National Security and Economic Growth

Abstract

D uring the past few decades, national security plays a central role in the process of economic development. Also, foreign investment and trade have rapidly increased worldwide and have enhanced economic growth in developing countries. Although foreign investment and trade bring huge economic benefits, many developing countries fear that by opening up markets to competition and foreign investment without restriction, they will lose national security. Therefore, the balance between economic gains from foreign investment and trade presents a challenging task for national security. Is national security a necessary mechanism for Persian Gulf countries to promote their economic growth? This article will examine how national security and its relation with foreign investment and trade effect Persian Gulf region’s economic growth over the 1990-2014 periods. The results show national security has negative effect but its relation with foreign investment and trade has positive effect on the region’s economic growth.