ABSTRACT
Defense expenditures may in some instances act as an economic stimulus in various ways such as financing heavy industry and the acquisition of advanced technologies, providing employment, and attracting investment. This chapter examines the relationship between defense spending and economic performance in the developing world in general, and in nine countries in the Middle East and South Asia in particular-Algeria, Egypt, Iran, Iraq, Israel, Syria, Saudi Arabia, Pakistan and India. It presents a detailed and rigorous quantitative economic assessment, analysis, and interpretation of the impact of defense expenditures in the Middle East and South Asia over the last two decades. However, such an economic analysis needs to be placed within the security context prevailing in the region. Oil remains central to any discussion of defense, security, economics, and sovereignty in the Middle East. Oil is the vital regional strategic and economic resource. The chapter also presents an overview of the key concepts discussed in this book.
