The Effect of NOCs on Trade, Military Spending and Economic Growth in Middle East Countries

Abstract

Effect of NOCs may improve quality of economic growth and trade of oil which impact on their domestic resident‟s life. Recent research shows that governments have constantly attempted to alter their economic growth through involving with oil productions especially in their national companies. The National Oil Companies which are built to cover up the lack of economic development and competitive point in the Middle East become one of the important issues for domestic countries. As a result, the level of accessibility and permeability of oil within the countries, in fact, affect the country's level of developing in economic and export that rise satisfaction and the quality of resident's life. Another topic that makes this paper more original and attractive is researching about how these NOCs can be effective for military spending; In fact I research on that the oil production of the NOCs is correlated with army and military spending in that regions. The result shows that high correlation between GDP growth and military spending is the one of section that directly affected by oil production of NOCs. The current study applies the using National Oil Companies concept as an important tool for reading interrelations between these companies and the economic growth in various contexts from the single country in Middle East. The thesis is aimed to support the argument of different oil company‟s impact on the quality of residential growth and the trade of oil by the means of a thorough literature review of the introductory chapter. After that it focuses on using of oil company concept and importance of accessibility to different type of them in sixth different countries typologies as samples. The results showed that using the NOCs have notable share in provide the opportunity for their domestic country to extend their economic growth and also rise their export of oil which is result more wealth for governments to extend their planes to development and raise the security of their country by spending the oil output on military and defense expenditure. Countries use NOCs as an instrument to reclaim the level of wealth and development in their domestic country, and define their territory by use output of oil on defense expenditure. Through the observations of country's history of oil production and export of fuel as percentage of GDP, using the NOCs increase the resident satisfaction and encouraged them to participate in the global activities. Since current countries development regulations and production methods of each country, this study suggested recreating the better management tools of oil companies, more focus on export of NOCs oil production and also tries to repair the existent NOCs to provide a new perspective in NOCs and economic growth. Keywords: National Oil Company, Middle East, Economic Growth, Oil production and Trade, Military Spending and Army.

ÖZ: Yerel Petrol Firmalarının etkisi, yerel halkın yaşamını olumlu yönde etkileyen petrol ticareti ve ekonomik büyümenin kalitesini iyileştirmektedir. Son yapılan araştırmalara göre, hükümetler yerel firmaların petrol üretmelerini desdekleyerek ekonomik büyümeyi değiştirmek için çaba harcamaktedırlar. Bu bağlamda, mevcut çalışmanın amaçlarından bir tanesi Yerel Petrol Firmalarının ekonomik büyümeye olan etkisini ölçmektir. Çalışmayı orijinal kılan bir diğer husus da petrol üretiminin ve dolayısı ile Yerel Petrol Firmalarının askeri harcamalara nasıl etki yapacağının incelemesidir. Çalışmadan çıkan sonuçlara göre Yerel Petrol Firmaları, hükümetlerin ekonomik büyümeyi sağlamalarında ve petrol ihracatının artırılması sureti ile askeri harcamalara destek çıkacak olan refah seviyesini yükseltmelerinde önemli bir katkı yapmaktadırlar. Dolayısı ile, mevcut çalışmadan çıkan sonuçlar doğrultusunda, ekonomik büyümeyi iyileştirmek ve bu bağlamda askeri harcamalarını artırmak isteyen ülkeler, Yerel Petrol Firmalarına ve petrol üretimine gereken önemi vermeli ve bu firmaların en iyi şekilde faaliyetlerini sürdürebilmeleri için en etkin staratejileri geliştirmelidirler. Anahtar kelimeler: Yerel Petrol Firmaları, Orta Doğu, Ekonomik Büyüme, Petrol Üretimi ve Ticaret, Askeri Harcamalar.