Background: Kuwait was attacked and overrun by Iraq on 2 August 1990. Following several weeks of aerial bombardment, a US-led UN coalition began a ground assault on 23 February 1991 that completely liberated Kuwait in four days. Kuwait has spent more than $5 billion to repair oil infrastructure damaged during 1990-91.
Government type: nominal constitutional monarchy
Capital: Kuwait
Currency: 1 Kuwaiti dinar (KD) = 1,000 fils
Geography of Kuwait
Location: Middle East, bordering the Persian Gulf, between Iraq and Saudi Arabia
Geographic coordinates: 29 30 N, 45 45 E
Area:
total: 17,820 sq km
land: 17,820 sq km
water: 0 sq km
Land boundaries:
total: 464 km
border countries: Iraq 242 km, Saudi Arabia 222 km
Coastline: 499 km
Maritime claims:
territorial sea: 12 nm
Climate: dry desert; intensely hot summers; short, cool winters
Terrain: flat to slightly undulating desert plain
Elevation extremes:
lowest point: Persian Gulf 0 m
highest point: unnamed location 306 m
Natural resources: petroleum, fish, shrimp, natural gas
Land use:
arable land: 0%
permanent crops: 0%
permanent pastures: 8%
forests and woodland: 0%
other: 92% (1993 est.)
Irrigated land: 20 sq km (1993 est.)
Natural hazards: sudden cloudbursts are common from October to April; they bring inordinate amounts of rain which can damage roads and houses; sandstorms and dust storms occur throughout the year, but are most common between March and August
Environment – current issues: limited natural fresh water resources; some of world’s largest and most sophisticated desalination facilities provide much of the water; air and water pollution; desertification
Environment – international agreements:
party to: Climate Change, Desertification, Environmental Modification, Hazardous Wastes, Law of the Sea, Nuclear Test Ban, Ozone Layer Protection
signed, but not ratified: Biodiversity, Endangered Species, Marine Dumping
Geography – note: strategic location at head of Persian Gulf
People of Kuwait
The people residing in the State of Kuwait are primarily Arab in origin, but less than half of them are from the Arabian Peninsula. Many Arabs from nearby states took up residence in Kuwait because of the prosperity brought by oil production after the 1940s. However, following the liberation of Kuwait from Iraqi occupation in 1991, the Kuwaiti Government undertook a serious effort to reduce the expatriate population. Kuwait still has a sizable Iranian and Indian population.
Seventy-five percent of native Kuwaitis are Sunni Muslims, and 25% are Shi’a Muslims. There are very few Kuwaiti Christians. The 79% literacy rate, one of the Arab world’s highest, is due to extensive government support for the education system. Public school education, including Kuwait University, is free.
Population: 2,335,648 (July 2005 est.)
note: includes 1,159,913 non-nationals
Age structure:
0-14 years: 28.76%
15-64 years: 68.82%
65 years and over: 2.42%
Population growth rate: 3.38%
note: this rate reflects a return to pre-Gulf crisis immigration of expatriates
Birth rate: 21.91 births/1,000 population
Death rate: 2.45 deaths/1,000 population
Net migration rate: 14.31 migrant(s)/1,000 population
Infant mortality rate: 11.18 deaths/1,000 live births
Life expectancy at birth:
total population: 76.27 years
male: 75.42 years
female: 77.15 years
Total fertility rate: 3.2 children born/woman
Nationality:
noun: Kuwaiti(s)
adjective: Kuwaiti
Ethnic groups: Kuwaiti 45%, other Arab 35%, South Asian 9%, Iranian 4%, other 7%
Religions: Muslim 85% (Sunni 45%, Shi’a 40%), Christian, Hindu, Parsi, and other 15%
Languages: Arabic (official), English widely spoken
Literacy:
definition: age 15 and over can read and write
total population: 78.6%
male: 82.2%
female: 74.9% (1995 est.)
History of Kuwait
Kuwait’s modern history began in the 18th century with the founding of the city of Kuwait by the Uteiba section of the Anaiza tribe, who wandered north from Qatar. Its first definite contact with the West was between 1775 and 1779, when the British-operated Persian Gulf-Aleppo Mail Service was diverted through Kuwait from Persian-occupied Basra (in Iraq).
During the 19th century, Kuwait tried to obtain British support to maintain its independence from the Turks and various powerful Arabian Peninsula groups. In 1899, the ruler Sheikh Mubarak Al Sabah–“the Great”–signed an agreement with the United Kingdom pledging 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. Britain agreed to grant an annual subsidy to support the Sheikh and his heirs and to provide its protection. Kuwait enjoyed special treaty relations with the U.K., which handled Kuwait’s foreign affairs and was responsible for its security.
Mubarak was followed as ruler by his son Jabir (1915-17) and another son Salim (1917-21). Subsequent amirs descended from these two brothers. Sheikh Ahmed al-Jabir Al Sabah ruled from 1921 until his death in 1950, and Sheikh Abdullah al-Salim Al Sabah from 1950 to 1965. By early 1961, the British had 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.
The boundary with Saudi Arabia was set in 1922 with the Treaty of Uqair following the Battle of Jahrah. This treaty 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. In December 1969, 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.
Kuwait’s northern border with Iraq dates from an agreement made 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, under the pretense 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.”
In August 1990, Iraq nevertheless invaded Kuwait but was forced out 7 months later by a UN coalition led by the United States. 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 Security Council Resolutions 773 and 883. Iraqi officials have, however, publicly indicated that they may again attempt to occupy Kuwait by force.
Kuwait Economy
Kuwait is a small country with massive oil reserves, whose economy has been traditionally dominated by the state and its oil industry. 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. All of these fires were extinguished within a year. Production has been restored, and refineries and facilities have been modernized. Oil exports surpassed their pre-invasion levels in 1993 with production levels only constrained by OPEC quotas.
Oil
In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil Co. (KOC), jointly owned by the British Petroleum Co. and Gulf Oil Corp. 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 Co., acquired the Saudi Arabian onshore concession in the Divided Zone.
Offshore the Divided Zone, the Arabian Oil Co.–80% owned by Japanese interests and 10% each by the Kuwaiti and Saudi Governments–has produced on behalf of both countries since 1961. The original concession agreements will expire in January 2003; negotiations to replace the concession with a technical service agreement should be completed in 2002.
The Kuwait Petroleum Corp. (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 94 billion barrels of recoverable oil; Saudi Arabia is the only single country which has larger reserves. Estimated capacity, before the war, 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 2.5 million b/d. Kuwait plans to increase its capacity to 3.5 million b/d by 2005.
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 items of worth, 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.
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. Kuwait’s fiscal surplus in 2000 was some 15% of GDP, while it reversed to a deficit of more that 2% of GDP in 2001 on sliding oil prices.
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 $80 billion. 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 was provided to Egypt, Syria, and Jordan, as well as the Palestine Liberation Organization. During the Iran-Iraq war, significant Kuwaiti aid was given to the Iraqis. The Kuwait fund issued loans and technical assistance grants totaling over $520 million during its fiscal year ending June 30, 2000.
GDP: purchasing power parity – $29.3 billion (2000 est.)
GDP – real growth rate: 6% (2000 est.)
GDP – per capita: purchasing power parity – $15,000 (2000 est.)
GDP – composition by sector:
agriculture: 0%
industry: 55%
services: 45% (1996)
Inflation rate (consumer prices): 3% (2000)
Labor force: 1.3 million (1998 est.)
note: 68% of the population in the 15-64 age group is non-national (July 1998 est.)
Labor force – by occupation: government and social services 50%, services 40%, industry and agriculture 10% (1996 est.)
Unemployment rate: 1.8% (official 1996 est.)
Budget:
revenues: $11.5 billion
expenditures: $17.2 billion (FY01/02)
Industries: petroleum, petrochemicals, desalination, food processing, construction materials, salt, construction
Industrial production growth rate: 1% (1997 est.)
Electricity – production: 31.567 billion kWh (1999)
Electricity – production by source:
fossil fuel: 100%
hydro: 0%
nuclear: 0%
other: 0% (1999)
Agriculture – products: practically no crops; fish
Exports: $23.2 billion (f.o.b., 2000 est.)
Exports – commodities: oil and refined products, fertilizers
Exports – partners: Japan 23%, US 12%, Singapore 8%, Netherlands 7% (1999)
Imports: $7.6 billion (f.o.b., 2000 est.)
Imports – commodities: food, construction materials, vehicles and parts, clothing
Imports – partners: United States 15%, Japan 10%, UK 7%, Germany 7% (1999)
Debt – external: $6.9 billion (2000 est.)
Economic aid – recipient: $27.6 million (1995)
Currency: Kuwaiti dinar (KWD)
Map of Kuwait
