The Economy and National Security Equation

Published in Hilal English

Written By: Malik Ahmed Jalal

Simply phrased, economic prosperity reduces the element of external dependence of a state and enhances national security. Any slackness on this front limits the foreign policy choices as well as puts strains on domestic policy. Our enemies would always endeavor to keep us economically weak and dependent thus ripe for coercion through sactions etc. Pakistan needs to develop a cohesive strategy and focus efforts for fast paced economic growth in order to generate revenues for investing in education, healthcare, housing, transportation and security. Pakistan should consider the application of the inclusive economic growth model, based on developing our human resource and equality of opportunity for all regardless of their creed, language or ethnicity.

Relationship of economic prosperity with internal stability and national security has been examined by eminent researchers and policymakers since the Second World War. There exists a strong connection between economic prosperity and national security.1 Both factors predetermine the other; economic prosperity is a precondition for national security just as national security is a precondition for economic prosperity.2

 

Economists stress the importance of security for an economy to develop. This is a self-evident relationship; a secure environment is crucial to the success of an economy. Internal discord and a state incapable of defending itself from internal and external de-stabilizing factors will hinder investment and progress of an economy.

 

On the other hand, it is also important to note that a vibrant economy will translate into strong national security. Leading researchers like Friedberg and Ferguson place greater emphasis on the need for economic stability for national security rather than vice versa, i.e., development and economic prosperity will enhance a state’s power and strengthen national security.

 

Though national security is commonly defined as a nation’s safety against threats such as war, terrorism and espionage, it is in fact a much broader term in its scope. It is not only limited to national defense but also incorporates the protection of series of geopolitical as well as economic objectives3 to safeguard a nation’s interests as a whole.

 

Therefore, it is important to widen the discussion from an abstract concept of power to better understand the different elements that constitute power–which are military as well as geo-political and economic. The historical and philosophical lens sees military power deriving from economic power.4 This is most evident in the U.S. example; the strongest economy in the world is also the superpower reflecting its military, economic and geopolitical dominance over the globe. This co-relation has been true since the time human beings organized themselves into tribes, city-states or countries.

 

USA’s superpower status is hinged upon its economic strength. The United States is the backbone of the global financial system as over 80% of financial transactions and 87% of foreign currency market transactions are conducted in U.S. dollars. America’s Gross Domestic Product (GDP) is 19 trillion (2017, est.), or around 25% of the global GDP . The country’s spending on defense corresponds to 37% of the global defense spending or more than the sum of the amount spent by the next nine largest countries. In addition, USA has influence over the supra-national financial institutions such as the World Bank due to its significant shareholding, further enhancing its global leverage.

 

The link between economy and national security can be seen in the architecture of the National Security Council (NSC) of USA. A forum that discusses matters related to national security, though its composition is not only limited to defense and intelligence but also gains input from treasury, foreign, commerce secretary, economic policy departments as well as the ambassador to the UN. This illustrates how national security encompasses domains related to the economy, domestic and international finance and trade as well as foreign policy.

 

On the contrary, if we consider how an underperforming economy impacts the national security of a state, the earstwhile USSR is an example. In 1980s, the USSR went through a phase of economic stagnation with its GDP falling by two percent in 1989 and further dropping eight percent in 1991. This decline was experienced in every sector from consumer durables to energy to agriculture. These coordinated economic problems resulted in its eventual political and security collapse. Lack of economic prosperity and significant imbalances in budget deficit and international trade weakened and ultimately unraveled the USSR’s national security and geographical integrity.

 

Pakistan can also learn from historical examples which illustrate the significance of economic prosperity for national security. Dating back to the ancient Athens that taxed its citizens to raise a military against Sparta signifies the relationship between wealth creation and security. It is also evident from the Ottoman Empire whose economy could not financially support the 1854 Crimean War and acquired substantial borrowing by signing fifteen debt agreements which eventually led to its bankruptcy in 1876.6 This lack of economic and financial self-reliance and independence led to the decline of the Ottoman Empire–starting from losing the freedom to act in protecting its interests and eventually military losses on the battlefield. The decline of the Ottoman Empire serves as a lesson that external financial dependency hampers economic sovereignty of a nation and leads to a decline of its security.

 

Simply phrased, economic prosperity reduces the element of external dependence of a state and enhances national security. Any slackness on this front limits the foreign policy choices as well as puts strains on domestic policy. Our enemies would always endeavor to keep us economically weak and dependent thus ripe for coercion through sanctions etc. Pakistan needs to develop a cohesive strategy and focus efforts for fast paced economic growth in order to generate revenues for investing in education, healthcare, housing, transportation and security. Pakistan should consider the application of the inclusive economic growth model, based on developing our human resource and equality of opportunity for all regardless of their creed, language or ethnicity. Such an economic model is participative in nature and enables any citizen to progress on merit with effort and character determining one’s success and position in the society. It reduces resentment and segmentation on the lines of socio-economic classes, which in turn leads to internal harmony and stability and hence stronger national security.

 

Improved economic performance will enable our citizens to be content with the hope of a better future united as a nation-state, and make the country financially strong to protect its vital national interests and positively engage in the world economically and politically.7

 

In the Fourth Industrial Revolution age, it is evident that a strong economy ensures national security. Inclusive economic prosperity and financial independence is the best weapon that we as a nation must have for enhancing our national security.

 

The writer is an economic and development expert with degrees in public policy, economics and chartered accountancy.

E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

1 Friedberg, A. L. (1991). The Changing Relationship between Economics and National Security.

Political Science Quarterly, 265-276.

2 Sehgal, I. (2017, September 29). Economy and Security. Business Recorder.

3 Holmes, K. R. (2015). What is National Security. The Heritage Foundation.

4 Ferguson, A. (2013). The Uneasy Relationship Between Economics and Security. Prism, 77-86.

5 https://knoema.com/nwnfkne/world-gdp- ranking-2017- gdp-by- country-data- and-charts

6 Ferguson, N. (2008, October 2). The End of Prosperity?. Time Magazine.

7 Ziauddin, M. (2016, March 4). The Express Tribune.

 
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