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

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.