Kuwait has been ruled by the AL-SABAH dynasty since the 18th century. The threat of Ottoman invasion in 1899 prompted Amir Mubarak AL-SABAH to seek protection from Britain, ceding foreign and defense responsibility to Britain until 1961, when the country attained its independence. Kuwait was attacked and overrun by Iraq on 2 August 1990. Following several weeks of aerial bombardment, a US-led UN coalition began a ground assault on 23 February 1991 that liberated Kuwait in four days. Kuwait spent more than $5 billion to repair oil infrastructure damaged during 1990-91. The AL-SABAH family returned to power in 1991 and established one of the most independent legislatures in the Arab World. The country witnessed the historic election in 2009 of four women to its National Assembly. Amid the 2010-11 uprisings and protests across the Arab world, stateless Arabs, known as bidoon, staged small protests in early 2011 demanding citizenship, jobs, and other benefits available to Kuwaiti nationals. Youth activist groups' repeated rallies in 2011 for the dismissal of a prime minister seen as being corrupt, ultimately led to his resignation in late 2011. Demonstrations renewed in late 2012 in response to an Amiri decree amending the electoral law. The opposition, led by a coalition of Sunni Islamists, tribalists, some liberals, and myriad youth groups, largely boycotted legislative elections in 2012 and 2013, which ushered in a legislature more amenable to the government's agenda. However, the opposition, expressing strong opposition to the government’s fiscal reforms, participated in the November 2016 National Assembly and won almost half of the positions. Since coming to power in 2006, the Amir has dissolved the National Assembly on seven occasions (the Constitutional Court annulled the Assembly in June 2012 and again in June 2013) and shuffled the cabinet over a dozen times, usually citing political stagnation and gridlock between the legislature and the government.
Middle East, bordering the Persian Gulf, between Iraq and Saudi Arabia
petroleum, fish, shrimp, natural gas
Population - distribution
densest settlement is along the Persian Gulf, particularly in Kuwait City and on Bubiyan Island; significant population threads extend south and west along highways that radiate from the capital, particularly in the southern half of the country
Arabic (official), English widely spoken
KUWAIT (capital) 2.779 million (2015)
- Conventional long form
- State of Kuwait
- Conventional short form
- Local long form
- Dawlat al Kuwayt
- Local short form
- Al Kuwayt
- Kuwait City
- Geographic coordinates
- 29 22 N, 47 58 E
- Time difference
- UTC+3 (8 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 102 billion barrels - more than 6% of world reserves. Kuwaiti officials plan to increase production to 4 million barrels of oil equivalent per day by 2020. Petroleum accounts for over half of GDP, 92% of export revenues, and 90% of government income.
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ 930,000,777
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 51,618,477,900
- Exports of goods and services
- US$ 62,013,958,126
- Total Merchandise Trade
- FDI, net inflows
- US$ 274,759,979
- Commercial Service Exports
- US$ 4,967,779,257
petroleum, petrochemicals, cement, shipbuilding and repair, water desalination, food processing, construction materials
- oil and refined products, fertilizers
- South Korea 14.8%, China 12.3%, Japan 10.6%, India 9.8%, US 7.7%, Pakistan 6%, Singapore 4.4% (2015)
- food, construction materials, vehicles and parts, clothing
- China 13.2%, US 9.6%, Saudi Arabia 7.7%, Japan 6.5%, Germany 5.1%, France 4.3%, India 4.3% (2015)
- Country Risk Rating
- Changes in generally good but somewhat volatile political and economic environment can affect corporate payment behavior. A basically secure business environment can nonetheless give rise to occasional difficulties for companies. Corporate default probability is quite acceptable on average.
- Business Climate Rating
- The business environment is acceptable. Corporate financial information is sometimes neither readily available nor sufficiently reliable. Debt collection is not always efficient and the institutional framework has shortcomings. Intercompany transactions may thus run into appreciable difficulties in the acceptable but occasionally unstable environments rated A4.
- Large oil reserves (9% of the global total)
- Very solid financial situation thanks to the accumulation of considerable public and external surpluses, managed by the Kuwait Investment Authority (KIA) sovereign fund
- Welfare state financed by the oil windfall
- Political obstacles to structural reforms
- Business and competitive climate can be improved (country ranked 104th out of 189 by the World Bank)
- Located in a region with acute geopolitical tensions, linked in particular to the proximity of Iraq and Iran
The acceleration in economic activity in 2016 is expected to moderate in 2017. Despite the drop in oil prices, increased hydrocarbon production contributed positively to growth, reaching a peak close to an average of 2.91 mbd in 2016 compared with 2.86 mbd in 2015.However, the rise in oil production will continue to support economic growth to a lesser extent in 2017. The non-oil economy could be tested by the slowdown in public spending. Construction, which showed signs of slowing down in 2016 following a fall in sales will benefit from a housing plan for 11,000 units initiated by the public housing authority. Moreover, some infrastructure investment marked as a priority in the five-year development plan is likely to be maintained. Household consumption will still contribute substantially to activity. Nevertheless, its dynamism could be tested by fiscal adjustments to wages and subsidies. Moreover, tensions between the newly elected parliament and the government could damage household and the private sector confidence. Inflation will remain high, fuelled by upper energy prices.
The significant rise in oil production led to higher public revenues in 2016, while the price per barrel hit its lowest levels since 2004. So, while public spending has grown, the public accounts balance has remained in positive territory. In 2017, the fiscal surplus is expected to get bigger. Oil revenues will rise less rapidly than in 2016, but spending is likely to decline. Capital spending will fall slightly but the most important part of this decline will be attributable to a contraction in current spending. The growth in spending on wages is likely to be contained by a less expansive recruitment policy as well as better wage control. The increase in electricity and water prices, which comes on the back of a rise in energy prices, will enable a reduction in subsidies. Transfers of 10% of revenues to the fund for future generations will be renewed, leading to a borrowing requirement which the authorities intend to meet through external borrowing. The government balance after transfers to the fund for future generations should show a deficit in excess of 10% of GDP. Kuwait, which enjoys the highest sovereign risk rating thanks to substantial assets, plans to benefit from low international interest rates and foreign investor appetite for bonds issued by the GCC countries. The government is planning to borrow over USD 10bn in 2017.
Because of weak oil prices in 2016, the current account surplus shrank but remains positive. However, it is expected to grow in 2017 insofar as hydrocarbon prices recover.
Kuwait's banking sector remains profitable and robust, thanks to stronger banking regulation by the central bank. The capital adequacy ratio imposed is well above that required by Basel III and the ratio of non-performing loans is declining. Moreover, the latter is unlikely to be confronted by tighter liquidity as observed in the other countries of the region, since the growth in public deposits helps offset the timid growth in private deposits. Nonetheless, sluggish consumption and private investment could be reflected in a deceleration in credit.
The recent decisions concerning the reduction in subsidies and reform of civil service wages led to renewed tensions on Kuwait's political stage resulting in the dissolution of parliament in October 2016. The November 2016 early elections were marked by an amendment to electoral law amending the principle of eligibility and accordingly excluding a section of the opposition, which had made a major comeback after boycotting the previous elections of 2013 and 2016. As relations between the parliament and the Al Sabah royal family, in charge of the executive, are characterised by recurring periods of lack of co-operation, the election of a parliament which disagrees with the government could result in political paralysis at leadership level and weaken the economy at a time when the problems relating to the succession of the Emir within the ruling family are making the country's political future unclear. The business climate is expected to improve slightly, following the reform of the investment code.