Indonesian economy forecast to grow by 6.com/apps/news?pid=20601080&sid=auV8HCfKVHto&refer=asia] Indonesia's Inflation Accelerates to 21-Month High (Update2)/ July 1.com/english/2008-07/09/content_8517925. The government raised oil prices by an average of 27.2 % in 1st half /July 9. Consumer prices rose 11. rupiah exchange rates against one U. has put pressure on inflation in Indonesia. who used 2002 as the base year. .6 percent to 9. China View [http://news.4 percent in May.261 and the oil lifting counted from December 2007 to May2008 was on average of 937.03 percent. stoking speculation the central bank will raise its benchmark interest rate for a third straight month. after gaining 10.xinhuanet. which have started to rise since at the beginning of this year.S.6 percent forecast in a Bloomberg News survey of 20 economists.03 percent in June from a year earlier. 000 barrel per day. The biggest Southeast Asia economy. the Central Statistics Bureau said in Jakarta today.bloomberg.5 percent this year. Indonesian Central Bank increased its interest rate by 25 basis point to 8. Inflation at a 21 month high Unditu 8 (Aloysius [http://www. Indonesia. The agency changed its base year to 2007 from 2002 for calculating June's inflation.8 percent in May.

com/apps/news?pid=20601091&sid=aUWETdDDd7JI&refer=india] China. 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. ``We will use all instruments'' to control price pressures.Gonzaga Debate Institute 2008 181 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – UQ – Inflation Down Indonesia fighting inflation now Goodman 8 (Wes [http://www.html] Inflation puts brakes on Asia's economic growth/ July 3. Governor Boediono said. Taiwan: Asia Local Bond Preview/ July 10.bloomberg. Singapore. including China. . That's the reason we are seeing growth moderating." The poll showed that central banks in seven economies. 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. Indonesia. Indonesia. India and Thailand. input costs have gone up. 2008) "In recent times. interest rates have gone up and investment demand is expected to plateau.com/business/Economy/10225511. would raise interest rates this year to tackle inflation. the Philippines.gulfnews. Boediono said at the Jakarta Foreign Correspondents Club yesterday.

annual real economic growth was more or less consistently in the 6%-10% range each year during the 1970s. Journal of Contemporary Asia. 2002: 42-3). 37) In this context. consultant to the World Bank. Vol. economic growth was somewhat slower. Indonesia's rapid economic growth during the 1970s and 1980s seems remarkable. the country had become widely regarded as one of East Asia's so-called "miracle" economies (World Bank. the Organisation for Economic Cooperation and Development.Gonzaga Debate Institute 2008 182 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Oil K/T Economy Oil is critical to Indonesian exports. due mainly to the contracting effects of the two-stage collapse of international oil prices in 1981-82 and 1985-86. political economist. except for a couple of years during the mid-1970s. But. So strong was Indonesia's economic growth during the 1970s and 1980s that by the early 1990s. which are critical to growth Rosser 7 (Andrew. 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. During the 1980s. As Figure 1 shows. despite this massive natural resource wealth. but was still strong overall. the country's economy grew strongly during the 1970s and 1980s. worked for AusAID. the UK Department for International Development. 1993) .

1994). 1987. 1987. education. Vandewalle. 1997. it is suggested that state capacity is likely to be less skewed across the different functions mentioned above. 37) A second group of scholars has focused on the link between natural resource wealth and state capacity. states that receive regular and substantial amounts of "unearned" income in the form of.Gonzaga Debate Institute 2008 183 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – A2: Dutch Disease Intense oil revenue spurs private sector development Rosser 7 (Andrew. They have pointed to the economic problems of so-called "rentier" states--that is. For example. Journal of Contemporary Asia. political economist. for instance. consultant to the World Bank. Chaudhry. Luciani. 1974. tend to develop greater capacity in distributive functions such as social welfare. 1987. 1970. 1982. the UK Department for International Development. Vandewalle. These states. 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. 1994. This in turn. it is argued. . 1998). the Organisation for Economic Cooperation and Development. Tanrer. it is suggested. Skocpol. 1990. in turn facilitating the promotion of private sector development (Karl. Chaudhry. 1998). Karl (1997) has explained Indonesia's economic success compared to other "petro-states" such as Nigeria and Venezuela in these terms. worked for AusAID. Beblawi. Vol. reduces the potential for economic policy-making geared towards private sector development. In these cases. taxes on natural resource exports or royalties on natural resource production (Mahdavy. 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. First.

As a result. the oil price averaged about US$71/barrel.wordpress. Note that given the production of crude oil could be maintained at around 900.000 barrels/day during 2007. the increase in world oil prices in 2007 did not have a significant impact on the Indonesian inflation figure. compared to the 2006 inflation rate. 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.99 percent y-o-y in September 2007 on the back of seasonal price increases during the Idul Fitri holiday season. January 15.Gonzaga Debate Institute 2008 184 Scholars Lab 2nd Wave Oil DA’s 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.6 percent y-o-y. the 2007 inflation rate was relatively unchanged at 6. the increase in international oil prices actually benefited the state budget in 2007. And inflation in the foodstuffs component peaked at a rate of 12. . climbing around 52. http://danareksaresearch. however. Bank Indonesia’s consistency in carrying out its monetary policy kept inflationary pressures in check in 2007.8 percent during 2007. However. 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. 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. Indeed.com/2008/01/15/faster-growth-despite-rising-external-risks/) International oil prices (US WTI) were on an uptrend since the beginning of 2007. Over the year. Unlike in 2005.

" he said.org/2LWKUZVSV0) For the past eight months.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. "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. participation and transparency and finding ways to help them achieve their goals. the World Bank said Wednesday. "The progress is a reflection of a country whose political leaders." Hellman says. "Corruption is often said to be ingrained at all levels of the system in Indonesia." Hellman says corruption has been one reason Indonesia has struggled to mobilize domestic investment and attract foreign investment. "A decade into the reform era. "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. and now freedom of public information. freedom of the press.and it is hoped the economic and poverty reduction performance in the selected regions. a statement said. Hellman. 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. policymakers. The country has not been seen as ready to take the next step in terms of governance. has been in Jakarta co-ordinating an ambitious program to tackle corruption in Indonesia from the ground up." Hellman says. In addition to filing 233 lawsuits charging corruption." report co-author Daniel Kaufmann was quoted by AFP as saying in the statement.freedom of expression. professionalism. Yesterday.co. Yudhoyono's biggest obstacles remains getting the country's lumbering bureaucracy to enact his policies. 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. one of the Bank's leading anti-corruption experts. productivity and "the increase of discipline and work ethos. 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. More ev… NYT 5 (8-17) Analysts also say that one of Mr. he reiterated his pledge to eradicate corruption and shake up the government machinery. the senior governance advisor." .antara. he said he would seek changes in government salaries. 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. Joel Hellman. "We have been concentrating on finding those who are committed to improving accountability. to the Bank's Indonesia resident mission says. freedom of association.worldbank. http://go.Gonzaga Debate Institute 2008 185 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – A2: Corruption World Bank anti-corruption efforts are working now The World Bank 4 (April 8. civil society and private sector view good governance and corruption control as crucial for sustained and shared growth. Even Government ministers talk openly to the press of the problem of corruption. Corruption is widely seen as endemic and "extremely difficult to eradicate". transparency and participation at the local level in Indonesia . Indonesia bears all the hallmarks of a thriving democracy -.

com/index. is the potential disruption of oil from the Middle East brought about by control of the Indonesian shipping lanes. tin.” Indonesian society is in danger of completely unraveling.” Indonesia is key to stability and global commerce The Trumpet 98 (the Philadelphia Trumpet newsmagazine analysis of recent global geopolitical. however. Pacific Command. Indonesia was Asia’s largest producer of natural gas. In fact. there’s every temptation to interception [piracy] in the hope of making your millions. you can bet that Indonesia’s flow of oil to the world will cease. tin. Oil tankers are protectionless. “The stakes are huge. senior lecturer at the National University of Singapore. “In the present economic circumstances. the Australian dollar sank to a 12-year low.S. Standard & Poor’s downgraded the credit rating on an Indonesian bond rating to triple C-plus.456 million barrels per day. shaky Korean and Japanese banks trembled at the thought of further delays in restructuring the massive debts owed them by Indonesian companies. from a more stable single B-minus.S.S. cocoa and vanilla. Admiral Joseph Prueher.Gonzaga Debate Institute 2008 186 Scholars Lab 2nd Wave Oil DA’s 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. And if there are rogue elements from the [Indonesian] military involved. Of more concern.com/index. 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.” The May 11 WSJ shed more light on Indonesia’s importance to the world when it reported. copper. It is also a major exporter of gold.thetrumpet.thetrumpet. economic events and trends http://www. but also for global commodity supplies…. If anarchy collapses Indonesia into total chaos. “While the Indonesian unrest rocked global commodities markets. a rating that implies a default [or failure of the government to pay] is possible. sending prices for resources such as coffee. the world’s second-largest producer of crude palm oil. commander of the U. not only for Indonesia. 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. warships in the Pacific even needed permission to cross Indonesian waters to get to the Persian Gulf. then it’s a whole different story. On Friday [May 15]. over half of all international shipping travels through Indonesian waters. 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. and among the top five producers of coffee.php?page=help&q=about ) In a tense reality check for world powers. a large portion of world trade is at risk. . 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. economic events and trends http://www. In 1997. 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. with an OPEC production quota of 1. with the world’s largest single copper and gold mine operating on the island of Irian Jaya. 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. Add to that the fact that Indonesia is the world’s largest Islamic country and the fourth most populated nation. a large percentage of which goes to Japan. lying between Malaysia and Indonesia.php?page=help&q=about ) Indonesia is an oil-rich group of islands stretching across Southeast Asia and Oceania. U. and Thailand’s Finance Minister warned that the unrest in Indonesia could spark a fresh wave of selling in markets across the region. In that event. said this before a U. said.

If Islamic fundamentalists succeed in stirring up more trouble in Indonesia. In the case of the king of the south. Social unrest of the kind recently incited in Indonesia can quickly lead to a change-over in leadership. sparked by the discontent caused by the country’s economic crisis. As witnessed in the mid-1960s. a significant increase in violence by radical Muslims.000 lives. oil and water do mix: meaning. a close relationship forms between Indonesian leaders and Islamic militants.” the May 19 WSJ asks. to attract foreign investment. If it does. Indonesia deserves more credit than it has been given for the political reforms that have taken root in recent years.” Even after Suharto’s resignation. “King of the Indonesia is like a ripe plum. Marriott Hotel in Jakarta’s financial district and the September 2004 car bombing of the Australian Embassy. will trigger a similar convulsion…. Indonesia has had only one change in leadership: when Suharto wrested control from President Sukarno. in part.php?page=help&q=about ) Since its independence in 1945. Indonesia is key to the fight against terrorism Kern 5 (Soeren Senior Analyst for Transatlantic Relations at the Strategic Studies Group http://www.realinstitutoelcano. to name a few. Indonesian-style violence can be devastatingly destructive when it occurs. In the age of terrorism.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. the world has an enormous stake in encouraging the development of a secure. The world’s largest Muslim nation and the world’s third largest democracy. The stage is set for a sharp new political confrontation in Indonesia.W. to maintain the pace of economic reform and to enhance her security. 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. But it is also the heartland of the Jemaah Islamiyah terrorist movement. the world could be in for real trouble! (see sidebar. the present volatility may lead to a global conflagration.org/speeches/howard05. But the country faces major problems: a complicated transition from authoritarian rule to democracy.asiasociety. remain active in the streets of Indonesia.” p. only awaiting a spark to re-ignite them. continue to help Indonesia in its efforts to strengthen democratic institutions. It is important that the international community. Time will tell if. especially radical Islam. “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.23). and it is one of the few Muslim-majority nations in which Islam is not the state religion. camp.” Time magazine of May 25 soberly stated. The US and Australia believe Indonesia has the potential to be a global beacon of moderate Islam. in the absence of Suharto. it is about the most powerful weapon we can have against Islamic extremism in our part of the world. 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. Indonesia has more Muslims than all the Middle Eastern Arab states combined. not least the United States. . The economic problems and social unrest are the perfect vehicle to vault a new leader into power. “is whether the anti- Suharto movement. ethnic and sectarian violence resulting in thousands of deaths and hundreds of thousands of displaced persons. That upheaval in 1965 and 1966 claimed as many as 500. democracy and growth. complex and politically sensitive economic problems left from the 1997-98 financial crisis. the August 2003 attack on the J. and especially meaning the flow of Middle East oil through those perilous waters! Surely. prosperous and democratic Indonesia.html) As this audience probably appreciates better than most.com/index.Gonzaga Debate Institute 2008 187 Scholars Lab 2nd Wave Oil DA’s 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. a vastly devalued currency and violent social unrest aimed at wealthy minorities. The success of Indonesia is crucial to the ongoing fight against terrorism in our region. and continued armed rebellion in Aceh. economic events and trends http://www. The same thing happened to Germany in the 1930s. just waiting to be picked and added to the radical Islamic South. an al-Qaeda affiliate responsible for the October 2002 bombings in Bali. Germany of the 1930s and Indonesia of the 1990s have many parallels: high unemployment. The unseating of Suharto may well have been only the first step in eventually empowering a leader steeped in Islamic fundamentalism. control of the Indonesian waterways through which perhaps one-half of the world’s commerce flows. Hitler came to power through promises of social and economic reform. also in Jakarta. enormous forces of anarchy. With about 90% of its 240 million people followers of Islam. The vast majority of Indonesia’s Muslims have historically been noted for their moderation.thetrumpet. “The question now.

Nevertheless. there will not be political stability. If that were to happen. reform with prosperity and freedom with peace. when there was considerable infiltration of the Pakistani government and the military by militant Islamic forces. including the backlash against Suharto’s 32-year rule. That was the Pakistani model before September 11.Gonzaga Debate Institute 2008 188 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democracy Economic problems cause the rise of an Islamic authoritarian regime Rabasa and Haseman 2 (Angel Senior Policy Analyst. 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. Indonesia needs time to work out this delicate balance. and independent sectors of society under its control and repress groups it considers subversive. The fragile economy and a breakdown of order could generate more negative scenarios. The challenge of democratic reform in Indonesia is not to drift from one form of extremism to another. devolution with unity. the most likely model would be a military-technocratic government. the country will plunge into instability with huge economic costs and this may reverse democratic reform. but the military would prefer to stay in the background. competent government. Without unity. A second negative scenario could be an alliance of the military with political sectors. One such negative scenario would be a return to authoritarian rule. . with economic policymaking in the hands of nonpolitical technocrats and eventual return to formal civilian control. but it is unwise for others to push Indonesia too hard in this process. Without economic recovery. 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. political parties. New Delhi “Democratic Transition and Political Development in Post-Soeharto Indonesia” ) Unless democratic processes and institutions quickly take root and deliver results. There are some powerful factors that militate against this outcome. This scenario could precipitate the secession from Indonesia of areas in which Christians are a majority or a substantial minority. the emergence of new political and civil society forces. but to find the right balance for the coexistence of democracy with stability. Indonesia needs time to work out this delicate balance. The challenge of democratic reform in Indonesia is not to drift from one form of extremism to another. Without economic recovery. there will not be political stability. This government would try to bring the press. Only a catastrophic political collapse would compel the military to assume effective control of the government. or could result in civil war. such as one or more of the Islamic parties. the country will plunge into instability with huge economic costs and this may reverse democratic reform. the pendulum may swing back the other way.” As the name of this scenario suggests. 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. continued inability of the new democratic institutions to deliver stability. A third version of the scenario might be one that follows the “Burmese model. reform with prosperity and freedom with peace. New Delhi “Democratic Transition and Political Development in Post-Soeharto Indonesia” ) Unless democratic processes and institutions quickly take root and deliver results. and some of the provinces will become more restless. the pendulum may swing back the other way. at least in the short term. Without unity. 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. and the discredit suffered by the military and the security services as a result of their association with the Suharto regime. but to find the right balance for the coexistence of democracy with stability. but it is unwise for others to push Indonesia too hard in this process. and economic growth could generate a demand for the return of a strong ruler. and some of the provinces will become more restless. Any return to authoritarian rule must have the backing of the military. it would constitute a very repressive form of military rule in which the leaders try to isolate the country from Western influences. devolution with unity. 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.

which had been generated by domestic and international public pressure after the fall of Suharto.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. it would be unrealistic to expect the military to withdraw from its economic activities. The military is formally under civilian authority. no inexorable Javanese cultural logic that Indonesia can not establish a genuinely democratic system. beginning in areas where that structure is no longer needed. but is obliged to mount costly counterinsurgency campaigns that overextend the military’s resources. rather than from off-budget sources. In this scenario.Gonzaga Debate Institute 2008 189 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democracy The economy is key to Indonesian democracy Forrester 99 (Geoff. 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”) In the best-case scenario. In the area of civil-military relations. Magnis-Suseno’s optimistic outlook has one proviso. Military reform comes to a halt after the initial impetus for reform. democratic trajectory. There would also be some movement away from the territorial structure. He believes the economy is the deciding factor. It is economics. a greater proportion of the Indonesian military’s expenditures could be funded from the state budget. Asia & Associates Pty Ltd (GFA) is an Australian-based company specialising in political and economic analysis of Indonesia http://books. such as the island of Java. there is more effective civilian control of the military through better oversight of military affairs by the minister of defense and the parliament. He expects democracy to prevail. 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”) This second scenario builds on trends that are already evident. The pressure on the military inevitably leads to overreaction and human rights violations which. This scenario reflects the current situation in Indonesia and is therefore the most relevant to current policymakers. and military reform. and in part because ABRI has acknowledged its past errors and is now behaving with appropriate humility. but fails to make meaningful progress on economic. political. . If economic growth resumed and the necessary resources became available. in turn.google.” Jakarta has the military power to prevent the separatists from seriously threatening its control of these provinces. makes progress in resolving some of the critical problems in the economy. If Indonesia’s economy really breaks down. He asserts that there is no ‘natural law’. and satisfies demands for provincial autonomy without losing central control of its macroeconomic policy. Indonesian growth is critical to stability Rabasa and Haseman 2 (Angel Senior Policy Analyst. slows down. … the next ten months will be decisive. will for many years be a beggar among the nations – a grotesque outcome against what the military once set out to achieve. generate criticism by human rights advocates and strain Jakarta’s relationship with the United States and other Western countries. In the short term. but retains a decisive voice in national security decision making. The greatest challenge does not lie in the political field. Economic stability is critical to Indonesian political stability and civilian military oversight Rabasa and Haseman 2 (Angel Senior Policy Analyst. the establishment of democracy may remain a short summer nights dream. but there could be greater transparency in the operation of military businesses. 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. Indonesia continues to develop along a secular. 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. The structural problems in the Indonesian economy are not addressed. Indonesia continues on a democratic path.’ And yet he is optimistic. in part because there is such a strong yearning for it at all levels of Indonesian society.

atimes. The doctrine of dwifungsi. While many attempted to co-opt new democratic institutions to perpetuate their power.sg] Indonesia/ 2008) Even more impressive than the recovery of the economy is the success of Indonesia’s transition to democracy. In certain conflict-plagued regions. It is impossible to conceive of this democratic transition having succeeded without the withdrawal of the military from politics. have frequently teamed up to beat competing candidates who ran on a one-religion ticket. Even in the 1950s democracy was never as firmly rooted and stable as it has now become.Gonzaga Debate Institute 2008 190 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democracy – It’s Up Indonesia transitioned to a democracy Singh 8 (Daljit. is not taking Indonesia back to a place where it once was but rather it is taking it somewhere it has never been before. 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”) Indonesia’s painful progress toward democracy—and the military’ssupport in this process—has created opportunities for a closer rela-tionship between the U. Asia Times Online's Southeast Asia editor [http://www. head and vice head candidates. often representing respectively localities' Muslim majority and Christian minority populations. but Indonesia is yet to match the rates of growth that it enjoyed in the 1980s and 90s. According to a recent report in the Jakarta-based Van Zorge Report. local-level democracy is rewarding politicians who form religiously inclusive. melted away with surprising rapidity and lack of contestation.html] Behold Indonesia's democratic beacon/ October 19. Indonesia's peripheral populations are now less captive to the interests and abuses of local political heavies. 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. not exclusive. Indonesian democracy up Crispin 6 (Shawn. and Indonesian militaries. In a very real sense Indonesia has now moved beyond initial democratic transition and is now in a period of democratic consolidation.edu. who under Suharto often inserted themselves as gatekeepers to financial and natural resources through central government authority. Military reform is still very much a work in progress. local democracy is even having a healing effect.bookshop. 2006) Breaking with former strongman Suharto's top-down New Order regime. 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.com/atimes/Southeast_Asia/HJ19Ae02. . however.iseas. which only recently seemed destined to prevail for decades more. US relations strengthen democratic consolidation Rabasa and Haseman 2 (Angel Senior Policy Analyst. That is. coalitions. but the withdrawal of the military from politics and governance is now complete. Singapore: Insitute of Southeast Asian Studies [www. nearly 40% of local level incumbents have in recent years been booted from office at the ballot box. at least in the nation’s capital.S. The democratic transition.

S. U. including a global nuclear exchange. this is the best long-term guiding principle and vision. Similarly. leadership would help preclude the rise of another hostile global rival. gestures toward Russia. First.S. as is the durability of U.S. the United States meanwhile tends to treat less benignly countries governed by such elites and their favored institutions. Such a vision is desirable not as an end in itself. On balance. power because political liberalism constitutes a transnational movement that has penetrated most potential challenger states at least to some degree.democracy. measured by the degree to which its internal institutions and practices are liberal and the degree to which liberals influence foreign policy. 26. it will likely counterbalance the United States more consistently. If Americans want to preserve primacy -. In this way the power of transnational liberal identity is limited. primacy outweigh the costs for many non-Americans as well as for Americans -. simultaneously preserving not only its power but transnational liberalism where it can. U. RAND. in part because the Russian domestic regime is itself unsettled. But antiliberal elites tend to perceive a more malign United States and devote relatively more state resources to counterbalancing. The Washington Quarterly. power is a function of how politically liberal that state is. and the rule of law. Finally. allies. 2002 (John M. .S. n15 No coalition has formed to counterbalance U. US leadership is essential to prevent global nuclear exchange. such a world would have a better chance of dealing cooperatively with the world's major problems. free markets. enabling the United States and the world to avoid another global cold or hot war and all the attendant dangers.S.S. Assistant Professor of Government and Foreign Affairs at University of Virginia.3. U. Spring 1995 Under the third option. policies are unlikely to cause China to abandon counterbalancing. In turn. Should Russia end up with an antiliberal regime. Bush on issues such as the environment and missile defense may perturb and even anger U.their country must walk a difficult line. policies toward Russia can have a marginal effect on the fate of Russian liberalism: The more objectively threatening are U. but because a world in which the United States exercises leadership would have tremendous advantages. International Security.. such as nuclear proliferation. primacy. Political liberalism is an ideology that seeks to uphold individual autonomy and prescribes a particular set of domestic institutions as means to that end.and the benefits of U. 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. and low-level conflicts. The U. Unilateral moves by the administration of George W.S. How liberal a state is affects both how it responds to U. but should not drive them toward military counterbalancing. U.-Russian relationship is the least settled. Lexis) In this article I argue that the degree to which a state counterbalances U. They tend to interpret the United States as benign and devote few state resources to counterbalancing it. Liberal elites the world over tend to perceive a relatively broad coincidence of interest between their country and other liberal countries. and yet guarding against actions that appear imperialistic to foreign elites.S. power and policy and how the United States treats it. Second. Zalmay Khalilzad.S. threats of regional hegemony by renegade states. the liberals who govern the United States tend to treat other liberal countries relatively benignly.S.S. 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. leadership would therefore be more conducive to global stability than a bipolar or a multipolar balance of power system. the global environment would be more open and more receptive to American values -.S. B.Gonzaga Debate Institute 2008 191 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democracy Good—Heg A. the more Russian liberals lose domestic credibility and influence. Global spread of liberal democracy key to check counter-balancing – only way to preserve primacy. Owen.

“Are we doomed yet?” http://www. Taken together." To cause great harm to millions of people. if open access to and unlimited development of knowledge henceforth puts us all in clear danger of extinction. robots. In real terms. limit corruption. and other fields are expanding the power of individuals to cause harm. 11 and the anthrax scare these still sound like wacky Orwellian ideas to you. Democracy is the only way to address the root cause of terrorism Dr." He says that it is time to reconsider the open. "greater government intervention" in Americans' lives. “Winning the New Cold War on Terrorism: The Democratic-Governance Imperative. encoded as matter. Senior Fellow at the Hoover Institution. March 31. and quickly get out of control. Advances in biotech. and nanobots share a dangerous amplifying factor: They can self-replicate. As Sun Microsystems' chief scientist. imagine how they will sound the day a terrorist opens a jar of Ebola-AIDS spores on Capitol Hill. It will not work to just throw money at the problem in some new "Marshall Plan. however. "[D]espite the strong historical precedents. genetic engineering. attract investment and answer to their own people. A network of cameras positioned on street corners would nicely complement their vision of America during the 21st century. their proposals aim to gather information from companies and individuals and feed that information into government agencies. "Civil liberties are important for a democratic society. and flit from place to place as easily as dangerous ideas now travel between our minds.Gonzaga Debate Institute 2008 192 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democracy Good—Terrorism (1/2) A." Joy calls the new threats "knowledge-enabled mass destruction. levels of U. Terrorism causes extinction Pacotti. Glenn E. The problem is a more fundamental shortage: of the institutions and norms of democracy and good governance. That requires dramatic improvements in governance." . to reconfigure some aspects of democracy. In 1999.proposals that went from fringe ideas to policy options and talk-show banter in less than a year. superterrorism has the potential to eradicate civilization as we know it.com/tech/feature/2003/03/31/knowledge/index. Joy's perfectly reasonable conclusion is that we should relinquish "certain kinds of knowledge." Schweitzer and Dorsch are so alarmed that they go on to say. the time has arrived. then common sense demands that we reexamine even these basic. and these will not come without increased international incentives and assistance." No infusion of economic resources. enforce laws. which itself will move through the biosphere.but one bot can become many. 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). Dorsch. control crime. warned: "We have yet to come to terms with the fact that the most compelling 21st-century technologies -. Bill Joy.S. given the violence that is on the doorstep. we must get serious about fostering development that gives people hope and dignity and improves the quality of their lives. engineered organisms. 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. countries will not develop and the rage against the West will not subside. and founding co-editor of the Journal of Democracy. This is why we must not only substantially increase our foreign assistance budget. 2003 A similar trend has appeared in proposed solutions to high-tech terrorist threats. Specifically. Unless we help to develop states that collect taxes. writing for The Futurist. A bomb is blown up only once -. Larry Diamond. Schweitzer and Carole C. development assistance have fallen dramatically since the 1970s and especially since the end of the last Cold War. gave this warning in 1999: "Technological advances threaten to outdo anything terrorists have done before. they recommended an expanded role for the CIA. and nanotechnology -. provide education.pose a different threat than the technologies that have come before. chemistry. and the "honorable deed" of "whistle-blowing" -. March 2002 If we are serious about getting at the roots of international terrorism. dangerous knowledge can be copied and disseminated at light speed. 11 attacks have obviously added credence to their opinions. no matter how massive and sustained. If after Sept.salon. Stanford University." The Sept.” Institute for Global Democracy.robotics. an extreme person will need only dangerous knowledge.html. long-held beliefs. secure property rights. and it threatens everyone. Therefore. unrestrained pursuit of knowledge that has been the foundation of science for 300 years. In the information age. B. and this has many people worried.

We must ultimately undermine their capacity to recruit and indoctrinate new true believers. force. Stanford University. and founding co-editor of the Journal of Democracy.” Institute for Global Democracy. Larry Diamond. law enforcement vigilance and operational genius can contain an army of suicide bombers that stretches endlessly across borders and over time. . Senior Fellow at the Hoover Institution. With time.Gonzaga Debate Institute 2008 193 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democracy Good—Terrorism (2/2) The root cause of terrorism is non-democratic states Dr. 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. That requires getting at the root factors that generate breeding grounds for terrorism. But no amount of military force. “Winning the New Cold War on Terrorism: The Democratic-Governance Imperative. And one of the principal factors is chronically bad governance. we may substantially destroy and disrupt the existing global infrastructure of terrorism. vigilance and some luck.

Masters 3 (Edward.Gonzaga Debate Institute 2008 194 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democr K/T US Rel’s An authoritarian government collapses U. . While the Indonesian military will have a decisive voice in determining the pace and timing of a return to democratic government.usindo. in the face of rising economic nationalism. 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 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.S. but they would be confronted with a dilemma.org/publications/US- Indonesia_Commission_Report_Oct03.S.S. administration in the direction of sanctions and curtailment of ties with the TNI. Some Indonesians already speak nostalgically of the stability and economic progress of the Suharto era. domestic and international pressures will drive the U. and other Western policymakers would want to develop a package of incentives and sanctions to bring about a rapid return to civilian rule. still a substantial majority. to work its way out of the economic mess left by the Suharto regime. relations with the region.S. Indonesian relations Rabasa and Haseman 2 (Angel Senior Policy Analyst. are under challenge from a radical fringe which has grown significantly during the past five years. Maintaining Indonesian security is key to avert a shift to radical Islam and authoritarian rule which crushes relations with the U. 3) The nation is striving. U.S. If it fails it could revert to authoritarianism or chaos. http://www. The goal of the radicals is to capitalize on domestic vulnerabilities and international issues to win over or intimidate the moderate majority. U. The outcome of these three contests will be crucial to the future of Southeast Asia and U.S.pdf) Indonesia faces three critical challenges: 1) It is striving to consolidate a fragile democratic system with little experience and limited resources.S. Indonesia Commission Vice Chairmen. U. 2) Moderate Muslims.

" Washington's limited relations with the TNI may therefore be obstructing deeper intelligence sharing. which is fundamental for successful counterterrorism. the military has not fully handed over internal security responsibilities to the police and thus still "has the only real database on Islamic extremists.-Indonesia Military Relations in the Anti-Terror War/ May 23. 11. Furthermore. Georgia and the Philippines as recipients of direct U. Indonesia may well have joined Yemen. when investigations led to fresh discoveries of terrorist evidence in Indonesia. Had Washington not had the congressional ban on relations with the TNI. military training and aid for counterterrorism purposes. The region was identified as a hotbed of terrorists soon after Sept. Malaysia and the Philippines.S.org/terrorism/priority.S. 2008) First. .Gonzaga Debate Institute 2008 195 Scholars Lab 2nd Wave Oil DA’s 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.cfm] Priority Dilemmas: U. some practical security reasons: full cooperation with Indonesia would facilitate the crackdown on Southeast Asian terrorist networks.cdi.

S. a generation of TNI officers has missed out on U. 2008) Second. they argue.cdi. human rights. is likely the best way to transform the military with a notorious record of human rights abuses.Gonzaga Debate Institute 2008 196 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Relations – Democracy US Indonesia relations key to democracy Huang 2 (Reyko.cfm] Priority Dilemmas: U. and the rule of law in the next generation of TNI officials.S.-Indonesia Military Relations in the Anti-Terror War/ May 23. A resumption of the IMET for the Indonesian forces would not only help them rebuild its damaged reputation and credibility. Center for Defense Information Research Analyst [http://www. officials claim. and more an argument based on values and principles: stronger U. . U. it would also inculcate values of democracy. as well as on opportunities to befriend American officers who could have served as exemplars. Since Washington ended Indonesian participation in its International Military and Education Training (IMET) program in 1991. ties with the TNI.S.S. military and human rights education.org/terrorism/priority.

html?res=9805E2D6103FF931A2575BC0A9679C8B63] U. whose ascent was supported by the military. to Renew Relationship With Military In Indonesia/ August 12. dating back to the early days of the cold war. The Pentagon once had longstanding ties with the Indonesian military. 2001) The Bush administration plans to renew some American ties to the Indonesian military. after the relatively smooth coming to power of the new president. The New York Times [http://query. one of the most important but unstable countries in the region. 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.com/gst/fullpage. But relations have been circumscribed since the early 1990's over human rights abuses. administration officials say. Megawati Sukarnoputri. a vast archipelago that has been riven by separatist movements. has assumed new significance as the broader region stumbles through an unexpected period of economic downturn and political uncertainty. . in particular those that accompanied the secession of East Timor from the country three years ago. In re-establishing military ties. Indonesia is seen as pivotal for the stability of Southeast Asia and.nytimes.Gonzaga Debate Institute 2008 197 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Relations – Asia Stability US Indonesian relations key to solving conflict in Asia Perlez 1 (Jane. the Bush administration says it would like to help ensure the stability of the country.S. Critics of the plan to revive ties say America's past training of Indonesian troops did little to prevent the widespread abuses.

asp+%22indonesia+is+a+model %22&hl=en&ct=clnk&cd=3&gl=us] As the world's largest Muslim-majority country.com/documents/2087.iri. but the next question elicited a more surprising response.pdf) In 2004. demonstrating that Islam and democracy are not incompatible. IRI has worked to support the change to popular representation. to be sure. Indonesia held three sets of elections. and train political parties to address the concerns of voters. The firm establishment of democracy in Indonesia can be a beacon to the rest of the Muslim world. “Voters demonstrated their commitment to democratic principles and to holding leaders accountable.85.141. but they are on the margins. as I was reminded when I went to a Jakarta mosque shortly after the terrorist attacks of Sept. to judge by its track record.” said Dr. and I fully expected the men I interviewed after Friday prayers would be uncompromising in their views. 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. Should sharia be the law of the land? All said no: That would upset Indonesian Christians. nonprofit nonpartisan organization [http://209.aspx?id=68101] As the world's largest Muslim nation struggles with democracy. its latest election offers encouraging news/ 2003) Indonesians. Aid money in great quantities flows to supposed democratic incubators like Iraq and Afghanistan. including Muslims. Do your wives and daughters wear headscarves? Oh no. they said. . strengthen the country's electoral system. is far more likely to succeed. including for the first time a direct election of the president.Gonzaga Debate Institute 2008 198 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Democr K/T World Model Indonesia is key to global democracy The Carter Center 4 (“Annual Report 2003-2004”http://cartercenter.org/asia/indonesia. 11.” Indonesia key to democracy Caragata 3 (Warren. Should women wear headscarves. They're too hot. “The 2004 elections were a major step forward in Indonesia’s democratic transition. David Carroll. Indonesia is crucial to democratic progress throughout Southeast Asia and beyond.104/search?q=cache:SIBZnnhBx5EJ:www.net/page. They don't like them. Indonesia key to democracy IRI 3 (International Republican Institute. The world’s fourth largest country and home to the world’s largest Muslim population. There are fundamentalists. I asked? Everyone in the small group agreed. The presence of our observers helped build confidence in the electoral process.jewishtoronto. The mosque was supposedly one of the most radical in the city. Indonesia is a model for other Muslim countries undergoing the transition to democracy. are a generally tolerant people. journalist with Maclean's and Asiaweek[http://www. acting director of the Center’s Democracy Program. but Indonesia's democratic experiment. demonstrating an impressive strengthening of democracy in the country.

It was also Indonesia’s first year of living normally. At the same time Indonesia had finally moved beyond its decade-long. At the same time. stable and accountable government. 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. public expenditure and public investment are back to being at or near pre-crisis levels. freedom of the press.bookshop. Indonesia is now safely past its crisis in political stability.iseas. Economic growth. thankfully. legislative reform. Singapore: Insitute of Southeast Asian Studies [www. Indonesia. Indonesia is now no longer facing a security crisis with respect to terrorism. and the withdrawal of the military from politics — had finally come.bookshop. the steady improvement in confidence. Singapore: Insitute of Southeast Asian Studies [www.edu.Gonzaga Debate Institute 2008 199 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Stability – It’s Up Indonesia is stable Singh 8 (Daljit. 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. greaterautonomy and a fairer share of resources for the regions.iseas. Indonesia has reached a state of stability Singh 8 (Daljit.sg] Indonesia/ 2008) In 2007 the news wires had comparatively little to report from Indonesia. 2007 was Indonesia’s first year in a decade of being post-crisis. And. the ending of large-scale conflict. 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.edu. multidimensional crisis. although the threat of terrorism will never completely disappear. .sg] Indonesia/ 2008) By 2007 many of the things that have been so long awaited — democracy. had dropped off the radar screen of breaking news series and live reports from disaster sites.

This influence will be enhanced if Indonesia succeeds in its efforts to develop a viable and nonsectarian democratic system. political instability and drift in Jakarta have taken a toll on Indonesia and all of Southeast Asia. China. There are two additional factors of great importance today:• Indonesia has by far the world’s largest Muslim population.S. it exercises strong influence in Southeast Asia and plays a constructive international role. For long the anchor of ASEAN. Indonesia is of particular importance in the region.to help secure maritime transit in the region. So far. Sunda. Naidu. The world’s fifteenth largest and fourth most populous nation. investment.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. 600 vessels navigate the Strait of Malacca daily. hamper efforts to combat piracy and drug trafficking. and weaken a potentially constructive regional counterpoint to China. G. Sisodia.S. with more than 300 major U. Indonesia is one of the very few Muslim-majority nations in which Islam is not the state religion. the container security initiative (CSI). . • A stable and responsible Indonesia is critical to regional stability. A corner may have been turned with the election of Susilo Bambang Yudhoyono as president in 2004.S. 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. The US has developed a range of policies. two-thirds of the worlds liquefied natural gas passes through Southeast Asian Seas. firms represented in the country. and others to discuss security issues. U.google. http://www. carrying 25 % of world commerce and half the worlds oil.including the proliferation security initiative (PSI). It is the anchor of the Association of Southeast Asian Nations (ASEAN) and a key player in the ASEAN Regional Forum (ARF). C.usindo. Given its geographic position and stretch. Success ultimately depends on cooperation and coordination with other countries in the region. In short. and historically Indonesia’s Muslims have been noted for their moderation. Indonesia is home to an estimated $25 billion in U.Gonzaga Debate Institute 2008 200 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Reg’l Stability Indonesia key to Southeast Asian stability Sisodia and Naidu 5 (N. the ASEAN nations. V. the record is mixed. 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. hostile or unpredictable Indonesia would adversely affect U. interests and objectives. Seven of the worlds 25 megaports are in Southeast Asia.the US is increasingly concerned about Maritime security in the region. but his plans may yet be frustrated by political inexperience and determined opposition.S. Instability in Southeast Asia has already provided openings for Islamic radicalism. Indonesia is key to world stability Masters 3 (Edward. Including the oil and mineral sectors.straddling the sea lanes through which pass so much of the world’s trade.pdf) Indonesia is the pivotal state in Southeast Asia. the only organization in the Asia-Pacific region that brings the United States together with Japan. Indonesia Commission Vice Chairmen. and Lombok.org/publications/US- Indonesia_Commission_Report_Oct03. The cohesion and effectiveness of ASEAN have eroded significantly due to Indonesia’s preoccupation with domestic crises. stability in Indonesia is critical to that of the region as a whole. an unstable. tilt the international balance toward radical Islam. Institute for Defence Studies and Analyses http://books. S. complicate transit through strategic sea and air routes. Indonesian Islamic scholars have had a moderating impact on debate within the Muslim world on the relationship between religion and the state. and the regional Maritime security initiative (RMSI).

an unstable or disintegrating Indonesia would make the regional security environment more unpredictable and dangerous. If Indonesia’s democratic transition holds. This transition could have enormously important global consequences. and generate large-scale humanitarian demands on the international community.1 . A stable.realinstitutoelcano. Half of the world’s merchant fleet capacity passes through the Straits of Malacca. vast natural resources and economic potential. contribute to maintaining regional stability. Beyond that. Indonesia is critical to regional stability Rabasa and Haseman 2 (Angel Senior Policy Analyst. Australia.Gonzaga Debate Institute 2008 201 Scholars Lab 2nd Wave Oil DA’s Indonesia DA – Impacts: Reg’l Stability Indonesia is key to regional stability and strategic U. and deter potential Chinese adventurism. Moreover. The future of Islam. Its importance derives from well-known geopolitical factors. further regional integration based on democratic principles. Indonesia also constitutes Australia’s largest and most immediate regional neighbour. 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”) Indonesia has been described as the least known of the world’s most important countries.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. Australian Defence Minister Richard Campbell Smith said a stable Indonesia is a ‘top national priority’. since 80% of China’s imported oil passes through the Strait of Malacca. some argue. As the world’s fourth most populous nation. Indonesia is the anchor of the Association of Southeast Asian Nations (ASEAN) and a key player in the ASEAN Regional Forum (ARF). with a population and a land mass almost as large as those of the rest of Southeast Asia combined. but in countries such as Indonesia. Conversely. 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. and a strategic location straddling critical sea lanes and straits—all of which makes it the key to Southeast Asia’s security. Japan and others to discuss security issues. strong. Indonesia can cut off China’s access to oil from the Persian Gulf. Sunda and Lombok. interests Kern 5 (Soeren Senior Analyst for Transatlantic Relations at the Strategic Studies Group http://www. Japan and the US also view Indonesia as a bulwark against Chinese expansionism in South- East Asia. Indonesia exercises major influence in the region and occupies some of the most strategic real estate on earth. the only organisation in the Asia-Pacific region that brings the US together with China. will not be decided in its Arab heartland with its authoritarian and intolerant models of governance. 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. It has vast natural resources and is strategically located astride major sea lines of communication (SLOCs) between the Pacific and Indian Oceans. create opportunities for forces seeking to subvert the regional status quo. It is the world’s fourth most populous country and the largest Muslim-majority country. the third largest democracy and the only Asian member of the Organisation of Petroleum Exporting Countries (OPEC). where Islam has not jelled into a fundamentalist mold and where democracy remains an attainable prospect. For example. and democratic Indonesia could resume its leadership role in the Association of Southeast Asian Nations (ASEAN). it will be the world’s third-largest democracy as well as the largest secular democracy in the Muslim world. any attack on the Australian mainland would have to be staged through the Indonesian archipelago. And in case of a Taiwan crisis. Indonesia creates a strategic northern shield for Australia. Indeed.S.

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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.

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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.

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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.

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***Indonesia Answers***

With implementing the policy.Internal Link Turn: Dutch Disease Indonesia is oil dependant and vulnerable to price shocks Syarifuddin 7 (Ferry. http://www.id/web/en/Publikasi/Kertas+Kerja+dan+Materi+Seminar/Kertas+Kerja/library7. The recent domestic oil supply disturbances have reduced production while domestic oil consumption has been increasing. . it is expected that by 2025.Gonzaga Debate Institute 2008 206 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers.go. the paper shows that since 2004. and diversification by utilizing alternative energy including renewable energy. Economist. the government has pursued some efforts to increase energy conservation. Indonesia has been facing a serious oil and refinery product shortage. oil import is also raising which making Indonesia as one of net oil-importing countries since then. In order to preserve national energy. Consequently. efficiency.htm) Overall. 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. Bank Indonesia. the national energy requirement composition will reduce oil dependency as well as raising alternative energy including renewable energy used in all sectors. It is confirmed by several oil dependence measurements.bi. June 15.

from 6. raised retail petrol and diesel prices last week. noting that other sectors were performing well. http://www. It is only in Singapore and Korea. ‘It leads to a deterioration in the government’s fiscal accounts.html?_r=3&oref=slogin&oref=slogin&oref=slo gin) This week. Faltering investment in oil and gas showed up as a 2. http://www. "It's not really a broad-based slowdown.’ . Consumer price inflation there is at a six- year high. 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. Economists say consumers should be made to feel the pinch of $60-a.com/2005/aug/07/busi. inflation was still high at 7." said Chua Hak Bin.com/2005/08/17/business/worldbusiness/17indo. "I find it difficult to be too alarmist. ‘More importantly.Gonzaga Debate Institute 2008 207 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers. Taiwan also has rising inflation. that price pressures remain muted.barrel oil.html) Indonesian inflation hit a two-year high of 8. But optimists were encouraged by the data. the world's most populous Muslim nation.8 percent in March. August 17. after the government raised domestic fuel prices. even if that means they pay more for goods and transport. Indonesia reported that its economy slowed to 5.2 percent in the first quarter. senior regional economist at DBS Bank in Singapore." But pessimists caution that rising fuel prices are pushing up prices for other goods and services. Subsidies can have grave side-effects. Inflation in July rose to 7. The second-quarter figure was below the government target of 6 percent for the year. In the year through July.8 percent. Rising oil prices cause inflation Reuters 5 (Singapore.8 percent.newagebd.nytimes.9 percent drop in overall mining output.5 percent in the second quarter compared with the period a year ago. countries where fuel is not subsidised.Internal Link Turn: Inflation Rising oil prices cause inflation Arnold 5 (Wayne.’ said Rob Subbaraman of Lehman Brothers in Tokyo. it is not allowing market forces to work. Asian households and companies are not going to become more efficient in using energy. August 7. Malaysia. auguring ill for consumer spending. which has the region’s highest subsidies.

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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.

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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.

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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.

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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.

. 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”) Although Indonesia’s future is highly uncertain. 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. if not properly managed. a sustained economic recovery is not on the horizon. if she is reelected. The Megawati government has been unable to make headway on economic reform or to show much administrative competency. several conditions can be expected to hold for the next several years: First. has the potential to be greatly destabilizing. Third. The decentralization process. but the opposition parties have yet to develop any coherent strategies for governing the country. Will Megawati. Although the economy (i. which has been trying to recreate itself as a viable post-Suharto party) collapses. the political system will remain under stress. Second.5 percent in 2001. 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. the issue of the role of Islam in politics—which.Gonzaga Debate Institute 2008 212 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers. continue to be dependent on the Muslim political parties for her parliamentary majority? If the Golkar organization (the political instrument of the New Order. will Islam form the basis for a new political bloc? . the GDP) grew at a rate of 3. as already noted in this report.Impact T/O: Stability Instability in Indonesia is inevitable Rabasa and Haseman 2 (Angel Senior Policy Analyst.e.

the emergence of new political and civil society forces. 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. . and the discredit suffered by the military and the security services as a result of their association with the Suharto regime. at least in the short term. but should be considered a low-probability scenario at this stage. continued inability of the new democratic in-stitutions to deliver stability. including the back-lash against Suharto’s 32- year rule.Impact T/O: Democracy New authoritarianism is low probability Rabasa and Haseman 2 (Angel Senior Policy Analyst. However.Gonzaga Debate Institute 2008 213 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers. Nevertheless. the vast majority of whom are moderate and do not support the radicals’ agenda. 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”) A radical Islamic takeover is possible. One such negative scenario would be a return to authoritarian rule. and economic growth could generate a demand for the return of a strong ruler. progressive Islamization—defined as increased influence of Islam in politics and more overt manifestations of religiosity in public behavior—would be entirely possible. It would be opposed by secularists in the political establishment and in the military and probably by most Indonesian Muslims themselves. No radical take-over Rabasa and Haseman 2 (Angel Senior Policy Analyst. competent government. There are some powerful factors that militate against this outcome. The fragile economy and a breakdown of order could generate morenegative scenarios.

Advances in biotech. Terrorism causes extinction Pacotti.Gonzaga Debate Institute 2008 214 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers. Winter 2005/2006 THE BUSH Administration has argued that promoting democracy in the Islamic world. and quickly get out of control. "greater government intervention" in Americans' lives. In the information age.pose a different threat than the technologies that have come before. the time has arrived. and this has many people worried. they recommended an expanded role for the CIA. Without a coherent state grounded in a consensus on which citizens will exercise self-determination. "Civil liberties are important for a democratic society. if open access to and unlimited development of knowledge henceforth puts us all in clear danger of extinction. 11 attacks have obviously added credence to their opinions. their proposals aim to gather information from companies and individuals and feed that information into government agencies. 11 and the anthrax scare these still sound like wacky Orwellian ideas to you. and nanobots share a dangerous amplifying factor: They can self-replicate. however. an extreme person will need only dangerous knowledge. Instead. and the "honorable deed" of "whistle-blowing" -." To cause great harm to millions of people." Joy calls the new threats "knowledge-enabled mass destruction. In 1999. and nanotechnology -. robots. March 31. given the violence that is on the doorstep. spurring war and terrorism Edward D. As Sun Microsystems' chief scientist. These episodes are not just a speed bump on the road to the democratic peace. engineered organisms. because tyranny breeds violence and democracies co-exist peacefully. If after Sept. imagine how they will sound the day a terrorist opens a jar of Ebola-AIDS spores on Capitol Hill. 2003 A similar trend has appeared in proposed solutions to high-tech terrorist threats. unrestrained pursuit of knowledge that has been the foundation of science for 300 years. Pushing countries too soon into competitive electoral politics not only risks stoking war.html. rogue states and China will enhance America's security. Bill Joy. democracy is deformed. unfettered electoral politics often gives rise to nationalism and violence at home and abroad. sectarianism and terrorism. A network of cameras positioned on street corners would nicely complement their vision of America during the 21st century. Schweitzer and Carole C. 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. 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. “Are we doomed yet?” http://www. Mansfield and Jack Snyder. Glenn E. A bomb is blown up only once -. and flit from place to place as easily as dangerous ideas now travel between our minds. Joy's perfectly reasonable conclusion is that we should relinquish "certain kinds of knowledge. genetic engineering." Schweitzer and Dorsch are so alarmed that they go on to say.proposals that went from fringe ideas to policy options and talk-show banter in less than a year.but one bot can become many.com/tech/feature/2003/03/31/knowledge/index.salon." The Sept. long-held beliefs. "[D]espite the strong historical precedents. to reconfigure some aspects of democracy. chemistry. then common sense demands that we reexamine even these basic. and it threatens everyone. writing for The Futurist." . “Prone to Violence. warned: "We have yet to come to terms with the fact that the most compelling 21st-century technologies -. and transitions toward democracy revert to autocracy or generate chaos. Therefore. But recent experience in Iraq and elsewhere reveals that the early stages of transitions to electoral politics have often been rife with violence. Absent these preconditions.robotics. Taken together. which itself will move through the biosphere." He says that it is time to reconsider the open. encoded as matter. dangerous knowledge can be copied and disseminated at light speed. Dorsch.” The National Interest. Specifically. and other fields are expanding the power of individuals to cause harm.Democracy Bad—Terrorism Democratization causes instability and rollback. but it also makes the future consolidation of democracy more difficult.

“Can Democracy Stop Terrorism?” Foreign Affairs. September/October 2005 There is.Gonzaga Debate Institute 2008 215 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers. Terror in the Name of God. and terrorism. There is no reason to believe that a more democratic Arab world will. generate fewer terrorists. .AT: Democracy Solves Terrorism There is no statistical or empirical evidence showing democracy decreases terrorism F." Terrorism springs from sources other than the form of government of a state. Gregory Gause III. no solid empirical evidence for a strong link between democracy. Associate Professor of Political Science at the University of Vermont and Director of its Middle East Studies Program." because the transition to democracy "has been found to be an especially vulnerable period for states across the board. simply by virtue of being more democratic. In her highly praised post-September 11 study of religious militants. in either a positive or a negative direction. Jessica Stern argues that "democratization is not necessarily the best way to fight Islamic extremism. or any other regime type. in other words.

ethnic. The international community is therefore particularly concerned with the wider implications of ethnic conflicts around the world. The 20th century demonstrated that states could not simply remake the world or abbreviate historical transformations. “The Ethnic Question. leaving deep scars in the body politic and the collective psyche.84. University of London.Gonzaga Debate Institute 2008 216 Scholars Lab 2nd Wave Oil DA’s Indonesia Answers. or both – is absent. when ethnic conflict becomes violent. there is no single sovereign people and therefore no legitimacy for arithmetical majorities. the conditions for effective democratic government are rare: an existing state enjoying legitimacy. Massive human rights violations have been associated with ethnic conflicts. the state has split (as in Czechoslovakia). "Spreading democracy" aggravated ethnic conflict and produced the disintegration of states in multinational and multicommunal regions after both 1918 and 1989. . 1990 Finally.” p. Hobsbawm. Nor can they easily effect social change by transferring institutions across borders. Even within the ranks of territorial nation-states. consent. ranging all the way from genocide to apartheid to terrorism.Democracy Bad— Conflict Democratization Fails & Spurs Ethnic Conflict Eric J. or society has descended into permanent civil war (as in Sri Lanka). and the ability to mediate conflicts between domestic groups. When this consensus – be it religious. September/October 2004 While threatening the integrity of universal values. democracy has been suspended (as is the case with democratic institutions in Northern Ireland). a bleak prospect. Professor at the United Nations University. the campaign to spread democracy will not succeed. Ethnic conflict causes terrorism and genocide that goes global Rodolfo Stavenhagen.” Foreign Policy. meritus professor of economic and social history at Birkbeck. Without such consensus. it has a tendency to be particularly destructive. “Spreading Democracy: The World's Most Dangerous Ideas.