Venezuela Oil Negative - DDI 2013 SS

8/12/2019 Venezuela Oil Negative - DDI 2013 SS

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Venezuela Oil NegativeCut reasons why Snowden spillover

1. Maduro would say nosorry buddy

WSJ 7/20(EZEQUIEL MINAYA, Staff Writer, Wall Street Journal, July 20, 2013,Venezuela Ends Attempt to Repair Diplomatic Relations With U.S.http://online.wsj.com/article/SB10001424127887323993804578618223346497776.html)CARACASThe Venezuelan government has ended fledgling efforts to repairdiplomatic relations with Washington in protest of comments made earlier in theweek by Samantha Power, the nominee for U.S. ambassador to the United Nations,who grouped the South American country among nations carrying out a "crackdownon civil society." Venezuela's foreign ministry released a statement late Friday that

"categorically rejected" Ms. Power's statement and criticized the State Departmentfor backing U.S. President Barack Obama's choice for envoy to the U.N. amid thecontroversy. The ministry statement said that steps that began last month tonormalize diplomatic ties between Washington and Caracas have beenshelved.

2. Venezuela oil production set to increase and the US already invested- proves

there is no internal link to relations

Nelson 13(George Nelson, 03 May 2013, Venezuela: Oil and Natural GasProduction Set To Increase The Argentina Independent,http://www.argentinaindependent.com/currentaffairs/newsfromlatinamerica/venezuela-oil-and-natural-gas-production-set-to-increase/)

Venezuela is set to increase oil production capacity by 2014,according to thegovernment. The worlds largest crude oil reserves are found in the country,estimated at around 297,700million barrels.The Venezuelan minister ofpetroleum and mining, Rafael Ramrez, said that US$25 billion is to beinvested in the oil sector in a bid to increase mining and production capacity.Our goal is to produce four million barrels per day, said Ramirez during a meetingwith the National Oil Chamber, in the Sucre State, in the northeast of the country.The country is currently producing three million barrels a day, although

present capacity stands at a potential 3.7 million barrels per day.3. Plan is a bad investment- it does not change the necessary framework-

investment in oil leads to the political instability

Goldwyn, their evidence, 13 (President, Goldwyn Global Strategies, LLC(4/11/2013, David L., The Impact of the Tight Oil and Gas Boom on Latin Americaand the Caribbean: Opportunities for Cooperation, House Committee on ForeignAffairs; Subcommittee on the Western Hemisphere; Energy Opportunities in Latin
http://online.wsj.com/article/SB10001424127887323993804578618223346497776.htmlhttp://online.wsj.com/article/SB10001424127887323993804578618223346497776.htmlhttp://online.wsj.com/article/SB10001424127887323993804578618223346497776.htmlhttp://www.argentinaindependent.com/currentaffairs/newsfromlatinamerica/venezuela-oil-and-natural-gas-production-set-to-increase/http://www.argentinaindependent.com/currentaffairs/newsfromlatinamerica/venezuela-oil-and-natural-gas-production-set-to-increase/http://www.argentinaindependent.com/currentaffairs/newsfromlatinamerica/venezuela-oil-and-natural-gas-production-set-to-increase/http://www.argentinaindependent.com/currentaffairs/newsfromlatinamerica/venezuela-oil-and-natural-gas-production-set-to-increase/http://online.wsj.com/article/SB10001424127887323993804578618223346497776.htmlhttp://online.wsj.com/article/SB10001424127887323993804578618223346497776.html


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America and the Caribbeanhttp://docs.house.gov/meetings/FA/FA07/20130411/100622/HHRG-113-FA07-Wstate-GoldwynD-20130411.pdf, JMP)


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The unconventional revolution will also force the resource-endowed nations of theWestern Hemisphere to develop more competitive investment frameworks. North

America has become the investment destination of choice, with large markets,attractive fiscal terms, strong rule of law and respect for contract sanctity inthe U.S and Canada. As will be discussed in greater depth, many Latin American

countries are noted for resource nationalism, volatile investmentframeworks, and political extremes rather than stability. In order for Latin

America to compete, investment terms will have to improve and regulatoryframeworks must be enforced with equity and consistency. In short, thesouthern half of the Hemisphere must prove that it can adapt to changing markets,resource bases and technologies in order to compete with the opportunities foundin North America. The prospects for this adaptation are mixed, providingopportunities for U.S. energy diplomacy. II. Energy Trends in the WesternHemisphere The Western Hemisphere has seen the rise of two trends inenergy governance in recent years. One trend is towards rising state control ofenergy resources in Venezuela, Argentina, Bolivia and Ecuador in particular. The

concern here is that this trend will limit the growth of global supplies of oiland gas by undermining the value of existing investments, discouraging futureinvestment and leading to political instabilityresulting from declining livingstandards. The economic consequence of this trend is that the hemisphere willcontribute less to the diversification of oil supply, thereby engendering atighter international oil market more vulnerable to the negative effects ofsupply shocks, increasing the importance of OPEC supply and, over time,undermining economic development in the region. The political consequences ofthese trends include the decline of U.S. influence in the region relative to competingideologies and the erosion of democratic structures. A second, much more positive,trend is towards creative fiscal regimes that welcome foreign investment and

require state owned companies to compete with international companies, withindependent regulators that promote fair and efficient regulation. Countriesobserving this model are increasing production or stalling the decline of existingreserves. Colombia, Trinidad and Tobago, and Peru are key examples of this creativemodel. When I last testified on Latin American energy trends before Congress,Mexico was generally considered to be a part of the first group, making the net trendnegative. Today, however, Mexicos government is actively seeking reforms thatinclude, but are certainly not limited to, the energy sector. A new question markhangs over Brazil, however. While Petrobras had been viewed as an exemplarnational oil company in recent years, it has recently seen its production estimatescurtailed, and its market value tumble. The company is no longer second in value

only to Exxon Mobil. Perhaps as a sign of changing regional dynamics, Petrobras isnow reported to be worth less than Colombias national oil company, a developmentthat would have been thought to be nearly unthinkable just a few years ago. 14While natural gas production is rising, oil production is falling, as Petrobras hasfaced major challenges fulfill both its newfound responsibilities in the deep andultra-deepwater subsalt resources, companies face challenges meeting aggressivelocal content requirements and Petrobras struggles to meet the politicalexpectations of the government. Venezuela and Mexico are the most important oil


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exporters in the hemisphere. While Brazil, Colombia and Argentina are importantdestinations for foreign investment, and helpfully produce enough oil to meet theirown domestic needs and make some contribution to the global export market, theyare not strategic suppliers to the global market at this time. Only Mexico, Brazil andVenezuela produce more than a million barrels per day, although Colombian crude

oil production rose as high as 944,310 barrels per day in 2012,15 and FedericoRenjifo, the Colombian Energy and Mining Minister, has stated that the countryexpects to produce 1.01 mbd in 2013.16 Bolivia has enormous gas reserves, butexports mostly to Brazil and modestly to Argentina. Only Trinidad and Tobago is akey supplier to the world gas market. A. The Rise in State Control From thosecountries now committed to increasing state control, the U.S. faces two keychallenges: the loss of production growth and diversity of supply from the region ifnew economic frameworks are unattractive to foreign investors and, most critically,the loss of U.S. influence vis--vis competing political visions. The Economic Impactof Rising State Control The recent wave of changes in contractual terms anddramatic changes in tax regimes in Venezuela, Bolivia, Ecuador and, in recent years,

Argentina, threatens to slow new investment and eventually deepen instability andpoverty in these nations, as well as destroy shareholder value for the companiesinvested there. The deterioration in the investment climate for energy in thesecountries is primarily an economic threat, as it foments an environment wheresupply is constrained and prices are high. We are seeing the revision of economicterms at a time when producers rather than companies hold more market power.Venezuela In 2007, President Hugo Chavez led the nationalization of oilexploration and production in Venezuela, mandating renegotiation of contracts witha minimum 60 percent PdVSA share. While sixteen companies, including Shell andChevron, complied with the new agreements, ExxonMobil and ENI refused tocooperate and were forcibly taken over. Both companies have pending complaints

before the International Centre for the Settlement of Investment Disputes (ICSID) atthe World Bank that are expected to be decided in late 2013. As a result of thoseclaims, particularly the ExxonMobil claim, Venezuela withdrew from the ICSID in2012.17 The impact of the nationalizations, according to expert analysts likeDeutsche Bank and Wood Mackenzie, was a massive flight of investment capitalfrom Venezuelas heavy oil sector to Canadas oil sands, effectively freezingdevelopment of the hemispheres largest oil reserves during one of the greatest oilbooms in history. The net impact on Venezuelas credit and credibility are quitenegative, again with serious negative long-term consequences for the global oilmarket and Venezuelas own economy. In 2008, ENI and Total came reached anagreement with PdVSA regarding a 2005 joint venture requirement that they had

not previously signed an MOU for. Terms for involvement in natural gasdevelopment in Venezuela are slightly more beneficial, although in 2012, the yearbefore his death, President Chavez expressed some interest in altering those terms.It is generally expected that Venezuelas oil production will continue to fluctuate orstagnate without considerable outside investment. According to the EIA, someanalysts estimate that PdVSA must spend at least $3 billion annually in order tokeep production at its current levels.18 Venezuela plays a significant role in theWestern Hemisphere, acting as a proxy for Cuba and providing oil at favorable cost


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and financing terms to Caribbean nations through Petrocaribe and the SouthernCone through Petrosur, ventures which add stress to the countrys fiscal situation.While change is unlikely to happen quickly, pressure stemming from the recentfailed currency devaluation, rising inflation, and vast external subsidies will take atoll on the economy and are ultimately unsustainable.

4. There are alternative sources of funding for Venezuela oilOrozco 13(Jose Orozco, Staff Writer, May 27, 2013, Chevron Lends Venezuelan OilVenture $2 Billion for Output Boost,http://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.html)

Petroleos de Venezuela SA,the countrys state-owned oil producer, signed a $2billion financing agreement withSan Ramon, California-based Chevron Corp.(CVX) to increase outputat their Petroboscan oil joint venture. The loans interestrate is the London Interbank Offered Rate plus 4.5 percentage points, Oil MinisterRafael Ramirez told reporters in Caracas today. The money will be handled

directly by Petroboscan and will help boost daily output to 127,000 barrelsfrom 107,000 barrels, he said. The loan has a very low rate because its acorporate loan from Chevron to its joint venture and is tied to increasedproduction, said Ramirez, who signed the credit along with Ali Moshiri, Chevronshead of Latin America, Middle East and Africa. That way we obligate ourselves andour partner to focus on increasing production. Venezuela, which channels oilearnings into social programs and regional fuelsubsidies, is seeking financingfrom foreign partners to tap more of the worlds largest oil reserves. Thestate-owned producer reached an agreement with China on terms of a $4billion loanon May 15 for the Sinovensa joint venture with China NationalPetroleum Corp. Ramirez said today hell sign the financing agreement in Beijing

this week.
http://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.htmlhttp://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.htmlhttp://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.htmlhttp://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.htmlhttp://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.htmlhttp://www.bloomberg.com/news/2013-05-27/chevron-lends-venezuelan-oil-venture-2-billion-for-output-boost.html


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Ext 1NC Maduro Says no

Maduro is built on Anti-Americanism- he will never say yesOReilly, their 1AC, evidence, 4/17(Andrew, 4/17/13, Fox News Latino,

U.S.-Venezuelan Relations Remain Tense Under Maduro, Experts Claimhttp://latino.foxnews.com/latino/politics/2013/04/17/us-venezuelan-relations-remain-tense-under-maduro-experts-claim/jj)

While the ultimate impact of the Venezuelan presidential election remains to beseen, what's for sure is that relations between the United States and theadministration of President-elect Nicols Maduro will continue to be as tense asunder the late Hugo Chvez, experts said. After voting on Sunday in a Caracas slum,Maduro said that while he would like to reestablish relations with the U.S. in termsof equality and respect, Washington will always try to undermine his rule. Thesewords followed a steady rhetoric on the campaign trail of Maduro accusing the U.S.

of conspiring against him and causing disruptions in Venezuela to unseat his rule,including working with opposition labor unions and causing electric powerblackouts. Experts argue that given Maduros anti-American sentiments leading upto the election, as well as the controversy surrounding his victory and thepolarization in Venezuela, there is little hope for a change in relations between thecountries. Its hard to see [Maduro] backing off his rhetoric in the aftermathofthe election...Americans will insist on a level of respect that he is not going togive them. Its hard to see [Maduro] backing off his rhetoric in the aftermath ofthe election, Eric Hershberg, the director of American Universitys Center forLatin American and Latino Studies, told Fox News Latino. Americans will insiston a level of respect that he is not going to give them. The death of Hugo Chvez

put Maduro and the rest of the Venezuelan left in a difficult position. Chvezscharisma held the movement together and his social spending allowed him to skirtthe dicey issues of rising inflation, high crime and a fledgling economy. While thecurrent election results are still being debated, how Maduro faces the countrysmounting problems both politically and socially are what will decide is he andChavismo survive his six-year term. In 2009, Chvez led a successful push for aconstitutional referendum that abolished term limits for the offices of President,state governors, mayors and congress members. The previous provision establisheda three-term limit for deputies and a two-term limit for the other offices, but withthe 2009 referendum, Chvez or any other leader could ostensibly stay in powerindefinitely. Maduro does not have the charm or power to hold the Chavistamovement together nor make Venezuelans forget about the problems plaguing theirnation. If Sundays vote is any indication, Venezuela is torn between Chvezs legacyand a dismal future, with the official results giving Maduro 51 percent of the vote tochallenger Henrique Capriles 49 percent although opposition sources showedCapriles winning by more than 300,000 votes. Chvez could overcome thedetractors because he was viewed as a national hero, Maduro doesnthave that,said Larry Birns with the Council for Hemispheric Affairs. To maintain his


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credibility within the Chavista movement and fend off opponents from within hisown party, Maduro needs to maintain his opposition to the U.S. and continue topaint Americans as imperialist intruders, experts said. Hes got to worryabout the opponents that will pose a threat to his rule, Birns said. These aredifficult times for Maduro and no one knows how the scenario will play out. For

its part, the United States is not in better shape when it comes to its relationswith Venezuelaor other Latin American nations. Diplomatic disputes withVenezuela and touchy relations with neighboring Bolivia and Ecuador have led to aschism between the United States and the countries in the Bolivarian Alliance forthe Americas. Hershberg said that the Obama administration's refusal to accept theofficial results of Venezuela's election will not only anger Maduro, but could beviewed as hypocritical in the light of the scandal surrounding the uncounted votesduring the 2000 U.S. presidential election that saw George W. Bush defeat Al Gore.The U.S. has a long history of political involvement both overtly and covertly inelections throughout Latin America. For the Americans to say this only 12 yearsafter Bush. V. Gore is remarkable, he said. "Latin America looked at the U.S. and said

that the U.S. will never again be able to tell us how to conduct our elections. Thismakes them look absurd, he added, about the State Departments refusal torecognize the election of Maduro. The State Department said it was "difficult tounderstand" why the commission certified ruling party candidate Nicols Maduro asthe winner in the absence of a recount, which challenger Henrique Capriles isdemanding. It also condemned the post-election violence that has killed at leastseven people and injured 61. In a televised broadcast Tuesday, Justice MinisterNestor Reverol accused Capriles of numerous crimes, including insurrection andcivil disobedience. Maduro blamed Capriles personally. "You are responsible forthe dead we are mourning," he said, calling Capriles "the defeated candidate."Government officials have been alleging since Monday that Capriles is plotting a

coup, and President-elect Maduro announced that he was prohibiting an oppositionmarch scheduled for Wednesday in the capital. On Tuesday Capriles' supportersprotested in cities including Merida and Maracay.


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1NC 3

Plan cannot solve- Venezuela oil is exporting well but the economy is doing

poorly it is purely a structural issue

AP 13(Associated Press, May 04, 2013Addicted to oil, Venezuela faces a grim future with prices and productiondropping http://www.foxnews.com/world/2013/05/04/addicted-to-oil-venezuela-faces-grim-future-with-prices-and-production-dropping/)

PDVSA, which accounts for 96 percent of the country's export earnings, nolonger"generates enough income to cover all its costs and finance itscommitments," said Pedro Luis Rodriguez Sosa, an energy expert at the Institute forAdvanced Studies in Administration in Caracas. He said that "you can see PDVSA isin trouble" at the $100-a-barrel level because of the many millions lost togasoline subsidies and spending on domestic social spending and PDVSA's use

as a "geopolitical tool"to maintain regional alliances. Venezuela has the world'slargest oil reserves but PDVSA's production, earnings and income all appear to be ona downward slide and its debts to suppliers rose 35 percent. Its debt to the CentralBank of Venezuela reached $26.19 billion last year, a nearly eight-fold increase intwo years. The government makes no apologies. It says it is employing the country'smost important natural resource for the good of the people and promises increasedproduction and revenues in the immediate future. Ramirez said that PDVSA's effortsremained focused on developing the remote Orinoco belt, site of the world's biggestoil reserves, with the aid of oil firms from China, Russia, the U.S., Italy, Vietnam,Malaysia, Japan and Spain. Venezuela hopes to lift overall production to some 3.32million barrels a day, 200,000 more than last year. "We're in a process of trying to

attract investment in dollars other than ours," Ramirez said, assuring reporters thatPDVSA would work with private investors to not take on more debt to make newinvestment. Outside experts, however, are deeply skeptical. They say PDVSA isbadly mismanaged and that even a radical overhaul would take years to showresults. Rather than reinvesting enough profits in exploration and maintenance,Chavez dedicated oil revenues to social spending such as building hundreds ofthousands of homes and free medical clinics for the poor, they say. Last year PDVSAsaid it spent $28.83 billion, nearly a quarter of its income, on various stateprograms. PDVSA also loses billions subsidizing gasoline for Venezuelan drivers,who pay less to fill up their tanks than people anywhere else in the world. "Thegovernment of Venezuela today uses PDVSA as its petty cash box to lead populist

social programs," said Jorge R. Pinon, associate director of the Latin America andCaribbean Program at the University of Texas, Austin. "Whatever capital is left inPDVSA is being mismanaged, mismanaged because they're just not focused onrunning the company. ... They're focused on building hospitals and schools." On topof that, state oil company PDVSA dedicates 42 percent of its production tofavored partners in the Caribbean and to consumption inside Venezuela,


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where gasoline is almost free, which means it can sell less than 60 percent atmarket price.


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1NC 5

Russia solves in the status quo

Reuters 4/15(Reuters, April 4, 2013Putin congratulates vote winner in oil ally

Venezuela,http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415)

Russian President Vladimir Putin congratulated Nicolas Maduroon Monday onwinning Venezuela's presidential election, saying he expected good relations tocontinue with a country where Moscow has significant oil investments. Tiesbetween Moscow and Caracas flourished under Hugo Chavez, the socialist leaderwho died last month of cancer. Maduro was Chavez's chosen successor and Russianofficials were hoping for continuity to protect their energy and arms deals there."Putin expressed confidence that under Maduro's leadership Venezuela willfurther strengthen its relations of strategic partnership with Russia," the

Kremlin said after the Sunday vote. Russia has invested billions of dollars inVenezuelan oil projectsand has given Caracas loans to buy weapons.

China is funding Venezuelan oil in the status quo

WSJ 6/13(MARI IWATA, June 6, 2013 Venezuela Secures $4 Billion Funding FromChinahttp://online.wsj.com/article/SB10001424127887324798904578528922435217366.html)Venezuela has secured $4 billion in funds from China to be used for oil fielddevelopment, Oil Minister Rafael Ramirez said Thursday. The minister didn't givedetails of the new funding from China, which will add to at least $35 billion of

credit Beijing has provided to Venezuela, mostly in return for future oildeliveries. The South American country's state energy company Petroleos deVenezuela SA, or PDVSA, said Wednesday that Venezuela was negotiating a $4billion creditline from Export-Import Bank of China. Mr. Ramirez was speaking inTokyo following a trip to Beijing for talks with Exim Bank President Li Ruogu andother officials. Venezuela has also secured a number of financing agreements withits partners, ranging from Russia's Rosneft to U.S. oil major Chevron Corp., CVX+0.09% during the past few weeks as it looks for funding for its plans to rapidlyboost oil production. The new Chinese funds add to a separate $4 billion loanthat PDVSA will receive from the Chinese government to boost oil productionat Petrolera Sinovensa, a joint venture in Venezuela's between PDVSA and China

National Petroleum Corp. in Venezuela's rich Orinoco heavy oil belt. "We plan toincrease output to four million barrels a day by 2014 and six million barrels aday by 2016. Only Asia can absorb these increases," Mr. Ramirez toldreporters. Venezuela currently produces about three million barrels a day ofcrude oil.
http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415http://www.reuters.com/article/2013/04/15/us-venezuela-election-russia-idUSBRE93E0C920130415


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Dutch DA

Oil prices fluctuate the most- means economic collapse inevitable

Mander 12(Benedict Mander, July 15, 2012,Venezuela more prone to oil price

jittershttp://www.ft.com/intl/cms/s/0/415985c2-7a88-11e1-8ae6-00144feab49a.html)

There is no question about it. Venezuela is not only more dependent on oil,but it is more dependent on the price of oil, as production has not increased,says Jorge Pion, a research fellow at the University of Texas. The rise in oil pricessince Mr Chvez came to power in 1998 has been a boon in many ways, allowinghim to bolster his popularity by splurging oil revenues on social programmes, in towhich state-owned oil company PDVSA funnelled some $53bn between 2006 and2010. The problem, however, is that PDVSA has neglected to invest in its corebusiness, causing production to decline: it spent just $1bn in exploration activities

over the same period. Venezuela produced 2.72m barrels a day in 2011, accordingto BPs annual statistical review, versus 3.48m bpd in 1998 when Mr Chvez wasfirst elected. This has made the economy more dependent on oil prices staying high.Oil prices are the Achilles heel of the Venezuelan economy, added Mr Pion.Venezuelan oil prices fell to a low of $86.17 a barrel last month, after peakingat $116.85 a barrel in March. Despite Mr Chvezs wishful prediction recentlythat oil prices should stabilise at around $100, fears that prices will continueto slide have triggered concerns about Venezuelas $340bn economy, whichrelies on oil for 95 per cent of export earnings. London-based Capital Economicscalculates that if Brent oil prices fall to $85 a barrel, as they expect, the decline inVenezuelas oil revenues would be equivalent to 2.5 per cent of gross domestic

product. This is unlikely to hinder Mr Chvezs pre-electoral spending binge that isalready well under way. Analysts are increasingly concerned that the populist leaderis sweeping the problem under the carpet. Venezuela is going to need a meaningfuladjustment next year, which will first involve devaluing the currency, says BorisSegura, an analyst at Nomura Securities. He adds that spending will also have to becut back significantly, and fewer dollars allotted for imports, possibly aggravatingshortages of basic goods. Paradoxically, one import that could be squeezed is oilproducts. Lack of investment by PDVSA has led to a decline in refining activities, andVenezuela imports 40,000 barrels per day of oil products, including petrol, from theUS, versus a previous high of 32,000 bpd in 2011, according to data from the USEnergy Information Administration. Given that petrol retails locally at 9 cents a

gallon, or around $5 a barrel, but costs around $200 at international prices,Venezuela is losing some $2.5bn a year on the trade, points out Juan Cristbal Nagel,a Venezuelan economist and blogger. Still, analysts point out that should thegovernment need to prevent unpopular problems like shortages from worsening, itcan always resort to borrowing more from countries like China, in exchange forfuture oil deliveries, and the government can also issue more debt. Jos Guerra, aneconomic adviser for the opposition, warns that the government is ill-prepared for afall in oil prices, and argues that the economy would be better managed by the
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opposition, because it understands markets better. This government only knows ofone way to solve the problem: printing money and getting into debt, said MrGuerra. Venezuela is in an extremely vulnerable situation, he warns,calculating that for every dollar that oil prices fall, the government forgoes some$800m in revenues each year.

Dependency on pure oil makes Venezuela more prone to economic collapse- it

will never help its economy the way the government is structurally set up

Fuentes 13(Federico Fuentes, Federico Fuentes is a national executive member ofthe Socialisthttp://www.greenleft.org.au/taxonomy/term/670#sthash.zazzqyfi.dpufGreen LeftWeekly, July 8th 2013, Venezuela: War for oil fuels economic crisishttp://venezuelanalysis.com/analysis/9820)

With Venezuelas inflation rate for May soaring to 6.1%,first quarter growth

stagnating at 0.7%, and shortages afflicting a number of basic goods,speculation has been rife regarding the countrys economic future.Critics fromthe right and left have argued these are all signs that Chavismo (the name given tothe radical project for change spearheaded by former president Hugo Chavez) hasreached its limits. In most cases, economic woes are primarily attributed to badpolicies that have led to an excessively centralised economy presided over bya bureaucratic state increasingly dependent on oil revenue. However, placingthe blame solely on the government ignores the neo-colonial economy inherited byChavismo. It also conceals the ongoing economic war by Venezuelaselites,who are seeking to regain control over the countrys prize possession oilwealth. This goal requires dismantling Chavismo, which represents an

attempt by Venezuelas historically excluded poor majority to capture thestate, stem the flow of oil wealth out of the country and re-orientate it towardsmeeting their needs. Oil impacts The rise of oil production in the 1920sdramatically transformed Venezuelas economy. Agricultural production slumped asforeign oil companies poured into the country to extract cheap oil and high profits.Rather than develop local industries, Venezuelas elites preferred to take part ofthis oil wealth for themselves. They used some of it to import goods fromabroad to sell in the domestic market. Venezuelas oil-based economy took theform of neo-colonial capitalism: formally an independent nation, Venezuelaseconomy was dominated by and dependent upon the economies of imperialistcountries especially the United States, the main destination for oil exports

and origin of imported basic goods.

Dutch disease is extremely specific to Venezuela- turns the Affirmative

Allegret and Benkdodjay 13(Jean-Pierre Allegret and Mohamed TaharBenkhodjay, February 5, 2013The Dutch Disease Effect in a High vs Low Oil Dependant
http://venezuelanalysis.com/analysis/9820http://venezuelanalysis.com/analysis/9820http://venezuelanalysis.com/analysis/9820


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Countries.http://www.iaee2013daegu.org/eng/sub14/mb/2b/Jean-PierreAllegret.pdf)Blanchard and Gali (2010) show that the increase in oil prices has not only anegative effect on both inflation and growth, but also on economic volatility.Regarding oil-exporting countries, the most cited impact in the literature is that

of Dutch disease. Following Corden and Neary (1982) and Corden (1984), theDutch disease shows that an exogenous increase in resource prices or in resourceoutput results in real exchange rate appreciation and a decline in the manufacturingsector. This eect occurs mainly in two forms: the spending eect and the resourcemovement eect. The spending eect can be deO ned as the negative consequence ofreal exchange rate appreciation on manufacturing sector production. The resourcemovement eect results from the perfect mobility of capital and labor from themanufacturing sector to the oil and services sectors. This eect occurs because anincrease in oil prices generates a rise in wages and/or proO ts and generates a rise inaggregate demand in the economy. To the extent that a part of this demand willmove toward the service sector, the price of non-tradable goods will rise.

Consequently, the real exchange rate appreciates and lead to a de-industrializationprocess. To investigate the dynamic eect of the recent increase in oil price on asmall open oil exporting economy, we estimate a Dynamic, Stochastic, Generalequilibrium (DSGE) model for some oil producing countries using the Bayesianapproach. We build a small open economy model with three production sectors.Empirically, we consider a sample of 16 oil exporting countries (Algeria, Argentina,Ecuador, Gabon, Indonesia, Kuwait, Libya, Malaysia, Mexico, Nigeria, Oman, Russia,Saudi Arabia, United Arab Emirates, and Venezuela) over the period from 1980 to2010, except for Russia where our sample begins in 1992. We use quarterlydetrended data extracted from the International Financial Statistics provided by theIMF. In order to distinguish between high-dependent and low-dependent countries,

we use two indicators: the ratio of fuel exports to total merchandise exports and theratio of oil exports to GDP. We estimate the median for each ratio on our 16 studiedcountries. Countries above below the median are considered as high low oildependent economies see Table 1. We verify if the O rst group is more sensitive tothe Dutch disease effect. In this paper, we also assess the role of monetary policy.For this, we evaluate the efficiency of two policy rules, namely exchange rate ERand inaation targeting IT rules. The choice of these rules is important in the case ofa Dutch disease. Indeed, since the Dutch disease occurs under the spending and theresource movement effects, each monetary policy could play a central role to avoidthis effect. Theoretically, in the case of an ER rule, the exchange rate will be O xed,which will lead to lock the spending effect channel. Similarly for the IT rule, the

inaation rate will be stabilized. Knowing that wages are indexed to price index, thisrule will prevent the resource movement effect. Thus, It would be interesting toverify if, empirically, these rules could prevent the Dutch disease. Our results showthat high oil dependent countries are most likely vulnerable to oil price shockthan low oil dependent ones.Regarding the appropriate monetary policy rule, weO nd that both inaation targeting and exchange rate rules may be eective to containthe size of the Dutch disease eect. Our results suggest that in Algeria and SaudiArabia, inaation targeting oers better performances. We observe the opposite in
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Gabon, Kuwait, Oman, and Venezuela. Such results are consistent witheconomic theory. Indeed, we see that in more open economies and smallercountries in terms of economic size, the exchange rate rule is preferable toinaation rule. Venezuela seems an exception. Such country does not fulO ll thetraditional criteria favoring the choice of the exchange rule. In fact, this exception is

only apparent. First, if we consider the volatility(see Table 1), we see thatVenezuela is among the most volatile economy.Second, Venezuela suffersfrom a fiscal dominance effect: both inflation rate and fiscal deficit are thehighest relative to other studied countries.


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AT Oil Shocks

No Chance of any shocksno one but Venezuelas economy will collapse

Krauss 13(CLIFFORD KRAUSS, Clifford Krauss has been a correspondent for The

New York Times since 1990. He currently is a national business correspondentbased in Houston, covering energy., March 8, 2013 Dwindling Production Has Ledto Lesser Role for Venezuela as Major Oil Powerhttp://www.nytimes.com/2013/03/09/world/americas/venezuelas-role-as-oil-power-diminished.html?_r=0)

International oil prices have barely moved since Mr. Chvez died. OPEC hasdecided to increase shipments to the United States and Europe this month,using oil from Saudi Arabia and other Gulf states.Oil company executives, longfrustrated by Mr. Chvezs nationalizations, are voicing only tepid hopes that theycould possibly return in full force to what was once one of their crown jewels.

Venezuelas annual oil production has declined since Mr. Chvez took office in1999 by roughly a quarter, and oil exports have dropped by nearly a half, amajor economic threat to a country that depends on oil for 95 percent of its exportsand 45 percent of its federal budget revenues. Venezuelas clout on OPEC and onworld oil prices has been greatly diminished because of its inability to exploitits enormous resources, said Michael Lynch, president of Strategic Energy andEconomic Research, a consultancy. In the 1990s, their production was booming andthey could thumb their nose at Saudi Arabia and get away with it, but now they havebecome OPECs poor cousin. In a fundamental geopolitical turn, Venezuela nowrelies far more on the United States than the United States relies on Venezuela.Venezuela depends on the United States to buy 40 percent of its exports

because Gulf of Mexico refineries were designed to process low-qualityVenezuelan and Mexican crudes that most refineries around the world cannoteasily handle. But in recent years, the United States has been replacing its imports ofLatin American crudes with oil from Canadian oil sands fields, which is similarlyheavy.American imports of Venezuelan oil have declined to just under amillion barrels a day, from 1.7 million barrels a day in 1997, according to theEnergy Department. And while Venezuelan exports of oil are in decline, itsdependency on American refineries for refined petroleum products has grown tonearly 200,000 barrels a day because of several recent Venezuelan refineryaccidents.
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Venezuela is meaningless

Saudi Arabia pumps three times as much oil in one day

Reuters 13 REUTERS, 7 May 2013 ,Saudi oil output rises to 9.3 m bpd in April

Arab News,http://www.arabnews.com/news/450695)

ALKHOBAR: Saudi Arabia produced 9.3 million barrels per day (bpd) of oil inApril, up from 9.14 million bpd in March, an industry source said.Supply to the domestic and export markets was around 9.2 million bpd, up slightlyfrom the 9.15 million bpd supplied in March, the source said. The other 100,000bpd of oil produced is likely to have been put into storage. Export figures werenot available. Sources familiar with Saudi oil policy said in late April that theyexpected external demand for Saudi crude to remain steady from Marchthrough June 2013. But Saudi Arabias own crude oil demand for powergeneration has jumped by an average of 147,000 bpd from March to April in

the previous threeyears, according to a Reuters analysis of official data.

Saudi Arabia can make up for any loss of oil in Venezuela

Rathee 12(Aabha Rathee, March 12, 2012, Staff WriterCan Saudi Arabia Control OilPrices?http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/)

Saudi Oil Minister Ali al-Naimi said at a press conference on Tuesday that thecountry was prepared to raise oil output to 12.5 million barrels per day, ifneeded. I want to assure you that there is no shortage of supply in the

market, Naimi said in Doha, Qatar. We are ready and willing to put more oil onthe market, but you need a buyer.
http://www.arabnews.com/news/450695http://www.arabnews.com/news/450695http://www.arabnews.com/news/450695http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/http://wallstcheatsheet.com/stocks/can-saudi-arabia-control-oil-prices.html/http://www.arabnews.com/news/450695


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Impact Defense

Even the largest shocks did not cause catastrophes

Rasmussen and Roitman 2012(Tobias, senior economist at the IMF, and Agustin,

economist at the IMF, February 22, Oil Shocks Aroundthe World: Are They ReallyThat Bad?,http://www.theoildrum.com/node/8944)Increases in international oil prices over the past couple years, explained partly bystrong growth in large emerging and developing economies, have raised concernsthat high oil prices could endanger the shaky recovery in advanced economies andsmall oil-importing countries. The notion that oil prices can have a macroeconomicimpact is well accepted; the debate has centred mainly on magnitude andtransmission channels. Most studies have focused on the US and other OECDeconomies. And much of the discussion has related to the role of monetary policy,labour markets, and the intensity of oil in production (Hamilton 1983, 1996, 2005,

2009, Barsky and Kilian 2004, Bernanke et al 1997, Blanchard and Gali 2007). Themanner in which oil prices affect emerging and developing economies has receivedsurprisingly little attention compared with the large body of evidence for advancedeconomies. In an attempt to provide a broader and more encompassing view on theimpact of oil price shocks, we document in recent research (Rasmussen andRoitman 2011) key stylised facts that characterise the relationship between oilprices and macroeconomic aggregates across the world. The big picture It is nosurprise that import bills go up when oil prices increase. It is more surprising thatGDP often goes up too. Figure 1 depicts the correlation between oil prices andGDP for 144 countries from 1970 to 2010. More precisely, it shows the cyclicalcomponents of oil prices and GDP, with long-term trends excluded. The set

includes 19 oil-exporting countries, represented by red bars, and 125 oil-importingcountries, represented by blue bars.A positive correlation indicates that whenoil prices go up, GDP goes up, and when oil prices go down, GDP goes down.The message is clear. In more than 80% of the countries, the correlation between oilprices and GDP is positive, and in only two advanced economies the US and Japanit is negative. One of the contributing factors to this pattern is that in 90% of thecountries, exports tend to move in the same direction as oil prices. Figure 1.Correlation between the cyclical component of real GDP and the cyclical componentof real oil prices (1970-2010) Anatomy of oil shock episodes Given that periods ofhigh oil prices have generally coincided with good times for the world economy,especially in recent years, it is important to disentangle the impact of oil price

increases on economic activity during episodes of markedly high oil prices.Following Hamilton (2003), we identify 12 episodes since 1970 in which oil priceshave reached three-year highs. The median increase in oil prices in these years was27%. We study the behaviour of macroeconomic aggregates during these episodesby comparing the median annual change in a particular variable during oil shockyears to the median annual change over the entire sample period. This tells us of anyunusual observed changes (Figure 2). We find no evidence of a widespreadcontemporaneous negative effect on economic output across oil-importing
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countries, but rather value and volume increases in both imports and exports. It isonly in the year after the shock that we find a negative impact on output for a smallmajority of countries. Figure 2. Real GDP growth in oil shock episodes less mediangrowth (1970-2010, in percent) Small effects for oil importers To analyse multiplecountries and control for global conditions, we adapt the basic autoregressive model

of Hamilton (2003, 2005). Our main interest is in the effect of an oil price shock onthe economy of a typical oil-importing country. Taking into account the fact thathigher oil prices are generally positively associated with good global conditions, wefind that the effect becomes larger and more significant as the ratio of oil imports toGDP increases (Figure 3). To trace out the full impact of an oil shock, wecalculate impulse responses for a 25% increase in oil prices(Figure 4). Theresults indicate that the typical oil importer can expect a cumulative GDP lossof about 0.3% over the first two years,with little subsequent impact. Forcountries with oil imports of more than 4% of GDP (ie at or above the averagefor middle- and low-income oil importers), however, the loss increases toabout 0.8% and this loss increases further for those with oil imports above 5% of

GDP. In contrast to the oil importers, oil exporters show little impact on GDP inthe first two years but then a substantial increase consistent with the positiveincome effect, with real GDP 0.6% higher three years after the initial shock. Figure3. To put these numbers in perspective, it is useful to think of an economy whereoil accounts for 4% of total expenditure and where aggregate spending isdetermined entirely by demand.If the quantity of oil consumption remainsunchanged, then a 25% increase in the price of oil will cause spending onother items to decrease and, hence, real GDP to contract by 1%of the total.From this reference point, one would expect the possibility of substituting awayfrom oil to reduce the overall impact on GDP. At the same time, there could also befactors working in the opposite direction, via, for example, confidence effects,

market frictions, or changes in monetary policy. With our estimates of the GDP lossat only about half the level implied by the direct price effect on the import bill, theresults presented here suggest the size of any such magnifying effects, if present, isnot substantial across countries. Are oil price increases really that bad?Conventional wisdom has it that oil shocks are bad for oil-importing countries. Thisis grounded in the experience of slumps in many advanced economies during the1970s. It is also consistent with the large body of research on the impact of higheroil prices on the US economy, although the magnitude and channels of the effect arestill being debated. Our recent research indicates that oil prices tend to besurprisingly closely associated with good times for the global economy. Indeed, wefind that the US has been somewhat of an outlier in the way that it has been

negatively affected by oil price increases. Across the world, oil price shock episodeshave generally not been associated with a contemporaneous decline in output but,rather, with increases in both imports and exports. There is evidence of laggednegative effects on output, particularly for OECD economies, but the magnitude hastypically been small. Controlling for global economic conditions, and thusabstracting from our finding that oil price increases generally appear to bedemand-driven, makes the impact of higher oil prices stand out more clearly.For a given level of world GDP, we do find that oil prices have a negative effect on


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oil-importing countries and also that cross-country differences in the magnitude ofthe impact depend to a large extent on the relative magnitude of oil imports. Theeffect is still not particularly large, however, with our estimates suggesting that a25% increase in oil prices will typically cause a loss of real GDP in oil-importing countries of less than half of 1%, spread over 2 to 3 years.

.


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Relations Advantage

1. Venezuela and US relations cannot be solved

RT 7/19(RT, July 19, 2013 , Kerry vows to put the screws to Venezuela overSnowden reporthttp://rt.com/news/kerry-threatens-venezuela-snowden-308/)US Secretary of State John Kerry has reportedly promised his Venezuelancounterpart to close NATO airspace to the countrys flights andstop crucial oilproduct deliveries if Caracas grants asylum to NSA leaker Edward Snowden.Last Friday night, just hours after Venezuela agreed to provide political asylumto former NSA contractor Edward Snowden, Kerry personally calledVenezuelan Foreign Minister Elias Jaua, a Spanish ABC media outlet cites a sourcefamiliar with the conversation as saying. Kerry reportedly threatened to groundany Venezuelan aircraft in Americas or any NATO countrys airspace if thereis the slightest suspicion that Snowden is using the flight to get to Caracas

2. Venezuela economy relies on Chinese economy- turns econBaiyi 13(Wu Baiyi, fellow researcher at Chinese Academy of Social SciencesMarch 18, 2013, Whats Ahead for Sino-Venezuelan Relations After Chavez?http://www.chinausfocus.com/foreign-policy/whats-ahead-for-sino-venezuelan-relations-after-chavez/)Chinas response to Chavezs death signifies the explicit support and closeattention that the country places on the stability of Venezuelaafter its loss of agreat leader. China and Venezuela are strategic partners in the boat ofcommon development, with the former being the latters second biggest oilimporter and the latter being the formers fourth biggest oil supplier. Thanksto their innovative credit models, the two countries have also achieved win-wincooperation in trade, science and technology, infrastructure development, andother fields in recent years;benefiting their people and satisfying their respectivedevelopment demands. Particularly in the wake of the financial crisis, theircooperation played an important role in growing their economies, and diversifyingtheir extraterritorial operations. This is in accordance with the general trend ofSouth-South cooperation in the world economy. Given the facts, this authorbelieves that Sino-Venezuelan relations after Chavez will feature mutual trust anddown-to-earth cooperation. First of all, the ruling Venezuelan United SocialistParty sees Chinas rise as a vital opportunity for Venezuelas development, andhas a strong desire to further cooperation with China. If he wins the generalelection scheduled for mid-April, Maduro and his team will surely committhemselves to advancing Venezuelas strategic cooperation with China, an effort thatnot only constitutes a part of Chavezs legacy but also has a direct bearing onVenezuelas core interests, such as the sustainable development of itseconomy and society, and its foreign relations. So far as China is concerned, policycontinuation in Venezuela will benefit Chinas business and diplomatic interests inVenezuela.
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3.US China war probability is extremely low- analysts

CNN 7/11 Ramy Inocencio and Jaime Florcruz, reporters, July 11, 2013 Will wereally see the dawn of a "new chapter" in U.S.-China relations? CNN,http://edition.cnn.com/2013/07/11/business/us-china-relations-new-chapter)

Thorny issues of unbalanced trade, cyber security and intellectual propertyrights stand stark in the spotlight at this year's U.S.-China Strategic EconomicDialoguenow underway in Washington, D.C. Top officials from both sides, includingco-chairs U.S. Secretary of State John Kerry and China's State Councilor Yang Jiechi,have expressed tempered optimism for "a new chapter" in bilateral ties -- despiterecent stumbles. The U.S. has slammed China on unfair subsidies on solar panels andthe theft of secrets owned by U.S. technology companies. China has returned its owncomplaints -- most recently after NSA leak Edward Snowden alleged Washingtonhas been hacking Chinese computers. Yet leaders of both the U.S. and China -- theworld's two largest economies -- know their nations are mutually dependent,especially on economy and foreign policy. Should either party try to distance

itself from the other, the result would be mutually detrimental, analysts say."For the United States, the biggest issue is market access to China and making sureAmerican companies have a level playing field," says Fred Neumann, HSBC Co-headof Asian Economics and Managing Director in Hong Kong. In March, the U.S.Commerce Department attempted to balance the field on the issue of solar panels.Washington slapped tariffs on Chinese-made panels in response to alleged subsidiesby Beijing. Under the ruling, Chinese panels were hit with tariffs from 2.9% to 4.7%,echoing similar spats between China and Europe over solar panels and Europeanwines. The biggest technological thorn in U.S.-China ties is "the respect forintellectual property created by U.S. firms" -- and lack thereof, says Chris Bronk, ITPolicy Fellow at Rice University's James A. Baker Institute. This includes "everything

from pirated movies and software to R&D and corporate strategy documents"because "losses will cut into the capacity for additional development if the return oninvestment is insufficient." In June, the U.S. Department of Justice charged one ofChina's biggest wind turbine makers, Sinovel, with stealing source codes from a U.S.competitor and manufacturing new machines. American SuperconductorCorporation claims Sinovel's theft resulted in $800 million in losses. The UnitedStates loses some $300 billion each year mostly because of Chinese intellectualproperty theft, said former U.S. ambassador to China John Huntsman to CNN in June.In addition to IP theft, U.S.-China cyber security issues have come to the fore in thepast month after NSA leak Edward Snowden alleged U.S. intelligence agents havebeen hacking hundreds of Chinese computers since at least 2009. China claimedSnowden's revelations would "test developing Sino-US ties" and exacerbate analready "soured relationship" on cybersecurity. Snowden's assertions, on top ofalleged Chinese hacking of U.S. firms, depict a clear degree of mutual mistrust. Themajority of headlines in China since then have referenced "strain," "tension," andeven "anger" between the U.S. and China. The potential and ease for cyber attacksbetween the U.S. and China will continue to grow, says Andy Mok, managing directorof Beijing-based Red Pagoda and former technology researcher for RAND
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Corporation. "When every physical object has an IP address ... the return onmalicious behavior becomes much higher. So on both sides -- China and the U.S. --the targets are increasingly attractive." National electrical grids and transportationnetworks are some of the most attractive marks in each country, adds Mok. "Thatsaid, the sky is not falling and I don't believe we are weeks or months away from a

cyberwar with China that will leave the U.S. power grid in tatters and the wholecountry sitting in the dark for months or years." The chances of direct conflict arelow, agree analysts. Economic, military, and technological disparity betweenthe U.S. and China is too great. China is not ready for a clash to occur. And theU.S. -- still on the mend from the 2008 financial crisis -- is unlikely to instigatea conflict with China because of its own fiscal binds to China.

4. Brazil is the most important country in terms of soft power- Venezuela is

meaningless

Wilson Center 12(Wilson Center, Latin America Program, June 01, 2012 ,Braziland South Americahttp://www.wilsoncenter.org/event/brazil-and-south-

america)At her inauguration in 2011, Brazilian President Dilma Rousseff announced, withvehemence and firmness, Brazils decision to associate its economic, social, andpolitical development with the continent of South America. Rousseff specificallymentioned the Mercosur trade bloc and the Union of South American Nations(UNASUR) as essential components in the construction of a multipolar world. Yethuge asymmetries separate Brazil from its neighbors: at the end of 2011,Brazils GDP accounted for approximately 60 percent of the total GDP of South

America and close to 40 percent of the total output of all of Latin America.Brazils rise as a global power and its growing clout on a host of global issuesraise as many questions as they answers about the Brazils relationship with other

nations in South America.

5. Relations with Venezuela are meaningless- nations are inherently realist and

will do things in their best interest

Jehangir 12(Hamza Jehangir, Staff Writer, February 19, 2012 Realism, Liberalismand the Possibilities of Peacehttp://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/)

However modern realism which is known as neo-realism separates itself fromthe political ruleswhich are situated in human nature and its characteristics andtakes the view that the structure in which states exists in international relations is

anarchic due to the absence of an overarching authority sovereign. (Waltz, 1979,p.103) Neo-realists thus explain that states serve their own interests in theinternational system by following a strict code of self help due to the absenceof any authority above them. Moreover, as all states exist in a state of anarchy inthe international arena of politics, they all pursue self interest and try toacquire power to secure themselvesand ensure their survival in a system whereno other state or authority will come to save them if they fail to do. (Waltz, 1979,p.104) Theorists such as Waltz argue that it is the structural effect of the system
http://www.wilsoncenter.org/event/brazil-and-south-americahttp://www.wilsoncenter.org/event/brazil-and-south-americahttp://www.wilsoncenter.org/event/brazil-and-south-americahttp://www.wilsoncenter.org/event/brazil-and-south-americahttp://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/http://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/http://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/http://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/http://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/http://www.e-ir.info/2012/02/19/realism-liberalism-and-the-possibilities-of-peace/http://www.wilsoncenter.org/event/brazil-and-south-americahttp://www.wilsoncenter.org/event/brazil-and-south-america


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which shapes the way its residing units act. Waltz argues, because some states mayat any time use force, all states must be prepared to do so-or live at the mercy oftheir militarily more vigorous neighbours, however this does not apply thatthere is constant warfare and conflict amongst statesin the state of anarchy butas Mearsheimer 1994 explains that there is not constant war but relentless

security competition with the possibility of war looming in the background. Waltz,1979, p.102; Mearsheimer, 1994, p.9) In such a situation, no one state can trustanother therefore cooperation is limited and unstable when it occurs. Statesfunction on a zero-sum principle because they are present in a structurewhich compels them to seek security which results in competition betweenstates and creates the possibility of states cheating their wayout of analliance to gain more power and security.(Mearsheimer, 1994, p.11; Waltz, 1979,p.106) Thus due to anarchy in the realm of international relations, realists viewstates as unitary rational actors and the principle movers in the game ofinternational politics, states seek self-preservation at a minimum but if given thechance they also dominate other units in the structure to make themselves

more secure which creates a security dilemma as all the states exist in a self-helpsystem of anarchy, positive moves can be deciphered as offensive ones amongststates due to the lack of trust and heightened suspicion that exists between them.(Waltz, 2001, p.181-188; Mearsheimer, 1994, 11-14)


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1NC 1

Venezuela and the United States will not resolve relationsSnowden proves

Neuman 7/20(WILLIAM NEUMAN, July 20, 2013, Venezuela Stops Efforts to

Improve U.S. Relationshttp://www.nytimes.com/2013/07/21/world/americas/venezuela-stops-efforts-to-improve-us-relations.html?_r=0)Venezuela announced late Friday that it was stopping the latest round of off-again-on-again efforts to improve relations with the United Statesin reaction tocomments by the Obama administrations nominee for United Nations ambassador.The nominee, Samantha Power, speaking before a Senate committee on Wednesday,said part of her role as ambassador would be to challenge a crackdown on civilsociety in several countries, including Venezuela. President Nicols Maduro hadalready lashed out on Thursday8at Ms. Power for her remarks, and late on Fridaythe Foreign Ministry said it was terminating efforts to improve relations with the

United States. Those efforts had inched forward just last month after Secretary ofState John Kerry publicly shook hands with the Venezuelan foreign minister, ElasJaua, during an international meeting in Guatemala one of the highest-levelmeetings between officials of the two countries in years. Venezuela will neveraccept interference of any kind in its internal affairs, the Foreign Ministry said in astatement, adding that it considered terminated the process begun in theconversations in Guatemala that had as their goal the regularization of ourdiplomatic relations.Relations with Venezuela have long been troubled,although the country has remained a major supplier of oil to the United States.Under the previous president, Hugo Chvez, a longtime nemesis of the United States,relations were bumpy, especially after the Bush administration tacitly supported a

coup that briefly ousted him. Mr. Maduro, Mr. Chvezs handpicked successor, hasgiven mixed messages about relations with the United States. In March, when Mr.Maduro was vice president, he kicked out two American military attachs, accusingthem of seeking to undermine the government. After he was elected in April, heordered the arrest of an American documentary filmmaker whom officials accusedof trying to start a civil war. The filmmaker, Tim Tracy, was later expelled from thecountry. And in recent days, in a sharp escalation of the war of words withWashington, Mr. Maduro has said he would give asylum to Edward J. Snowden,the former American intelligence contractor who leaked secrets about Americanintelligence programs and is staying at a Moscow airport.
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1NC 2

China is key to Venezuelas economy- 300 bilateral agreements and 80 major

projects

Arsenault 13(Chris Arsenault, Staff Writer, 12 Mar 2013, Venezuela looks to Chinafor economic boostAl Jazeera,http://www.aljazeera.com/indepth/features/2013/03/201331271053389351.html)

As Chinas economic and political footprint grows across Latin AmericaandAfrica, worrying some and enriching others, Alvaro Ruiz Sanchez has his eyes on theprize. President of OrOctrading, a consulting firm, Sanchez - sporting thick cufflinkswith the red Chinese flag and a dark blazer - has been teaching Venezuelancompanies about doing business with the worlds second-largest economy. Usually,manufactured goods from China are coming into Latin America and rawmaterials are going out, Sanchez told Al Jazeera. Venezuela has posted a

positive trade balance with China,because of oil exports, but without those wewould have a major deficit.Trade between Venezuela, holder of the worldslargest oil reserves, and China grew to $18bn in 2011, a 24-fold increase from2003, reported China Daily, a government-backed newspaper. Venezuela exportsmore than 500,000 barrels of oil to the Asian giant daily, according togovernment figures, and plans to increase that to one million by 2015. The twocountries had signed 300 bilateral agreements, including 80 major projects,according to a University of Miami study in 2010. Looking east Alvaro RuizSanchez believes trade with China is the way of the future for Venezuela [ChrisArsenault/Al Jazeera] As relations between Venezuela and the US soured in recentyears, Venezuela looked away from its traditional trading partner towards the east.

China could soon surpass the US as Venezuelas largest trading partner.
http://www.aljazeera.com/indepth/features/2013/03/201331271053389351.htmlhttp://www.aljazeera.com/indepth/features/2013/03/201331271053389351.htmlhttp://www.aljazeera.com/indepth/features/2013/03/201331271053389351.htmlhttp://www.aljazeera.com/indepth/features/2013/03/201331271053389351.htmlhttp://www.aljazeera.com/indepth/features/2013/03/201331271053389351.html


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1NC 4

Brazil is a lot more important then Venezuela

Leahy 13(Joe Leahy, FTs Brazil bureau chief, February 22, 2013, FT, Brazil: the

first big soft powerhttp://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jt)

The Brazil of Niemeyers last 10 years was one in which the lower middle class roseto account for more than half of the population a fabulous turnround for what forfive centuries has been one of the worlds most unequal societies. It is a Brazil thathas had stable government for nearly two decades, from the sociologist-turned-centre-right-president Fernando Henrique Cardoso, to the former firebrandunionist, Luiz Incio Lula da Silva, who took office in 2003, and his successor in theruling Workers Party (PT), Dilma Rousseff, a Marxist guerrilla-turned-technocrat. Itis a Brazil whose global standing has rarely been higher. Its agriculture feeds

the planet. It has good relations with virtually every country in the world,from the US to North Korea. It has curbed, though not yet halted completely, thedestruction of the Amazon. And it is preparing to host the World Cup next year andthe Olympics two years later a feat few countries have ever attempted. If thegames are successful which they probably will be, despite Brazils reputationforhaving a very relaxed attitude to planning they will help seal the countrysimage globally as one of the worlds emerging powers. Not a military power,bristling with missiles and troubled by messy border disputes like China orIndia, but the first big soft power, a kind of Canada writ large but with Carnivalthrown in.

Title: 2013 : U.S. trade in goods with Venezuela

NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless

otherwise specified.Details may not equal totals due to rounding.

Month Exports Imports Balance

January 2013 1,436.6 3,408.9 -1,972.3

February 2013 1,039.1 2,182.9 -1,143.8

March 2013 980.0 2,256.3 -1,276.2

April 2013 1,298.6 2,817.8 -1,519.1

May 2013 1,230.4 2,742.6 -1,512.2

TOTAL 2013 5,984.7 13,408.4 -7,423.7
http://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jthttp://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jthttp://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jthttp://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jthttp://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jthttp://www.ft.com/intl/cms/s/2/37685a5c-7bbd-11e2-95b9-00144feabdc0.html#axzz2a6Y4Q4jt


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Title: 2013 : U.S. trade in goods with South and Central America

NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless

otherwise specified.Details may not equal totals due to rounding.

Month Exports Imports Balance

January 2013 15,149.9 14,067.1 1,082.9

February 2013 14,545.3 11,832.2 2,713.2

March 2013 15,666.6 13,199.7 2,466.9

April 2013 14,319.2 13,443.8 875.3

May 2013 14,844.5 14,343.6 500.9

TOTAL 2013 74,525.5 66,886.3 7,639.2

These graphs show that Venezuela means nothing in terms of politics with Latin

America- the US will inevitably trade with other countries


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Other Miscellaneous Arguments

Their Wallis card takes out the first advantage because Venezuela is turning to

China and Russia in the status quo

There Cerna card that makes the litmus test claim is talking about Brazil

Their Dowd cards make hyperbolic claims not supported by warrants

1. No evidence that China is actually selling military equipment to LatinAmerica

2. Aff cannot solve it says the United States has to engage militarily

No chance of US engagement with Venezuela as long as we are the hegemons

Press TV 7/24 (Press TV July 24,No dialogue unless US changes imperialisticstance: Venezuelahttp://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/)Venezuelan President Nicolas Maduro says Caracas-Washington ties could notbe normalized unless the US ends its imperialistic attitude towards Latin

America. Improved relations with the United States does not depend on justus, it depends on them (US).If they can rectify (this)and are able to, which Idoubt, there will be another position; we will renew dialogue, Madurotold acheering audience in the Caribbean state of Monagas on Tuesday.
http://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/http://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/http://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/http://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/http://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/http://www.presstv.ir/detail/2013/07/24/315416/us-must-end-imperialistic-stance-maduro/


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Venezuela DA

The disadvantage can be strategic if you ask them about their Tulchin card in

1AC cross x. This is the internal link to their impact and it says tensions are

building up because of an economy. You have to win that those people do notcare about the economy but more about keeping the US out.

Maduros power is contingent on Anti- American sentiments

El Universal 7/19El Universal, July 19, 2013Maduro asks Washington to rectifyupon ambassador nominee's statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statements)

President of Venezuela Nicols Maduro late on Thursday demanded thegovernment of US President Barack Obama to rectify immediately, upon the

statements issued by Samantha Power, the US ambassador nominee to the UnitedNations. "I repudiate and reject in their entirety the ambassador's intemperate,unjust and aggressive statements," Maduro said during a ceremony in Monagasstate, east Venezuela. Maduro referred to the remarks uttered by Power, who onWednesday criticized the actions of Cuba and Venezuela in the region. "Power saysshe'll fight repression in Venezuela? What repression? There is repression in theUnited States, where they kill African-Americans with impunity, and wherethey hunt the youngster Edward Snowden just for telling the truth,"admonished Maduro. He warned that "the fascist right-wing applauds the USimperialism's interference in Venezuela and seeks to return to power tosurrender the country to them again." He criticized the fact that Washington talks

of respect and improvement of relationships: "We cannot believe in any USimperial government ever." Maduro stressed.

US involvement backlash against Maduro causes a power struggle

Spetalnick 13 (Matt Spetalnick , White House correspondent who has coverednews on four continents for Reuters, from Latin American coups and drug wars,Reuters, March 6th, 2013,Despite new hopes, U.S. treads cautiously after death ofVenezuela's Chavez http://uk.reuters.com/article/2013/03/06/uk-venezuela-chavez-usa-idUKBRE92504920130306)

Washington's challenge will be to figure out how far to go in seizing the

opening to engage with Venezuelan leaders as well as its political oppositionwithout giving the impression of U.S. meddling following the socialist president'sdeath after a two-year battle with cancer. "We're not interested in having aconfrontational relationship with Venezuela," a senior U.S. official toldReuters. "We're going to have to see how things evolve. It's a dynamic period."For Washington, a major test will be whether Venezuela follows its own constitution- which has been widely interpreted to require a special election to pick Chavez'ssuccessor - and if such a vote is conducted in a free and fair way in "accordance with
http://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statementshttp://english.eluniversal.com/nacional-y-politica/130719/maduro-asks-washington-to-rectify-upon-ambassador-nominees-statements


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hemispheric norms," the official said. Washington had accused Chavez and hisallies of electoral abuses, such as intimidating foes and misusing state media duringhis 14-year rule. Chavez had created headaches for successive U.S. administrationswith his strong anti-American rhetoric and his alliances with some of Washington'smain foes, including Cuba and Iran. The question now is whether his leftist

"revolution" and incendiary foreign policy can live on without his dominantpersonality at the helm. In a normally divided Washington, Chavez's deathbrought a rare moment of bipartisan agreement, with Republicans and Democratsalike seeing it as a chance to turn a page after a long period of strained U.S.-Venezuelan ties. "Hugo Chavez was a destabilizing force in Latin America, and anobstacle to progress in the region," said Mike Rogers, a Republican from Michiganand chairman of the U.S. House of Representatives intelligence committee. "I hopehis death provides an opportunity for a new chapter in U.S.-Venezuelan relations.""Hopefully there will be a peaceful transition of power in Venezuela with real,meaningful democratic reforms," U.S. Senator Bill Nelson, a Democrat from Florida,said in a message on Twitter. OBAMA'S NOT-SO-SUBTLE MESSAGE Obama called

it a "challenging time" for Venezuela and - in a measured but not-so-subtle messageto Vice President Nicolas Maduro, Chavez's preferred successor - said the UnitedStates "remains committed to policies that promote democratic principles, the ruleof law and respect for human rights." Taking the chill off the relationship betweenWashington and Caracas will not be easy. Recent U.S. efforts to improve long-dormant cooperation in areas like drug interdiction and regional security werefavourably received at first in Caracas but ultimately failed to yield any realprogress, the senior administration official said. And Washington was quick toreject Maduro's accusations, made just hours before his announcement of Chavez'sdeath, that the United States had been engaged in a conspiracy against the presidentand Venezuela. "Their statements and actions today call into question their interest

in having a functional and productive relationship with the United States," theofficial said. Chavez, who took on Cuban leader Fidel Castro's role as Latin

America's most vocal critic of Washington, accused the United States ofpursuing imperialist policies in the region as he used Venezuela's oil wealth tobolster leftist allies. As for whether Washington hoped to see Venezuela moveaway from its alliance with communist-ruled Cuba, the U.S. official said: "That's upto them to determine who their partners are." But the official added thatWashington has not hesitated to make known its displeasure when "therewere relationships with actors of concern." U.S. officials had contended thatChavez' rule eroded democratic freedoms in Venezuela and he went too far inconcentrating power in his own hands. But any overt U.S. effort to intervene in

Venezuela's politics now would almost certainly backfire,and possibly harmthe anti-Chavez opposition. "It is a delicate time. I think the United States needsto be very patient and not become a factor internally in a way that ... couldbecome negative," said Arturo Valenzuela, the U.S. State Department's top officialfor the Western Hemisphere from 2009 to 2011


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Every Maduro action is watched carefully by Narco-generals the country is on

the brink of a social meltdown

Noriega 13 (Roger F. Noriega was ambassador to the Organization of AmericanStates from 2001-2003 and assistant secretary of state from 2003-2005. He is avisiting fellow at the American Enterprise Institute Venezuela elections may stir

things up InterAmerica Security Watch April 13th, 2013 http://interamericansecuritywatch.com/venezuela-elections-may-stir-things-up/

As I noted after Chvezs death last month, Venezuela is a country on the verge ofa socioeconomic meltdown. Street crime, power outages, and shortages offood and consumer goods trouble the lives of millions of citizens.Thegovernment is running a dangerous fiscal deficit; mismanaged socialprograms are unsustainable.State revenues are down dramatically because thestate-run oil company packed with political cronies and plundered by Chvez tofund pet projects is producing far less oil than it was 15 years ago. The regimehas forfeited its legitimacy as senior officials are complicit with drug

trafficking and terrorism. And the shameless intervention of Havana tomanage the chavista succession has stirred anger among nationalists inVenezuelas once-proud military. Confronting these challenges without Chvez atthe top of the ticket, the regime has exploited every unfair advantage to engineer aconvincing victory. Although the chavista leadership has closed ranks aroundMaduro, their confidence has to have been shaken by his buffoonish performance claiming to chat with Chvez through a little bird circling over his head, for instance,or clumsily mimicking the antics of his charismatic predecessor. Even if thechavistas decide to steal an electoral victory for Maduro, after the election, thenarcogenerals led by National Assembly president and ruling party chiefDiosdado Cabello will second-guess Maduro as he tries to run the country.Cabello considers himself a much more able administrator, and he has a bitterdistrust of the Cubans who appear to be micromanaging Maduro and his campaign.

Narco uprising leads to terrorism- specifically FARC

Feldman, 8 (Andreas E. Feldmann, Maiju Perala. Wiley online library.Reassessing the Causes of Nongovernmental Terrorism in Latin America,http://onlinelibrary.wiley.com/doi/10.1111/j.1548-2456.2004.tb00277.x/abstract)//SDLSome guerrilla organizations have resorted to terrorism as a delib- eratestrategy to attain certain goals; principally, demoralizing security forces and

undermining the ruling governments legitimacy by exposing their incapacity toprotect their citizens. Some guerrilla groups are more inclined to useterrorism than others. In Latin America, for example, while groups such as ElSalvadors Farabundo Marti National Liberation Front (FMLN) very seldomengaged in terrorism, others, including Perus Sender0 Luminoso (Shining Path)andthe Fuerzas Armadas Revolu- cionarias de Colombia (FARC), have usedterrorism quite frequently as part of their military strategy. The principaldifference between terrorism and guerrilla warfare is the nature of the act itself,


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irrespective of the individual or organization that carries out the actions. States,state-sponsored groups, criminal organizations, guerrillas, and individuals allperpetrate terrorist acts. Laqueur asserts that while guerrilla operations aredirected principally against the members of the enemys security and armed forces,as well as their infrastructure, particularly strategic installations, terrorist organ-

izations are far less discriminate in their choice of targets(1976, 404). In order to challenge their enemy, Laqueur says, terrorist groups generally conduct sporadic, highly visible attacks, normally directed against non- combatants. These attacks aim to create commotion among the popula- tionand to weaken the power and legitimacy of government(Laqueur 1987, 144-48, 1976, 400-4). In short, guerrilla actions consist of warfare tactics used by aweaker side to inflict damage on its enemy. Terrorism, conversely, consists ofdeliberate, indiscriminate attacks on noncombat- ants to instill terror in thepopulation and undermine the power of political authorities.

Venezuela is the greatest threat to the US nowties with Iran, Russia, and the

Middle Eastasymmetrical warfare provesNoriega, 12 Roger Noriega, Senior State Department Official, Sizing up theVenezuela Threat, http://www.aei-ideas.org/2012/08/sizing-up-the-venezuela-threat/)//SDL

Hugo Chvezhas converted Venezuela into the greatest narcotrafficking,

terrorism, and organized crime threat in the Americas . His minister of defense is among a

dozen Venezuelan officials who have been sanctioned for their involvement in narcoterrorism. His military is notonly compliantwith the illicit drug trade, it is complicit with Colombian and Mexican

crime syndicates.Chvez has made Venezuela one of Iransmost important

allies . He has provided material and logistical support to Middle Eastern and

Colombia terrorists , provides oil to Syria , and extends Iran the means to

launder billions of dollars to support its illegal nuclear program . If terrorism,

Syria, and Iran are threats, than so too is Venezuela. Venezuelasarms build

up at least $10 billion in Russian arms purchases and production of

assault rifles and ammunition gives it the means to sow mayhem in thecountry and beyond. Such conventional weaponrymay not pose a threat to the United States,

but it can be used as Chvezs asymmetrical strategy to harm U.S. security and

interests .Such a threat requires an asymmetrical response . Fortunately, several U.S.law enforcement agencies have taken the lead in targeting the links in the narcoterrorist networks in Venezuela. As for General

Fraser, he is set to retire this fall; he will be replaced by a Marine Corps general who will have to start from scratch in sizing upthe Venezuela threat


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Link Uniquness

Maduro narrowly holding-off internal military challenges because of an anti- US

ideologyMetzker 13 (Jared Metzker, IPS Reporter, June 17, 2013, Analysts Say Oil CouldHelp Mend U.S.-Venezuela Relations, http://www.ipsnews.net/2013/06/analysts-say-oil-could-help-mend-u-s-venezuela-relations/)

The new president's waffling may be a reflection of his tenuous grip on power.By many accounts, Maduro lacks the political prowess and rabble-rousing charm ofChavez, who enjoyed military backing as well as fervent support from the lowerclasses. In addition to a strong anti-Chavista opposition that openlychallenges the legitimacy of his narrowly won election, Maduro has had todeal with a split within Chavez's own former political base. Shifter pointed out

that among the military, which was once a source of significant strength forChavez, more support is given to Diosdado Cabello, currently head ofVenezuela's parliament and whose supporters believe he was the rightful heir to thepresidency. Maduro's legitimacy stems largely from his perceived ideologicalfidelity, the reason for his selection by Chavez to lead in the first place. Shiftersaid this leads him to "emulate" his predecessor and makes rapprochementwith the United States less probable.


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Link

Narco militants are ideologically against the United States

Shinkman 13Paul D. Shinkman, April 24, 2013 Iranian

Venezuela Oil Negative - DDI 2013 SS

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