TOPOGRAPHY

Kuwait consists almost entirely of flat rolling desert and mud flats. There is a 1,137-m (450-ft) ridge at Mina' al-Ahmadi and a 290-m (951-ft) prominence in the southwest corner. There are no permanent rivers or lakes, but there are some desert wadis that collect water during the rains.

CLIMATE

During the summer, which lasts roughly from May to October, the air generally is dry, but southeasterly winds often raise day-time humidity to 90% for a few weeks in August or September. Between November and April, the climate is pleasant, with cool nights and warm sunny days. In December and January, night temperatures occasionally touch the freezing point. Summer temperatures range from 29°c (84°f) in the morning to more than 49°c (120°f) in the shade at noon. Frost, almost unknown on the coast, is common in the interior. Annual rainfall, which averages less than 25 cm (10 in), comes in the form of showers or storms between October and April. Cloudbursts have amounted to as much as 6.4 cm (2.5 in) of rain in one day, and can heavily damage roads and houses. The prevailing northwest wind (shamal) is a cooling breeze in summer.

FLORA AND FAUNA

Plants and animals are those common to the arid parts of Arabia. There is little vegetation except camel thorn in the desert and some shrubs along the coastal strip. Between October and March, however, when sufficient rain falls at intervals, the desert is transformed: Grass and foliage are plentiful, flowers and plants appear in great variety, and in the spring truffles and mushrooms can be found.

The fox and jackal have decreased in numbers; other mammals found in Kuwait include gerbils, jerboas, and desert hares. Reptile species include various lizards, geckos, and snakes. Fish are plentiful. Among the species of migratory birds are swallows, wagtails, chiffchaff, skylarks, wrens, eagles, cormorants, hoopoes, and terns.

As of 2002, there were at least 21 species of mammals, 35 species of birds, and over 200 species of plants throughout the country.

ENVIRONMENT

The Persian Gulf War of 1991 and its aftermath caused severe environmental problems for Kuwait, releasing large quantities of oil into the environment and threatening the water supply. Kuwait has no renewable water resources and must rely on wells and desalination of sea water. The nation has some of the largest and most advanced desalination plants in the world, which provide much of its water.

 

In 2003, only about 1.5% of the total land area was protected by the state. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species include 1 type of mammal, 12 species of birds, 1 type of reptile, and 6 species of fish. the slender-billed curlew and hawksbill turtle are on the endangered list. the Saudi gazelle has become extinct in the wild.

POPULATION

The population of Kuwait in 2005 was estimated by the United Nations (UN) at 2,589,000, which placed it at number 136 in population among the 193 nations of the world. This number includes over one million nonnationals who live and work in the country. In 2005, approximately 2% of the population was over 65 years of age, with another 26% of the population under 15 years of age. There were 150 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 1.7%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 4,610,000. The population density was 145 per sq km (376 per sq mi). the vast majority of the population resides along the coast.

The UN estimated that 96% of the population lived in urban areas in 2005 and that urban areas were growing at an annual rate of 2.67%. The capital city, Kuwait (Al-Kuwayt), had a population of 1,222,000 in that year.

MIGRATION

With the discovery of oil and the consequent rise in living standards, Kuwait acquired a large immigrant population, attracted by jobs, free education for their children, and free medical care. The number of foreign residents more than doubled during the 1970s, and in 1994 they accounted for an estimated 56.4% of the population. After the Persian Gulf war, Kuwait deported tens of thousands of foreign workers from countries whose leaders had backed Iraq in the conflict. Of the estimated 400,000 Palestinians living in Kuwait before the 1990–91 Gulf War, reportedly only about one-sixth were allowed to remain. Only about 120,000 of the 220,000 prewar Bedouins (mostly nomads from Syria, Jordan, and Iraq) were allowed to stay. These stateless Arabs had remained in Kuwait under Iraqi occupation and were suspected of collaboration. Most other foreign workers were able to return to their home countries. By 1996, however, Egyptians, Pakistanis, Filipinos, and others had filled the void that the previous foreign workers had left behind. Kuwait carried out amnesty plans for illegal foreigners in 1988, 1996, and 2002.

In 2000, there were 1,108,000 migrants living in Kuwait. This accounted for 57.9% of the population. The number of refugees that year was 2,800. In 2004, there were 1,519 refugees and 157 asylum seekers. The number of persons of concern to the United Nations High Commissioner for Refugees (UNHCR) was 102,676, made up of 80,000 stateless Bedouins, 13,000 Iraqis, 6,000 Palestinians, and 2,000 Somalis. In 2005, the net migration rate was an estimated 14.96 migrants per 1,000 population. the government views the immigration level as too high.

ETHNIC GROUPS

Ethnic Kuwaitis are mostly descendants of the tribes of Najd (central Arabia) but some descend from Iraqi Arabs. Still others are of Iranian origin. The number of non-Kuwaitis are divided roughly in half between Arabs and non-Arabs such as Iranians, Indians, Pakistanis, and Filipinos. According to the latest estimates, about 45% of the population are Kuwaiti, 35% are other Arab, 9% South Asian, 4% Iranian, and 7% other. It has also been estimated that over 100,000 people are considered to be bidoon residents, that is Arabs who have long-standing residency in the nation but no documented proof of nationality.

LANGUAGES

Arabic is the official language. The Arabic spoken in Kuwait is closer to classical Arabic than to the colloquial Arabic spoken in many other parts of the Middle East. English is generally used by businesspeople, employees of oil companies, foreign residents, and students, and it is the second language taught in the schools.

RELIGIONS

Islam is the state religion. According 2004 figures, Muslims represented about 64% of the total population, with a majority believed to be Sunni Muslim. About 30–35% of Muslim citizens were of the Shia branch. The Christian population includes between 250,000 and 500,000 people. Catholic groups include Roman Catholic, Maronite, Coptic, Armenian, Greek, Malabar, and Malankara congregations. Orthodox groups include the Greek, Armenian, Coptic, and the Indian Orthodox Syrian Church. the National Evangelical Church (Protestant) has about 20,000 members. Other Protestant groups include the Anglicans, Seventh-Day Adventists, Mormons, and Marthoma. Other religious groups include Hindus, Baha'is, Sikhs, and Buddhists.

The constitution provides for freedom of religion, but this right is limited in some cases by the government, in that religious practices are not permitted to conflict with public policy or morals. Blasphemy, apostasy (of Muslims), and proselytizing are illegal, with the exception of the Islam Presentation Committee, which encourages the conversion on non-Muslims to Islam. Family law is administered through the Islamic court system. Religious affairs are overseen by the Ministry of Awqaf and Islamic Affairs. Only four non-Muslim groups have the full legal recognition in the government: the Roman Catholic Church, the Coptic Orthodox Church, the Anglican Church, and the National Evangelical Church. While these groups are offered a certain amount of freedom, there are quotas in place that limit the number of clergy and staff each group can have. Other groups are generally allowed to worship freely in private homes. Certain Muslim holidays are celebrated as national holidays.

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HISTORY

The historical records of the Arab coast of the Persian Gulf are meager. Archaeological discoveries on Faylakah Island reveal an ancient civilization about 2800 bc that had trade links with the Sumerians. By the 6th century bc, this part of the Gulf was a principal supply route for trade with India. There is evidence of early migrations to the East African coast by the seafaring inhabitants. The historical turning point for the entire Arabian Peninsula was the conversion of the people to Islam in the 7th century ad, during the lifetime of Muhammad.

Kuwait's recent history starts in 1716, when several clans of the tribe of Aniza migrated from the interior of the Arabian Desert to a tiny Gulf coastal locality, later to be called Kuwait (a diminutive of the word kut, meaning "fort"). In 1756, the settled tribesmen rallied around the As-Sabah family and chose as their ruler Sheikh Sabah 'Abd ar-Rahim, founder of the present ruling dynasty. During the latter part of the century, raids by land and by sea resulted in the decline of Kuwait, but after the British suppression of piracy in the region, trading and shipbuilding prospered.

During the period in which Sheikh 'Abdallah as-Sabah ruled Kuwait (1866–92), a dynastic battle raged in Arabia between the rival houses of Ar-Rashid and As-Sa'ud. The Ottoman Turks, supporting Ibn Rashid, sought to extend their control over the coastal area to the south of Kuwait. Fearing that his territory would be lost to the Turks who considered it part of their province of Basra, Sheikh Mubarak as-Sabah (r.1896–1915) asked to be taken under British protection. The British were concerned not only because of the Turkish claims but also because the Russians were seeking to set up a coaling station in Kuwait, and both the Germans and the Turks had planned to make it a terminus of the Berlin–Baghdād railroad. In 1899, Sheikh Mubarak agreed not to alienate any of his territory or to receive representatives of any foreign power without British consent. In return, the British offered their services as well as an annual subsidy to support the sheikh and his heirs.

On 19 June 1961, the protective treaty relations with the United Kingdom were terminated by mutual consent, and Kuwait declared itself fully sovereign and independent. By this time, the sheikhdom had already become a major oil producer and had acquired a controlling interest in the petroleum industry. Iraq refused to recognize Kuwait's independence, asserting it had inherited the Ottoman claim to the territory. Baghdād's threat of an invasion was foiled by the dispatch of British troops and later the support of the Arab League for Kuwait. Iraq then appeared to acquiesce in Kuwait's sovereignty, although border issues were never definitely resolved. During the next two decades, Kuwait succeeded in establishing an open and prosperous economy, based in large part on foreign, especially Palestinian and Egyptian, labor.

During the Iran-Iraq War, Kuwait, albeit technically neutral, rendered important assistance to Baghdād, including the transshipment of goods and the provision of over $6 billion in loans. As a response, members of Kuwait's large Shia minority and other radical dissidents waged a war of terrorism against the government. Throughout the 1980s, there were bombings, assassination attempts, hijackings, and sabotage against oil facilities.

In 1987, Iranian attacks on Persian Gulf shipping led Kuwait to request US protection for its supertankers. Washington agreed, and when a "reflagged" Kuwaiti vessel was attacked, American forces retaliated against an Iranian offshore oil rig.

 

With the end of the war, Iraq–Kuwait relations were stable until 1990, when Saddam Hussein accused his neighbor of waging economic warfare against Iraq by illegally drilling oil from the shared Rumailia field, overproducing oil to drive down prices and unfairly demanding repayment of wartime loans. Tensions could not be defused by negotiations or mediation and on 2 August 1990, Iraqi forces invaded Kuwait, asserting that they were rightfully reclaiming their territory. Kuwaiti defense forces offered little resistance and most senior officials fled the country.

The United States led an international coalition of Arab and other nations to demand the withdrawal of Iraqi forces. After a lengthy buildup of forces, Iraq was assaulted by massive air and land forces; after six weeks, its defenses collapsed and Kuwait was liberated in February 1991. Kuwait's leaders returned to find a disgruntled population that resented their abandonment and demanded greater political participation. Enormous physical damage had been inflicted on the country, including over 700 oil well fires that did serious ecological damage before being extinguished after almost nine months' effort.

The regime, and many Kuwaitis, turned harshly against those suspected of collaboration with Iraq. As a consequence, much of the large Palestinian community was ejected from the country. Relations with Iraq naturally remained tense, with some Baghdād officials continuing to assert their claim to Kuwait. On 27 May 1993, the United Nations Security Council reaffirmed the decision of a Boundary Demarcation Commission establishing the border between the two nations. Kuwait's vulnerability to possible attack from Iraq or Iran drew the nation closer to the United States, which has been willing to offer enhanced security collaboration.

In October 1994, Iraq began moving 60,000 troops to within 32 km (20 mi) of the Kuwaiti border. The UN Security Council voted unanimously to condemn Iraq's actions, and the United States, the United Kingdom, and other countries came to Kuwait's assistance. Kuwait agreed to allow the United States to station a squadron of 24 warplanes there as part of a broad effort to curb Iraqi military power. The plan kept reserves of American warplanes and a division's worth of tanks and armor stationed in the region. On 10 November 1994, Iraq agreed to recognize the independence and current borders of Kuwait, a major step apparently aimed at allowing at least some UN sanctions against Iraq to be lifted. However, in August 1995, Iraqi troop movements along the Kuwaiti border caused alarm again, and the United States began sending ships carrying equipment and supplies to the Persian Gulf. In April 1996, an international military exercise (involving forces of the United States, the United Kingdom, Russia, China, Italy, and other Arab nations) was held in Kuwait. The UN also renewed its multi-national force of border observers in April 1996 to oversee the 14-km (9-mi) demilitarized zone that separates Kuwait from Iraq.

Although some of its neighbors in the Persian Gulf began to pursue a rapprochement with Iraq over the following years, Kuwait maintained its vigilance against the regime of Saddam Hussein. Early in 1998, it granted expanded staging areas to the United States in anticipation of possible military action in response to Iraq's failure to cooperate with UN weapons inspections. At the end of 1998, it supported NATO air strikes against Iraq over the same issue. In January 1999, Kuwait placed its military on full alert in response to renewed threats from Iraq. As of 2000, a special UN commission had awarded $15.7 billion in reparations for damages suffered in Iraq's 1990 invasion of Kuwait. In January 2003, Iraqi and Kuwaiti officials resumed talks on the fate of people who had gone missing during the Iraqi occupation of Kuwait in 1990–91. Kuwait claims Iraq must account for more than 600 Kuwaitis who disappeared during the occupation. Iraq insists it holds no such detainees, and accuses Kuwait of failing to account for more than 1,000 Iraqis.

On 8 November 2002, the UN Security Council passed Resolution 1441, calling on Iraq to disarm itself immediately of weapons of mass destruction (chemical, biological, and nuclear weapons), to abide by all former UN resolutions regarding the country since the end of the 1991 Gulf War, and to allow for the reintroduction of UN and IAEA weapons inspectors (they were expelled from the country in 1998). The United States adopted a firm position toward Iraq's disarmament, which it disputed, and by March 2003, was preparing for war. Since Kuwait's liberation from Iraq in 1991, it has become the world's largest per capita defense spender. As of 2003, Kuwait had purchased Patriot antimissile batteries, F/A-18 warplanes, and Apache attack helicopters for a military force estimated at 15,500, with 23,700 in reserves. However, Kuwait was not expected to take part in the expected US-led invasion of Iraq; instead, its forces were to defend the country from retaliation or other forms of attack by Iraq. By early March 2003, nearly 140,000 US and British military personnel had arrived in Kuwait.

On 21 January 2003, a civilian contractor for the US military was killed and another wounded when their car was fired upon outside Kuwait City. A Kuwaiti man was arrested and claimed responsibility for the shooting, expressing support for Osama bin Laden's al-Qaeda organization. Kuwait is concerned about a rise in Islamic fundamentalism and anti-American sentiment.

On 19 March 2003, the United States launched air strikes on Baghdād, and the war in Iraq began. Iraq fired a number of missiles at Kuwait, and one struck a mall in Kuwait City but resulted in no deaths. Most of the missiles were destroyed by defensive Patriot missiles. The regime of Saddam Hussein was toppled on 9 April, and the military stage of the war ended soon after. Plans for the reconstruction of Iraq and for the establishment of a legitimate government were in the making in April, but it was acknowledged such progress could take years.

In May 1999, the emir of Kuwait dissolved the National Assembly in the wake of a long-standing political deadlock between government and opposition forces. However, the opposition gained even more ground in national elections held in July, with both Islamists and liberals gaining additional seats. Among the matters awaiting parliamentary consideration was a controversial decree by the emir that would allow women to vote and run for office by the next election, scheduled for 2003. Parliament on 23 November 1999 voted against the emir's decree to grant full political rights to women.

 

Traditionally, the emir has appointed the crown prince as prime minister. In July 2003, he appointed Sheikh Sabah al-Ahmad al-Sabah prime minister, separating the post from the role of heir to the throne for first time since independence. In the legislative elections on 5 July 2003, 148 candidates ran for 50 places. Voter turnout was 81%, electing new candidates to half of the Assembly seats: procabinet, 20 seats; Islamist, 16 seats; independents, 12 seats; and liberals, 2 seats. In May 2005, parliament approved constitutional amendments to give women full political rights. In June, the first woman cabinet minister was appointed. Women will be able to take part in parliamentary elections scheduled to take place in 2007 and local elections in 2009.

In January 2005, lethal gun battles erupted between suspected Islamist militants and police. In October 2005, the future leadership of Kuwait was brought into question as the aging leadership of the royal family, all in their late seventies, suffered from debilitating illnesses.

GOVERNMENT

According to the constitution of 16 November 1962, Kuwait is an independent sovereign Arab state under a constitutional monarch. Executive power is vested in the emir, who exercises it through a Council of Ministers. Succession is restricted to descendants of Mubarak as-Sabah; an heir apparent must be appointed within one year of the accession of a new ruler. The emir appoints a prime minister after traditional consultations and appoints ministers on the prime minister's recommendation. Emir Sabah as-Salim as-Sabah died in December 1977 after a reign of 12 years and was succeeded by Emir Jabir al-Ahmad al-Jabir as-Sabah. the as-Sabah family, advised by wealthy merchants and other community leaders, dominates the government.

The National Assembly (Majlis) consists of 50 elected representatives. Elections are held every four years among adult literate males who resided in Kuwait before 1920 and their descendants; candidates must be Kuwaiti males at least 21 years of age. As a result, the electorate only accounts for about 10% of Kuwait's total population. In 1996, naturalized citizens who did not meet the pre-1920 qualification but had been naturalized for 30 years became eligible to vote. The assembly may be dissolved at any time by the emir. It was dissolved in 1976, as part of a political crackdown that followed the government's announced support of Syrian intervention in Lebanon. Elections were held in February 1981 and a new assembly was convened after elections in 1985; it was dissolved once again in 1986 as a result of national tensions over the Iran-Iraq War. It remained suspended until elections in October 1992. In 1993, the new Assembly actively produced new legislation, including a national budget. The emir suspended the Assembly once again in 1999, but new elections were held within two months.

POLITICAL PARTIES

Political parties are prohibited, but opposition groups are active in the nation's political life. Several political groups act as de facto parties: Bedouins, merchants, Sunni and Shiite activists, and secular leftists and nationalists. Political opinions are freely expressed in informal gatherings in the homes of government officials and leading citizens.

Progovernment forces gained ground over Muslim fundamentalist candidates in the elections of 8 October 1996. Following the 1999 elections, the Assembly was split almost evenly among pro-government, liberal, and Islamic members. Progovernment forces held 13 seats, with the rest held by Islamic and liberal parties and unaffiliated independents.

The Islamists are divided between the Ikhwan, which traces its political antecedents to Egypt's Muslim Brotherhood, and two Salafigroups that draw inspiration from Saudi Arabia. Current political groupings include the Islamic Constitutional Movement (ICM) and the Islamic Popular Group (of the Salafitendency), two Sunni organizations; the Islamic National Alliance, the main faction for Shia Muslims; the Kuwait Democratic Forum (KDF), a loose association of groups with Nassarist and pan-Arabist foundations; and the National Democratic Group, composed of generally secular progressives with liberal tendencies. The rest are independents or are tribal confederations.

LOCAL GOVERNMENT

There are five governorates (Ahmadi, Al-Jahrah, Al-Kuwayt, Hawalli, and Al-Farwaniyah), but political authority is highly centralized in the capital. A tradition of diwaniyya, or family or tribal gatherings, serves as a forum for debate in society, largely oriented around the proceedings of parliament.

JUDICIAL SYSTEM

The system of Muslim law (Shariah) was augmented by 1959 legislation that established courts of law, regulated the judicial system, and adopted modern legal codes. In each administrative district of Kuwait, there is a summary court composed of one or more divisions, each presided over by one judge. The summary courts deal with civil and commercial cases and leases. A tribunal of first instance has jurisdiction over matters involving personal status, civil and commercial cases, and criminal cases, except those of a religious nature and cases in which the amount involved exceeds kd1,000. The High Court of Appeals is divided into two chambers, one with jurisdiction over appeals involving personal status and civil cases, the other over appeals involving commercial and criminal cases. State security court decisions may be appealed to the Court of Cassation. Ordinary criminal cases may be appealed to the High Court of Appeals. the five-member Superior Constitutional Court is the highest level of the Kuwaiti judiciary. the Superior Constitutional Court interprets the constitution and deals with disputes related to the constitutionality of laws, statutes, and by-laws. A military court handles offenses committed by members of the security forces. Religious courts, Sunni and Shia, decide family law matters, but there is also a separate domestic court for non-Muslims. There is no Shia appellate court. Shia cases are adjudicated by Sunni courts of appeals.

While the 1962 constitution guarantees an independent judiciary, the executive branch retains control over its administration and budget. the emir, after recommendation of the Justice Ministry, appoints judges in the regular courts. Kuwaiti nationals receive lifetime appointments; non-Kuwaiti judges receive renewable terms of one to three years.

The constitution gives the authority to pardon and commute sentences to the emir. The Special State Security Court was abolished in 1995.

ARMED FORCES

Kuwait's all-volunteer armed forces totaled 15,500 active personnel in 2005. The Army had 11,000 personnel and was equipped with 368 main battle tanks, up to 450 armored infantry fighting vehicles, 321 armored personnel carriers, and 218 artillery pieces. The Air Force numbered an estimated 2,500 and had 50 combat-capable aircraft, including 39 fighter ground attack aircraft, in addition to 16 attack helicopters. The Navy had an estimated 2,000 personnel, with major naval units including 40 patrol/coastal vessels. Paramilitary forces consisted of an estimated 6,600-member National Guard. The UN provided troops and observers in Kuwait. In addition, the United States maintained a military presence with 25,250 troops stationed in the country. The defense budget in 2005 was estimated at $4.27 billion.

INTERNATIONAL COOPERATION

Kuwait was admitted to the United Nations (UN) on 14 May 1963 and is a member of ESCWA and several nonregional specialized agencies, such as UNESCO, UNIDO, IAEA, FAO, IFC, IMF, the World Bank, ILO, and WHO. It belongs to the Arab League, the Arab Bank for Economic Development in Africa, the African Development Bank, the Arab Monetary Union, the Council of Arab Economic Unity, the Central African States Development Bank (BDEAC), the Organization of the Islamic Conference (OIC), G-77, OPEC, WTO, and OAPEC; in 1981, it was a leader in forming the Gulf Cooperation Council with Saudi Arabia and four other Gulf states.

Kuwait played a key role in Operation Iraqi Freedom (2002–03) by offering land use and finances for the US-led coalition forces. The nation has also continued to support reconstruction efforts in Iraq. Kuwait is part of the Nonaligned Movement. In environmental cooperation, Kuwait is part of the Basel Convention, the Montréal Protocol, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change and Desertification.

ECONOMY

The discovery of oil in 1934 transformed the economy. Kuwait's enormous oil reserve of 94 billion barrels and huge quantities of natural gas have provided the base for an economic presence of worldwide significance. The Kuwaiti standard of living was among the highest in the Middle East and in the world by the early 1980s. Oil wealth has stimulated trade, fishery development, and service industries. The government has used its oil revenues to build ports, roads, an international airport, a seawater distillation plant, and modern government and office buildings. The public has also been served by the large-scale construction of public works, free public services, and highly subsidized public utilities, transforming Kuwait into a fully developed welfare state. Prudent management of budgetary allocations and development priorities, as well as substantial interest from overseas investment, helped cushion the adverse impact of the collapse of the Souk al-Manakh—an unregulated curbside securities market—in 1982, the collapse in world oil prices during the mid-1980s, and the 1980–88 Iran-Iraq War. In addition, acquisition of 5,000 retail outlets in Western Europe (marketed under the name "Q-8") and expansion into the manufacture and sale of refined oil products have bolstered the Kuwaiti economy.

Oil extraction and processing accounts for about 50% of GDP, 95% of export earnings, and 75% of government revenues. Kuwait's economy suffered enormously from the effects of the Gulf War and the Iraqi occupation, which ended in February 1991 with the destruction of much of Kuwait's oil production capacity and other economic infrastructure. The damage inflicted on the economy was estimated at $20 billion. Real growth in GDP was estimated at 9% in 1994. Economic improvement from 1994 to 1997 came largely from growth in the industrial and financial sectors. the Difficult Debts Law, which aided investors with losses incurred during the Iraqi invasion and an informal stock crash in the early 1980s, significantly improved investor confidence. Reversing this trend, GDP shrank 16% due to a large decline in world oil prices. The loss was more than restored by the recovery of oil prices beginning in the second half of 1999. GDP rose 17.22% in 1999, and then an extraordinary 26.88% in 2000. Inflation rose to 4.7% in 1999, but declined to 2.7% in 2000. GDP growth in 2001 was 5.43% and inflation was down to 2%. From 1999 to 2001, per capita GDP rose from $13,082 to $17,880. Kuwait's portfolio investments have generally served to double the income it receives from its basic oil industry.

While the GDP growth rate slumped in the negatives in 2001 and 2002 (-1.0% and–0.4% respectively), it quickly recovered, jumping to 9.9% in 2003, and 7.2% in 2004; in 2005, the economy was expected to expand by 4.0%. As a result of this boom, income per capita has also improved, reaching $20,088 in 2004, and an estimated $23,347 in 2005. Inflation and unemployment have been kept under control (reaching 1.2% and 2.2%, respectively, in 2004) and do not pose a major problem to the economy. Although Kuwait is a country with a high standard of living, it is still dependent on food and water imports. In the future, it plans to open up oil exploitations in the northern part of the country.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005, Kuwait's gross domestic product (GDP) was estimated at $51.6 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $22,100. the annual growth rate of GDP was estimated at 4.5%. the average inflation rate in 2005 was 3.5%. It was estimated that agriculture accounted for 0.5% of GDP, industry 52.1%, and services 47.4%.

Foreign aid receipts amounted to $4 million or about $2 per capita.

The World Bank reports that in 2003, household consumption in Kuwait totaled $20.70 billion or about $8,637 per capita based on a GDP of $41.7 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1980 to 1990, household consumption grew at an average annual rate of -1.4%.

LABOR

In 2005, Kuwait's labor force was estimated at 1.67 million workers, approximately 80% of whom were not Kuwaiti nationals. Although there was no data available on the occupational breakdown of the country's workforce, as of 2002, Kuwaiti nationals accounted for 93% those employed in the public/government sector. The government-owned oil industry dominates the economy. The unemployment rate was estimated at 2.2% in 2004.

Although workers are legally permitted to join unions, less than 5% of the labor force are union members. Virtually all are affiliated with the Kuwait Trade Union Federation, the only trade federation allowed by law. The government performs a pervasive supervisory role of all unions, both subsidizing union expenses and carefully monitoring union activities. The right to strike is severely limited, and strikes rarely occur. About 10% of union members are foreign workers, but foreign workers must be in Kuwait for five years before they can join a union and then may not vote in elections or hold official positions. The right to strike is limited.

In general, all workers are entitled to a 48-hour workweek, compensation for overtime, sick leave, termination pay, and access to arbitration for settlement of disputes. However, many laborers from developing countries are willing to tolerate poor or unhealthy working conditions in order to earn a wage that is significantly higher than in their own countries. the minimum working age is 18, although children who are at least 16 may work limited hours in nonhazardous occupations. Foreign workers must be at least 18 to work in Kuwait. In 2002, the public-sector minimum wage was about $742 per month for citizens and $296 per month for noncitizens. Health and safety standards are lax in regard to foreign workers.

AGRICULTURE

Only 1% of the total land area is utilized for the cultivation of crops; permanent pasture land amounts to 7.6% of total land area. Despite the absence of rivers and streams and the paucity of rain, the development of agriculture has been actively pursued. the government apportions arable land at nominal prices on a long-term basis among farmers to stimulate production of vegetables and other crops. It also provides farmers with long-term loans and low-cost irrigation. The state has supplied extension services and demonstration centers for new farming techniques in an attempt to increase agricultural production. Nevertheless, farming contributes less than 1% of the non-oil GDP. Agricultural output in 2004 included 185,620 tons of vegetables and melons and 16,900 tons of fruit.

ANIMAL HUSBANDRY

When the desert is green (from the middle of March to the end of April), about one-fourth of Kuwait's meat supply is provided locally. The 2005 livestock population included: cattle, 28,000; sheep, 900,000; goats, 150,000; and chickens, 32,500,000. Kuwait's poultry production has recovered from damages inflicted during the 1990 invasion. Production in 2005 was estimated at 80,535 tons, exceeding the previous high of 21,000 tons in 1989. A small number of Bedouins raise camels, goats, and sheep for meat and milk.

FISHING

Small boats catch enough fish to satisfy local demand. Species caught include sardines, mackerel, tuna, shark (for the fins exported to China), barracuda, and mullet. Crabs, crayfish, and oysters are plentiful, and undik and zubaidi (butterfish) are both tasty and very popular. Shrimp are produced for a growing export market. the fish catch in 2003 totaled 6,095 tons, down from 8,466 in 1993 but up from the low of 2,034 in 1991, the year of the Iraqi invasion.

FORESTRY

There are no natural forests in Kuwait. The government's afforestation projects cover an area of about 5,000 hectares (12,300 acres). Imports of forest products totaled $108 million in 2004.

MINING

In addition to petroleum and natural gas, the country's main commodities, Kuwait produced caustic soda, chlorine, cement, clays, clay products, fertilizer, lime, salt, and sand and gravel. the cement and fertilizer production plants were damaged by retreating Iraqi troops during the 1991 Gulf War. Cement production in 2004 was estimated at 1.6 million metric tons, unchanged from 2003. Ammonia production (nitrogen content) in 2004 was 413,400 metric tons, and output of urea (nitrogen content) was 320,000 tons metric tons.

ENERGY AND POWER

The Persian Gulf is geologically unique. Sedimentary deposits are combined with large, relatively unbroken folding that results in underground oil reservoirs 16 to 240 km (10–150 mi) long, containing billions of barrels of oil. Kuwait's known petroleum deposits are among the worlds largest. As of 1 January 2005, Kuwait's proven oil reserves came to an estimated 99 billion barrels. However, another 2.5 billion barrels are held in the Saudi–Kuwaiti neutral zone or "divided zone," thus putting Kuwait's proven oil reserves at 101.5 billion barrels. The neutral zone covers an area of 6,200 sq mi and holds an estimated 5 billion barrels of oil and 1 trillion cu ft of natural gas. Kuwait possesses about 8% of the known global resources of petroleum.

Although Kuwait's crude oil production capacity in 2005 was estimated at 2.5 million barrels per day (includes half of the neutral zone), as a member of the Organization of Petroleum Exporting Countries (OPEC) Kuwait's crude oil output is limited by a production quota. As of March 16, 2005, that quota was set at 2.207 million barrels per day. However, for the period January through May 2005, oil output was estimated at an average of 2.6 billion barrels per day, of which 2.5 billion barrels per day was crude oil. Domestic demand for oil was estimated for 2005 at 293,000 barrels per day. Crude oil refining capacity, as of 1 January 2005, was estimated at 889,200 barrels per day. Kuwait's cost of production is perhaps the lowest in the world because its vast pools of oil lie fairly close to the surface and conveniently near tidewater. the oil rises to the surface under its own pressure and, owing to a natural gradient, flows downhill to dockside without pumping. Kuwait exports more than 60% of its oil to Asian countries, although exports are also sent to Europe and the United States.

Kuwait also has large reserves of natural gas. As of 1 January 2005, Kuwait's natural gas reserves were estimated at 55.5 trillion cu ft, which included 0.5 trillion cu ft in the neutral zone. In spite of its large natural gas reserves, production and domestic consumption are relatively modest. In 2002, output and demand for natural gas by Kuwait came to an estimated 293 billion cu ft each. the vast amount of this gas is found and produced along with oil. However, Kuwait is looking to expand its production and consumption of natural gas so as to free up more oil for export. The country is also hoping to cut the flaring or burning-off of natural gas.

All electric power is produced thermally from oil or natural gas. Generating capacity has grown dramatically during the past two decades and is estimated to have reached 9.4 million kW in 2002. Electric power production increased from 30.6 billion kWh in 2000, to an estimated 32.4 billion kWh in 2002. All electric power is generated by burning fossil fuels. Most of the country is provided with electrical service; electric refrigeration and air conditioning are widely available. An extensive diesel power generating system serves outlying villages.

INDUSTRY

Although oil extraction continues to be the economic mainstay, Kuwait has diversified its industry. Small-scale manufacturing plants produce ammonia, fertilizer, paper products, processed foods, and other consumer goods. In 2002, the food processing industry was expanding, with growth sectors including vegetable oils, beverage bases, breakfast cereals, poultry parts, cheese, frozen vegetables, and snack foods. In 2002, Kuwait had three oil refineries with a total refining capacity of 828,000 barrels a day, including 773,000 barrels per day of crude oil distillation, 41,000 barrels per day of catalytic cracking capacity, and 14,000 barrels per day of reforming capacity. The major refinery products were fuel oil, gas oil, naphtha, kerosene, and diesel fuel. Industrial products include desalinated water, chemical detergents, chlorine, caustic soda, urea, concrete pipes, soap, flour, cleansers, asbestos, and bricks. The construction industry is highly developed.

Manufacturing all but stopped during the Iraqi invasion due to shortages of inputs and looting of equipment. After liberation, the sector was hard hit by the departure of Palestinian skilled labor. Low international oil prices have cut down on the value of industrial exports, but increases from the latter half of 1999 have produced windfall returns. In 2000, industry accounted for 60% of GDP.

The share of the industry in the GDP remained relatively stable in subsequent years (although the industrial production growth rate slumped at -5% in 2002), reaching 60.5% in 2004; agriculture is virtually nonexistent in Kuwait, accounting for only 0.4% of the economy in 2004; services came in second with a 39.1% share in the GDP. Around 80% of the 1.42 million working people are represented by non-Kuwaitis.

SCIENCE AND TECHNOLOGY

High technology in Kuwait has been largely confined to the oil industry and has been imported, along with the scientists and technicians needed to install and operate oil refineries and related facilities.

The Kuwait Institute for Scientific Research, founded in 1967 at Safat, promotes and conducts scientific research in the fields of food resources, water resources, oil-sector support, and environmental studies. The Agriculture Affairs and Fish Resources Authority has an experimental research station in Safat.

Kuwait University, founded in 1962 at Safat, has colleges of science, engineering and petroleum, medicine, and allied health sciences and nursing. The College of Technological Studies, in Shuwaikh, was founded in 1976. The Telecommunications and Navigation Institute, at Safat, was founded in 1966.

In 1987–97, science and engineering students accounted for 29% of college and university enrollments. In 2002, research and development spending totaled $73.448 million, or 0.19% of GDP. Of that total, 80% came from government sources, with the rest from business. In that same year, there were 73 researchers and 180 technicians per million people.

DOMESTIC TRADE

Until the early 1960s, the traditional small shop or market stall dominated retail trade. In recent decades, however, modern business centers with hundreds of new shops and offices have opened, and some smaller villages have developed retail stores with impressive stocks of foreign goods. Franchising is also becoming well established, though most of the franchise market is currently held by American fast-food and restaurant firms. The city of Kuwait is the distribution center for the emirate and serves the transit trade of nearby states.

Usual business hours in summer (May to October) are from 6 am to 12 noon and from 4 pm to 6 pm; and during the rest of the year, from 7 am to 12 noon and from 3 pm to 6 pm. Stores are closed Fridays.

FOREIGN TRADE

For many years, Kuwait maintained a boycott of imports from Israel. However, after liberation from Iraqi occupation in 1991, Kuwait relaxed its trade policies so that Israeli companies previously subject to boycott were permitted to do business in Kuwait. Kuwait also announced a trade embargo against the countries it regarded as having supported Iraq during the occupation—Jordan, Yemen, Tunisia, Sudan, Algeria, and Mauritania. Major export partners in 1997 were Japan (24%), India (16%), the United States (13%), South Korea (11%), and Singapore (8%). Imports came primarily from the United States (22%), Japan (15%), the United Kingdom (13%), Germany (8%), and Italy (6%).

The export of fuels sustains Kuwait, accounting for the vast majority of commodity exports (91%). Kuwait is the source of 3.3% of the world's crude petroleum exports. Polymers are another important export (4.8% of Kuwait's exports).

In 2004, Kuwait's exports grew to $27.4 billion (FOB—Free on Board), while its imports were more than half that, at $11.1 billion (FOB). The bulk of exports went to Japan (20.5%), South Korea (13.7%), the United States (12.4%), Singapore (11.3%), Taiwan

CountryExportsImportsBalance

World16,164.57,869.08,295.5

Areas nes7,358.6…7,358.6

Japan3,275.6752.22,523.4

United States1,777.1834.6942.5

Netherlands895.0125.7769.3

Other Asia nes621.791.1530.6

Singapore351.764.7287.0

Korea, Republic of330.4215.1115.3

Sa'udi Arabia163.9508.7-344.8

France-Monaco159.1282.8-123.7

United Arab Emirates129.6282.1-152.5

(…) data not available or not significant.

(9.9%), Pakistan (3.3%), and the Netherlands (3.3%). Imports included food, construction materials, vehicles and parts, and clothing and mainly came from the United States (12.9%), Germany (11.9%), Japan (7.9%), the United Kingdom (5.5%), Saudi Arabia (5.5%), Italy (5%), France (4.5%), and China (4.1%).

BALANCE OF PAYMENTS

Kuwait enjoys a highly favorable payments position because of its huge trade surpluses. The Kuwaiti dinar is completely covered by the country's reserve fund, 50% of which must be in gold.

The US Central Intelligence Agency (CIA) reported that in 2001, the purchasing power parity of Kuwait's exports was $16.2 billion, while imports totaled $7.4 billion, resulting in a trade surplus of $8.8 billion.

Current Account7,567.0

     Balance on goods11,261.0

         Imports-9,698.0

         Exports20,959.0

     Balance on services-4,641.0

     Balance on income3,326.0

     Current transfers-2,379.0

Capital Account1,429.0

Financial Account-11,332.0

     Direct investment abroad4,990.0

     Direct investment in Kuwait-67.0

     Portfolio investment assets-13,379.0

     Portfolio investment liabilities336.0

     Financial derivatives…

     Other investment assets-2,812.0

     Other investment liabilities-399.0

Net Errors and Omissions511.0

Reserves and Related Items1,824.0

(…) data not available or not significant.

The International Monetary Fund (IMF) reported that in 2001, Kuwait had exports of goods totaling $16.2 billion and imports totaling $6.93 billion. The services credit totaled $1.79 billion and debit $5.34 billion.

Exports of goods reached $30.2 billion in 2004 and were expected to grow to $43.4 billion in 2005. Imports were expected to reach $11.8 billion in 2005, up from $10.9 billion in 2004. Kuwait has thus managed to keep both a positive resource balance ($19.3 billion, and $31.6 billion, respectively), and a positive current account balance ($18.8 billion in 2004, and an expected $31.1 billion in 2005). Foreign exchange reserves (excluding gold) reached $8.2 billion in 2004, covering almost 10 months of imports.

BANKING AND SECURITIES

The Central Bank of Kuwait, established in 1969, formulates and implements the nation's monetary policy, regulates the currency, and controls the banking system. There are seven commercial banks with 96 branches in Kuwait, of which one is a single-branch operation belonging to a joint-venture bank (the Bank of Bahrain and Kuwait). Apart from this special case, foreign banks are not permitted to operate within Kuwait or to own shares in Kuwaiti banks. Kuwaiti bank shares are typically closely held, either by the government and its agencies or by the merchant families who founded them. The preeminent bank is the National Bank of Kuwait, which at the end of 1999 accounted for one-third of all Kuwaiti bank branch assets.

The Central Bank of Kuwait only took on a serious regulatory role in 1984, after a debt crisis engulfed commercial banks, all of which had exposure to the collapsed informal stock market. However, the Central Bank's powers are limited, and, although it considers some of the banks to be too weak to be competitive, so far it has been unable to force mergers.

There are three specialized banks, one of which, Kuwait Finance House, operates as a commercial bank restricted to Islamic financial transactions. The other two, Industrial Bank of Kuwait and Kuwait Real Estate Bank, were created to provide long-term credit at a time when the supply of fresh capital from the public sector was not constrained. In the more austere environment since the war, they function like a US investment bank. The idea of establishing more Islamic banks has been welcomed. the International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $5.4 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $30.0 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 4.62%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 4.25%.

Kuwait's official securities exchange, the Kuwait Stock Exchange (KSE), first introduced in 1962, was founded in 1977 and handles only government bonds and securities of Kuwaiti companies. An unofficial and unregulated securities exchange, the Souk al-Manakh, listing the stocks of 45 Gulf companies outside Kuwait and considered highly speculative, collapsed suddenly in August 1982. At the time of the crash, some 6,000 investors and $94 billion in postdated checks drawn in anticipation of future stock price increases were said to be involved. In order to limit the effect of the collapse on the Kuwaiti economy, the government created a special rescue fund to pay compensation to small investors for validated claims. All trading operations of the KSE were suspended on the Iraqi invasion of Kuwait on 2 August 1990. the KSE recommenced trading on 28 September 1992. On the exchange, 1995 was a banner year. The combined effect of rapidly expanding credit and privatization resulted in a 36% increase in the stock price index and a 226% increase in trading volume. By the end of 2001, 88 companies were listed with a total capitalization of kd26.7 billion ($86.9 billion) and a trading value of kd11.7 billion ($38 billion). Only Gulf Cooperation Council (GCC) citizens are permitted to buy shares in Kuwaiti companies.

INSURANCE

The insurance sector is closed to foreign institutions. As of 2000, the insurance sector was dominated by three companies: Ahlia Insurance, Gulf Insurance, and Kuwait Insurance Co. Marine, fire, accident, and life insurance policies constitute the bulk of all policies issued. Third-party liability insurance for motor vehicles is compulsory. In 2003, the value of all direct premiums written totaled $320 million, of which nonlife premiums accounted for $240 million. In 2002, Al-Ahleia was the top nonlife insurer, with gross written nonlife premiums of $45.9 million. In that same year, Gulf was the country's top life insurer, with gross written life premiums of $35.6 million.

PUBLIC FINANCE

Much of the recent improvement in public finances has been the result of higher oil prices and production rather than government reforms. In 1994, the Kuwaiti government began to consider various austerity measures, which became a source of debate in parliament. Several plans called for reductions in government subsidies and welfare benefits, increases in taxes, privatization of state-owned businesses, and banking-sector reforms. Subsidies are one of the most contentious and politicized austerity measures; in 1995, the Ministry of Finance stated that the country annually spent $1.8 billion on utility subsidies and free health care. the Kuwaiti cabinet passed a reform package in 1999, including a reduction in subsidies and increasing taxes on luxury goods. A government surplus of about 15% if GDP in 2000 was reduced to a deficit of over 2% in 2001 as a result of soft world oil prices.

The US Central Intelligence Agency (CIA) estimated that in 2005 Kuwait's central government took in revenues of approximately $47.2 billion and had expenditures of $20.7 billion. Revenues minus expenditures totaled approximately $26.4 billion. Public debt in 2005 amounted to 17.6% of GDP. Total external debt was $14.93 billion.

The International Monetary Fund (IMF) reported that in 1999, the most recent year for which it had data, central government revenues were kd3,063 million and expenditures were kd3,930 million. The value of revenues was us$9,324 million and expenditures us$11,963 million, based on a official exchange rate for 1999 of us$1 = kd0.32850 as reported by the IMF. Government out-lays by function were as follows: general public services, 13.2%; defense, 17.3%; public order and safety, 9.4%; economic affairs, 9.9%; housing and community amenities, 4.8%; health, 7.2%; recreation, culture, and religion, 3.1%; education, 14.8%; and social protection, 20.4%.

Revenue and Grants3,063100.0%

     Tax revenue1163.8%

     Social contributions1896.2%

     Grants……

     Other revenue2,75890.0%

Expenditures3,930100.0%

     General public services51813.2%

     Defense67917.3%

     Public order and safety3699.4%

     Economic affairs3909.9%

     Environmental protection……

     Housing and community amenities1874.8%

     Health2817.2%

     Recreational, culture, and religion1233.1%

     Education58214.8%

     Social protection80120.4%

(…) data not available or not significant.

TAXATION

Companies that are registered in Kuwait or in countries that are members of the Gulf Cooperation Council (GCC) and are wholly owned by Kuwaiti and/or citizens of GCC countries are not subject to income tax. However, foreign companies carrying on trade or business in Kuwait are subject to varying corporate tax rates based on defined income levels and where the operations are located. Operations on the Kuwaiti mainland are subject to tax rates contained in the Amiri Decree No. 3 of 1955, which range from 0–55%, covering 11 income levels. Operations located on the islands of Kubr, Qaru, and Umm Al Maradim are subject to the tax rates contained in Law No. 23 of 1961, which has two income levels and rates of 20% and 57%. Foreign companies doing business in the portion of the offshore area of the partitioned neutral zone that is under Saudi Arabian administration are subject to a tax of 50% of what they would pay under Amiri Decree No. 3 of 1955. Capital gains derived from the sale of assets and shares are treated as normal business profits subject to the appropriate tax rate. Other taxes include social security levies of 10.5% on employers; a 1% levy on a shareholding company's profit, payable to the Kuwait Foundation for Scientific Research; and a 2.5% employment tax on net annual distributable profits. Kuwaiti citizens are exempt from paying taxes. The government passed a law to introduce limited taxation in 2000, in the form of sales taxes.

CUSTOMS AND DUTIES

Customs duties are generally 5% ad valorem, but many goods are admitted duty free. the tariff on cigarettes was increased to 100% (from 70%) as of July 1997. Imports of liquor are prohibited by law. Protective tariffs may be levied at up to 25%.

FOREIGN INVESTMENT

Through tax concessions, Kuwait welcomes foreign investment in heavy and light industries but continues to resist foreign investment in the oil sector. In May 2000, the government passed the Indirect Foreign Investment Law, allowing the purchase of up to 100% of the stock of companies listed on the Kuwait Stock Exchange, except for banks. In March 2001 the government passed a liberalized Foreign Investment Law that, together with a five-year privatization plan announced July 2001, expected to substantially increase foreign investment in Kuwait. Previously, foreign investment was not permitted in certain sectors, such as banking or insurance, and was restricted to less than 49% of ownership shares in permitted areas. Foreign investors are no longer required to have a Kuwaiti sponsor but are subject to a 55% corporate tax that Kuwaiti companies do not pay. Major foreign investors in Kuwait as of 2001 included Japan's Arabian Oil Co. and US-owned Texaco. In July 1995, the Union Carbide Corp. and Kuwait's Petrochemical Industries Co. began construction of a $2 billion petrochemical plant, the biggest joint venture involving a foreign company to date in Kuwait. Foreign investment totaled $110 million in 1995. Foreign direct investment (FDI) has historically been low and not encouraged by a government concerned with the "Kuwaitization" of the economy. In 1997, FDI was reported at $20 million, rising to $59.1 million in 1998, and reaching $72.3 million in 1999. However, FDI inflow fell to $16.3 million in 2000, and then in 2001 turned into a net outflow of -$39 million.

Low inward investment contrasts with remarkably high outward investment, though the government does not publish any statistics for these activities. Kuwaiti outward investment consists of portfolio investments held by the Kuwait Investment Authority (KIA), other direct investments by other government entities, and outward investments by private citizens. The KIA portfolio was estimated to have reached about $60 billion in 2002. Entities like the Kuwait Petroleum Corp. have sizeable investments in production, refining and marketing activities abroad, but only the roughest estimates as to their value can be made. Investments by private citizens are thought to at least equal the government's holdings.

New estimates place outward public investments at around $80 billion. At the same time, investments made outside Kuwait by the private sector are estimated to have grown to around $100 billion.

ECONOMIC DEVELOPMENT

Since the mid-1970s, Kuwait has restrained its spending on economic development and fostered a policy of controlled growth. From 1977 to 1982, allocations for development projects remained steady at $1.7–2.5 billion annually, of which 76% was spent on public works, electric power plants, and desalination and irrigation projects. Development plans for the 1980s, stressing industrial diversification, included the expansion of local oil refineries and major projects in petrochemicals, electricity, water supply, highway construction, and telecommunications. Overseas, refining and marketing operations were stepped up.

Postwar economic planning was hampered by the expulsion of the mainly Palestinian middle-ranking civil servants in various government departments. The Industrial Bank of Kuwait played a major role in the industrial redevelopment of the emirate following the war. Diversification and privatization continue to be the strategic goals of the government to increase employment and counter the abrupt swings in the economy due to the heavy dependence on the oil sector. Increased foreign investment has come to be seen as essential to these goals. In May 2000, the government passed the Foreign Investment Law, allowing foreign investors to buy up to 100% of companies listed on the Kuwait Stock Exchange (KSE), except for banks. The government, however, controls which companies are publicly traded. In March 2001, the Foreign Direct Investment Law was passed, allowing up to 100% ownership of a company operating in Kuwait, although with the disincentive that the profits of the foreign company would be subject to a 55% tax. In July 2001, the government announced a five-year privatization program.

Toward the end of 2005, plans were made to build one of the largest refineries in the region. The project, financed by state-owned Kuwait National Petroleum Co. (KNPC), will cost around $6 billion and when completed will refine 615,000 barrels per day. The economy as a whole is expected to grow at steady rates in coming years (around 3.5% in 2006 and 2007), despite slumping government expenditures and possible constraints in the rate of expansion of the oil industry.

SOCIAL DEVELOPMENT

Kuwait has a widespread system of social welfare that is operated on a paternalistic basis and financed by government oil revenues. Social insurance legislation provides for old-age, disability, and survivor pensions, for which the worker pays 5% of earnings, the employer pays 11% of payroll, and the government provides a subsidy. Retirement benefits ranged from 65–95% of earnings, depending upon the length of employment. The government pays for medical care in case of work injury.

Women are denied equal rights and legal protection under Kuwaiti law and do not have the right to vote. Women must first obtain their husband's permission before applying for a passport. Kuwaiti women married to foreign men suffer legal discrimination, are not entitled to government housing subsidies, and are required to pay a residency fee. Women (including foreign women) who wear Western clothing are often subject to harassment. Domestic abuse is common. Rape and abuse of foreign domestic workers is widespread. In 2004, it was still common for employers to confiscate and withhold the passports of domestic servants preventing them from leaving the country.

Bedouin minorities face considerable legal discrimination. They are not entitled to citizenship, but beginning in 2004, they were able to enroll their children in school, and health care became available in 2005.

HEALTH

Kuwait has a highly advanced public health service that is extended to all Kuwaiti residents, regardless of citizenship. the entire population has access to health care services. Total health care expenditure was estimated at 3.3% of GDP. the urban population has access to safe water and adequate sanitation. As of 2004, there were an estimated 153 physicians, 391 nurses, 32 pharmacists, and 29 dentists per 100,000 people.

The incidence of typhoid fever and most infectious diseases is comparatively low; however, influenza is common and measles has resulted in a high fatality rate among children up to age five. Immunization rates for children up to one year of age were as follows: tuberculosis, 93%; diphtheria, pertussis, and tetanus, 98%; polio, 98%; and measles, 97%. The rates for DPT and measles were 94% and 95%, respectively. Common diseases were malaria and measles.

Life expectancy in 2005 was 77.03 years, and infant mortality was estimated at 9.95 per 1,000 live births. As of 2002, the crude birth rate and overall mortality rate were estimated at, 21.8 and 2.5 per 1,000 people, respectively. The total fertility rate in 2000 was 2.7 children per woman during childbearing years. In 2001, the HIV prevalence was estimated at 0.12 per 100 adults.

HOUSING

For centuries, housing in Kuwait consisted primarily of small cottages, mud huts, and a few larger dwellings built of coral and plastered with cement and limestone. However, improved housing for the general population has been a main government objective since 1970, and many of the traditional Arab houses have been replaced with new government model housing.

The National Housing Authority built about 50,000 dwelling units in 1977–85. Between 1989 and 1994, 25,213 applications were presented for the housing distribution program. According to the 1995 census, there were 255,477 households in Kuwait. the total number of dwellings that year was 251,682, of which 234,153 were private and 17,529 were collective dwellings. Including vacant dwellings and those under construction, the total number was 287,574 in 1995. About 50% of all housing units were apartments, 19% were villas, 15% were traditional dwellings, 10% were annexes, and 4% were shacks and other marginal dwellings. In 2000–01 there were 8,875 government housing projects and 3,118 new dwellings constructed.

EDUCATION

Kuwait offers its citizens free education, including free food, clothing, books, stationery, and transportation from kindergarten through the fourth year of college. Schools below university level are segregated by sex. Four years of primary school are compulsory. Students may then move on to four years of intermediate school and four years of secondary school. For the last two years of schooling, students may choose a specialized curriculum in science, arts, or religious studies. The Ministry of Education oversees all aspects of secondary education, both public and private, for general and Islamic schools. The school year runs from September to June.

In 2001, about 73% of children between the ages of four and five were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 83% of age-eligible students. In 2001, secondary school enrollment was about 79% of age-eligible students. It is estimated that about 96% of all students complete their primary education. the student-to-teacher ratio for primary school was at about 13:1 in 2003.

Kuwait University (opened in 1966) is the only university in the country. There are several colleges offering programs, as well as a Cadet Academy sponsored by the military. Kuwaiti students who complete their secondary school science courses in the upper 80% of their class and arts courses in the upper 70% are eligible to study abroad at government expense. In 1999, about 21% of the tertiary-age population were enrolled in some type of higher education program: 12% men and 32% women. The adult literacy rate for 2004 was estimated at about 82.9%, with 84.7% for men and 81% for women.

As of 1999, public expenditures on education were estimated at 6.5% of GDP.

LIBRARIES AND MUSEUMS

The National Library of Kuwait has over 150,000 volumes, 90% of them in Arabic; it has established 22 branches throughout the country. The Kuwait University Library system has over 294,000 volumes. The Arab Planning Institute in Safat has a library of about 48,000 volumes. Other schools and oil companies maintain special libraries.

The Kuwait National Museum in Kuwait City displays ancient Kuwaiti artifacts (recovered from excavations on Faylakah Island), as well as exhibits concerning Islamic art, and local plant, bird, and animal life. The Kuwait Museum of Islamic Art in Kuwait City was founded in 1983. The Educational Science in Safat Museum was established in 1972 and features sections on natural history, space, oil, health, and meteorology.

MEDIA

The government administers telephone, television, radio, postal, and telegraph services. In 2003, there were an estimated 198 mainline telephones for every 1,000 people. The same year, there were approximately 578 mobile phones in use for every 1,000 people.

Government-controlled Kuwait Television operates three networks and Radio Kuwait offers one station, with programs in English, Urdu, Persian, and Arabic. There are private stations for both radio and television, including a private satellite television channel launched in 2004. In 2003, there were an estimated 570 radios and 418 television sets for every 1,000 people. The same year, there were 162.8 personal computers for every 1,000 people and 228 of every 1,000 people had access to the Internet. There were 52 secure Internet servers in the country in 2004.

As of 2002, Kuwait had eight daily newspapers. Major Arabic dailies (with estimated 2002 circulation) include Al-Anbaa (the News, 106,830), Al-Rai al-'Amm (Public Opinion, 86,900), Al Jameheer (83,000), Al-Qabas (Firebrand, 79,700), Al-Seyassa (Policy, 70,000), and Al-Watan (the Homeland, 59,940). English-language dailies include the Arab Times (41,920), and Kuwait Times(28,000). The popular monthly magazine Al-'Arabi (350,000 in 1995), similar to the Reader's Digest, is widely read in Kuwait.

The constitution provides for freedom of speech and the press, and with a few exceptions, citizens are said to freely criticize the government in all media. A Press Law, revised in 2003, prohibits the publication of any materials that criticizes the emir or is deemed an insult to Godor Islam.

ORGANIZATIONS

There is a chamber of commerce and industry in the capital. Workers are represented through a number of associations, including the Kuwait Trade Union Federation. The Ministry of Social Affairs and Labor encourages and supports cultural and recreational organizations and sponsors theatrical activities for youth. the Kuwait National Commission for Education, Science, and Culture is the primary organization for the advancement of science, art, and culture. Organizations such as the Kuwait Medical Association promote research and education in specialized fields. the multi-national Islamic Organization for Medical Sciences and the Arab Center for Medical Literature are in Kuwait. National youth organizations include the National Union of Kuwaiti Students and the Boy Scouts and Girl Scouts Associations. There is a national chapter of the Red Crescent Society.

TOURISM, TRAVEL, AND RECREATION

By 1992, the second anniversary of the Iraqi invasion, many of the physical scars of war and occupation had already been erased. the government has restored many of the country's extensive prewar accommodations and amenities. Kuwait City offers gardens and parks, along with landmarks such as the Kuwait Towers; Seif Palace was built in 1896 and boasts original Islamic mosaic tilework. A valid passport and visa are required of all visitors.

In 2001, a total of 2,069,051 foreign visitors arrived in Kuwait. Tourist receipts totaled $328 million in 2003. Hotel rooms numbered 1,988 with 2,857 beds.

According to the US Department of State, the estimated cost of staying in Kuwait in 2004 was $344 per day.

FAMOUS KUWAITIS

During the reign of Emir Sir 'Abdallah as-Salim as-Sabah (1870–1965), Kuwait attained a prominent position among the great oil-producing nations of the world, and the state adopted a social welfare program founded on a unique patriarchal system; the emir was revered as a man of simplicity, devotion, and deep concern for his people. He was succeeded as emir by Sabah as-Salim as-Sabah (1913–77), from 1965 to 1977; Jabir al-Ahmad al-Sabah (1926–2006), from 1977 to 2006; and Sabah IV Al-Ahmad Al-Jaber Al-Sabah (b.1929), who became emir in 2006.

DEPENDENCIES

Kuwait has no territories or colonies.

BIBLIOGRAPHY

Cordesman, Anthony H. Kuwait: Recovery and Security After the Gulf War. Boulder, Colo.: Westview Press, 1997.

Fernea, Elizabeth Warnock (ed.). Remembering Childhood in the Middle East: Memoirs from a Century of Change. Austin, Tex.: University of Texas Press, 2002.

Hourani, Albert Habib. A History of the Arab Peoples. Cambridge, Mass.: Belknap Press of Harvard University Press, 2002.

Isiorho, S.A. Kuwait. Philadelphia: Chelsea House, 2002.

Kennedy, Paul D. Doing Business with Kuwait. 2nd ed. Sterling, Va.: Kogan Page, 2004.

Khadduri, Majid. War in the Gulf, 1990-91: the Iraq-Kuwait Conflict and its Implications. New York: Oxford University Press, 1997.

Marcovitz, Hal. Kuwait. Philadelphia, Pa.: Mason Crest Publishers, 2003.

The Middle East. Washington, DC.: CQ Press, 2005.

Moore, Pete W. Doing Business in the Middle East: Politics and Economic Crisis in Jordan and Kuwait. New York: Cambridge University Press, 2004.

Seddon, David (ed.). A Political and Economic Dictionary of the Middle East. Philadelphia: Routledge/Taylor and Francis, 2004.

Tétreault, Mary Ann. Stories of Democracy: Politics and Society in Contemporary Kuwait. New York: Columbia University Press, 2000.