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WNDI 2008 1

Solar Power Neg Scholars – Palladium DA

Solar Power Neg Scholars – Palladium DA


Solar Power Neg Scholars – Palladium DA................................................................................................................1
Solar Power Neg Scholars – Palladium DA.................................................................................1
Palladium DA 1NC 1/3...............................................................................................................................................3
Palladium DA 1NC 1/3...................................................................................................................3
Palladium DA 1NC 2/3...............................................................................................................................................4
Palladium DA 1NC 2/3...................................................................................................................4
Palladium DA 1NC 3/3...............................................................................................................................................5
Palladium DA 1NC 3/3...................................................................................................................5
No palladium prices....................................................................................................................................................6
No palladium prices.......................................................................................................................6
No Russian palladium prices.......................................................................................................................................7
No Russian palladium prices.........................................................................................................7
A2: Russian inflation is out of control........................................................................................................................8
A2: Russian inflation is out of control..........................................................................................8
A2: Russian infrastructure turn...................................................................................................................................9
A2: Russian infrastructure turn...................................................................................................9
A2: Russian infrastructure turn.................................................................................................................................10
A2: Russian infrastructure turn.................................................................................................10
Link – hydrogen........................................................................................................................................................11
Link – hydrogen...........................................................................................................................11
A2: We’ll get palladium from somewhere else.........................................................................................................12
A2: We’ll get palladium from somewhere else..........................................................................12
A2: auto-industry will switch to platinum................................................................................................................13
A2: auto-industry will switch to platinum.................................................................................13
A2: We use silicon.....................................................................................................................................................14
A2: We use silicon........................................................................................................................14
High palladium prices bad – turns case/warming 2NC.............................................................................................15
High palladium prices bad – turns case/warming 2NC............................................................15
High palladium prices bad – Japan 2NC...................................................................................................................16
High palladium prices bad – Japan 2NC...................................................................................16
Russian econ ext – WTO accession good 2NC.........................................................................................................17
Russian econ ext – WTO accession good 2NC...........................................................................17
Russian WTO accession good – US/Russian relations FL.......................................................................................18
Russian WTO accession good – US/Russian relations FL........................................................18
WNDI 2008 2
Solar Power Neg Scholars – Palladium DA

Russian WTO accession good – econ.......................................................................................................................19


Russian WTO accession good – econ..........................................................................................19
WNDI 2008 3
Solar Power Neg Scholars – Palladium DA

Palladium DA 1NC 1/3


Palladium prices are low now – demand is down
Metal Markets “Gold, silver advance as platinum, palladium prices drop,” 7/2/08
Precious metals prices were mixed Wednesday in New York after the dollar weakened again and crude oil set new
prices records. August gold added $2 to $946.50 per troy ounce while September silver gained 14 cents to $18.43 per troy ounce, but
October platinum dropped $11.70 to $2,077 per troy ounce and palladium fell $2.05 to $4.70 per troy ounce. Platinum and
palladium prices were down on demand concerns after the top three auto manufacturers in the United
States, General Motors (NYSE: GM), Toyota (TYO: 7203) and Ford Motor (NYSE: F) all reported that sales were down in June.
Both platinum and palladium are used in the manufacture of pollution control devices for motor
vehicles.

Plan drives up palladium prices – just 2 satellites would use 25% of the world’s supply
Annalisa Weigel, Aeronautics/Astronautics & Engineering Systems, MIT. “Solar Power Satellites: Historical
Perspectives with a Look to the Future,” AIAA Space 2007 Conference & Exposition September 18-20, 2007
http://lean.mit.edu/index.php?option=com_docman&task=cat_view&gid=353&Itemid=1&mosmsg=You+are+trying
+to+access+from+a+non-authorized+domain.+%28www.google.com%29
The sheer size of the SPS structure simply cannot be overlooked. Each satellite required over 9 million pounds of
composite material. A construction rate of two satellites per year would consume 25% of the world’s
annual production of palladium. The required amounts for palladium and six other key resources exceeded U.S.
production rates at the time and required U.S. production expansion, foreign purchase, or expenditure of reserves. Substitute
materials would likely need to be developed to replace the requirement for gold. The rectenna site selection was a driver for schedule,
manpower, and equipment requirements. As the receiving apparatus for the microwave beam, environmental impact analysis cannot be
overlooked. The sheer size of the panel area also led to a high probability of multiple lighting strikes that could impart local physical
damage to the panels and propagating damage to circuitry.

Russia is the world’s largest palladium producer


Stillwater Palladium, Palladium mining company based in Montana. “World Production of Palladium,”
http://www.stillwaterpalladium.com/production.html
Sources of palladium production are quite limited. More than 80% of world palladium production is
concentrated in just two countries: the Russian Federation and South Africa. The Russian Federation alone accounts
for nearly half of total palladium supply. Russia has three sources of palladium: the Norilsk Nickel mine, Gokhran (Russia's
precious metals and gems reserve) and the Russian Central Bank. The state-owned trading monopoly, Almazyuvelirexport, handles
palladium shipments from Russia. The Norilsk-Talnakh region in the Russian Federation produces the majority of its palladium, and the
company NORILSK NICKEL is the world palladium industry leader. Because the palladium mined by this company falls short of
meeting the tremendously growing world demand, the Russian State has filled the deficit from large state stockpiles. The Norilsk-
Talnakh mines reached their highest level of production in the late eighties. Output fell at the beginning of the nineties, mainly due to
low level of investment as well as to lower productive capacity. PGMs grades were also lower due to the mining-out of massive sulphide
ores. Higher palladium prices in the late nineties prompted Norilsk Nickel to successfully invest in improving PGM recoveries, resulting
in increases in refined PGM production. The Russian Federation is also the only country which has held significant
stockpiles of palladium, although many believe that their level has decreased considerably. The actual level of Russian palladium
stockpiles is a state secret. Russian Government export policies have significantly influenced world palladium supply and prices
volatility.
WNDI 2008 4
Solar Power Neg Scholars – Palladium DA

Palladium DA 1NC 2/3


High palladium prices would increase Russian inflation – it would swamp current attempts
to regain control
Heather Connon, from Money Observer. “Waking giant,” Interactive Investor 6/27/08
http://www.iii.co.uk/articles/articledisplay.jsp?section=Markets&article_id=9937459
Oil is not Russia's only resource. The country is also among the world's largest producers of gold,
palladium and nickel and has substantial reserves of commodities ranging from coal to diamonds. Minerals and mining is
the next largest stock market sector, accounting for a fifth of total market capitalisation. The soaring
income from these commodities is also helping finance an investment boom as the authorities bid to
reverse decades of under-investment in the country's infrastructure. Roland Nash, head of research and chief
strategist at Renaissance Capital, has lived in the capital since 1994. He says net investment has been negative since the break-up of the
Soviet Union, leaving the average age of its assets older than they were then: "With the huge wealth in the Stabilisation fund, the
debate is whether to invest that money in infrastructure. The problem is that this would fuel
inflation." Inflation is one of the biggest problems facing Putin, who has just moved from the post of president to
prime minister, and his successor Dmitry Medvedev. At almost 15%, it is already higher than in any other
developing market and, experts fear, rising sharply. That is not just because of rising food and fuel prices - although,
with food accounting for 40% of the average Russian's spending, it is a key factor - but also because of labour constraints. Russia's
population is in decline and male life expectancy averages just 58 years, leading to skill shortages. That is partly alleviated by immigrant
labour - some estimate there are as many ?as three million foreigners in Moscow alone - but is also pushing wages sharply higher.
Putin has made it clear that he is prepared to see the rouble rise further to control inflation, rather
than rein back his commitment to infrastructure spending. Huge amounts of that are needed: road and rail transport
networks are extremely poor, while the housing stock is outdated and in poor condition. Investment spending has been doubling in
recent years, with the bulk of it going on roads and airports.

Increasing inflationary pressure would cause wide scale revolt – current inflation already
has Russia on the brink
Tom Lasseter, “Russia worries about its high inflation,” McClatchy Newspaper July 17, 2008
http://www.mcclatchydc.com/164/story/44620.html
Larissa Vasilyeva wound her way through a bustling outdoor food market in a working-class neighborhood in southwest Moscow, tallying in her head the
rubles and kopecks she had left to spend for the week and wondering how much more food she should buy. A year ago, Vasilyeva said, she spent about
1,500 rubles a week on groceries, some $59 at the time. Now, she spends 2,000 to 2,500, about $107 at the high end. That's steep for a country in which the
average monthly salary was about $720 in May, according to official statistics. "We
have practically nothing left to buy clothes," said
Vasilyeva, a retired economist. "People are very unhappy about it . . . there may be a political revolt." Vasilyeva
knows firsthand what mountains of statistics show: Underneath the booming Russian economy, fueled by large
supplies of oil and natural gas, inflation is slamming many ordinary Russians. While the strengthening ruble
has helped — it's gained some 9 percent against the dollar since last July — inflation shows no sign of slowing. Inflation
last year in Russia was 11.9 percent, according to state statistics. In the United States, where inflation concerns are rampant, that figure
was just under 3 percent in 2007. "The impact is serious, it's one of the most difficult problems we have,"
said Tatiana Stanovaya, the head analyst at the Center for Political Technologies, a Moscow research center. "If the prices continue
rising, the ruling power risks losing the confidence of a very large part of the population." The Russian
Finance Ministry said last month that it was going to be difficult to keep inflation at its target of 10.5 percent this year. The
economic pressure has further highlighted the dramatic difference between the nation's wildly affluent nouveau
riche — often made wealthy by natural resources or connections to the government — and everyone else. "Frankly
speaking, I haven't felt it," said a Russian named Georgi, wearing Armani sunglasses, a Dolce & Gabbana shirt and twirling the key to his BMW. He was shopping at a market in
central Moscow, not far from the Kremlin and Red Square, which are next to Moscow's Lamborghini and Maserati dealerships. Georgi declined to give his family name, saying that
he didn't want to be identified publicly. But lower and middle-class Moscovites are hurting. Official statistics show that the price of a "bread basket" of 11 different food items
jumped by about 33.65 percent from 2006 to last month. And price increases may be far higher, many Russians say. Vasilyeva said that a liter of milk that cost her 15 rubles about a
year ago now cost 25 and butter was almost twice as expensive. FBK Co., a business consulting firm in Russia, said in an assessment in mid-July that because of high food costs,
those who lived below the poverty line would face inflation of at least 25 percent this year. Alarmed by the numbers, Russian officials have raised pensions and government salaries.
Inflation is particularly troublesome for the legacy of Prime Minister Vladimir Putin, who during his eight years as president trumpeted the progress made in the country since its
economic collapse in 1998. He went out of his way to address the problem as he planned the transition from president to prime minister earlier this year. "I'm perfectly aware of
everything to do with inflation, price growth and so on," he told a meeting of the State Council in February. But, Putin said, income and pensions had risen by some two-and-a-half-
fold during his eight years in office. The ruling party, United Russia, which Putin heads, recently proposed to the Duma that the government hand out debit cards giving needy
Financial analysts say that while there are some problems
families 12,000 rubles of credit — about $517 — each month to buy groceries.
with the Russian economy, it's important to remember that there are a lot of strengths — such as quickly
growing gross domestic product and vast supplies of natural resources — and the Soviet Union disintegrated in 1991, less than 20 years ago. "It's hard to
say now how normal the state of things is, and how well we're developing, because so little time has passed," said Polina Lazich, a senior analyst at AK Bars
Finance, an offshoot of a large Russian bank. While the nation's economy has experienced tremendous growth since Putin's first year as president in 2000,
some Russians struggling to make ends meet have begun to question the government's abilities. "The people think that the government is not coping with
inflation," said Elena Shumnova, who was shopping recently in a working-class Moscow market. "They criticize the government between themselves."
Yevgeni Pashintsev, another shopper there, agreed. "The government isn't dealing with inflation. It seems like it can't," he said, walking past stands of fruit
and vegetables.
WNDI 2008 5
Solar Power Neg Scholars – Palladium DA

Palladium DA 1NC 3/3


Nuclear war
Steven David, Prof. of political science at Johns Hopkins, 1999, Foreign Affairs
If internal war does strike Russia, economic deterioration will be a prime cause. From 1989 to the present, the
GDP has fallen by 50 percent. In a society where, ten years ago, unemployment scarcely existed, it reached 9.5 percent in 1997 with
many economists declaring the true figure to be much higher. Twenty-two percent of Russians live below the official poverty line
(earning less than $ 70 a month). Modern Russia can neither collect taxes (it gathers only half the revenue it is due) nor significantly cut
spending. Reformers tout privatization as the country's cure-all, but in a land without well-defined property rights or contract law and
where subsidies remain a way of life, the prospects for transition to an American-style capitalist economy look remote at best. As the
massive devaluation of the ruble and the current political crisis show, Russia's condition is even worse than most analysts feared. If
conditions get worse, even the stoic Russian people will soon run out of patience. A future conflict would quickly draw in Russia's
military. In the Soviet days civilian rule kept the powerful armed forces in check. But with the Communist Party out of office, what little
civilian control remains relies on an exceedingly fragile foundation -- personal friendships between government leaders and military
commanders. Meanwhile, the morale of Russian soldiers has fallen to a dangerous low. Drastic cuts in spending mean inadequate pay,
housing, and medical care. A new emphasis on domestic missions has created an ideological split between the old and new guard in the
military leadership, increasing the risk that disgruntled generals may enter the political fray and feeding the resentment of soldiers who
dislike being used as a national police force. Newly enhanced ties between military units and local authorities pose another danger.
Soldiers grow ever more dependent on local governments for housing, food, and wages. Draftees serve closer to home, and new laws
have increased local control over the armed forces. Were a conflict to emerge between a regional power and Moscow, it is not at all clear
which side the military would support. Divining the military's allegiance is crucial, however, since the structure of the Russian
Federation makes it virtually certain that regional conflicts will continue to erupt. Russia's 89 republics, krais, and oblasts grow ever
more independent in a system that does little to keep them together. As the central government finds itself unable to force its will beyond
Moscow (if even that far), power devolves to the periphery. With the economy collapsing, republics feel less and less incentive to pay
taxes to Moscow when they receive so little in return. Three-quarters of them already have their own constitutions, nearly all of which
make some claim to sovereignty. Strong ethnic bonds promoted by shortsighted Soviet policies may motivate non-Russians to secede
from the Federation. Chechnya's successful revolt against Russian control inspired similar movements for autonomy and independence
throughout the country. If these rebellions spread and Moscow responds with force, civil war is likely. Should Russia succumb
to internal war, the consequences for the United States and Europe will be severe. A major power like Russia
-- even though in decline -- does not suffer civil war quietly or alone. An embattled Russian Federation might provoke
opportunistic attacks from enemies such as China. Massive flows of refugees would pour into central and western
Europe. Armed struggles in Russia could easily spill into its neighbors. Damage from the fighting, particularly
attacks on nuclear plants, would poison the environment of much of Europe and Asia. Within Russia, the
consequences would be even worse. Just as the sheer brutality of the last Russian civil war laid the basis for the privations of Soviet
communism, a second civil war might produce another horrific regime. Most alarming is the real possibility that the violent
disintegration of Russia could lead to loss of control over its nuclear arsenal. No nuclear state has ever fallen victim
to civil war, but even without a clear precedent the grim consequences can be foreseen. Russia retains some 20,000 nuclear
weapons and the raw material for tens of thousands more, in scores of sites scattered throughout the country. So far, the
government has managed to prevent the loss of any weapons or much material. If war erupts, however, Moscow's already
weak grip on nuclear sites will slacken, making weapons and supplies available to a wide range of anti-
American groups and states. Such dispersal of nuclear weapons represents the greatest physical threat America now
faces. And it is hard to think of anything that would increase this threat more than the chaos that
would follow a Russian civil war.
WNDI 2008 6
Solar Power Neg Scholars – Palladium DA

No palladium prices
Palladium prices are down – low US demand
Daily Times, “Oil prices spike as Iran N-row returns to haunt market,” 8/3 2008
http://www.dailytimes.com.pk/default.asp?page=2008%5C08%5C03%5Cstory_3-8-2008_pg5_23
World oil prices faced a roller coaster ride this week, tumbling on US demand concerns before rocketing higher on resurgent fears about
the Iranian nuclear energy crisis, traders said. Some commodities fell in value as poor US economic growth data
reignited concerns about slowing demand for raw materials from the world’s biggest economy. Oil: Oil prices stormed
higher Friday after Washington set the weekend as a deadline for key crude producer Iran to reply to an international offer of incentives
for a freeze in its nuclear drive. “We expect a response this weekend,” Gonzalo Gallegos, a State Department spokesman, told AFP
without specifying Saturday or Sunday. In reaction, New York crude leapt as high as $128.60 per barrel and London Brent oil soared as
high as 127.94. Iran is the world’s fourth-largest crude oil producer and tension over its nuclear programme helped push crude prices to
record highs above $147 a barrel on July 11. Oil prices had tumbled on Thursday and earlier Friday after weaker-than-expected US
growth figures stoked fresh worries about the outlook for global energy demand. Oil prices began the week higher, rallying on Monday
after militants attacked a Royal Dutch Shell pipeline in Nigeria, leading the Anglo-Dutch energy giant to reduce output. The market
reversed direction on Tuesday after a report that US gasoline consumption fell last week for the 14th week in a row, according to credit
card firm Mastercard. But prices rebounded by more than four dollars Wednesday on news of an unexpectedly sharp decline in US motor
fuel stockpiles. The US government’s Department of Energy said that gasoline or petrol inventories dropped by 3.5 million barrels in
the week ending July 25, overturning market forecasts for a gain of 400,000 barrels. The news came amid the so-called US driving
season — when many Americans hit the roads for their summer holidays pushing up demand for motor fuel. By Friday, New York’s
main oil futures contract, light sweet crude for September delivery rose sharply to $126.76 a barrel, from $124 a week earlier. Brent
North Sea crude for September climbed to $126.20 from $125.02. Precious metals: Precious metals prices were held back by the
strengthening US currency, which weighs on demand for dollar-priced goods because they become more expensive for buyers holding
weaker currencies. “Dollar strength and improved US equity sentiment triggered further bouts of speculative selling in commodities,”
said metals analyst James Moore at TheBullionDesk. On the London Bullion Market, gold fell to $912.50 per ounce at Friday’s late
fixing from $920.50 a week earlier. Silver firmed to $17.59 per ounce from $17.55. On the London Platinum and Palladium Market,
platinum decreased to $1,675 per ounce at the late fixing on Friday from $1,726. Palladium slipped to $367 per ounce from
$383.

Decreasing demand has palladium prices at their lowest


Reuters, 8/1 2008 http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=58503&sn=Detail
Platinum and palladium
prices have fallen over five percent on Friday, sliding to the lowest levels in six months,
due to declining demand. Platinum slipped more than 5 percent on Friday to $1,658.50 an ounce, its lowest level since January
25, amid fears over softening demand. Palladium also slid more than 5 percent to its lowest level since December 2007, tracking its
sister metal. The moves reflected a decline across the precious metals as the dollar firmed in the wake of U.S. jobs data and oil prices
softened. Spot platinum <XPT=> fell to $1,667.50/1,687.50 an ounce at 1243 GMT from $1,749.50/1,769.50 late in New York on
Thursday. Spot palladium also fell more than 5 percent to $356.00 an ounce, a seven-month low. It was later at $359.00/367.00 an ounce,
against $379.50/387.50 late in New York on Thursday.

Palladium prices are going down now – oil and demand


Harvey 7/7/08 (jan, reuters, “Gold slides as dollar firms, oil slips”)
While in the short term weaker oil prices are pressuring gold, in the longer run near-record crude prices are seen as a
major supportive factor for the precious metal. "Oil prices at these levels should anchor precious metal investment
demand as investors seek portfolio protection against rising global inflation expectations," said Standard Bank analyst Manqoba
Madinane in a note. In fundamental news, London-based ETF Securities said the amount of gold it holds to back its Physical Gold
exchange-traded fund has risen 15 percent in the last week to a record 1.459 million ounces. The rise reflected gains across its physically
backed precious metals ETFs, with its platinum and palladium holdings also rising to new records and silver ticking up 1 percent.
Platinum group metals prices are also sliding, with platinum shedding 1.5 percent to a one-month low
and palladium just under 1 percent weaker, as investors took profits after the metals' recent gains,
amid fears demand may slacken. The PGMs are chiefly used in the manufacture of autocatalysts. Investors fear that
falling car sales as the U.S. ecoonomy falters could hit PGM consumption hard. "Fears over weaker
auto demand impacting PGM demand, as well as weaker gold prices, have pulled down platinum," said
Fairfax investment bank analyst John Meyer. "Despite the weaker pricing, producers remain under considerable pressure due to the
power shortages in South Africa," he added.
WNDI 2008 7
Solar Power Neg Scholars – Palladium DA

No Russian palladium prices


Russian palladium production is down now
Reuters, “Russia's Norilsk H1 nickel output up, palladium down,” 7/31, 2008
http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKWLA738220080731
Russian metals giant Norilsk Nickel (GMKN.MM: Quote, Profile, Research) said on Thursday nickel
output rose 13.7 percent to 143,407 tonnes in the first half of 2008 from the same period in 2007. Norilsk
said in a statement palladium output declined by 5.5 percent to 1.438 million ounces. Sister metal
platinum output was 338,000 ounces, down 7.1 percent from year-ago levels. Copper output rose by 3.1
percent to 208,046 tonnes. (Reporting by Aleksandras Budrys, editing by Robin Paxton)

FYI – Norilsk is Russia largest palladium producer


WNDI 2008 8
Solar Power Neg Scholars – Palladium DA

A2: Russian inflation is out of control


Russian inflation is declining, but even a short-term link triggers our impact – rates have to
be lower every month to stabilize the economy
Interfax, “Inflation in Russia Won't Exceed 2007 Level This Year,” 7/28, 2008
http://www.istockanalyst.com/article/viewiStockNews+articleid_2444545~title_Inflation-in-Russia.html
Inflation in Russia this year won't exceed the level of 2007, when consumer prices rose 11.9%, Arkady
Dvorkovich, an assistant to the Russian president, told journalists on Monday. Inflationary rates in July
were already lower than they were in the same period of last year following rapid growth in consumer
prices in the first half of 2008, he said. "Overall inflationary dynamics are contracting and inflation
should not exceed the 2007 level at the end of the year," he said. Dvorkovich admitted that high inflation
remains the biggest short- term risk for the Russian economy, while accumulated inflationary potential
will likely make it difficult to achieve deflation in the next few months. "The Central Bank has done
everything it can. The money offering growth rates have declined and their further reduction could
have a negative impact on economic growth and liquidity on the market," he said. "It is important now
that in each remaining month inflation is lower than in the same period of 2007. This will be a sufficient
signal that the situation has improved," Dvorkovich said.

Russian inflation rates are lower than this time last year
AFP, “Kremlin warns of Russian inflation risk,” 7/28, 2008
Kremlin adviser Arkady Dvorkovich on Monday warned inflation was Russia's biggest short-term economic risk as the government
upped its forecast figure for 2008 to 11.8 percent. "Inflation is the biggest short-term risk" to the economy,
Dvorkovich told reporters in Moscow. "But inflationary pressures are going down. We expect it not to exceed
last year's level" of 11.9 percent, he added.
WNDI 2008 9
Solar Power Neg Scholars – Palladium DA

A2: Russian infrastructure turn


They have ZERO evidence proving that Russia needs MORE money for infrastructure –
Revenue from high oil prices solves their infrastructure turn – their author
Shigeo Katsu, World Bank Vice-President for Europe and Central Asia. “Meeting Russia’s Infrastructure Gap,”
Sep 2007
http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTPROGRAMS/EXTTRADERES
EARCH/0,,contentMDK:21481768~menuPK:64001880~pagePK:210083~piPK:152538~theSitePK:544849,00.html
Against this background, Russia faces the obvious need to develop and upgrade her infrastructure, such as roads, bridges,
airports, electricity, water supply and sanitation, to enable producers to get their goods to market, to spur economic growth, and to
provide education, health care and adequate living conditions for all, including the elderly. One need only travel on the roads around
Moscow or St. Petersburg to see how the numbers of motor vehicles have doubled, some even say quadrupled, since the transition and
the strain that is putting on the road infrastructure that Russia inherited from Soviet times. With its abundant oil and gas
revenues, Russia has a single advantage today that other countries would envy. But international experience
with infrastructure finance suggests that this is no reason for complacency. Challenges abound, even in cash rich countries.

This means there’s only a risk of our inflation scenario and no risk of their turn – raising
palladium prices causes an influx of cash beyond what is necessary to fund infrastructure
projects – guarantees short-term economic collapse – that’s Connon and Lasseter

Our impact happens quicker – Russian inflation is decreasing now but just one month of
higher rates triggers the impact
Interfax, “Inflation in Russia Won't Exceed 2007 Level This Year,” 7/28, 2008
http://www.istockanalyst.com/article/viewiStockNews+articleid_2444545~title_Inflation-in-Russia.html
Inflation in Russia this year won't exceed the level of 2007, when consumer prices rose 11.9%, Arkady
Dvorkovich, an assistant to the Russian president, told journalists on Monday. Inflationary rates in July
were already lower than they were in the same period of last year following rapid growth in consumer
prices in the first half of 2008, he said. "Overall inflationary dynamics are contracting and inflation
should not exceed the 2007 level at the end of the year," he said. Dvorkovich admitted that high inflation
remains the biggest short- term risk for the Russian economy, while accumulated inflationary potential
will likely make it difficult to achieve deflation in the next few months. "The Central Bank has done
everything it can. The money offering growth rates have declined and their further reduction could
have a negative impact on economic growth and liquidity on the market," he said. "It is important now
that in each remaining month inflation is lower than in the same period of 2007. This will be a sufficient
signal that the situation has improved," Dvorkovich said.
WNDI 2008 10
Solar Power Neg Scholars – Palladium DA

A2: Russian infrastructure turn


Infrastructure projects funding by natural resource revenue spikes increases inflation –
Azerbaijan proves and the IMF concludes
Rovshan Ismayilov, “Is Bigger Better For Azerbaijan’s Budget?” 5/13/08
http://www.eurasianet.org/departments/insight/articles/eav051308a.shtml
It’s a question that other countries in the South Caucasus would love to ask: How best to use a 42-percent
increase in state revenues? Surging oil prices have kicked off a debate in cash-rich Azerbaijan about
spending practices and inflation that analysts say highlights dangerous pitfalls in the country’s budget
planning. On May 2, parliament revised Azerbaijan’s state budget to accommodate rising oil and gas revenues. At roughly $4.6
billion (3.8 billion manats), oil and gas revenues from Azerbaijan’s State Oil Fund (SOFAZ) are up six and a half times compared with
2007. The income accounts for 87.3 percent of the fresh budgetary funds. As a result, state spending is up by 30 percent
to 11.6 billion manats or roughly $14 billion, while revenues have surged by 42 percent to 10.5 billion manats, or about $12.7 billion. The state budget
deficit, now at about $2.7 billion, has been reduced by half. The government has indicated two priorities for the new budget: various government
infrastructure projects and the armed forces. Infrastructure spending now accounts for close to $2 billion (a 53.3 percent increase from the original 2008
budget), while military spending increased by 31.8 percent to close in on $2 billion. By comparison, expenditures on education, health care and other social
welfare categories increased by a mere 10 percent. With current oil prices at just under $124 per barrel, that spending is expected to only increase. Analysts
in Baku, though, question the efficiency of the government’s spending strategy and its heavy reliance on the State Oil Fund. Inglab Akhmadov, director of
the Public Finance Monitoring Center, calls the government’s decision to revise the budget at mid-year "not a normal practice," and one that could
contribute to inflation. The revision is the third such measure for the last three years. The increased use of money from the State Oil Fund "is even less
normal," he charged. "At the beginning of the year, we criticized SOFAZ transfers to the budget for making up 14 percent of all government revenues. Now
the number has reached 36 percent," Akhmadov said. The Fund, set up in 1999 to oversee government usage of revenue from oil and gas sales, has been
closely watched as an indicator of what attempts are being made to diversify Azerbaijan’s economy away from its dominant energy industry. "It is a very
serious problem when the government does not put any limit on borrowing from the Oil Fund and everything depends on the government’s appetites,"
commented Akhmadov. Rasim Huseynov, an economic analyst for the pro-opposition Turan news agency, agrees. "There is no clear plan on how to spend
the revenues and the problem will get worse in the future as revenues increase," Huseynov said. Azerbaijan’s lack of a "budgetary culture" – the proposed
revised budget passed without amendments or debate – adds to that concern, he noted. The lack of discussion meant that consideration of what the hike in
government spending will mean for inflation was largely absent. The government has conceded that it will not be able to keep annual inflation within the
previously targeted 13 percent – 14 percent range, but has attributed the price increase to a worldwide surge in prices for consumer goods and food.
Independent experts, who dispute
According to the State Statistics Committee, inflation stood at 8 percent for the first three months of 2008.
the official numbers, however, predict that the expanded budget could contribute to an annual inflation rate of
more than 20 percent for 2008. Inflation, noted the Public Finance Monitoring Center’s Akhmadov, "is really a major
challenge for the government. And so far, I do not see a clear analysis of the inflationary picture by the government. So far,
the government just spurs inflation by increasing spending." [The Public Finance Monitoring Center has received
funding from the Open Society Institute – Assistance Foundation Azerbaijan, a member of the Soros Foundations network.
EurasiaNet.org is also part of the Soros Foundations network, though operates as a distinct entity from the Open Society Institute –
Assistance Foundation Azerbaijan.] Aside from military expenditures (largely a closed topic), spending on infrastructure has
become a virtual industry in itself in recent years. During the first three months of 2008, the government spent 17.5 times more money on
water and sewage improvement than it did for the same period in 2007, according to the State Statistics Committee. Roads are also a priority: Each month,
new bridges and roads throughout the country are completed. On May 9, the government unveiled the first 17 kilometers of a new concrete highway leading
to Baku International Airport. The overall cost of these projects has not been released, however. The scale of the projects, however, has led to questions
about their implementation, added Akhmadov. "[T]here are many . . . questions: How efficiently are the funds being spent when there is no transparency in
this issue? Who is responsible for choosing the projects? How are the contractors chosen? How is the spending being monitored?" In a set of
recommendations released on May 7, the
International Monetary Fund also expressed concerns about the
government’s growing infrastructure
expenditures. Largely echoing Akhmadov’s criticisms, the Fund wrote that the
economy has "limited" capability to absorb hefty infrastructure spending, while government officials have an
"inadequate" ability to "implement large investment programs."

Over-investment in infrastructure is creating a bubble that risks a Latin America-like


collapse
Kit R. Roane. “The Next Asset Bubble,” Feb 4 2008 http://www.portfolio.com/news-markets/national-
news/portfolio/2008/02/04/Infrastructure-Investment-Bubble
Some investors, hoping to avoid inflated prices in Europe and in the United States, are now looking to
emerging markets, where infrastructure investment has been rising at a fast clip. More than $56 billion
was spent on Russian infrastructure in 2007, compared with only $3.9 billion the year before, for example.
Other investors are taking what could be an even bigger gamble, partnering with construction companies to build the infrastructure of
the future—known as greenfield developments—instead of bidding on what already exists. All of these investors can draw
comfort from reams of data projecting the risks and the rewards inherent in their decisions. But the
world can change quickly and forecasting gets a lot harder the further out you go. Just ask the
investors who were forced to renegotiate Latin American infrastructure investments in the 1990s; those
caught short when the Eurotunnel linking England and France defaulted on its debt; or anyone hit by boycotts of their sparkling new toll
roads.
WNDI 2008 11
Solar Power Neg Scholars – Palladium DA

Link – hydrogen
Reliance on Hydrogen increases demand for palladium – driving up prices
Emanuel Balarie, an experienced advisor who has advised thousands of clients over his career, Mr. Balarie brings
a wealth of knowledge to Wisdom Financial. “The Case for Palladium,” Fast Break, August 19, 2005
http://partners.futuresource.com/fbp/2005/0819.htm
Yet another source of demand for the metal is coming from the alternative fuel industry. With the price of oil
hitting over $66 a barrel, there has been a renewed focus on alternative fuel sources. Hydrogen Fuel Cell technology is one
area that seems promising. So much so, that governments and private companies have invested more than a billion dollars to
expedite its progress. In essence, fuel cells are electrochemical devices that turn the energy from a chemical reaction into electricity.
How does palladium come into play? Well, palladium has a natural affinity to hydrogen. It is able to
absorb and store up to 800 times its own volume of hydrogen. Since hydrogen fuel cell technology is
dependent on "hydrogen", the demand for the metal will likely increase as hydrogen fuel cells come to
fruition.

Cheap palladium is key to hydrogen cells


Los Angeles times 6/25/2008 (“You can fill 'er up with hydrogen”)
The hydrogen highway has its potholes. The fuel is difficult to store and often kept in expensive steel tanks. The fuel
cells usually are made of precious metals such as platinum and palladium. Stations can take a long time to
permit and build because codes and standards are being adjusted and created to suit the new technology, Macleod said.
WNDI 2008 12
Solar Power Neg Scholars – Palladium DA

A2: We’ll get palladium from somewhere else


We’ll get our palladium from Russia – our Stillwater evidence says Russia has over half the
world’s palladium resources and the biggest standing reserve

The US currently gets its palladium from Russia – they’ve got no evidence we’ll switch
suppliers
Orsa Maggiore, 15 years of trading experience in Milan, London, Chicago and Lugano working for a major US
bank and a Swiss Global MAcro Hedge Fund. “Russia Palladium Stockpiles, Sep 13, 2007 http://palladium-
bar.blogspot.com/2007/09/russian-palladium-stockpiles.html
The main importer of Russian Palladium export is USA (7 million ounces) followed by Switzerland (6.8
million ounces) and Japan (4.8 million ounces): USA and Japan consume Russian Palladium mainly to
produce autocalysts, as well as Korea. Italy is a car manufacturer country and a jewellery country. UK has
imported 1.2 million ounces of Russian Palaldium, but the bulk of it was shipped to USA as payment for
Norilsk acquisition of Stillwater Mining in 2003. China is also an importer of Russian Palladium and ots
imports are already significant if counted together with Hong Kong imports (China+ Hong Kong imported
more than 600K ounces from Russia) and I expect China to become within 2-3 years the main importer of
Russian Palladium.
WNDI 2008 13
Solar Power Neg Scholars – Palladium DA

A2: auto-industry will switch to platinum


No, they misunderstand the way the auto-industry purchases metal – their platinum-switch
argument only makes sense if platinum prices reserves are high – they aren’t, that’s the last
line of their Balarie evidence

Platinum is more than FIVE TIMES the price of palladium – proves they crush the auto
industry
Reuters, 8/1 2008 http://www.mineweb.com/mineweb/view/mineweb/en/page504?oid=58503&sn=Detail
Platinum and palladium prices have fallen over five percent on Friday, sliding to the lowest levels in six months, due to declining
demand. Platinum slipped more than 5 percent on Friday to $1,658.50 an ounce, its lowest level since January 25, amid fears over
softening demand. Palladium also slid more than 5 percent to its lowest level since December 2007, tracking its sister metal. The moves
reflected a decline across the precious metals as the dollar firmed in the wake of U.S. jobs data and oil prices softened. Spot platinum
<XPT=> fell to $1,667.50/1,687.50 an ounce at 1243 GMT from $1,749.50/1,769.50 late in New York on Thursday. Spot
palladium also fell more than 5 percent to $356.00 an ounce, a seven-month low. It was later at $359.00/367.00 an ounce, against
$379.50/387.50 late in New York on Thursday.
WNDI 2008 14
Solar Power Neg Scholars – Palladium DA

A2: We use silicon


Silicon solar panels fail – they can only absorb a very narrow spectrum of light
American Elements “Solar Energy,” 6/2/2008 http://www.americanelements.com/AEsolarenergy.html
All silicon-based photovoltaic solar energy collectors however suffer from their ability to absorb
energy from a relatively narrow range of the sun's light wave emission. Substantial research ha gone into
developing materials that can either expand the band gap or create multiple band gaps in order to absorb a
greater portion of the solar energy spectrum. This has lead to the development of PV cells based on Copper
Indium Selenide (CuInSe2) or "CIS" Absorption Layers which can capture energy from portions of the light's
spectrum not collected by silicon-based PV cells. Doping CIS with Gallium increases the band gap even
further and as such most PV cells are now based on Copper Indium Gallium Selenide (CuInGaSe2) and are
referred to as "CIGS".
WNDI 2008 15
Solar Power Neg Scholars – Palladium DA

High palladium prices bad – turns case/warming 2NC


Turns the case –
The Weigal evidence proves their aff will never even get off the ground – global Palladium
supplies will run out before enough satellites can be built to solve

And they are net WORSE for warming –


Cheap palladium is key to auto pollution controls
Edmunds Auto Observer 5/21/2007 (“palladium: a hot commodity”)
Palladium is this year’s best investment among precious metals, due to high demand, in large part from the auto industry, and tightening
supplies, according to Bloomberg News. A cheaper alternative to platinum, palladium is used in catalytic
converters that reduce emissions from exhaust systems of motor vehicles. Palladium use has been increasing in
all vehicles, and last year, it was used for the first time in diesel-powered cars. A palladium-based pollution-control device
for diesels was developed in 2004 to replace the more expensive platinum-based ones.

Auto pollution controls are key to solving warming – California proves


Diane E. Brown. “2007 EPA Waiver Hearing on California State Motor Vehicle Pollution Control Standards,” June
2007 http://www.arizonapirg.org/uploads/2h/rH/2hrHlVnZ25HArXBuB6guJw/Background-On-CAs-EPA-
Waiver.pdf
California acted based upon the facts—that cars and SUVs are a major contributor to global warming pollution—and
rationally acted to reduce that pollution at the source. California’s standards were developed over four years with careful and measured
technical review and public input. • Passenger vehicles are the largest source of global warming emissions in
California, responsible for approximately 40% of carbon dioxide emissions in the state. • California’s program would
significantly cut global warming pollution from passenger vehicles in the state. Beginning in model year 2009,
California’s program would require automakers to reduce the average amount of global warming
pollution from their cars, light trucks and SUVs. By 2015, new cars would be required to emit 34% and light trucks
25% less global warming pollution on average. • California and the other states that have adopted the California
program account for more than one-third of the U.S. auto market. By cutting global warming pollution from
tailpipes, these states can help make a big dent in the emissions reductions we need to achieve to
avoid the worst effects of global warming. • According to an analysis by the Arizona PIRG (Arizona Public Interest Research
Group) Education Fund, by 2020 the cumulative emissions reductions achieved by the 12 state clean cars programs will be equivalent
to taking 74 million of today’s cars off the road for an entire year.
WNDI 2008 16
Solar Power Neg Scholars – Palladium DA

High palladium prices bad – Japan 2NC


High palladium prices crushes the Japanese auto industry
James Dines, one of the most accurate and highly regarded investment analysts today. Called “one of the most
extraordinary men in America today; a man with a long and glorious reputation in being one of the first people to
call the real turns in the strategic moves that happened in our marketplaces over the years” by Moneyline. “The
Emerging Palladium Bull Market,” The Bull & Bear Financial Report, 2000
http://www.thebullandbear.com/articles/2000/0300-palladium.html
The chart of palladium indicates to us that the metal is still in its roaring Uptrend, and we continue to stick our necks out calling for
higher prices even from these breathtakingly-elevated heights. How high? That depends on how much palladium Russia's governmental
agencies still possess in reserves. But if they are actually running out, if the Russians are secretly scraping the bottom of their barrel and
have not much more to sell, then palladium prices could have a rise that will be described later as
"frightening." That is because automobile manufacturers cannot build a car without palladium,
they simply must have it, it is a relatively small amount of money per vehicle and cost could be passed on to the purchaser. But
Japanese manufacturers, pioneers of the "just-in-time" method of maintaining inventories at
extremely low levels, are the most vulnerable of all and are in a panic about obtaining palladium at
any price.

That collapses Japan’s economy


J-Cast Business News. “Automotive Industry Overview,” 1/11/2004 http://en.j-
cast.com/2004/11/01000150.html
Auto manufacturing is a leading industry in Japan, and the nation is the number two automotive
powerhouse of the world. The total value of Japanese motor vehicle shipments in 2002 (including two-
wheelers) was 43 trillion 163 billion yen. This accounts for 16 percent of the Japanese manufacturing
industry's value of shipments, and 35 percent of the mechanical engineering shipment value.
Automotives is one of the important and essential industries that support the Japanese
economy.

Collapsing Japan’s economy would cause nuclear war with China and destroy the global
economy
The Guardian 2-11-2002
Even so, the west cannot afford to be complacent about what is happening in Japan, unless it intends to use the country as a test case to
explore whether a full-scale depression is less painful now than it was 70 years ago. Action is needed, and quickly because this is an
economy that could soak up some of the world's excess capacity if functioning properly. A strong Japan is not only essential
for the long-term health of the global economy, it is also needed as a counter-weight to the growing
power of China. A collapse in the Japanese economy, which looks ever more likely, would have profound ramifications;
some experts believe it could even unleash a wave of extreme nationalism that would push the country
into conflict with its bigger (and nuclear) neighbour.
WNDI 2008 17
Solar Power Neg Scholars – Palladium DA

Russian econ ext – WTO accession good 2NC


Economic stability is key to Russian WTO accession – the US is using it as an excuse to
support Russia
William H. Cooper, Specialist in International Trade and Finance, CRS Foreign Affairs, Defense, and Trade
Division. “Russia’s Economic Performance and Policies and Their Implications for the United States,”
Congressional Research Service Report for Congress, May 30, 2008 http://www.fas.org/sgp/crs/row/RL34512.pdf
The greater importance of Russia’s economic policies and prospects to the United States lie in their indirect
effect on the overall economic and political environment in which the United States and Russia operate. From this
perspective, Russia’s continuing economic stability and growth can be considered positive for the United States. Because financial
markets are interrelated, chaos in even some of the smaller economies can cause uncertainty throughout the rest of the world. Such was
the case during Russia’s financial meltdown in 1998. Promotion of economic stability in Russia has been a basis for
U.S. support for Russia’s membership in international economic organizations, including the International Monetary Fund
(IMF), the World Bank, and the [WTO] World Trade Organization (WTO). As a major oil producer and exporter, Russia influences
world oil prices that affect U.S. consumers. The impact of Russian economic policies and prospects also plays a role in U.S. national
security interests. For example, Russia is a major supplier of natural gas to many U.S. European allies. In 2005,
Russia accounted for 26% of France’s, 30% of Italy’s, and 43% of Germany’s consumption of natural gas, making these allies possibly
vulnerable to political pressure. On January 1, 2006, Russia temporarily shut-off gas supplies to Ukraine over a price dispute which
affected supplies to Europe. 81 While Europe was not the target of the action, the disruption affected European views of
Russia as a reliable supplier of gas. Russia is also a primary supplier of natural gas to other former Soviet republics, providing it with
potential political leverage. The United States has been promoting the construction of pipelines that by-pass Russia, thus decreasing
Moscow’s monopoly control of Caspian and Central Asian energy flows.

WTO accession spurs reforms that prevent corruption


A. Elizabeth Jones, Assistant Secretary for European and Eurasian Affairs. “U.S.-Russia Relations in Putin's
Second Term,” Testimony Before the House International Relations Committee March 18, 2004
http://www.state.gov/p/eur/rls/rm/30556.htm
We support Russia’s continued economic reform efforts, including its push for WTO accession. There is a direct
connection between Russia’s integration into the world trading system and internal reforms. Rule of law,
respect for the sanctity of contracts, independence and effectiveness of the judiciary and curbing
government corruption are all part of what is needed for Russia to become a major destination for investment. The sad fact is
that U.S. investment in Russia is lower than it could be and the reasons are clear: official corruption, doubts about the quality of justice
available in Russian courts, disregard for the sanctity of contracts, unpredictability of the tax system, excessive bureaucracy and lack of
transparency. We hope the new government will be successful in grappling with these problems.

Unchecked corruption in Russia will result in a nuclear terrorist attack on the US


The National Interest Fall 2002
The opportunities for terrorists to smuggle a nuclear weapon into Russia or another state are even greater. Russia's
land borders are nearly twice as long as America's, connecting it to more than a dozen other states. In many places, in part because
borders between republics were less significant in the time of the Soviet Union, these borders are not closely monitored.
Corruption has been a major problem among border patrols. Visa-free travel between Russia and several of its neighbors
creates additional opportunities for weapons smugglers and terrorists. The "homeland security"
challenge for Russia is truly monumental. In sum: even a conservative estimate must conclude that dozens of
terrorist groups have sufficient motive to use a nuclear weapon, several could potentially obtain
nuclear means, and hundreds of opportunities exist for a group with means and motive to make the
United States or Russia a victim of nuclear terrorism. The mystery before us is not how a nuclear terrorist attack could
possibly occur, but rather why no terrorist group has yet combined motive, means and opportunity to commit a nuclear attack. We have
been lucky so far, but who among us trusts luck to protect us in the future?

A nuclear terrorist attack triggers retaliation the leads to global nuclear war
Easterbrook, visiting fellow - Brookings Institute, 2001 [Gregg, CNN,November 2, 2001, p. lexis]
Terrorists may not be held by this, especially suicidal terrorists, of the kind that al Qaeda is attempting to cultivate. But I think, if I could
leave you with one message, it would be this: that the search for terrorist atomic weapons would be of great benefit to the Muslim
peoples of the world in addition to members, to people of the United States and Western Europe, because if an atomic warhead
goes off in Washington, say, in the current environment or anything like it, in the 24 hours that followed, a hundred
million Muslims would die as U.S. nuclear bombs rained down on every conceivable military target in a
dozen Muslim countries.
WNDI 2008 18
Solar Power Neg Scholars – Palladium DA

Russian WTO accession good – US/Russian relations FL


Russian WTO accession is key to US/Russian relations
James R. Schlesinger. “Advancing American Interests And The U.S.-Russian Relationship,” The Commission On
America’s National Interests And Russia September 2003
http://www.nixoncenter.org/publications/Program%20Briefs/interim%20report%20final%20complete.pdf
Finally, U.S. leaders should recognize that economic modernization is Russia’s number one national
priority that it is likely to remain so for some time, and that a successful relationship must help Russia achieve this
goal. This is not a call for charity or foreign aid. Moscow has much to bring to the table as the world’s largest producer of energy (oil
and gas) and a reservoir of extraordinary scientific and technical talent. The expansion of economic cooperation with
Russia can to be one of the most effective means available to build a “positive” constituency for the
U.S.-Russian relationship in both Russia and the United States. Accordingly, President Bush should make Russia’s
removal from the largely symbolic constraints of the Jackson-Vanik Amendment a genuine priority. The administration should
also exercise greater leadership in advancing bilateral trade with Russia and remain supportive of Russia’s WTO accession
process, though the burden is primarily on Moscow in meeting the appropriate criteria. Moreover, if Russia cooperates in stabilizing
post-war Iraq, the U.S. should be “imaginative” in honoring Russian interests there.

Strong US-Russian relations are key to prevent escalating war in Georgia


CSM, The Christian Science Monitor, 8/12/2004
But others warn the region is a powderkeg that could explode, despite the best intentions in Moscow and Washington.
"Georgia is the No. 1 flash point between the US and Russia just now. There are competing interests there
which could be managed if Russia and the US cooperate closely, but could easily fly out of control if
they don't," says Vitaly Naumkin, director of the independent Center for Strategic and International Studies in Moscow.

Central Asian instability leads to nuclear war


M. Ehsan Ahrari, Professor of National Security and Strategy of the Joint and Combined Warfighting School at
the Armed Forces Staff College, August 2001 , “Jihadi Groups, Nuclear Pakistan and the New Great Game,”
South and Central Asia constitute a part of the world where a well-designed American strategy might well
help avoid crises or catastrophe. The U.S. military would provide only one component of such a strategy, and a secondary one
at that, but has an important role to play through engagement activities and regional confidence building. Insecurity has led the
states of the region to seek weapons of mass destruction, missiles and conventional arms. It has also led them toward
policies which undercut the security of their neighbors. If such activities continue, the result could be
increased terrorism, humanitarian disasters, continued low-level conflict and potentially even major
regional war or a thermonuclear exchange. A shift away from this pattern could allow the states of the region to become
solid economic and political partners for the United States, thus representing a gain for all concerned.
WNDI 2008 19
Solar Power Neg Scholars – Palladium DA

Russian WTO accession good – econ


WTO accession is key to the Russian economy – reduces dependence on natural resources that make it
vulnerable to boom and bust cycles
Jeremy R. Regal, J.D. candidate 2005, UCLA School of Law. “Russia In The Wto: How Russia's Institutional
Idiosyncrasies May Impede Its Ability To Abide By The Wto's Governing Cornerstones,” UCLA Journal of
International Law and Foreign Affaire Spring / Summer, 2004
Following China's accession on December 11, 2001, 9 the most notable non-member to the WTO is the erstwhile superpower, Russia. As
a permanent member of the United Nations Security Council, a sanctioned nuclear power, a partner in the campaign against terror, the
owner of 32% of the world's gas reserves 10 and the security guarantor within the Commonwealth of Independent States (CIS), 11
Russia remains a strategically important country. However, Russia's economic influence remains far below its potential: Despite having
a population of 150 million, Russia accounts for less than 3% of the world's GDP. 12 Although Russia lacks the market share to
influence the prices of goods, it remains heavily dependent on the exports of natural resources. 13 WTO
membership should improve market access for Russian goods besides raw materials because Russia
would enjoy access to the markets of all WTO member-states. This access would enable Russia to reduce
its dependency on natural resources and achieve a level of growth that creates a large consumer
market for imports. However, economic integration [*101] requires WTO member-states to possess certain characteristics which
underpin the basic cornerstones of the international liberal economic order. Without these characteristics, Russia is unlikely to achieve a
degree of economic integration sufficient for interdependence even if it accedes in the near future. 14 This comment examines the
current institutional characteristics that may impede Russia's ability to abide by the WTO's governing cornerstones once it is admitted to
the organization. Section one outlines the internal circumstances that necessitate Russia's integration into the international economic
order. Section two discusses the neo-liberal institutional characteristics that a WTO member is expected to possess in order to promote
economic integration. Section three analyzes institutional characteristics within Russia which may complicate its ability to abide by the
cornerstones of the WTO. Finally, the conclusion will analyze how WTO accession may induce the changes necessary to integrate
Russia into the neo-liberal economic order. I. Russia's Current Economic State A. Dependency on Natural Resources Although
the Russian economy has managed to grow at an annual rate of more than 6% since 1999, 15 almost all of the
growth can be attributed to favorable prices of natural resources rather than government policy. 16 Despite the
enormous base of technological resources that Russia accrued during the Cold War, 17 its high
technology sector accounts for less than 2% of exports of manufactured goods. 18 Few domestic industries
are competitive on the international market: Only 5% of Russia's domestic industries are competitive
[*102] beyond the borders of the CIS. 19 The underdevelopment of these sectors has forced Russia to
rely on revenues from natural resources. 20 This dependency on exports, in particular oil, 21 leaves
Russia susceptible to the vicissitudes of world markets over which it has minimal control. 22 The downward
trend in prices of many raw materials has increased the dangers of relying on natural resource exports to spur economic growth. 23