Bhr Russia And Saudi Oil Updates

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Russia and Saudi Oil DA Updates Russia DA Uniqueness...........................................................................................2

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Russia DA Uniqueness Russia’s economy is surging because of high oil prices but inflation has also risen making the economy vulnerable to any sudden change Emirates Business 24/7 July 11, 2008 (“Russian Economy flourishes like UAE’s”, http://www.business247.ae/Articles/2008/7/Pages/RussianeconomyflourisheslikeUAE%E2%80%99s.aspx) With oil prices remaining high, Russia is enjoying a similar economic boom to the Emirates, and has amassed $500 billion (Dh1.83trn) in foreign currency reserves. GDP has been rising sharply at around seven per cent per annum for the past seven years. And as emerging stock markets like China and India have sold down rapidly since last October, 48 and 35 per cent respectively, the Russian bourse hovers near an all-time high. Last week came the news that Dubai World and OAO Roskommunenergo are to bid $5.3bn for Russia’s biggest wholesale power producer before price caps end in 2011. This will be the first Russian Energy investment by a GCC oil state, and part of a $34bn sale of electricity generation and distribution assets since 2006. Dubai-based entities have a mixed record for buying foreign assets in recent years. Property giant Emaar bought UK estate agency Hamptons just in time for the market to slump, and acquiring the second-largest US housebuilder John Laing was arguably even worse on timing. But then Madame Tussauds in London proved an excellent buy and was sold on for double the sale price. Then again last August Dubai World agreed to invest $5.1bn in Kirk Kerkorian’s MGM Mirage company in Las Vegas as part of Dubai’s diversification plans. Since then Las Vegas has gone into an unprecedented slump with tourism falling in a city once thought recession proof. OGK-1 has four plants in European Russia and two in Siberia, and supplies electricity to Moscow and the oil-rich Tyumen region. Only time will tell if this is the right time to buy. It is only too easy for foreign investors to become the latecomers to any investment party. But the omens are very fortuitous in post-Putin Russia. The economic transformation runs deep and is being overlooked by the Cold War mentality of some observers in the West. Arriving back in Russia after a year’s absence last week there is an immediate sense of economic prosperity in the air, and none of the near panic seen in the UK, US and parts of Europe. Indeed,

the most apparent change is that inflation has surged in Russia, usually a sign of economic strength or possibly overheating. The cost of the train ticket from Moscow to St Petersburg has doubled in a year, similarly ballet prices have shot up and even the price of art on the streets is double what it was two years ago. Even gas at the pumps sells for US prices these days. Russia’s economy to grow 8% this year, but isn’t infallible Istock analysis July 10, 2008 (“Russian Economy could grow 8% in 2008”, http://www.istockanalyst.com/article/viewiStockNews+articleid_2387619&title=Russian _Economy_Could.html) Russian GDP could grow about 8% in 2008, Deputy Prime Minister Alexander Zhukov said at a meeting with members of the Association of European Business in Moscow on Thursday. “Based on my appraisals and the appraisals of the Economic Development Ministry, GDP growth could close in on 8% in 2008,” he said.

Industrial

production could grow by more than 6%, he said. The government’s official forecast for GDP growth in 2008 currently stands at 7.6%, while the forecast for industrial production is 5.7%. The Economic Development Ministry will present an

According to the Economic Development Ministry, Russian GDP grew 8.3% in the first half of 2008, while industrial production increased 6.6%. Zhukov noted that Russia has maintained a rather high level of economic growth “despite the continuing financial crisis throughout the world,” although there have nevertheless been some negative consequences. As an example, he cited inflation, which was already up to 9% for the year on updated forecast for 2008 to the government at the end of July.

July 7, or three percentage points higher than in the same period of last year.

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Russia DA Uniqueness The Russian economy is strong and getting stronger, although some problems plague it Moscow News 7/6/08 (“World Bank Chief praises Russian economy”, http://mnweekly.ru/world/20080619/55333975.html ) Zoellick was generous with his praise for the Russian economy. He congratulated President Dmitry Medvedev and his colleagues on Russia's strong economic growth, and said that this is a very interesting time for Russia and its relations with the World Bank. Zoellick was much more diplomatic than the authors of the World Bank's early June report on the Russian economy. They too commended Russia for its economic growth rates: 8.1 percent in 2007, and 8.7 percent in the first quarter of this year. But they again criticized the Russian government for persistent inflation (which reached 7.7 percent from January to May of this year, and was up to 8.1 percent by June 9).

Importantly, for the first time World Bank experts spoke about the overheating of the Russian economy, which they define as a situation where consumer demand outstrips the supply of goods and services. Graphic evidence of this is the faster growth of wages and salaries than labor productivity. This situation threatens even higher inflation, which could eventually slow down economic growth rates. Nevertheless, the experts have concluded that all macroeconomic indicators, except for inflation, point to the strength of the Russian economy.

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Russia DA I/L oil prices key to economy The Russian economy is strong now solely because of oil prices it’s the only thing masking the underlying problems McClatchy Newspapers July 17, 2008 (“Russia worries about its high inflation”, http://www.mcclatchydc.com/100/story/44620.html) inflation generally was thought to be fueled by the infusion of cash into the economy as well as the higher prices of oil and gas. But lurking beneath everything, he said, is the fundamental problem that the country's infrastructure was never fully rebuilt after chronic underinvestment by the Soviets, followed by the collapse of the Soviet Union and then the 1998 economic crisis. For instance, Dmitry Sorokin, a prominent economist in Moscow, said Russia's

the total volume of agricultural production in Russia in 2007 was roughly 25 percent less than in 1989, said Sorokin, the deputy

Why, then, is Russia's gross domestic product — about $1.29 trillion last year — so high? "The answer is obvious. It's because of high oil prices, which have given us money, but not products," Sorokin said. "I call it a GDP made of air; it's not true growth." director of the economics institute at Russia's academy of sciences in Moscow.

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Islamic Bank Add on A. Currently High oil prices are giving money to help Islamic banks who will invest that in helping Africa because there are people who will only take sharia productsplan takes away the income The Guardian July 23, 2008 (“Centres fight for Islamic finance as oil booms”, http://www.guardian.co.uk/business/feedarticle/7672824) From Africa to Paris to Britain's former industrial heartland, Islamic law-compliant investment products are springing into existence as financial centres try to compete for a slice of the Middle East's colossal new oil revenues. With conventional sources of cash depleted by the credit crunch and fears of recession around the developed world -- and with high oil and food prices limiting growth -- oil-rich Gulf markets are one of the few reliable sources of finance. With dollar crude prices soaring to almost double their level of a year ago -- and Western financial woes seen deepening -- a new intensity has gripped Islamic finance growth. Estimates of the total size of assets held under Islamic finance rules vary, but the Asian Development Bank estimates it at around $1 trillion, with growth of 10 to 15 percent a year. It is no surprise then that cities with substantial Muslim populations and connections as diverse as Singapore and Hong Kong, London and Birmingham and even Paris are vying to act as key centres of expertise in the new boom. "The French have lagged the British...but recently the French government signalled a change in attitude," ratings agency Standard & Poor's said this week. "By preparing the ground for Islamic finance, France can help financial innovation and benefit from the deep pockets of Middle Eastern investors as liquidity has dried up elsewhere in the global financial markets." It is unclear to what extent, if at all, the vast sovereign wealth funds being built up by Gulf oil produces might be managed under the strictest principles of Islamic law, which prohibits the use of interest -- and therefore investment in conventional banks,

more and more takers have been coming forward with products to target those who demand sharia products. In June, investment bank Investec announced a partnership with a Saudi investment provider to produce the first sharia-compliant fund targeting Africa. Other funds are following. For now, two thirds of the worldwide alcohol or pornography producers. But

Islamic sukuk bond market -- an estimated $100 billion -- is based in Malaysia where the industry first took off.

B. There is a huge population of Muslims in Africa and their numbers are only increasing Hunwick 96 (John, Dr. Hunwick holds a joint position as professor of religion and professor of African history. His research has concerned aspects of the intellectual and social history of Muslims in West Africa, especially in Mali and Nigeria, “Africa and Islamic Revival: Historical and Contemporary Perspectives”, http://www.uga.edu/islam/hunwick.html) One thousand, three hundred and fifty-five years ago, in A.D. 641, the Arab commander 'Amr ibn al-'As led his army across what we

The move constituted Islam's first footsteps in the African continent, and opened up an era of continuous expansion for the faith, both as a spiritual enterprise and a political kingdom. Today approximately one quarter of the world's one billion Muslims live in Africa-that is about 250 million. In the countries of the northern one third of the continent they are a majority-up to 99% of the population in some cases. This includes all the countries we would nowadays recognize as "Arab" countries in Africa (Egypt, Libya, Tunisia, Algeria, Morocco, Mauritania and, to some extent the Sudan), as well as a second tier of countries where Islam is either the majority religion, such as Somalia, Chad, Niger, Mali, Senegal and Guinea, or is the religion of approximately half of the population, such as Nigeria, Eritrea and Ethiopia. Most other African would now call the Gaza Strip and into Egypt.

countries have minority Muslim populations, i.e. less than 50% of the inhabitants, and these include some with sizeable minorities such as Ghana, Ivory Coast, Sierra Leone, Kenya and Tanzania; others have smaller numbers.

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Islamic Bank Add on C. Muslims in Africa are at a Unique risk of contracting AIDS without assistance, they don’t believe it affects them when it does Royal Tropical Institute 2003 (“"Positive Muslims" leadership in South Africa”, http://www.kit.nl/exchange/html/2001-3-postive_muslims.asp ) One of the difficulties Positive Muslims faces is convincing the Muslim community that AIDS is something that also affects them. Many Muslims believe that AIDS is a homosexual disease or a disease that affects black people only. This attitude stems from the belief that the Islamic way of life protects people from contracting HIV and, second, that most Muslims believe they have not seen or touched a fellow Muslim living with HIV/AIDS. Islam, like many other religious traditions, advocates abstinence from any sexual activity before marriage. The reality is that many Muslims have sex before marriage and engage in extra-marital affairs. The belief that the Islamic way of life protects Muslims is therefore unrealistic and leads to a false sense of security in the Muslim community. Being able to see and touch something often makes it more real for people. Since most Muslims believe that they have not touched or seen a fellow Muslim who is HIV-positive, they conclude that AIDS does not affect them. The reality is that one cannot see who is HIVpositive or negative, and so many Muslims have come across someone who is HIV-positive. Due to the secrecy surrounding HIV/AIDS, Muslims are unwilling to reveal their status while alive and families are afraid to say how their loved ones died. The denial and taboos surrounding HIV/AIDS result in people questioning Positive Muslims' leadership in this field. People challenge our legitimacy and purpose as an organisation, questioning the type of leadership we provide and asking whether Muslim leadership on HIV/AIDS is required in the first place. Probably, one of our greatest challenges has been to establish ourselves and our ability to lead in a community that believes it does not require leadership in the face of the AIDS pandemic. We continue to grapple with this, hoping

through our awareness and education campaigns, Muslims will realise the importance of HIV prevention, before they are able to see and touch fellow Muslims whom they know are HIV-positive. that

D. The impact is extinction Muchiri 2k [Michael Kibaara Staff Member at Ministry of Education in Nairobi, “Will Annan finally put out Africa’s fires?” Jakarta Post, March 6, LN] The executive director of UNAIDS, Peter Piot, estimated that Africa would annually need between $ 1 billion to $ 3 billion to combat

World Bank President James Wolfensohn lamented that Africa was losing teachers faster than they could be replaced, and that AIDS was now more effective than war in destabilizing African countries. Statistics show that AIDS is the leading killer in sub-Saharan Africa, surpassing people killed in warfare. In 1998, 200,000 people died from armed conflicts compared to 2.2 million from AIDS. Some 33.6 million people have HIV around the world, 70 percent of them in Africa, thereby robbing countries of their most productive members and decimating entire villages. About 13 million of the 16 million people who have died of AIDS are in Africa, according to the UN. What barometer is used to proclaim a holocaust if this number is not a sure measure? There is no doubt that AIDS is the most serious threat to humankind, more serious than hurricanes, earthquakes, economic crises, capital crashes or floods. It has no cure yet. We are watching a whole continent degenerate into ghostly skeletons that finally succumb to a most excruciating, dehumanizing death. Gore said that his new initiative, if approved by the U.S. Congress, would bring U.S. contributions to the disease, but currently receives only $ 160 million a year in official assistance.

fighting AIDS and other infectious diseases to $ 325 million. Does this mean that the UN Security Council and the U.S. in particular have at last decided to remember Africa? Suddenly, AIDS was seen as threat to world peace, and Gore would ask the congress to set up millions of dollars on this case. The hope is that Gore does not intend to make political capital out of this by painting the usually disagreeable Republicancontrolled Congress as the bad guy and hope the buck stops on the whole of current and future U.S. governments' conscience. Maybe there is nothing left to salvage in Africa after all and this talk is about the African-American vote in November's U.S. presidential vote. Although the UN

, the AIDS challenge is a fundamental one in that it threatens to wipe out man. The challenge is not one of a single continent alone because Africa cannot be quarantined. The trouble is that AIDS has no cure -- and thus even the West has stakes in the AIDS challenge. Once suband the Security Council cannot solve all African problems

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Saharan Africa is wiped out, it shall not be long before another continent is on the brink of extinction. Sure as death, Africa's time has run out, signaling the beginning of the end of the black race and maybe the human race. A2: Russian Oil Production Peaked Russia will still be able to increase production by 2010- Their evidence doesn’t assume new findings The Guardian UK July 23, 2008 (“Russia oil output seen up at 10.3 mbpd in 2010”, http://www.guardian.co.uk/business/feedarticle/7672661) Russia expects its oil output will rise by 4.6 percent in 2010 compared to 2007, an energy ministry document showed on Wednesday, stopping short of making predictions for 2008-09. A government source quoted the report, issued by Energy Minister Sergei Shmatko to Prime Minister Vladimir Putin, as saying that oil output in Russia will reach 514 million tonnes (10.3 million barrels per day) in 2010, up from 491.5 million tonnes last year. The report did not include the ministry's forecasts of oil production for this year and 2009. Oil production in Russia, the world's second largest oil exporter after Saudi Arabia, fell by 0.3 percent in the first half of this year, prompting some analysts to say the fall might become a trend until the country launches production at new deposits in East Siberia and the Far East. Shmatko said earlier this month that Russian oil output will be at least flat this year despite a drop in the first half and will certainly rise next year. Last year, Russian production rose by 2.3 percent, a notch up from 2.2 percent in 2006, but much lower than huge spikes in previous

The government made maintaining output and exploring for more oil top priorities for the strategic oil sector and approved a number of tax breaks for the oil industry from 2009 to allow firms to fund new projects. years -- including a record 11 percent in 2003.

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A2: Russia DA Oil prices wont Collapse Econ The Russian government is making the economy impervious to oil prices Istock analysis July 10, 2008 (“Russian Economy could grow 8% in 2008”, http://www.istockanalyst.com/article/viewiStockNews+articleid_2387619&title=Russian _Economy_Could.html) Zhukov noted that Russia has maintained a rather high level of economic growth "despite the continuing financial crisis throughout the world," although there have nevertheless been some negative consequences. As an example, he cited inflation, which was already up to 9% for the year on July 7, or three percentage points higher

He also said the government has set the goal of "using the favorable situation on the global energy market to switch the Russian economy to an innovative development model, raise the competitiveness of Russian business, retain a high level of investment, carry out several large infrastructural projects, steadily develop the banking system and increase its contribution to economic growth." The innovative development model will make it possible to maintain average GDP growth rates at 6.5% per year for the period until 2020 even if oil prices fall, he said. than in the same period of last year.

Non-Unique Oil Prices are falling and the Russian economy is just getting stronger RussiaToday July 17, 2008 (“Oil Prices Wont Affect Russian Economy”, http://www.russiatoday.ru/business/news/27632) Fears of an economic slowdown in the US keep kept oil markets volatile on wednesday with a sharp downward movement of 6 dollars a barrel for the second day running. At around 135 dollars, it’s a sign the markets are not sure strong levels of demand can persist. However, Ron Smith of Alfa Bank says long-term, fundamental demand for oil remains strong. If this trend continues in the next ten days or two weeks we should see another run at higher prices. At the same time there is reason to believe this might be a bubble, and if this trade ever turns, if the hedge funds and everyone else who’s piled into suddenly start to think that prices are going to go down then that will become a self fulfilling prophecy and they will go down.

Russia, the world’s second-biggest oil exporter, remains little affected for now. With petro-dollars flowing into the country, any hope that lower prices will slow inflation are also vague. Inflation has topped 9 per cent so far this year. But the falls in the oil price of this week wont have an immediate impact on inflationary pressure according to Roland Nash of Renaissance Capital. Its to small a move to have a big impact on the inflation rate in the short term.

You need to see the oil price fall for a considerable period of time. While the clouds continue to gather for the leading developed economies, investors are increasingly looking to Russia as a safe haven. So the decision by ratings agency Moody’s to lift its investment rating of Russian government debt is a timely signal to investors.

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A2: Russia DA Oil prices wont Collapse Econ Arguments that the Russia Economy is too dependant on energy exports are wrong2 reasons Business Week July 18, 2008 (“A rougher road for emerging market stocks”, http://www.businessweek.com/investor/content/jul2008/pi20080718_363030.htm?chan=s earch) While the Russian economy is arguably too dependent on energy exports, we believe two factors mitigate this risk. First, rising incomes and credit growth have led to strong Russian household consumption, which is supporting service and manufacturing growth, and is helping to diversify the economy. Second, although increasing speculation has made a short-term correction in raw material prices likely, in our view, we believe a secular increase in emerging market demand, combined with tight global capacity, will keep the long-term commodity uptrend intact.

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A2: Russia and Saudi Arabia Non Unique Non-Unique- oil prices just fell Iran News July 22, 2008 (“Oil prices fell again after iran deadlock, Gulf storm”, http://www.iranmania.com/News/ArticleView/Default.asp?NewsCode=60171&NewsKin d=Current%20Affairs) Oil prices fell again after Iran and world powers announced resumption of talks to put an end to the nuclear standoff; Traders said that prices also slipped on prospects that slowing economic growth would cut demand for crude, Iran Daily reported. Talk might be cheap, but in the case of Iran, talk might lead to cheaper gas at the pump. Traders were watching developments in the Middle East after what appeared to be a shift in US policy toward Iran announced last Tuesday, which left much more impact on the oil market. Talk might be cheap, but in Iran’s case, talk might lead to cheaper gas at the pump. While certainly not the only reason for sky-high oil, unnecessary tensions over Iran’s civilian nuclear program have helped fuel the surge in gas prices that is altering American lifestyles. The

cost of a barrel of oil shot up nearly 8 percent in a single day in June after a senior Israeli official raised the specter of an attack on Iran, CHN reported. But the price has dropped to $131 from a record $147, not only because Americans are driving less but because the Bush administration has finally come to its senses to talk to the Islamic Republic of Iran over its civilian nuclear program instead of demanding that the country suspend its nuclear enrichment before any face-to-face negotiations.

Non- Unique- Steepest four day decline of oil prices in history and nothing to do with supply and demand The Huffington Post July 23, 2008 (“Oil Prices in steep decline: be afraid be very afraid”, http://www.huffingtonpost.com/raymond-j-learsy/oil-prices-in-steepdecli_b_113994.html) Here we go again. Oil prices tumbling "in the steepest four day decline in history." The sense of relief throughout the land is palpable. For a moment the fact that we are still at levels over 160% above prices of only a year and a half ago -- prices unheard of before -- seems lost in the ebullient moment. And

silenced for the moment is the inane

commentary of President Bush, of our stalwart Secretary of Energy Sam Bodman, not to speak of our Chairman of the Federal Reserve Ben Bernanke, of myriad oil company poobahs, and of course our ex-Wall Streeter, Secretary of the Treasury Henry Paulson who understands that when his cronies on Wall Street are bleeding it's because of the manipulation of the "short sellers", but

All this while our regulatory commission, the CFTC, has become more of a casino huckster than vigilant overseer, forever whitewashing the commodity exchanges, proclaiming "We see no evidence of manipulation or undue speculation" -- as if an eighteen dollar plunge in four trading days had everything to do with "supply and demand" -- thereby shamelessly providing this administration, especially our Energy Secretary, talking points to rationalize doing nothing. when it's you and I paying through the nose at the pump "it's all about supply and demand".

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A2: Russia: Impact inevitable Russian economic decline inevitable inflation Istock Analyst July 22, 2008 (“Russian economy still growing, but could be slowed by high infation”, http://www.istockanalyst.com/article/viewiStockNews+articleid_2423563~title_RussianEconomy-Still.html) The Russian economy continues to grow, however high inflation will certainly lead to a slowdown in economic growth, Deputy Prime Minister and Finance Minister Alexei Kudrin said. "It can't be said for now that economic growth rates are declining," he told journalists on Tuesday in comments on the low growth levels in fixed capital investment and a reduction in retail growth rates in June. Economic trends cannot be based on a single month, he said. At the same time, he said that "a slowdown in economic growth always occurs when inflation is high." Inflation in Russia stood at 9.1% as of July 14. The problems facing the Russian economy are not connected with the global financial crisis, he said. "Russia's problem is inflation," he said. Inflation is the main factor behind the decline in retail turnover, rising interest rates and lower investment levels, he said. At the same time, he noted that investment has yet to decline but could do so. "In the end, inflation leads to a decline in economic growth rates. There is a basic impression in Russia that high economic growth rates can be achieved when inflation is up," he said. In recent years, when inflation was on the decline, economic growth was high and investment increased, he said.

Now, investment is not coming into the economy when inflation is high, he added.

Russia’s is growing so fast its overheating boom will turn into bust, the Status Quo leads to nuke war inevitably, its try or die for the aff The International Herald Tribune July 22, 2008 (“Some fear Russia's boom could turn to bust as economy growing too fast”, http://www.iht.com/articles/ap/2008/07/22/business/EU-Russia-OverheatingEconomy.php) Fears are growing that Russia's oil and gas fueled economy is running too hot — and about to boil over in the kind of mess that has scalded smaller East European neighbors. Some of the most vehement warnings have been coming from the normally bland Finance Minister Alexei Kudrin, who says gross domestic product is growing too fast and any ill-conceived stimulus measures such proposed tax cuts will lead to intolerable inflation and a sudden stall in growth. Kudrin startled audience at a recent tax conference when he compared the issue to nuclear war. Cut taxes, Kudrin warned, and Russia won't maintain its thousands of atomic warheads. "The 33 percent share of the budget spent on defense and security is our guarantee that there won't be a nuclear war," the minister said. His opponents, including Economic Development Minister Elvira Nabiullina, are clamoring for the sharp tax cut to wean Russia off its addiction to imports, which are growing at an annual rate of over 40 percent.

The government is walking a tightrope. With all the government and private sector spending, inflation is reeling out of control — food prices are soaring at an annual rate of 25 percent — and threatens to submerge hundreds of thousands of people below the poverty line.

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A2: Russia DA: No Impact Russia’s economy wont decline their evidence is old and doesn’t assume Russian measures to prevent a crisis The International Herald Tribune July 22, 2008 (“Some fear Russia's boom could turn to bust as economy growing too fast”, http://www.iht.com/articles/ap/2008/07/22/business/EU-Russia-OverheatingEconomy.php) Concerns over Russia's economy coincide with the approaching 10th anniversary of the 1998 financial crisis, when the country defaulted on domestic debt and devalued the currency, causing a shock wave on international markets. Millions of Russians lost their savings. Economists stress there is no chance of a repeat crisis. Russia has wisely used the oil windfall to tuck away hundreds of billions of dollars in strategic reserves and sovereign wealth funds — "rainy day" funds that it can use as a buffer against any short-term shock such as a precipitous drop in oil prices.

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Saudi DA- Uniqueness Currently the Saudi Economy Relies completely on oil revolving around weak governance and private sector Reuters News July 24, 2008 (“Trouble looms for oil producers –report”, http://africa.reuters.com/wire/news/usnL24200465.html ) Oil producing countries need to fix the rest of their economies to prepare for inevitable falls in exports, a report by a British think tank said on Wednesday. The survey of the economic prospects of 12 oil-producing countries by Britain's Royal Institute for International Affairs -- entitled "Ending Dependence, Hard Choices for Oil-Exporting States" -- described its own conclusions as "rather depressing". Only three of the 12 countries -- Indonesia, Malaysia and Norway -- were "well on the road to moving towards a non-hydrocarbon-dependent economy." The others -- Algeria, Nigeria, Angola, Azerbaijan, Kazakhstan, Timor Leste (East Timor), Saudi Arabia, Kuwait and Iran -"face serious barriers and constraints. "These revolve around weak governance, poorly performing private sectors and an inadequate programme of economic and political reform." Although many of them will be able to sell oil for decades, they face a plateau period long before oil runs out, when the rate of production stops increasing while growing domestic demand means exports slow and revenues shrink. "Time, not oil, is running out," it said. The Saudi Economy is experiencing a boom from high oil prices Al Bawaba News July 23, 2008 (“Global : Saudi Apparel Retail Market – Continues to Grow Strongly”, http://www.albawaba.com/en/countries/Kuwait/232663) The Saudi economy has witnessed an economic boom over the past few years thanks to the high crude oil prices, which have risen from US$25 per barrel in 2003 to exceed US$130 per barrel in 2008. This oil boom led to the increase in government revenue and expenditure, which in turn boosted the economy. Furthermore, the government is investing revenue surplus in building infrastructure and growing the manufacturing and services sectors in the long term. This in turn will help in preserving the country’s economic strength for the upcoming years. The impact of a healthy economy on clothing spending is notably positive. With higher levels of disposable income, and consumer confidence, Saudi consumers are spending more money, particularly on non-necessities such as mass market branded clothing. Continued growth in GDP for the short to medium term will have a positive affect on the growth of purchasing power for consumers.

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A2: Saudi DA: Impact inevitable (If you have oil adv.) Impact inevitable in Status Quo, plan solves The Economic Times July 3, 2008 (“World oil market in fear of terror attack in Saudi Arabia”,http://economictimes.indiatimes.com/News/Economy/Indicators/World_oil_mar ket_in_fear_of_terror_attack_in_Saudi_Arabia/articleshow/3190779.cms) An attack -- or even an attempted attack -- by Islamic extremists on Saudi Arabia's oil sector would have disastrous consequences on the world market and the price per barrel, analysts warn. Of more than 700 people arrested in the course of the last six months in Saudi Arabia, dozens had been part of cells charged with preparing attacks against oil sites, according to authorities in Riyadh. With the price per barrel rising constantly and the capacity to increase global production almost non-existent, apart from in Saudi Arabia, the world market has never been so vulnerable to an offensive by Jihadists in the kingdom, they said. Michael Klare, head of the University of Massachusetts's peace and world security programme and author of the book "Resource Wars", said that even if an attack caused little damage, the impact would still be enormous. "There would be a tremendous psychological effect because the market is already prepared to expect terrorist events like this. It would have an immediate effect on prices," he said.

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A2: Saudi DA: Non Unique Non Unique demand is falling in the Status Quo causing prices to go down Emirates Business 24/7 July 25, 2008 (“Demand for oil falling due to high prices”, http://www.business247.ae/articles/2008/7/pages/07252008_d150dc86aab547d6961a1c7e51988274.aspx) A surge in oil prices above $100 over the past few months has started to destroy strong demand and this was evident in the recent price collapse, said a report. With the exception of the world's oil giant Saudi Arabia, the Organisation of Petroleum Exporting Countries (Opec) as a whole has remained reluctant to increase production because it wants to drive prices even higher, said the report by the

London-based Centre for Global Energy Studies (CGES), which is run by former Saudi oil minister Sheikh Ahmed Zaki Al Yamani. In its monthly report for August, sent to Emirates Business, CGES rebuffed OPEC claims that the sharp rise in crude prices has been a result of speculation and the weak US dollar, saying supply shortage is the main reason for the surge. "The world has been short of oil since the middle of 2006 and remains short now, although demand destruction is gathering pace and prices have fallen by more than $17 a barrel in the past three days," CGES said. "Producers argue that they are supplying every barrel that their customers want to lift, but demand is a function of price also and, in the case of crude oil, it is a function of price differentials as well as absolute prices."

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A2: Saudi DA: No Impact Other Countries’ production will collapse soon, this will keep prices up Houston Chronicle July 24, 2008 ( “Study: Saudi oil exports may start falling in 2014”, http://www.chron.com/disp/story.mpl/headline/biz/5905279.html) To ensure the Saudi economy keeps growing, other sources of income will be needed to replace oil revenue, which may plateau by the middle of the next decade, according to the report's authors John Mitchell from the Oxford Institute of Energy Studies and Dundee University Emeritus Professor Paul Stevens. Saudi Arabia, Iran and Nigeria will stop exporting oil by 2040, the researchers said.

Oil output from Iran, Kuwait and Nigeria, whose production capacity represents more than a quarter of the Organization of Petroleum Exporting Countries' total, will level off as soon as 2010, the report said. Oil exports may last longer if producing nations scrap domestic fuel subsidies to reduce energy use or adopt renewable energy. With oil at $100 a barrel, which the authors take as a floor price, Saudi Arabia's hydrocarbons revenue will fail to cover its fiscal deficit from 2030 onwards, they said. Iran's oil income will cover its expenses until 2025, and Kuwait's until 2040, according to the report.