WEEK 9- Askeri Harcamalar ve Ekonomi liki

t is helpful to examine the role of the army within a much larger frame
of reference, one that seeks to identify its place within both state and society.
Following the work of Maurice Janowitz, Robin Luckham and others, this
involves concentration on three specific features.

The first is the notion of an army as a special type of

organization, with its own particular form of hierarchy, its own
welldefined boundaries and its own type of professionalism, features
that are more or less common to all military formations everywhere.

A second area of examination involves the international

sphere.

The third and final feature that requires examination is the

relationship of an army to the state of which it forms a part.
The smaller Arab armies can be divided into a number of types. These
include: the modern professional (for example, Algeria, Jordan, Morocco,
Sudan, Tunisia and the former North Yemen); the modern professional that
coexists with tribal-based military organizations (Saudi Arabia and Oman);
the modern confessional (Lebanon); and the guerrilla (the Palestinian
resistance).
Amassing a relatively huge force at any time requires the removal of
men and equally animals, tools and matriel from productive and civil
activities to be used for the preparation of and actual execution of warfare.
This action has had a double-edged effect on societies.

Firstly, spare time was required for soldiers to train and

prepare for war and to be away from the production of goods and
services intended for civilian consumption for a long period of time.

Secondly, the men involved in wars the preparation for war

would require feeding, clothing and equipment
All current and capital expenditure on the armed forces, in the running
of defence departments and other government agencies engaged in defence
projects as well as space projects; the costs of paramilitary forces and police
when judged to be trained and equipped for military operation; military R&D,
tests and evaluation costs; and the costs of retirement pensions of civilian
employees, military aid are concluded in the expenditure of the donor
countries. Excluded are items on civilian defence, interest on war debts and
veterans payments.
Given the problems faced by most Middle Eastern states after
independence, it is easy to see why regimes felt that they needed to create a
substantial military force 198 Themes of contemporary Middle Eastern
politics to enhance both internal and external security. Moreover, they were
greatly assisted in this aim by the fact that the regions role in the Cold War
provided them with super-power patrons willing to supply them with military
aid and modern weaponry. Oil money, too, was an important factor from the
1970s onwards. By the same token it is also easy to see why military

personnel became so salient in the administration and politics of many

Middle Eastern states, posing particularly difficult problems for civilian control
and leading to endless competition over the management of state power and
the allocation of national resources.
In the developed world the 1990s saw a general reduction both in
military budgets and in the prestige of the professional soldier. But in the
non-European world at large, although there were signs that some of the
same budgetary pressures were at work, regimes with weak legitimacy,
ruling countries with restive populations and with unresolved disputes with
their neighbours, could not afford to allow the process of military downsizing
to go too far.
This was especially true of the Middle East where, apart from the two
areas of major tension in and around Israel/Palestine and the Gulf, there were
also any number of violent internal conflicts, most notably those in Algeria,
Sudan and eastern Turkey. Indeed, in all three of these latter countries, the
intensity of the conflict itself was enough to ensure that the generals either
ran the government directly or managed it forcefully from behind the scenes.
With armies so closely involved in government and with the existence
of still pressing problems of national security, it is not surprising that
information about their size, their budgets and their control over national
resources remains a closely guarded secret. This, in itself, is sufficient to
make analysis of either their present position or their possible future position
particularly difficult. All that can be said with confidence is that, over time,
they are likely to be forced to come to terms with the general trend towards
global liberalization which will demand that they just like the Chinese army
give up their privileged position with respect to their lack of accountability,
their industrial holdings and their day-today role in internal security. However,
this will depend on the peaceful settlement of regional disputes, as well as
progress towards closer association with other regional organizations such as
the European Union. Until then, it is quite easy to imagine the Middle Eastern
army remaining part of the powerful coalition of forces which opposes
privatization, the retreat of the state and the further introduction of courtbased rules of law
n funding wars, Adam Smith prefers borrowing to direct taxation
mainly because, as mentioned above, taxes trickle down slowly and the
sudden high requirements of military effort cannot wait for future payments.
During periods of war, raising taxes is also an undesirable public policy.
Therefore, borrowing is the more attractive option for politicians.
The other reason that Smith cites for borrowing is that governments
would be unable to determine the exact level of taxation required to cover a
war effort. Therefore, the ease of borrowing would save them embarrassment
For Smith, the economic effects of allocation of resources to war efforts
are manifested in his distinguishing between productive and unproductive
labour. The allocation of labour and capital to war, though providing peace
necessary for the progress of the society, is largely unproductive in economic
terms.

D. Ricardo argued that The commencement of war after a long peace,

or of peace after a long war, generally produces considerable distress in
trade
Therefore, some labour and capital will necessarily be removed for the
production of other commodities which the society has naturally produced
during peacetime conditions.
Wars also disrupt the pattern of trade between nations. This will
inevitably change the comparative advantage of a nation.
Benoit argued that defence expenditure makes a tangible contribution
to civilian economies by:
1) feeding, clothing, and housing a number of people who would
otherwise have to be fed, housed, and clothed by the civilian economy;
2) providing education and medical care as well as vocational and
technical training;
3) engaging in a variety of public works roads, dams, river
improvements, airports, communication networks; and
4) engaging in scientific and technical specialities
Chowdhury (1991) and Kusi (1995) use the same methodology to
analyse the presence and direction of causality between economic growth
and military expenditure using different sample periods. Both studies arrive
at the conclusion that the relationship between military expenditure and
economic growth cannot be generalised across countries. The actual
relationship may vary from one country to another due to factors such as the
use of different sample periods, differences in socio-economic structure and
types of government in each country
Dunne (1996) and Smith (2000) provide an extensive list of models that
suggest various possible channels through which military expenditure may
influence output
1)
Direct effects: This includes the demand effects suggested
by Benoit. It is argued that higher military expenditure will increase the
demand for goods and services and stimulates the economy through
the Keynesian multiplier effect.
2)
Resource mobilisation effects: It is argued that military
expenditure may increase resource mobilisation particularly during
periods of perceived external threat.
3)
Open economy effects: Armament imports may reduce the
imports of other essential goods such technology, medicine and other
growthinducing commodities.
4)
Security provision: It has long been argued that the
provision of security by the military is vital for investment and
economic growth
Loonely and Winterford The countries covered by the study are Algeria,
Egypt, Syria, Israel, Saudi Arabia and Pakistan over various sub-periods
between 1955 and 1988. The authors find that, aside from Pakistan, there is
little evidence that defence hurts investment and growth. However, when the
authors examine the relationship between military expenditures and human

capital development, they find, albeit with reservations, that military

expenditure appears to retard human capital development in the region.
However, Al-Yousif (2002) looks at defence spending and economic growth in
six Arab Gulf countries using a similar method and has found that neither
growth nor defence can be considered exogenous and the relationship
between the two cannot be generalised across countries. Abu-Qarn and AbuBader (2003) also examine government expenditure, military spending and
economic growth in Egypt, Israel and Syria using causality evidence and find
that the military burden has negatively affected economic growth for all three
countries in the past three decades.
The conclusion from the overall empirical studies on the relationship
between military expenditure and economic growth is that the findings of
studies are dependent on the theoretical and empirical framework followed.
Though none of the approaches seriously consider the opportunity costs of
military expenditure and the destructive consequences of military conflict on
the economy of the region, the models which are based on the Harrod-Domar
growth framework are more likely to emphasise the existence of the trade-off
between military and non-military output and growth.
The Middle East Military Spendings

Military spending in the Middle East amounted to $196 billion in 2014,

an increase of 5.2 per cent over 2013, and 57 per cent since 2005 (see table
4). The largest increases since 2005 were by Iraq (286 per cent), the UAE
(135 per cent), Bahrain (126 per cent) and Saudi Arabia (112 per cent).
Figures for 2014 were not available for Kuwait, but its spending increased by
112 per cent between 2005 and 2013. Aazll these countries are major oil
producers, and their state revenues were boosted by high oil prices over the
period. Military expenditure budgets of states in the region may be aff ected
by the fall in the price of oil in late 2014, but any eff ects will likely be
mitigated by the strong fi nancial reserves built up by many countries
following several years of high oil prices.
In contrast, Turkeys spending grew by just 15 per cent since 2005,
while Israels military spending remained relatively stable throughout 2005
14. Based on data available, Israels spending decreased by 8 per cent from
2013 to 2014; however, the fi nal fi gure for 2014 is likely to be substantially
higher as the current estimate may not fully cover the costs of the war in
Gaza in 2014. The last available fi gure for Qatars military expenditure dates
from 2010 when it stood at $1.9 billion. However, Qatar started a major
expansion of its armed forces in 2012 and announced orders for weapons
worth $23.9 billion dollars in 2014, suggesting a substantial increase in its
military spending since 2010.
COUNTRIES WITH HIGH MILITARY EXPENDITURE AS A SHARE OF GDP