2NC inflation answers
1. Inflation high now
kommersant.com Russia’s daily online July 14, 2008 “Inflation to Exceed 25% for the Poorest” http://www.kommersant.com/p-12824/r_528/Inflation_poorest/
Taken for the poorest Russians, the 2008 inflation will be notably above the official outlook of 10.5 percent, climbing to the height of 25 percent, RIA Novosti reported with reference to analysts of FBK Audit & Consulting Company. This surge will widen ranks of the poor, the analysts concluded.
FBK hasn’t revised its general inflation forecast for this year, predicting the growth of at least 14 percent. As to the poorest, the analysts used data on movement in prices for the minimal food basket.
2. All of their evidence assumes that oil prices will rise in the status quo, but oil prices are at supply demand equilibrium now guarantees stable prices
ANTHONY HILTON, EVENING STANDARD FINANCIAL EDITOR 17 July 2008 “Reasons to believe oil prices may ease soon” 2ND cousin twice removed of paris Hilton. http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=447523&in_page_id=19&in_author_id=4&position=moretopstories
It is too early to say whether this week's wobble in the oil price marks the top, but there are reasons to think it might - and if it does, it is the best possible news for a beleaguered world economy. Much as the attention of politicians and regulators is focused on the credit crunch and inflation, oil is the thing that matters; the price of oil is what will determine the extent of the global economic slowdown. Things are certainly changing in the market. For the past few years, the problem has been what's called a demand shock - the growing economies of India, China and the rest of Asia developed a huge thirst for oil the existing producers were unable to meet. That drove the price up. But the situation has changed recently. Higher prices have caused people and companies to reduce consumption, particularly in the West. As a result, demand for oil in many leading economies has begun to drop, and will fall more as the economies slow down.
A2: Foreign Investment
2NC Foreign Investment answers
1. High oil prices key to foreign investment in Russia
By Lynn Berry, Staff Writer, The Moscow Times. January 30, 2006. Page 1. Moscow, Russia, "Russia's Future, Pinchuk's Lunch” http://action-ukraine-report.blogspot.com/2006_01_01_archive.html
Alexander Izosimov, CEO of VimpelCom, stood up to take issue with the premise that high oil prices are holding Russia back. He made the case that high oil prices bring a sense of stability, reduce the risk of borrowing money and thus allow other sectors that require significant outlays of capital, such as telecommunications, to grow. "Look at the amount of money being borrowed in the West," Izosimov said, expanding on his remarks after the conclusion of the session, which like most sessions at Davos is off the record unless the speaker explicitly agrees to be quoted. "The accessibility of international money would not happen if Russia were not perceived as stable." He was joined by Alexei Mordashov, head of Severstal, who said that in addition to creating stability, high oil prices generated demand and allowed for increases in public sector wages.
2. Foreign investment prevents economic collapse
Foreign Affairs May 2007 - June 2007, “Containing Russia” Yuliya Tymoshenko
The impending shortage means that Gazprom will not be able to increase gas supplies to Europe, at least in the short term -- something that European countries should be aware of and concerned about. This may explain why Gazprom abandoned its plan to send gas from the Shtokman field, in the Barents Sea, to the U.S. market as liquefied natural gas and diverted it to Europe instead. The decision, initially interpreted as a move intended to irk Washington, may actually have been a sign of desperation: sending Shtokman gas to Europe would free up Siberian output for domestic consumption. The problem, of course, is not a lack of gas -- Russia has 16 percent of the world's total known reserves -- but Gazprom's investment strategy. Over the past few years, the company has spent vigorously on everything but developing its reserves. It has built a pipeline to Turkey, taken over an oil company, invested in UESR, tried to gain footholds in European distribution markets, and become Russia's biggest media company. All this was done in the name of creating and sustaining a "national energy champion." Yet investment in Gazprom's core business was grossly inadequate. There is another problem facing Gazprom: the actual engineering costs of developing new gas fields in Russia. In the Shtokman gas field and on the Yamal Peninsula, in particular, the engineering costs, including the cost of transporting the output to Europe, are twice as high as for new gas fields in North Africa and the Middle East. The international gas market is already beginning to recognize this, and, over the long term, it could be enormously dangerous for Russia. Indeed, Russia may actually be putting itself out of the gas business, because high engineering costs for new projects in Russia are signaling to the market that Russia and Gazprom lack the capacity to develop these fields. Western companies could come in and do the job, but given the Kremlin's recent usurpation of Shell's investments on Sakhalin Island, these companies would be remiss in their fiduciary duties if they undertook such investments. The only way to avoid a crisis is to break Gazprom's monopoly on pipeline infrastructure and to license independent gas producers. Independent producers already account for 20 percent of domestic gas sales in Russia and are boosting their output. Further gains would require market-based incentives. Europe can help by explicitly linking its acceptance of Russia's WTO membership to Russia's ratification of the Energy Charter and its attendant Transit Protocol, which would guarantee access to Russian pipelines for Gazprom's competitors.
A2: Caspian
1. U.S. presence in Caspian and Central Asia key to prevent Russian monopolization, instability and major war outbreak
Krzysztof Strachota is the Director of Central Asia and Caucuses Section at the Center at the Center for Eastern Studies in Warsaw 2002, Stefan Batory Foundation (Warsaw), and Institute for Democracy in Eastern Europe (Washington, DC). “Russian Policy in the Caucuses and Central Asia” Toward an Understanding of Russia: New European Perspectives, Council on Foreign Relations, New Yorkm p. 132-133.
The process of reconstructing Russia’s influence in Asia gained in intensity after September 11, 2001, because of Russia’s importance in the antiterrorist coalition and strong political factions in Afghanistan (especially after the defeat of the Taliban) and the surrounding region. Russia’s most important entry point for the future is its position in the south of the CIS in Central Asia and the southern Caucasus. This is the region that will decide Russia’s superpower potential. So far, as a result of traditions and weak economic tools, Russia has been building its influence in this region by playing on weaknesses and local conflicts. This destabilizes the region and hinders its development, but this policy seems to be successful in the short term. In the longer term, it may have catastrophic results beyond the region. The great threat for this policy after September 11, 2001 is strong military, political and economic engagement on the part of the United States (and the European Union in the economic sphere) in Central Asia and the Caucasus. This calls into question Russia’s monopoly, gives a geopolitical alternative for the region, strengthens the independence of the new states, and encourages growth in terms of regional stability. These opposing tendencies—U.S. involvement in Russia’s sphere of influence and growing role of Russia in the coalition, Russia’s particular influence in Central Asia and Afghanistan with Russia flexibility in Moscow-Washington relations—create a completely new style of policy for Russia in the south of the CIS. Thanks to its position in the region, Russia has become an important player in global (Asiatic) policy and a kind of partner and ally for the United States. Though thus far it is symbolic, the breaking of Russia’s monopoly in Central Asia by the United States seems to be a good price to pay for the change in Russia’s position, particularly as Moscow has been keeping fairly tight control of political processes in the region. Russia’s biggest problem will be keeping these political instruments and finding solutions for the region’s social, economic, and cultural problems.
2NC Caspian answers
2. U.S. presence in central is essential—leaving Russia in control leads terrorism, Pakistani coups, and major war outbreaks
Krzysztof Strachota is the Director of Central Asia and Caucuses Section at the Center at the Center for Eastern Studies in Warsaw 2002, Stefan Batory Foundation (Warsaw), and Institute for Democracy in Eastern Europe (Washington, DC). “Russian Policy in the Caucuses and Central Asia” Toward an Understanding of Russia: New European Perspectives, Council on Foreign Relations, New Yorkm p. 131.
As the antiterrorist coalition has expanded, the new era of U.S. involvement in the south of the CIS has become fact. Never before has the United States had a direct military presence here. This creates both enormous opportunities and enormous dangers. The presence of the United States in the region seem inevitable: a state that wants to play the role of a superpower cannot allow itself to be absent from a place where the influences of the greatest power of Asia (at once partners and rivals of the United States) clash, four of which have nuclear weapons (Russia, China, Pakistan, and India). This is especially true as Pakistan, hitherto the linchpin of U.S. support, is undoubtedly experiencing immense internal tensions that threaten destabilization with far-reaching results beyond the region’s borders. Thus, it becomes key to provide enormous and constant support—both political and economic—for building independent and efficient states in the region. U.S. involvement also seems beyond debate in a region where the Islamic fundamentalism that given birth to terrorism plainly has perfect conditions for development (both in Afghanistan and Tajikistan, the entire Fergana Valley, and the Northern Caucasus, Chechnya, and Dagestan). The problems that accompany (and frequently precede) fundamentalism include uncontrolled trade in drugs and arms, as well as problems both social and humanitarian (such as refugees). Despite its rhetoric, Russia is not able to solve these problems, and even seems to generate them (considering the example of Chechnya, and indirectly Tajikistan). The current Russia-centered defense system therefore requires fundamental revision; otherwise problems will snowball out of control.
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