New iraq advs econ adv debt 1ac contention Economy


Low – gov’t Fails The Iranian government hasn’t done anything to help the economy



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Low – gov’t Fails

The Iranian government hasn’t done anything to help the economy.

Secor 9 (Laura,  an independent journalist and editor with exceptional insight into Iran's political culture , “The Rationalist: A Dissident Economist’s Attempts to Reform the Resolution”, Feb, 2, The New Yorker, http://www.newyorker.com/reporting/2009/02/02/090202fa_fact_secor)


In the strange, tumultuous story of Iran’s thirty-year-old Islamic Republic, the battle over free speech has captured the world’s imagination, but the debate over free markets goes just as deep. Since the revolution, most industries in Iran have been owned either by the state or by enormous Islamic foundations that are connected to the ruling oligarchy and exempt from government oversight and taxation. While the Iranian government points to rapid economic growth, inefficiencies are rampant, and the traffic in exports, other than petroleum products, is anemic. Even traditional Iranian products like carpets have done poorly on the international market in recent years. (Between 1979 and 2003, the value of Iranian carpet exports dropped by more than half.) Iran’s economy is sustained almost entirely by oil, which accounts for eighty-five per cent of all government revenues, and in the past five years this money has kept the country afloat as the price of crude reached record highs. Now that oil prices have fallen steeply, a crisis looms. Since the early eighties, Tabibian and other trained economists have advised the government to dismantle trade barriers, drop price controls, and force companies such as Iran Khodro—the troubled state-backed automaker—to compete or perish. But the government, in its various incarnations, has not listened. The current President, Mahmoud Ahmadinejad, who was elected in 2005 on a promise to distribute Iran’s oil wealth downward, has shrugged off expert economic advice in favor of grandiose gestures toward the poor. Upon taking office, he promiscuously handed out grants and subsidies; when these were not approved by the state budget office, he simply ordered the banks to issue more currency. He injected billions in oil revenues directly into the economy, dipping into the country’s savings to do so. Liquidity increased by nearly forty per cent in the space of a year. Iranians, lacking incentives for investment, used this cash to buy imports, which buried local industries and sent prices soaring. Already on the rise worldwide, inflation in Iran skyrocketed. Within a year of Ahmadinejad’s election, the inflation rate was the fourth highest in the world, after Zimbabwe, Uzbekistan, and Burma; by the summer of 2008, it topped twenty-eight per cent. Meanwhile, Ahmadinejad slashed interest rates, a move that encouraged lending, pushed the country’s fragile banking sector to the edge of ruin, and contributed to a surreal housing bubble in Iran’s cities. For each of the past two years in Tehran, real-estate prices have more than doubled.

AT: Stock Market High

Stock market is not an accurate representation of the failing economy.

Radio liberty 7/15 (is a private, international communications service to Eastern and Southeastern Europe, Russia, the Caucasus, Central Asia, the Middle East, and Southwestern Asia, funded by the U.S. Congress through the Broadcasting Board of Governor, “Iranian Stock Market Booms Despite New Sanctions”, July 15, 2010, Radio Free Europe, Radio liberty, http://www.payvand.com/news/10/jul/1132.html)


Paris-based economist Fereidoun Khavand downplayed the significance of the milestone. He told Radio Farda that the Tehran stock market is not an accurate "thermometer" of the health of Iran's economy. He pointed to the leverage of state-run companies in Iran's stock market, noting that its direction can be manipulated by the ruling elite. Iran's semiofficial Fars new agency said earlier this week that the stock market's rise is the result of Iranians' response to the "empty drum" of the U.S. and international sanctions. Iranian President Mahmud Ahmadinejad last week took credit for the market's rise. U.S.-based economist Kamran Dadkhah told Radio Farda on July 12 that the 20 percent rise in the Tehran stock market since the beginning of this year does not indicate the country's economy is strong. "Even in the U.S., there is no direct relation between a booming stock market and the economy, let alone in a country like Iran, whose government interferes constantly in the economy," Dadkhah said. "The government and the [Islamic] Revolutionary Guards [Corps], which owns a significant part of Iran's economy, can raise share prices [by their intervention]." Fars reported that the global increase in oil prices has contributed to Tehran's stock market rise. But Dadkhah said there has, in fact, been no increase in the price of oil over the past few months. Dadkhah told Radio Farda that he believes the international sanctions will have a negative impact on Iran's economy. He said that calling the sanctions an "an empty drum" is simply propaganda.

***RELATIONS***

**China-Taiwan**

High – domestic advances



Tensions are easing between China and Taiwan – domestic advances prove

The China Post 7/12/10 (The China Post Staff, “KMT, CPC agree to expand cooperation”, http://www.chinapost.com.tw/taiwan/china-taiwan-relations/2010/07/12/264230/KMT-CPC.htm)

Taiwan's ruling Kuomintang (KMT) and its Chinese counterpart, the Communist Party of China (CPC), yesterday reached consensus to expand cooperation and interchanges in the fields of culture, education, sports, and economic development. Delegates from the ruling parties on the two sides of the Taiwan Strait agreed on 22 proposals at the sixth annual forum on economic and cultural cooperation that lasted for two days in China's southern Guangzhou City. At the closing of the forum, KMT Honorary Chairman Wu Poh-hsiung said that cooperation between China and Taiwan on the development of new energy will offer a chance for the two partners to be the world's leading players in the field. Wu, who led the KMT delegation to the forum, said that using energy more efficiently and cutting carbon dioxide emissions are major challenges facing the entire world. “However, it also brings about an opportunity for developing countries that lag behind in conventional or high-tech industries to catch up with developed nations in this unexplored field,” he said. Wu said that when it comes to solar energy, wind energy and the development of electrical cars and light-emitting diodes, Taiwan and China are not too far away from the technological levels of European and North American nations, and even on par with them on certain fronts.




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