KUWAIT, DECEMBER 2001 PROFILE--HISTORY-- Principal Government OfficialsEONOMY--OIL-SOCIAL BENEFITS--FOREIGN RELATIONS--DEFENSE--GOVERNMENT AND POLITICAL CONDITIONS--INDUSTRY AND TRADE--AGRICULTURE--SHIPPING
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PEOPLE
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, but access is restricted for foreign residents. The government sends
qualified students abroad for degrees not offered at Kuwait University.
About 1,000 Kuwaitis are currently studying in U.S. universities.
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.GOVERNMENT AND POLITICAL CONDITIONS
The State of Kuwait has been ruled by the Sabah family since 1751. The
1962 constitution contains detailed provisions on the powers and
relationships of the branches of government and on the rights of citizens.
Upon the death of an amir, the crown prince assumes his position. A new
crown prince is then selected by members of the Sabah family from among the
direct descendants of Mubarak the Great. Under the constitution, the
designation is subject to the approval of the National Assembly. Since
independence, successions have been orderly, both in 1965 and 1978.Kuwait experienced an unprecedented era of prosperity under Amir Sabah
al-Salim Al Sabah, who died in 1977 after ruling for 12 years, and under his
successor, Amir Jabir al-Ahmad al-Jabir Al Sabah. The country was
transformed into a highly developed welfare state with a free market
economy. During the 7-month occupation by Iraq, the Amir, the government,
and many Kuwaitis took refuge in Saudi Arabia or 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.
His return after the liberation in February 1991 was relatively smooth.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.No political parties exist in Kuwait, although there are several major
political groupings that function like parties. Although the Amir maintains
the final word on most government policies, the National
Assembly plays a real role in decisionmaking, with powers to initiate
legislation, question government 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 Jabir al-Ahmad al-Jabir Al Sabah
Crown Prince and Prime Minister--His Highness Sheikh Saad al-Abdullah
al-Salim Al Sabah
First Deputy Prime Minister and Minister of Foreign Affairs--Sheikh
Sabah al-Ahmad al-Jabir Al SabahAmbassador to the United States--Salim al-Abdullah Jabir Al Sabah
Permanent Representative to the United Nations--Muhammad Abdul HasanKuwait maintains an embassy in the United States at 2940 Tilden Street NW,
Washington, D.C. 20008 (tel. 202-966-0702).
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.
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.
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 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 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.
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.
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.
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. Conversely, Kuwait's relations with those nations that
supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, remain strained
or nonexistent. Palestine Liberation Organization (PLO) Chairman Yasir
Arafat's support for Saddam Hussein during the war also has affected
Kuwait's attitudes toward the PLO and the peace process.Since the conclusion of the Gulf war, Kuwait has made efforts to secure
allies throughout the world, particularly United Nations Security Council
members. In addition to the United States, defense arrangements have been
concluded with the United Kingdom, Russia, and France. Close ties to other
key Arab members of the Gulf war coalition--Egypt and Syria--also have been
sustained.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 Marine 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).
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 still retains a substantial amount of captured Kuwaiti military
equipment in violation of UN resolutions.Since the war, Kuwait, with the help of the U.S. and other allies, has made
significant efforts to increase the size and modernity of their 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.A separately organized National Guard maintains internal security. Police
forces are under the authority of the Ministry of Interior.
U.S.-KUWAITI RELATIONS
A U.S. consulate was opened at Kuwait in October 1951 and was elevated to
embassy status at the time of Kuwait's independence 10 years later. The
United States supports Kuwait's sovereignty, security, and independence as
well as closer cooperation among the GCC countries.In 1987, cooperation between the United States and Kuwait increased due to
the implementation of the maritime protection regime to ensure freedom of
navigation through the Gulf for 11 Kuwaiti tankers that were reflagged with
U.S. markings.The U.S.-Kuwaiti partnership reached dramatic new levels of cooperation
after the Iraqi invasion. The United States assumed a leading role in the
implementation of Operation Desert Shield. The United States led the UN
Security Council to demand Iraqi withdrawal from Kuwait and authorize the
use of force, if necessary, to remove Iraqi forces from the occupied
country. The United States played a major role in the evolution of Desert
Shield into Desert Storm, the multinational military operation to liberate
the State of Kuwait.Eventually, the U.S. provided the bulk of the troops and equipment that were
used by the multinational coalition that liberated Kuwait. The U.S.-Kuwaiti
relationship has remained strong in the post-war period.The United States has provided military and defense technical assistance to
Kuwait from both foreign military sales (FMS) and commercial sources. All
transactions have been made by direct cash sale. The U.S. Office of
Military Cooperation in Kuwait is attached to the American Embassy and
manages the FMS program. U.S. military sales to Kuwait total $5.5 billion
over the last 10 years. Principal U.S. military systems currently purchased
by the Kuwait Defense Forces are Patriot missile system, F-18 Hornet
fighters, and the M1A2 Main Battle Tank.The United States is currently Kuwait's largest supplier, and Kuwait is the
fifth-largest market in the Middle East for U.S. goods and services. Since
the Gulf war, Kuwaiti attitudes toward Americans and American products have
been excellent. U.S. exports to Kuwait totaled $787 billion in 2000.
Provided their prices are reasonable, U.S. firms have a competitive
advantage in many areas requiring advanced technology, such as oil field
equipment and services, electric power generation and distribution
equipment, telecommunications gear, consumer goods, and military equipment.
In 1993, Kuwait publicly announced abandonment of the secondary and tertiary
aspects of the Arab boycott of Israel (those aspects affecting U.S. firms).Kuwait also is an important partner in the current U.S.-led campaign against
terrorism, providing assistance in the military, diplomatic, and financial
arenas.
OFFICIAL NAME:
State of KuwaitGeography
Area: 17,820 sq. km. (about 6,880 sq. mi.); slightly smaller than New
Jersey.
Cities: Capital--Kuwait (pop. about 238,000). Other towns--Ahmadi, Jahra,
Fahaheel.
Terrain: Flat to slightly undulating desert plain.
Climate: Intensely hot and dry in summers; short, cool winters with
limited rain.People
Nationality: Noun and adjective--Kuwaiti(s).
Population (2001): 2.04 million, including non-Kuwaiti citizens.
Annual growth rate : 3.38%.
Ethnic groups: Arab 80%, South Asian, Iranian, Southeast Asian.
Religion: Islam 85% (Kuwaiti citizens are 100% Muslim).
Languages: Arabic (official); English widely spoken.
Education (free through high school): Years compulsory--8. Literacy--male
82.2%, female 74.9% over age of 15.
Health: Infant mortality rate--11 deaths/1,000 births.
Life expectancy--75 yrs. male, 77 yrs. female.
Work force (2001): 1.214 million.Government
Type: Constitutional Hereditary Amirate.
Independence: June 19, 1961.
Constitution: approved and promulgated November 11, 1962.
Branches: Executive--Amir (head of state). Legislative--elected National
Assembly (Majlis al-'Umma) of 50 members. Judicial--High Court of Appeal.
Political Parties: None.
Suffrage: Adult males who have been naturalized for 30 years or more or
have resided in Kuwait before 1920 and their male descendants 21 and over.
Only 14% of all citizens are eligible to vote.
Subdivisions: Government is centralized, but for administrative purposes
there are five governorates: Al 'Asimah, Hawalli, Al Ahmadi, Al Jahra', and
Al Farwaniyah.Economy
GDP (2000): $37.7 billion.
Annual growth rate in real GDP (2000 over 1999): 0.9%.
Per capita GDP (2000): $15,000.
Natural resources: Petroleum, fisheries.
Agriculture: Most food is imported. Cultivated land--1%.
Industry: Types--petroleum extraction and refining, fertilizer, chemicals,
some construction materials. Water desalinization capacity: 215 million
gallons per day.
Trade (2000): Exports and re-exports--$17.033 billion: oil (90%). Major
markets--Japan 23%, U.S. 12%, Singapore 8%, Netherlands 7%. Imports--$7.6
billion: food, construction materials, vehicles and parts, clothing.
Suppliers--U.S. 15%, Japan 10%, Germany 7%, U.K. 7%.
