GEOGRAPHY

Area: 17,820 sq. km. (6,880 sq. mi.); approximately the size of the State of New Jersey. Cities: Capital — Kuwait City, pop. (2016 est.) 2.4 million. Other cities –Ahmadi, Jahra, Fahaheel. Terrain: Almost entirely flat desert plain (highest elevation point–306 m). Climate: Summers are intensely hot and dry with average highs ranging from 42o-46oC (108o-115oF); winters are short (Dec.-Feb.) and cool, averaging 10o-30oC (50o-80oF), with limited rain.

PEOPLE

Nationality: Noun and adjective – Kuwaiti(s). Population (2016 est.): 4.3 million, of which 1.2-1.4 million (28-32%) locals and about 3.0 million (70%) expatriates. Annual growth rate: 1.99%. Ethnic groups break-up: Kuwaiti 28%, other Arab 27.9%, Asian (mostly south) 37.8%, African 1.9%, other 1.1%. Religion: Muslim (official) 76.7%, Christian 17.3%, Other and Unspecified 5.9%,, with small Hindu and Sikh communities. Languages: Arabic (official), English is widely spoken.

Education: Kuwait’s’s UNDP HDI (Human Development Indicator) ranking is 51. Estimated net primary school enrolment ratio (2016) is 98.2%. Adult literacy rate (% age 15 and over HDI (2016)) is 96.2% for the overall population. Adult literacy rate (% ages 15 and above) male is 96.4% and female is 94.3%. Health: Infant mortality rate (2016) is 7.3/1,000 live births. Life expectancy at birth (2016) is 74.5 years with male life expectancy at birth at 73.6 years (2016) and females at 75.9 years (2016). The crude death rate is 20.9 per 1000 population (Unicef, 2012). The under-five year mortality rate (2016) is 11 per 1000 live births. There are 79.2 internet users (2012) per 100 people.

GOVERNMENT

Type: Constitutional hereditary emirate. Independence: June 19, 1961 (from U.K.). Constitution: Approved and promulgated November 11, 1962. Branches: Executive–Amir (head of state); prime minister (head of government); Council of Ministers (cabinet) is appointed by prime minister and approved by the Amir. Legislative–unicameral elected National Assembly (Majlis al-‘Umma) of 50 members who serve 4-year terms. Judicial–High Court of Appeal. Administrative subdivisions: Six governorates (muhafazat): Al ‘Asimah, Hawalli, Al Ahmadi, Al Jahra’, Mubarak Al-Kebir, and Al Farwaniyah. Political parties: None; formal political parties are banned although de facto political blocs exist. Elections: There are no executive branch elections; the Amir is hereditary; prime minister and deputy prime ministers are appointed by the Amir. Legislative branch elections were last held July 5, 2003 (next National Assembly election is due in 2007) Suffrage: Adult males who have been citizens for 20 years and are not in the security forces (about 14% of all citizens).

ECONOMY

In 2013, foreign direct investment flows into Kuwait stood at $52.3 billion. Current GDP (2011): $114.04billion. GDP growth rate was 1.8% (2015) with per capita GDP at $35,490. GDP break-up by sector (2016): Agriculture: 0.4%, industry: 59.6% , services: 40%. In 2016-17, government budget was -3.62% of GDP, with a $431.90 KWD million deficit. Trade balance was 23.5% of GDP. Exports stood at $115.46 billion, of which oil and gas constituted 95% of total exports. Other exports included chemicals and manufactured goods. Major markets for non-oil exports included Saudi Arabia (13.3%), UAE (10.6%), Indonesia (10%), India (6.4%), and China (6%). Imports stood at $33.3 billion and included food, construction materials, vehicles and parts and also clothing. Major suppliers included China ($5B), the United Arab Emirates ($2.91B), the United States ($2.9B), Japan ($2.11B) and Saudi Arabia ($1.67B). With a score of 41, Kuwait ranks 75th on Transparency International’s Corruption Perception Index in 2016.

PEOPLE

Over 90% of the population lives within a 500-square kilometer area surrounding Kuwait City and its harbor. Although the majority of people residing in the State of Kuwait are of Arab origin, less than half are originally from the Arabian Peninsula. The discovery of oil in 1938 drew many Arabs from nearby states. Following the liberation of Kuwait from Iraqi occupation in 1991, the Kuwaiti Government undertook a serious effort to reduce the expatriate population by specifically limiting the entry of workers from nations whose leaders had supported Iraq during the Gulf War. Kuwait later abandoned this policy, and it currently has a sizable foreign labor force (78% of the total population).

The national census does not distinguish between Sunni and Shi’a adherents, but an estimated 60-65% of residents, including the ruling family and 525,000 Kuwaiti nationals, belong to the Sunni branch of Islam. An estimated 35-40% of residents are Shi’a including about 300,000 Kuwaitis. Estimates of the Christian population runs around 600,000 residents, including about 200-400 citizens. There also are communities of Hindus (estimated at 300,000) and Sikhs (estimated at 10,000).

Kuwait’s 96.2% literacy rate, one of the Arab world’s highest, is the result of extensive government support for the education system. Public school education, including Kuwait University, is free, but access is restricted for foreign residents. The government sponsors the foreign study of qualified students abroad for degrees not offered at Kuwait University. About 3,000 Kuwaitis are currently enrolled in U.S. universities.

HISTORY

Archaeological finds on Failaka, the largest of Kuwait’s nine islands, suggests it was a trading post at the time of the ancient Sumerians. Failaka appears to have continued to serve as a market for approximately 2,000 years, and was known to the ancient Greeks. Despite its long history as a market and sanctuary for traders, Failaka appears to have been abandoned as a permanent settlement in the 1st century A.D. Kuwait’s modern history began in the 18th century with the founding of the city of Kuwait by the Uteiba, a subsection of the Anaiza tribe, who are believed to have traveled north from Qatar.

Threatened in the 19th century by the Ottoman Turks and various powerful Arabian Peninsula groups, Kuwait sought the same treaty relationship Britain had already signed with the Trucial States (UAE) and Bahrain. In January 1899, the ruler Sheikh Mubarak Al Sabah –“the Great”– signed an agreement with the British Government that pledged himself and his successors neither to cede any territory, nor to receive agents or representatives of any foreign power without the British Government’s consent, in exchange for protection and an annual subsidy. When Mubarak died in 1915, the population of Kuwait of about 35,000 was heavily dependent on shipbuilding (using wood imported from India) and pearl diving.

Mubarak was succeeded as ruler by his sons Jabir (1915-17) and Salim (1917-21). Kuwait’s subsequent rulers have descended from these two brothers. Sheikh Ahmed al-Jabir Al Sabah ruled Kuwait from 1921 until his death in 1950, a period in which oil was discovered and in which the government attempted to establish the first internationally recognized boundaries; the 1922 Treaty of Uqair set Kuwait’s border with Saudi Arabia and also established the Kuwait-Saudi Arabia Neutral Zone, an area of about 5,180 sq. km. (2,000 sq. mi.) adjoining Kuwait’s southern border.

Kuwait achieved independence from the British under Sheikh Ahmed’s successor, Sheikh Abdullah al-Salim Al Sabah. By early 1961, the British had already withdrawn their special court system, which handled the cases of foreigners resident in Kuwait, and the Kuwaiti Government began to exercise legal jurisdiction under new laws drawn up by an Egyptian jurist. On June 19, 1961, Kuwait became fully independent following an exchange of notes with the United Kingdom.

Kuwait enjoyed an unprecedented period of prosperity under Amir Sabah al-Salim Al Sabah, who died in 1977 after ruling for 12 years. Under his rule, Kuwait and Saudi Arabia signed an agreement dividing the Neutral Zone (now called the Divided Zone) and demarcating a new international boundary. Both countries share equally the Divided Zone’s petroleum, onshore and offshore. The country was transformed into a highly developed welfare state with a free market economy.

In August 1990, Iraq attacked and invaded Kuwait. Kuwait’s northern border with Iraq dates from an agreement reached with Turkey in 1913. Iraq accepted this claim in 1932 upon its independence from Turkey. However, following Kuwait’s independence in 1961, Iraq claimed Kuwait, arguing that Kuwait had been part of the Ottoman Empire subject to Iraqi suzerainty. In 1963, Iraq reaffirmed its acceptance of Kuwaiti sovereignty and the boundary it agreed to in 1913 and 1932, in the “Agreed Minutes between the State of Kuwait and the Republic of Iraq Regarding the Restoration of Friendly Relations, Recognition, and Related Matters.”

Following several weeks of aerial bombardment, a UN-mandated coalition led by the United States began a ground assault in February 1991 that liberated Kuwait. During the 7-month occupation by Iraq, the Amir, the Government of Kuwait, and many Kuwaitis took refuge in Saudi Arabia and other nations. The Amir and the government successfully managed Kuwaiti affairs from Saudi Arabia, London, and elsewhere during the period, relying on substantial Kuwaiti investments available outside Kuwait for funding and war-related expenses. Following liberation, the UN, under Security Council Resolution 687, demarcated the Iraq-Kuwait boundary on the basis of the 1932 and the 1963 agreements between the two states. In November 1994, Iraq formally accepted the UN-demarcated border with Kuwait, which had been further spelled out in UN Security Council Resolutions 773 and 883.

GOVERNMENT AND POLITICAL CONDITIONS

Kuwait is a constitutional, hereditary emirate ruled by princes (Amirs) who have been drawn from the Al Sabah family for over 200 years. The 1962 constitution provides for an elected National Assembly and details the powers of the branches of government and the rights of citizens. Under the Constitution, the National Assembly has a limited role in approving the Amir’s choice of the Crown Prince, who succeeds the Amir upon his death. If the National Assembly rejects his nominee, the Amir then submits three names of qualified candidates from among the direct descendants of Mubarak the Great, from which the Assembly must choose the new Crown Prince. Successions have been orderly since independence.

For almost 40 years, the Amir has appointed the Crown Prince as Kuwait’s Prime Minister. However, in an unprecedented development, the Amir formally separated the two positions and appointed a new Prime Minister in July 2003.

Kuwait’s first National Assembly was elected in 1963, with follow-on elections held in 1967, 1971, and 1975. From 1976 to 1981, the National Assembly was suspended. Following elections in 1981 and 1985, the National Assembly was again dissolved. Fulfilling a promise made during the period of Iraqi occupation, the Amir held new elections for the National Assembly in 1992. On May 4, 1999, the Amir once again dissolved the National Assembly. This time, however, it was done through entirely constitutional means, and new elections were held on July 3, 1999. The general election held in July 2003 was considered free and fair, although there were some credible reports of vote buying by the government and the opposition.

The government bans formal political parties, but de facto political blocs exist and are typically organized along ideological lines. Although the Amir maintains the final word on most government policies, the National Assembly plays a real role in decision-making, with powers to initiate legislation, question Cabinet ministers, and express lack of confidence in individual ministers. For example, in May 1999, the Amir issued several landmark decrees dealing with women’s suffrage, economic liberalization, and nationality. The National Assembly later rejected all of these decrees as a matter of principle and then reintroduced most of them as parliamentary legislation.

PRINCIPAL GOVERNMENT OFFICIALS

Amir–His Highness Sheikh Sabah IV Ahmad Al-Jaber Al-Sabah
Crown Prince–His Highness Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah
Prime Minister–His Highness Sheikh Jaber Al-Mubarak Al-Hamad Al-Sabah
First Deputy Prime Minister and Minister of Interior–Sheikh Khaled Al Jarrah Al Sabah
Deputy Prime Minister and Minister of Defense–Sheikh Mohammad Khalid Al Hamad Al Sabah
Deputy Prime Minister and Minister of State for Cabinet Affairs–Mohammad Abdullah Al-Mubarak Al-Sabah
Minister of State for National Assembly Affairs–Faleh Abdullah Al-Azeb
Foreign Minister–Sheikh Sabah Al Khalid Al Sabah
National Assembly Speaker–Marzouq Al-Ghanim

ECONOMY

Kuwait has a small, relatively open economy dominated by the oil industry and government sector. It has proved crude oil reserves of about 101,500 million barrels–10% of world reserves–account for nearly half of GDP, 95% of export revenues, and 80% of government income. During the 1970s, Kuwait benefited from the dramatic rise in oil prices, which Kuwait actively promoted through its membership in the Organization of Petroleum Exporting Countries (OPEC). The economy suffered from the triple shock of a 1982 securities market crash, the mid-1980s drop in oil prices, and the 1990 Iraqi invasion and occupation. The Kuwaiti Government-in-exile depended upon its $100 billion in overseas investments during the Iraqi occupation in order to help pay for the reconstruction. Thus, by 1993, this balance was cut to less than half of its pre-invasion level. The wealth of Kuwait is based primarily on oil and capital reserves, and the Iraqi occupation severely damaged both.

In the closing hours of the Gulf War in February 1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait’s oil wells. Kuwait spent more than $5 billion to repair oil infrastructure damage. Oil production was 1.5 million b/d by the end of 1992, and pre-war capacity was restored in 1993. Kuwait’s current production capacity is estimated to be 2.8 million b/d..

OIL

In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil Company (KOC), jointly owned by the British Petroleum Company and Gulf Oil Corporation. In 1976, the Kuwaiti Government nationalized KOC. The following year, Kuwait took over onshore production in the Divided Zone between Kuwait and Saudi Arabia. KOC produces jointly there with Texaco, Inc., which, by its 1984 purchase of Getty Oil Company, acquired the Saudi Arabian onshore concession in the Divided Zone.

Offshore, the Divided Zone, the Arabian Oil Company (AOC)–80% owned by Japanese interests and 10% each by the Kuwaiti and Saudi Governments–produced on behalf of both countries from 1961 until 2000, when its concession in the Saudi zone expired. AOC gave up its drilling rights in the Kuwaiti sector 3 years later. The Kuwait Gulf Oil Company (a wholly-owned subsidiary of the Kuwait Petroleum Company–KPC) has assumed AOC’s offshore operations.

The KPC, an integrated international oil company, is the parent company of the government’s operations in the petroleum sector, and includes Kuwait Oil Company, which produced oil and gas; Kuwait National Petroleum Co., refining and domestic sales; Petrochemical Industries Co., producing ammonia and urea; Kuwait Foreign Petroleum Exploration Co., with several concessions in developing countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp. The latter, purchased outright in 1982, gives KPC a worldwide presence in the petroleum industry.

KPC also has purchased from Gulf Oil Co. refineries and associated service stations in the Benelux nations and Scandinavia, as well as storage facilities and a network of service stations in Italy. In 1987, KPC bought a 19% share in British Petroleum, which was later reduced to 10%. KPC markets its products in Europe under the brand Q8 and is interested in the markets of the United States and Japan.

Kuwait has about 101,500 million barrels of recoverable oil; only Venezuela, Saudi Arabia, Canada, Iran,and Iraq have larger proven reserves. Estimated capacity before the occupation was about 2.4 million barrels per day (b/d). During the Iraqi occupation, Kuwait’s oil-producing capacity was reduced to practically nothing. However, tremendous recovery and improvements have been made. Oil production was 1.5 million b/d by the end of 1992, and pre-war capacity was restored in 1993. Kuwait’s production capacity is estimated to be 2.8 million b/d.

SOCIAL BENEFITS

The government has sponsored many social welfare, public works, and development plans financed with oil and investment revenues. Among the benefits for Kuwaiti citizens are retirement income, marriage bonuses, housing loans, virtually guaranteed employment, free medical services, and education at all levels. Foreign nationals residing in Kuwait obtain some, but not all, of the welfare services. The right to own stock in publicly traded companies, real estate, and banks or a majority interest in a business is limited to Kuwaiti citizens, and citizens of GCC states under limited circumstances.

INDUSTRY AND DEVELOPMENT

Industry in Kuwait consists of several large export-oriented petrochemical units, oil refineries, and a range of small manufacturers. It also includes large water desalinization, ammonia, desulfurization, fertilizer, brick, block, and cement plants. During the invasion, the Iraqis looted nearly all movable equipment of value, especially high-technology items and small machinery. Much of this has been replaced with newer equipment.

AGRICULTURE

Agriculture is limited by the lack of water and arable land. The government has experimented in growing food through hydroponics and carefully managed farms. However, most of the soil which was suitable for farming in south central Kuwait was destroyed when Iraqi troops set fire to oil wells in the area and created vast “oil lakes.” Fish and shrimp are plentiful in territorial waters, and largescale commercial fishing has been undertaken locally and in the Indian Ocean.

SOCIAL BENEFITS

The government has sponsored many social welfare, public works, and development plans financed with oil and investment revenues. Among the benefits for Kuwaiti citizens are retirement income, marriage bonuses, housing loans, virtually guaranteed employment, free medical services, and education at all levels. Foreign nationals residing in Kuwait obtain some, but not all, of the welfare services. The right to own stock in publicly traded companies, real estate, and banks or a majority interest in a business is limited to Kuwaiti citizens, and citizens of GCC states under limited circumstances.

SHIPPING

The Kuwait Oil Tankers Co. has 35 crude oil and refined product carriers and is the largest tanker company in an OPEC country. Kuwait also is a member of the United Arab Shipping Company.

TRADE, FINANCE, AND AID

The Kuwaiti dinar is a strong currency pegged to a basket of currencies in which the U.S. dollar has the most weight. Kuwait ordinarily runs a balance-of-payments surplus.

Government revenues are dependent on oil revenues. Although government expenditures decreased by about 6% from 2014 to 2015, Kuwait’s government debt to GDP remains at 18.6%.

The government’s two reserve funds–the Fund for Future Generations and the General Reserve Fund–which totaled nearly $100 billion prior to the invasion in 1990, were the primary source of capital for the Kuwaiti Government during the war. While these funds were depleted to $40-$50 billion after the war, they currently are estimated around $592 billion as of 2015. The bulk of this reserve is invested in the United States, Germany, the United Kingdom, France, Japan, and Southeast Asia. In order of importance, foreign assets are believed to be invested in stocks and bonds, fixed yield instruments (mostly short term), and real estate. Kuwait follows a generally conservative investment policy.

Kuwait has been a major source of foreign economic assistance to other states through the Kuwait Fund for Arab Economic Development, an autonomous state institution created in 1961 on the pattern of Western and international development agencies. In 1974, the fund’s lending mandate was expanded to include all-not just Arab-developing countries. Over the years aid Kuwait has provided aid to Egypt, Syria, and Jordan, as well as the Palestine Liberation Organization. During the Iran-Iraq war, Kuwait also gave significant aid to the Iraqis. The Kuwait fund issued loans and technical assistance grants totaling over $419 million during its fiscal year ending March 31, 2003.

FOREIGN RELATIONS

Following independence in June 1961, Kuwait faced its first major foreign policy problem arising from Iraqi claims to Kuwait’s territory. The Iraqis threatened invasion but were dissuaded by the U.K.’s ready response to the Amir’s request for assistance. Kuwait presented its case before the United Nations and preserved its sovereignty. U.K. forces were later withdrawn and replaced by troops from Arab League nations, which were withdrawn in 1963 at Kuwait’s request.

On August 2, 1990, Iraq invaded and occupied Kuwait. Through U.S. efforts, a multinational coalition was assembled, and, under UN auspices, initiated military action against Iraq to liberate Kuwait. Arab states, especially the other five members of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates), Egypt, and Syria, supported Kuwait by sending troops to fight with the coalition. Many European and East Asian states sent troops, equipment, and/or financial support.

After liberation, Kuwait concentrated its foreign policy efforts on development of ties to states which had participated in the multinational coalition. Notably, these states were given the lead role in Kuwait’s reconstruction. Kuwait’s relations with those nations that supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, were slow to recover. Palestine Liberation Organization (PLO) Chairman Yasir Arafat’s support for Saddam Hussein during the war also affected Kuwait’s attitudes toward the PLO though Kuwait supports the Arab-Israeli peace process.

The Government of Kuwait has abandoned its previous policy of limiting the entry of workers from nations whose leaders had supported Iraq during the Gulf War. In August 2001, the Interior Minister announced that there were no longer any special restrictions or permits required for Palestinian workers wishing to return to the country. At the end of 2002, there were approximately 30,000 to 40,000 Palestinians, 30,000 to 40,000 Jordanians, and 5,000 Yemenis resident in Kuwait.

Since liberation from Iraq, Kuwait has made efforts to secure allies throughout the world, particularly UN Security Council members. In addition to the United States, defense arrangements have been concluded with the United Kingdom, Russia, and France. Ties to other key Arab members of the Gulf War coalition–Egypt and Syria–also have been sustained.

During the 2002-03 build up to and execution of Operation Iraqi Freedom (OIF), Kuwait was a vital coalition partner, reserving a full 60% of its total land mass for use by coalition forces and donating upward of $350 million in assistance in kind (primarily fuel) to the effort. In the aftermath of OIF, Kuwait has been consistently involved in reconstruction efforts in Iraq, pledging $1.5 billion at the October 2003 international donors’ conference in Madrid.

Kuwait is a member of the UN and some of its specialized and related agencies, including the World Bank (IBRD), International Monetary Fund (IMF), World Trade Organization (WTO), General Agreement on Tariffs and Trade (GATT); African Development Bank (AFDB), Arab Fund for Economic and Social Development (AFESD), Arab League, Arab Monetary Fund (AMF), Council of Arab Economic Unity (CAEU), Economic and Social Commission for Western Asia (ESCWA), Group of 77 (G-77), Gulf Cooperation Council (GCC), INMARSAT, International Development Association (IDA), International Finance Corporation, International Fund for Agricultural Development, International Labor Organization (ILO), International Maritime Organization, Interpol, INTELSAT, IOC, Islamic Development Bank (IDB), League of Red Cross and Red Crescent Societies (LORCS), Non-Aligned Movement, Organization of Arab Petroleum Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC), Organization of Petroleum Exporting Countries (OPEC), and the International Atomic Energy Agency (IAEA).

DEFENSE

Before the Gulf War, Kuwait maintained a small military force consisting of army, navy, and air force units. The majority of equipment for the military was supplied by the United Kingdom. Aside from the few units that were able to escape to Saudi Arabia, including a majority of the air force, all of this equipment was either destroyed or taken by the Iraqis. Much of the property returned by Iraq after the Gulf War was damaged beyond repair. Iraq retained a substantial amount of captured Kuwaiti military equipment in violation of UN resolutions.

Since liberation, Kuwait, with the help of the United States and other allies, has made significant efforts to increase the size and modernity of its armed forces. These efforts are succeeding. The government also continues to improve defense arrangements with other Arab states, as well as UN Security Council members. During Operation Iraqi Freedom, in 2003, Kuwaiti military elements successfully operated missile defense systems.

A separately organized National Guard maintains internal security. The police constitute a single national force under the purview of civilian authorities of the Ministry of Interior.

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