Kuwait (11/06)For the most current version of this Note, see Background Notes A-Z.
PROFILE OFFICIAL NAME: Geography People Government Economy PEOPLE Of the country’s total population, approximately 2.6 million are Muslims, including nearly all of its 973,000 citizens. While the national census does not distinguish between Sunni and Shi’a adherents, the majority of citizens, including the ruling family, belong to the Sunni branch of Islam. The total Sunni Muslim population is approximately 1.8 million, 681,100 of whom are citizens. The remaining 30% of Muslim citizens (approximately 778,260) are Shi’a. The Christian population is estimated to be more than 300,000 residents, including about 200 citizens. There also are communities of Hindus, Buddhists, and Sikhs. Kuwait’s 83.5% literacy rate, one of the Arab world's highest, is the result of extensive government support for the education system. Public school education, including Kuwait University, is free, but access is restricted for foreign residents. The government sponsors the foreign study of qualified students abroad for degrees not offered at Kuwait University. In 2004, approximately 1,720 Kuwaitis were enrolled in U.S. universities, down 6.8% from the previous year. HISTORY Threatened in the 19th century by the Ottoman Turks and various powerful Arabian Peninsula groups, Kuwait sought the same treaty relationship Britain had already signed with the Trucial States (UAE) and Bahrain. In January 1899, the ruler Sheikh Mubarak Al Sabah--"the Great"--signed an agreement with the British Government that pledged himself and his successors neither to cede any territory, nor to receive agents or representatives of any foreign power without the British Government's consent, in exchange for protection and an annual subsidy. When Mubarak died in 1915, the population of Kuwait of about 35,000 was heavily dependent on shipbuilding (using wood imported from India) and pearl diving. Mubarak was succeeded as ruler by his sons Jabir (1915-17) and Salim (1917-21). Kuwait’s subsequent rulers have descended from these two brothers. Sheikh Ahmed al-Jabir Al Sabah ruled Kuwait from 1921 until his death in 1950, a period in which oil was discovered and in which the government attempted to establish the first internationally recognized boundaries; the 1922 Treaty of Uqair set Kuwait’s border with Saudi Arabia and also established the Kuwait-Saudi Arabia Neutral Zone, an area of about 5,180 sq. km. (2,000 sq. mi.) adjoining Kuwait's southern border. Kuwait achieved independence from the British under Sheikh Ahmed’s successor, Sheikh Abdullah al-Salim Al Sabah. By early 1961, the British had already withdrawn their special court system, which handled the cases of foreigners resident in Kuwait, and the Kuwaiti Government began to exercise legal jurisdiction under new laws drawn up by an Egyptian jurist. On June 19, 1961, Kuwait became fully independent following an exchange of notes with the United Kingdom. Kuwait enjoyed an unprecedented period of prosperity under Amir Sabah al-Salim Al Sabah, who died in 1977 after ruling for 12 years. Under his rule, Kuwait and Saudi Arabia signed an agreement dividing the Neutral Zone (now called the Divided Zone) and demarcating a new international boundary. Both countries share equally the Divided Zone's petroleum, onshore and offshore. The country was transformed into a highly developed welfare state with a free market economy. In August 1990, Iraq attacked and invaded Kuwait. Kuwait's northern border with Iraq dates from an agreement reached with Turkey in 1913. Iraq accepted this claim in 1932 upon its independence from Turkey. However, following Kuwait's independence in 1961, Iraq claimed Kuwait, arguing that Kuwait had been part of the Ottoman Empire subject to Iraqi suzerainty. In 1963, Iraq reaffirmed its acceptance of Kuwaiti sovereignty and the boundary it agreed to in 1913 and 1932, in the "Agreed Minutes between the State of Kuwait and the Republic of Iraq Regarding the Restoration of Friendly Relations, Recognition, and Related Matters." Following several weeks of aerial bombardment, a UN-mandated coalition led by the United States began a ground assault in February 1991 that liberated Kuwait. During the 7-month occupation by Iraq, the Amir, the Government of Kuwait, and many Kuwaitis took refuge in Saudi Arabia and other nations. The Amir and the government successfully managed Kuwaiti affairs from Saudi Arabia, London, and elsewhere during the period, relying on substantial Kuwaiti investments available outside Kuwait for funding and war-related expenses. Following liberation, the UN, under Security Council Resolution 687, demarcated the Iraq-Kuwait boundary on the basis of the 1932 and the 1963 agreements between the two states. In November 1994, Iraq formally accepted the UN-demarcated border with Kuwait, which had been further spelled out in UN Security Council Resolutions 773 and 883. GOVERNMENT AND POLITICAL CONDITIONS For almost 40 years, the Amir appointed the Crown Prince as Kuwait’s Prime Minister. However, in an unprecedented development, the Amir formally separated the two positions and appointed a new Prime Minister in July 2003. Kuwait's first National Assembly was elected in 1963, with follow-on elections held in 1967, 1971, and 1975. From 1976 to 1981, the National Assembly was suspended. Following elections in 1981 and 1985, the National Assembly was again dissolved. Fulfilling a promise made during the period of Iraqi occupation, the Amir held new elections for the National Assembly in 1992. On May 4, 1999, the Amir once again dissolved the National Assembly. This time, however, it was done through entirely constitutional means, and new elections were held on July 3, 1999. The most recent general election, held in June 2006, was considered free and fair and was marked by the participation of women for the first time as voters and candidates who introduced social and educational issues to the political debate. The government does not officially recognize political parties; however, de facto political blocs, typically organized along ideological lines, exist and are active in the National Assembly. Although the Amir maintains the final word on most government policies, the National Assembly plays a real role in decision-making, with powers to initiate legislation, question (grill) cabinet ministers, and express lack of confidence in individual ministers. For example, in May 1999, the Amir issued several landmark decrees dealing with women's suffrage, economic liberalization, and nationality. The National Assembly later rejected all of these decrees as a matter of principle and then reintroduced most of them as parliamentary legislation. In May 2005, the National Assembly approved legislation granting women full political rights. Subsequently the Prime Minister appointed Kuwait’s first female minister, Dr. Masouma Al-Mubarak, as Planning Minister and Minister of State for Administrative Development Affairs, and the government appointed two women to Kuwait’s Municipal Council. Following the May 2006 constitutional dissolution of parliament and subsequent elections, Dr. Masouma remained the only woman in the cabinet, reappointed as Minister of Communications. Principal Government Officials Kuwait maintains an embassy in the United States at 2940 Tilden Street NW, Washington, DC 20008 (tel. [1] (202)-966-0702). ECONOMY In the closing hours of the Gulf War in February 1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait's oil wells. Kuwait spent more than $5 billion to repair oil infrastructure damage. Oil production was 1.5 million barrels per day (bpd) by the end of 1992, and pre-war capacity was restored in 1993. Kuwait's current production capacity is estimated to be 2.5 million bpd. Kuwait plans to increase its capacity to 3.5 million bpd by 2008. Oil Offshore, the Divided Zone, the Arabian Oil Company (AOC)--80% owned by Japanese interests and 10% each by the Kuwaiti and Saudi Governments--produced on behalf of both countries from 1961 until 2000, when its concession in the Saudi zone expired. AOC gave up its drilling rights in the Kuwaiti sector 3 years later. The Kuwait Gulf Oil Company (a wholly-owned subsidiary of the Kuwait Petroleum Company--KPC) has assumed AOC’s offshore operations. The KPC, an integrated international oil company, is the parent company of the government's operations in the petroleum sector, and includes Kuwait Oil Company, which produced oil and gas; Kuwait National Petroleum Co., refining and domestic sales; Petrochemical Industries Co., producing ammonia and urea; Kuwait Foreign Petroleum Exploration Co., with several concessions in developing countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp. The latter, purchased outright in 1982, gives KPC a worldwide presence in the petroleum industry. KPC also has purchased from Gulf Oil Co. refineries and associated service stations in the Benelux nations and Scandinavia, as well as storage facilities and a network of service stations in Italy. In 1987, KPC bought a 19% share in British Petroleum, which was later reduced to 10%. KPC markets its products in Europe under the brand Q8 and is interested in the markets of the United States and Japan. Kuwait has about 96.5 billion barrels of recoverable oil; only Saudi Arabia and Iraq have larger proven reserves. Estimated capacity before the occupation was about 2.4 million bpd. 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 bpd by the end of 1992, and pre-war capacity was restored in 1993. Kuwait's production capacity is estimated to be 2.5 million bpd. Kuwait plans to increase its capacity to 3.5 million bpd by 2008. Oil revenues comprise 91% of total government revenues. 2004 saw a 31% increase in the average price of crude oil. Kuwaiti export crude averaged $32.7 for the year. Social Benefits Industry and Development Agriculture Shipping Trade, Finance, and Aid 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 $75 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 (KFAED), an autonomous state institution created in 1961 on the pattern of Western and international development agencies and chaired by the Foreign Minister. In 1974, the fund's lending mandate was expanded to include all non-Arab-developing countries. Since its inception, KFAED has disbursed $11 billion in concessionary loans and technical grants to 102 countries worldwide. KFAED is responsible for administering the disbursal of at least $500 million in concessionary loans to Iraq in support of reconstruction efforts. Over the years Kuwait has provided aid to Egypt, Syria, and Jordan, as well as the Palestinian Authority. During the Iran-Iraq war, Kuwait also gave significant aid to the Iraqis. The Kuwait fund issued loans and technical assistance grants totaling over $419 million during its fiscal year ending March 31, 2003. Kuwaiti provided unparalleled assistance during Operation Iraqi Freedom by establishing and operating the Humanitarian Operations Center for Iraq. At the 2003 Madrid Conference, the Government of Kuwait pledged $1.5 billion in assistance to Iraq. KFAED is responsible for disbursing and overseeing as much as $560 million of that assistance through grants. In 2005, KFAED contributed $50 million to Pakistan earthquake relief, pledged $500 million for Hurricane Katrina relief, and made significant contributions to tsunami relief efforts. FOREIGN RELATIONS On August 2, 1990, Iraq invaded and occupied Kuwait. Through U.S. efforts, a multinational coalition was assembled, and, under UN auspices, initiated military action against Iraq to liberate Kuwait. Arab states, especially the other five members of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates), Egypt, and Syria, supported Kuwait by sending troops to fight with the coalition. Many European and East Asian states sent troops, equipment, and/or financial support. After liberation, Kuwait concentrated its foreign policy efforts on development of ties to states which had participated in the multinational coalition. Notably, these states were given the lead role in Kuwait's reconstruction. Kuwait's relations with those nations that supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, were slow to recover. Palestine Liberation Organization (PLO) Chairman Yasir Arafat's support for Saddam Hussein during the war also affected Kuwait's attitudes toward the PLO though Kuwait supports the Arab-Israeli peace process. The Government of Kuwait has abandoned its previous policy of limiting the entry of workers from nations whose leaders had supported Iraq during the Gulf War. In August 2001, the Interior Minister announced that there were no longer any special restrictions or permits required for Palestinian workers wishing to return to the country. At the end of 2002, there were approximately 30,000 to 40,000 Palestinians, 30,000 to 40,000 Jordanians, and 5,000 Yemenis resident in Kuwait. Since liberation from Iraq, Kuwait has made efforts to secure allies throughout the world, particularly UN Security Council members. In addition to the United States, defense arrangements have been concluded with the United Kingdom, Russia, and France. Ties to other key Arab members of the Gulf War coalition--Egypt and Syria--also have been sustained. During the 2002-03 buildup to and execution of Operation Iraqi Freedom (OIF), Kuwait was a vital coalition partner, reserving a full 60% of its total land mass for use by coalition forces and donating significant assistance in kind to the effort. Kuwait continues to provide generous assistance in kind to ongoing coalition operations in Iraq. Kuwait has been consistently involved in reconstruction efforts in Iraq, pledging $1.5 billion at the October 2003 international donors’ conference in Madrid, and consulting closely with Iraqi officials, including former Prime Minister Ibrahim Jaffari, who visited Kuwait in late October 2005, and Prime Minister Nuri al-Maliki, who visited in July 2006. Kuwait has been an active and vocal public supporter of the political process in Iraq, welcoming the January 2005 elections and praising Iraq’s October 2005 successful constitutional referendum. Iraqi President Talibani visited Kuwait in September 2006. Kuwait is a member of the UN and some of its specialized and related agencies, including the World Bank (IBRD), International Monetary Fund (IMF), World Trade Organization (WTO), General Agreement on Tariffs and Trade (GATT); African Development Bank (AFDB), Arab Fund for Economic and Social Development (AFESD), Arab League, Arab Monetary Fund (AMF), Council of Arab Economic Unity (CAEU), Economic and Social Commission for Western Asia (ESCWA), Group of 77 (G-77), Gulf Cooperation Council (GCC), INMARSAT, International Development Association (IDA), International Finance Corporation, International Fund for Agricultural Development, International Labor Organization (ILO), International Maritime Organization, Interpol, IOC, Islamic Development Bank (IDB), International Federation of Red Cross and Red Crescent Societies, Non-Aligned Movement, Organization of Arab Petroleum Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC), Organization of Petroleum Exporting Countries (OPEC), and the International Atomic Energy Agency (IAEA). DEFENSE Since liberation, Kuwait, with the help of the United States and other allies, has made significant efforts to increase the size and modernity of its armed forces. These efforts are succeeding. The government also continues to improve defense arrangements with other Arab states, as well as UN Security Council members. During Operation Iraqi Freedom, in 2003, Kuwaiti military elements successfully operated missile defense systems. A separately organized National Guard maintains internal security. The police constitute a single national force under the purview of civilian authorities of the Ministry of Interior. U.S.-KUWAITI RELATIONS Strategic cooperation between the United States and Kuwait increased in 1987 with the implementation of a maritime protection regime that ensured the freedom of navigation through the Gulf for 11 Kuwaiti tankers that were reflagged with U.S. markings. The U.S.-Kuwaiti strategic partnership intensified dramatically again after Iraq’s invasion of Kuwait. The United States spearheaded UN Security Council demands that Iraq withdraw from Kuwait and its authorization of the use of force, if necessary, to remove Iraqi forces from the occupied country. The Untied States also played a dominant role in the development of the multinational military operations Desert Shield and Desert Storm that liberated Kuwait. The U.S.-Kuwaiti relationship has remained strong in the post-Gulf War period. Kuwait and the United States worked on a daily basis to monitor and to enforce Iraq’s compliance with UN Security Council resolutions, and Kuwait also provided the main platform for Operation Iraqi Freedom in 2003. Since Kuwait’s liberation, 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. There are currently 98 FMS contracts between the U.S. military and the Kuwait Ministry of Defense totaling $6.84 billion. Principal U.S. military systems currently purchased by the Kuwait Defense Forces are Patriot Missile systems, F-18 Hornet fighters, the M1A2 main battle tank, and the Apache helicopter. Kuwaiti attitudes toward American products have been favorable since the Gulf War. In 1993, Kuwait publicly announced abandonment of the secondary and tertiary aspects of the Arab boycott of Israel (those aspects affecting U.S. firms). The United States is currently Kuwait's largest supplier of goods and services, and Kuwait is the fifth-largest market in the Middle East. U.S. exports to Kuwait totaled $902 million in 2002. 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. Kuwait also is an important partner in the ongoing U.S.-led campaign against international terrorism, providing assistance in the military, diplomatic, and intelligence arenas and also supporting efforts to block financing of terrorist groups. In January 2005, Kuwait Security Services forces engaged in gun battles with local extremists, resulting in fatalities on both sides in the first such incident in Kuwait’s history. Principal U.S. Officials The U.S. Embassy in Kuwait is located at Al Masjed Al Aqsa Street. Plot 14, Block 14, Bayan Plan 36302. The mailing address is P.O. Box 77, SAFAT, 13001 Safat, Kuwait; or PSC 1280 APO AE 09880. |
