Arms and Conflict in the Middle East: Volume 13

It was widely expected that when the Cold War was over, there will be peace dividends and the amounts of military spending will decrease. It was also believed that worldwide conflict will decline. However, these have not taken place. In place of international tension and conflict, we have intra-country/regional/ethnic conflicts and wars. Military spending in some geographical areas has increased. This is true for South Asia and the Middle East. This book addressed to the Middle East has two objectives. First, it makes a detailed analysis of the root causes of conflict in the Middle East, the amount of military spending in the region, and its opportunity cost for economic development.

The current study is an extension of the PF model research program that began after the Great Depression in the early 1930s. The purpose of the study is to introduce political dimensions to the PF defense-growth model and to assess the impact of political and conflict variables on EG. The study theorizes that excluding political factors from the PF defense-growth model hampers any realistic explanation of the problems of EG; that the influences of economic and military variables and their externalities effects vary across different political contexts; that political factors are at least as important as economic factors in determining the outcome of EG; that intrastate and interstate conflicts have differential effects on EG (both types of conflicts have negative effects on EG; however, intrastate conflicts have more damaging effects on growth than do interstate conflicts); and that the impact of conflicts on EG differs across regions.

The fact that the ME has been an area of conflicts throughout its history is an indication of its utmost relevance to the strategy formulations of major powers. The ME can be called “the land bridge of civilization” because it links Africa with Eurasia, and it has been the trade route of peoples from Asia, Africa, and Europe. Ancient empires, as well as contemporary major powers, have competed for power and influence in the region to enhance their relative economic and military positions. The discovery of oil in the region escalated the struggle among major powers, created societal dislocations, and increased internal and external conflicts. The ME has been the major artery of contact for over 3000 years (Weatherby, 2001, pp. 1–4). One hundred years ago, scholar-adventurer John L. Stoddard recognized this fact when he described a small portion of the region, Palestine. According to Stoddard, “Palestine has an area only a little larger than the state of Massachusetts, while Russia occupies one seventh of the habitable globe: yet in the scales of intellectuals and moral value the little province of Judea outweighs beyond comparison the empire of Czar” (Weatherby, 2001, pp. 1–4).

For more than nine decades, the Jewish–Palestinian conflict has dominated all aspects of life in the Arab world. The Arabs have disregarded and neglected their political, economic, and social development since 1916 because of their obsession with defeating the Jews or driving them into the sea. When the Arab armies collectively failed to destroy the newly established Jewish state in 1948, the dynamics of the conflict changed. On the one hand, Arab rationalists such as King Abdullah ibn al-Husyan (King Abdullah-I) (d 1951) of the Hashemite Kingdom of Jordan (HKJ) suggested accepting the United Nations Partition Plan as proposed by the UN General Assembly on November 29, 1947. On the other hand, most Arab countries followed the lead of Egyptian President Gamal Abdul Nassir, who advocated the destruction of Israel. The latter view was also adopted by the PLO during Ahmad Shukeiri's reign (1964–1967) and later by Yasir Arafat (1969–2004) and most Palestinian armed factions.

It is generally believed that Middle Eastern countries are homogenous. Although this belief holds some truth, Middle Eastern countries have more differences than similarities. They differ in language, race, psychology, perception of threats, historical and colonial backgrounds, and political and economic developments. Realizing these differences, I expect that these countries have varying perceptions and interpretations of external threats and different methods of dealing with those threats. It is theoretically implausible to contemplate a general trend in defense spending across Middle Eastern countries; however, it is theoretically sound to view several broad trends within the region.

According to Thucydides, writing in 416 BC, when the Melians suggested that the Athenians accept Melian neutrality in the war against Sparta, the Athenians replied, “No, for your enmity doth not so much hurt us as your friendship will be an argument of our weakness and your hatred of our power amongst those we have ruled over” (Vasquez, 1996, p. 16). Realists consider the Melian Dialogue to be an immutable lesson that morality in itself is not sufficient against power (Vasquez, 1996, p. 1). Edward H. Carr (1939) articulates the main tenets of classical realism in The Twenty Years’ Crisis 1919–1939. According to Carr, “Internationally, it is no longer possible to deduce virtue from right reasoning, because it is no longer seriously possible to believe that every state, by pursuing the greatest good of the whole world, is pursuing the greatest good of its own citizens, and vice versa” (p. 12). Thus, the eternal dispute, as Albert Sorel put it, is “between those who imagine the world to suit their policy, and those who arrange their policy to suit the realities of the world,” and the realists resolved it by making policies that suit the world (as cited by Carr, 2001, p. 12).

I developed eight hypotheses concerning the impact of political factors on economic growth. The hypotheses are valid for the NLS analysis as well as for the CNTS analysis.H1Interstate conflict has a negative effect on economic growth in developing countries.H2Intra-state conflict has a negative effect on economic growth in developing countries.H3The effect of total conflict on economic growth in developing countries is negative.H4The effect of political freedom on economic growth in developing countries is positive.H5Institutional freedom has a positive effect on economic growth in developing countries.H6A democratic political regime has a positive effect on economic growth in developing countries.H7A stable political regime has a positive effect on economic growth in developing countries.H8There is a positive relationship between a liberal ideological base and economic growth in developing countries.

Data on economic variables are drawn from the International Financial Statistics (IFS) Yearbook (Edward, 2008; Carson, 2000, 2002, 2004; McLenaghan, 1992, 1995) published by the International Monetary Fund (IMF) Statistics Department (1964, 1973, 1981, 1983). The economic variables that I obtained from the IFS are GDP, gross domestic investment, and government expenditures. The IMF values for the variables are in current prices. The current values are non-comparable across countries due to the different amounts of inflation across nations over time. I converted all data to constant values with the year 1985 as a base year using the GDP deflator provided by the IFS. For countries that do not have GDP deflators for the period (1960–2002), I used the consumer price index (CPI)² provided by the same source. In addition, the values for the variables are converted from their respective national currencies to U.S. dollars. Some countries in Latin America posed problems when I conducted the conversion process because they arbitrarily changed their national currencies several times from 1960 to 2002. These currency changes made it very difficult in the cases of Argentina, Brazil, Bolivia, and Mexico to draw reliable conclusions from the empirical analysis. Several countries – Chile, Indonesia, Liberia, Mauritius, Madagascar, the Sudan, Tanzania, Zaire, and Zambia – have numerous missing values that made their time series fall below the required span for appropriate time series analysis. These nine countries were dropped from the NLS analysis, which reduced the number of countries involved in the NLS analysis to sixty countries. However, these nine countries were included in the CNTS analysis.

Despite the poor economic conditions and the low standards of living, the military expenditures in the developing countries continue to rise and pose great burdens on their respective budgets. Thus, the interplay of resources between defense and civilian sectors is crucial to national economic development because unmanaged military expenditures may divert the resources necessary to attain the developmental objectives, especially in countries with scarce resources.