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Kuwait (12/01)


For the most current version of this Note, see Background Notes A-Z.


State of Kuwait

Area: 17,820 sq. km. (about 6,880 sq. mi.); slightly smaller than New Jersey.
Cities: Capital--Kuwait (pop. about 238,000). Other towns--Ahmadi, Jahra, Fahaheel.
Terrain: Flat to slightly undulating desert plain.
Climate: Intensely hot and dry in summers; short, cool winters with limited rain.

Nationality: Noun and adjective--Kuwaiti(s).
Population (2001): 2.04 million, including non-Kuwaiti citizens.
Annual growth rate : 3.38%.
Ethnic groups: Arab 80%, South Asian, Iranian, Southeast Asian.
Religion: Islam 85% (Kuwaiti citizens are 100% Muslim).
Languages: Arabic (official); English widely spoken.
Education (free through high school): Years compulsory--8. Literacy--male 82.2%, female 74.9% over age of 15.
Health: Infant mortality rate--11 deaths/1,000 births. Life expectancy--75 yrs. male, 77 yrs. female.
Work force (2001): 1.214 million.

Type: Constitutional Hereditary Amirate.
Independence: June 19, 1961.
Constitution: approved and promulgated November 11, 1962.
Branches: Executive--Amir (head of state).
Legislative--elected National Assembly (Majlis al-'Umma) of 50 members. Judicial--High Court of Appeal.
Political parties: None.
Suffrage: Adult males who have been naturalized for 30 years or more or have resided in Kuwait before 1920 and their male descendants 21 and over. Only 14% of all citizens are eligible to vote.
Subdivisions: Government is centralized, but for administrative purposes there are five governorates: Al 'Asimah, Hawalli, Al Ahmadi, Al Jahra', and Al Farwaniyah.

Flag: flag of kuwait

GDP (2000): $37.7 billion.
Annual growth rate in real GDP (2000 over 1999): 0.9%.
Per capita GDP (2000): $15,000.
Natural resources: Petroleum, fisheries.
Agriculture: Most food is imported. Cultivated land--1%.
Industry: Types--petroleum extraction and refining, fertilizer, chemicals, some construction materials. Water desalinization capacity: 215 million gallons per day.
Trade (2000): Exports and re-exports--$17.033 billion: oil (90%). Major markets--Japan 23%, U.S. 12%, Singapore 8%, Netherlands 7%. Imports--$7.6 billion: food, construction materials, vehicles and parts, clothing. Suppliers--U.S. 15%, Japan 10%, Germany 7%, U.K. 7%.

The people residing in the State of Kuwait are primarily Arab in origin, but less than half of them are from the Arabian Peninsula. Many Arabs from nearby states took up residence in Kuwait because of the prosperity brought by oil production after the 1940s. However, following the liberation of Kuwait from Iraqi occupation in 1991, the Kuwaiti Government undertook a serious effort to reduce the expatriate population. Kuwait still has a sizable Iranian and Indian population.

Seventy-five percent of native Kuwaitis are Sunni Muslims, and 25% are Shi'a Muslims. There are very few Kuwaiti Christians. The 79% literacy rate, one of the Arab world's highest, is due to extensive government support for the education system. Public school education, including Kuwait University, is free, but access is restricted for foreign residents. The government sends qualified students abroad for degrees not offered at Kuwait University. About 1,000 Kuwaitis are currently studying in U.S. universities.

Kuwait's modern history began in the 18th century with the founding of the city of Kuwait by the Uteiba section of the Anaiza tribe, who wandered north from Qatar. Its first definite contact with the West was between 1775 and 1779, when the British-operated Persian Gulf-Aleppo Mail Service was diverted through Kuwait from Persian-occupied Basra (in Iraq).

During the 19th century, Kuwait tried to obtain British support to maintain its independence from the Turks and various powerful Arabian Peninsula groups. In 1899, the ruler Sheikh Mubarak Al Sabah--"the Great"--signed an agreement with the United Kingdom pledging himself and his successors neither to cede any territory nor to receive agents or representatives of any foreign power without the British Government's consent. Britain agreed to grant an annual subsidy to support the Sheikh and his heirs and to provide its protection. Kuwait enjoyed special treaty relations with the U.K., which handled Kuwait's foreign affairs and was responsible for its security.

Mubarak was followed as ruler by his son Jabir (1915-17) and another son Salim (1917-21). Subsequent amirs descended from these two brothers. Sheikh Ahmed al-Jabir Al Sabah ruled from 1921 until his death in 1950, and Sheikh Abdullah al-Salim Al Sabah from 1950 to 1965. By early 1961, the British had withdrawn their special court system, which handled the cases of foreigners resident in Kuwait, and the Kuwaiti Government began to exercise legal jurisdiction under new laws drawn up by an Egyptian jurist. On June 19, 1961, Kuwait became fully independent following an exchange of notes with the United Kingdom.

The boundary with Saudi Arabia was set in 1922 with the Treaty of Uqair following the Battle of Jahrah. This treaty also established the Kuwait-Saudi Arabia Neutral Zone, an area of about 5,180 sq. km. (2,000 sq. mi.) adjoining Kuwait's southern border. In December 1969, Kuwait and Saudi Arabia signed an agreement dividing the Neutral Zone (now called the Divided Zone) and demarcating a new international boundary. Both countries share equally the Divided Zone's petroleum, onshore and offshore.

Kuwait's northern border with Iraq dates from an agreement made with Turkey in 1913. Iraq accepted this claim in 1932 upon its independence from Turkey. However, following Kuwait's independence in 1961, Iraq claimed Kuwait, under the pretense that Kuwait had been part of the Ottoman Empire subject to Iraqi suzerainty. In 1963, Iraq reaffirmed its acceptance of Kuwaiti sovereignty and the boundary it agreed to in 1913 and 1932, in the "Agreed Minutes between the State of Kuwait and the Republic of Iraq Regarding the Restoration of Friendly Relations, Recognition, and Related Matters."

In August 1990, Iraq nevertheless invaded Kuwait but was forced out 7 months later by a UN coalition led by the United States. Following liberation, the UN, under Security Council Resolution 687, demarcated the Iraq-Kuwait boundary on the basis of the 1932 and the 1963 agreements between the two states. In November 1994, Iraq formally accepted the UN-demarcated border with Kuwait, which had been further spelled out in Security Council Resolutions 773 and 883. Iraqi officials have, however, publicly indicated that they may again attempt to occupy Kuwait by force.

The State of Kuwait has been ruled by the Sabah family since 1751. The 1962 constitution contains detailed provisions on the powers and relationships of the branches of government and on the rights of citizens. Upon the death of an amir, the crown prince assumes his position. A new crown prince is then selected by members of the Sabah family from among the direct descendants of Mubarak the Great. Under the constitution, the designation is subject to the approval of the National Assembly. Since independence, successions have been orderly, both in 1965 and 1978.

Kuwait experienced an unprecedented era of prosperity under Amir Sabah al-Salim Al Sabah, who died in 1977 after ruling for 12 years, and under his successor, Amir Jabir al-Ahmad al-Jabir Al Sabah. The country was transformed into a highly developed welfare state with a free market economy. During the 7-month occupation by Iraq, the Amir, the government, and many Kuwaitis took refuge in Saudi Arabia or other nations. The Amir and the government successfully managed Kuwaiti affairs from Saudi Arabia, London, and elsewhere during the period, relying on substantial Kuwaiti investments available outside Kuwait for funding and war-related expenses. His return after the liberation in February 1991 was relatively smooth.

Kuwait's first National Assembly was elected in 1963, with follow-on elections held in 1967, 1971, and 1975. From 1976 to 1981, the National Assembly was suspended. Following elections in 1981 and 1985, the National Assembly was again dissolved. Fulfilling a promise made during the period of Iraqi occupation, the Amir held new elections for the National Assembly in 1992. On May 4, 1999, the Amir once again dissolved the National Assembly. This time, however, it was done through entirely constitutional means, and new elections were held on July 3, 1999.

No political parties exist in Kuwait, although there are several major political groupings that function like parties. Although the Amir maintains the final word on most government policies, the National Assembly plays a real role in decisionmaking, with powers to initiate legislation, question government ministers, and express lack of confidence in individual ministers. For example, in May 1999, the Amir issued several landmark decrees dealing with women's suffrage, economic liberalization, and nationality. The National Assembly later rejected all of these decrees as a matter of principle and then reintroduced most of them as parliamentary legislation.

Principal Government Officials
Amir--His Highness Sheikh Jabir al-Ahmad al-Jabir Al Sabah
Crown Prince and Prime Minister--His Highness Sheikh Saad al-Abdullah al-Salim Al Sabah
First Deputy Prime Minister and Minister of Foreign Affairs--Sheikh Sabah al-Ahmad al-Jabir Al Sabah

Ambassador to the United States--Salim al-Abdullah Jabir Al Sabah
Permanent Representative to the United Nations--Muhammad Abdul Hasan

Kuwait maintains an embassy in the United States at 2940 Tilden Street NW, Washington, D.C. 20008 (tel. 202-966-0702).

Kuwait is a small country with massive oil reserves, whose economy has been traditionally dominated by the state and its oil industry. During the 1970s, Kuwait benefited from the dramatic rise in oil prices, which Kuwait actively promoted through its membership in the Organization of Petroleum Exporting Countries (OPEC). The economy suffered from the triple shock of a 1982 securities market crash, the mid-1980s drop in oil prices, and the 1990 Iraqi invasion and occupation. The Kuwaiti Government-in-exile depended upon its $100 billion in overseas investments during the Iraqi occupation in order to help pay for the reconstruction. Thus, by 1993, this balance was cut to less than half of its pre-invasion level. The wealth of Kuwait is based primarily on oil and capital reserves, and the Iraqi occupation severely damaged both.

In the closing hours of the Gulf war in February 1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait's oil wells. All of these fires were extinguished within a year. Production has been restored, and refineries and facilities have been modernized. Oil exports surpassed their pre-invasion levels in 1993 with production levels only constrained by OPEC quotas.

In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil Co. (KOC), jointly owned by the British Petroleum Co. and Gulf Oil Corp. In 1976, the Kuwaiti Government nationalized KOC. The following year, Kuwait took over onshore production in the Divided Zone between Kuwait and Saudi Arabia. KOC produces jointly there with Texaco, Inc., which, by its 1984 purchase of Getty Oil Co., acquired the Saudi Arabian onshore concession in the Divided Zone.

Offshore the Divided Zone, the Arabian Oil Co.--80% owned by Japanese interests and 10% each by the Kuwaiti and Saudi Governments--has produced on behalf of both countries since 1961. The original concession agreements will expire in January 2003; negotiations to replace the concession with a technical service agreement should be completed in 2002.

The Kuwait Petroleum Corp. (KPC), an integrated international oil company, is the parent company of the government's operations in the petroleum sector, and includes Kuwait Oil Company, which produced oil and gas; Kuwait National Petroleum Co., refining and domestic sales; Petrochemical Industries Co., producing ammonia and urea; Kuwait Foreign Petroleum Exploration Co., with several concessions in developing countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp. The latter, purchased outright in 1982, gives KPC a worldwide presence in the petroleum industry.

KPC also has purchased from Gulf Oil Co. refineries and associated service stations in the Benelux nations and Scandinavia, as well as storage facilities and a network of service stations in Italy. In 1987, KPC bought a 19% share in British Petroleum, which was later reduced to 10%. KPC markets its products in Europe under the brand Q8 and is interested in the markets of the United States and Japan.

Kuwait has about 94 billion barrels of recoverable oil; Saudi Arabia is the only single country which has larger reserves. Estimated capacity, before the war, was about 2.4 million barrels per day (b/d). During the Iraqi occupation, Kuwait's oil-producing capacity was reduced to practically nothing. However, tremendous recovery and improvements have been made. Oil production was 1.5 million b/d by the end of 1992, and pre-war capacity was restored in 1993. Kuwait's production capacity is estimated to be 2.5 million b/d. Kuwait plans to increase its capacity to 3.5 million b/d by 2005.

Social Benefits
The government has sponsored many social welfare, public works, and development plans financed with oil and investment revenues. Among the benefits for Kuwaiti citizens are retirement income, marriage bonuses, housing loans, virtually guaranteed employment, free medical services, and education at all levels. Foreign nationals residing in Kuwait obtain some, but not all, of the welfare services. The right to own stock in publicly traded companies, real estate, and banks or a majority interest in a business is limited to Kuwaiti citizens and citizens of GCC states under limited circumstances.

Industry and Development
Industry in Kuwait consists of several large export-oriented petrochemical units, oil refineries, and a range of small manufacturers. It also includes large water desalinization, ammonia, desulfurization, fertilizer, brick, block, and cement plants. During the invasion, the Iraqis looted nearly all movable items of worth, especially high-technology items and small machinery. Much of this has been replaced with newer equipment.

Agriculture is limited by the lack of water and arable land. The government has experimented in growing food through hydroponics and carefully managed farms. However, most of the soil which was suitable for farming in south central Kuwait was destroyed when Iraqi troops set fire to oil wells in the area and created vast "oil lakes." Fish and shrimp are plentiful in territorial waters, and largescale commercial fishing has been undertaken locally and in the Indian Ocean.

The Kuwait Oil Tankers Co. has 35 crude oil and refined product carriers and is the largest tanker company in an OPEC country. Kuwait also is a member of the United Arab Shipping Company.

Trade, Finance, and Aid
The Kuwaiti dinar is a strong currency pegged to a basket of currencies in which the U.S. dollar has the most weight. Kuwait ordinarily runs a balance-of-payments surplus.

Government revenues are dependent on oil revenues. Kuwait's fiscal surplus in 2000 was some 15% of GDP, while it reversed to a deficit of more that 2% of GDP in 2001 on sliding oil prices.

The government's two reserve funds: the Fund for Future Generations and the General Reserve Fund, which totaled nearly $100 billion prior to the invasion in 1990, were the primary source of capital for the Kuwaiti Government during the war. While these funds were depleted to $40-$50 billion after the war, they currently are estimated around $80 billion. The bulk of this reserve is invested in the United States, Germany, the United Kingdom, France, Japan, and Southeast Asia. In order of importance, foreign assets are believed to be invested in stocks and bonds, fixed yield instruments (mostly short term), and real estate. Kuwait follows a generally conservative investment policy.

Kuwait has been a major source of foreign economic assistance to other states through the Kuwait Fund for Arab Economic Development, an autonomous state institution created in 1961 on the pattern of Western and international development agencies. In 1974, the fund's lending mandate was expanded to include all-not just Arab-developing countries.

Over the years aid was provided to Egypt, Syria, and Jordan, as well as the Palestine Liberation Organization. During the Iran-Iraq war, significant Kuwaiti aid was given to the Iraqis. The Kuwait fund issued loans and technical assistance grants totaling over $520 million during its fiscal year ending June 30, 2000.

Following independence in June 1961, Kuwait faced its first major foreign policy problem arising from Iraqi claims to Kuwait's territory. The Iraqis threatened invasion, but were dissuaded by the U.K.'s ready response to the Amir's request for assistance. Kuwait presented its case before the United Nations and preserved its sovereignty. U.K. forces were later withdrawn and replaced by troops from Arab League nations, which were withdrawn in 1963 at Kuwait's request.

On August 2, 1990, Iraq invaded and occupied Kuwait. Through U.S. efforts, a multinational coalition was assembled, and, under UN auspices, initiated military action against Iraq to liberate Kuwait. Arab states, especially the other five members of the Gulf Cooperation Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab Emirates), Egypt, and Syria, supported Kuwait by sending troops to fight with the coalition. Many European and East Asian states sent troops, equipment, and/or financial support.

After liberation, Kuwait concentrated its foreign policy efforts on development of ties to states which had participated in the multinational coalition. Notably, these states were given the lead role in Kuwait's reconstruction. Conversely, Kuwait's relations with those nations that supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, remain strained or nonexistent. Palestine Liberation Organization (PLO) Chairman Yasir Arafat's support for Saddam Hussein during the war also has affected Kuwait's attitudes toward the PLO and the peace process.

Since the conclusion of the Gulf war, Kuwait has made efforts to secure allies throughout the world, particularly United Nations Security Council members. In addition to the United States, defense arrangements have been concluded with the United Kingdom, Russia, and France. Close ties to other key Arab members of the Gulf war coalition--Egypt and Syria--also have been sustained.

Kuwait is a member of the UN and some of its specialized and related agencies, including the World Bank (IBRD), International Monetary Fund (IMF), World Trade Organization (WTO), General Agreement on Tariffs and Trade (GATT); African Development Bank (AFDB), Arab Fund for Economic and Social Development (AFESD), Arab League, Arab Monetary Fund (AMF), Council of Arab Economic Unity (CAEU), Economic and Social Commission for Western Asia (ESCWA), Group of 77 (G-77), Gulf Cooperation Council (GCC), INMARSAT, International Development Association (IDA), International Finance Corporation, International Fund for Agricultural Development, International Labor Organization (ILO), International Marine Organization, Interpol, INTELSAT, IOC, Islamic Development Bank (IDB), League of Red Cross and Red Crescent Societies (LORCS), Non-Aligned Movement, Organization of Arab Petroleum Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC), Organization of Petroleum Exporting Countries (OPEC), and the International Atomic Energy Agency (IAEA).

Before the Gulf war, Kuwait maintained a small military force consisting of army, navy, and air force units. The majority of equipment for the military was supplied by the United Kingdom. Aside from the few units that were able to escape to Saudi Arabia, including a majority of the air force, all of this equipment was either destroyed or taken by the Iraqis. Much of the property returned by Iraq after the Gulf war was damaged beyond repair. Iraq still retains a substantial amount of captured Kuwaiti military equipment in violation of UN resolutions.

Since the war, Kuwait, with the help of the U.S. and other allies, has made significant efforts to increase the size and modernity of their armed forces. These efforts are succeeding. The government also continues to improve defense arrangements with other Arab states, as well as UN Security Council members.

A separately organized National Guard maintains internal security. Police forces are under the authority of the Ministry of Interior.

A U.S. consulate was opened at Kuwait in October 1951 and was elevated to embassy status at the time of Kuwait's independence 10 years later. The United States supports Kuwait's sovereignty, security, and independence as well as closer cooperation among the GCC countries.

In 1987, cooperation between the United States and Kuwait increased due to the implementation of the maritime protection regime to ensure freedom of navigation through the Gulf for 11 Kuwaiti tankers that were reflagged with U.S. markings.

The U.S.-Kuwaiti partnership reached dramatic new levels of cooperation after the Iraqi invasion. The United States assumed a leading role in the implementation of Operation Desert Shield. The United States led the UN Security Council to demand Iraqi withdrawal from Kuwait and authorize the use of force, if necessary, to remove Iraqi forces from the occupied country. The United States played a major role in the evolution of Desert Shield into Desert Storm, the multinational military operation to liberate the State of Kuwait.

Eventually, the U.S. provided the bulk of the troops and equipment that were used by the multinational coalition that liberated Kuwait. The U.S.-Kuwaiti relationship has remained strong in the post-war period.

The United States has provided military and defense technical assistance to Kuwait from both foreign military sales (FMS) and commercial sources. All transactions have been made by direct cash sale. The U.S. Office of Military Cooperation in Kuwait is attached to the American embassy and manages the FMS program. U.S. military sales to Kuwait total $5.5 billion over the last 10 years. Principal U.S. military systems currently purchased by the Kuwait Defense Forces are Patriot missile system, F-18 Hornet fighters, and the M1A2 Main Battle Tank.

The United States is currently Kuwait's largest supplier, and Kuwait is the fifth-largest market in the Middle East for U.S. goods and services. Since the Gulf war, Kuwaiti attitudes toward Americans and American products have been excellent. U.S. exports to Kuwait totaled $787 billion in 2000. Provided their prices are reasonable, U.S. firms have a competitive advantage in many areas requiring advanced technology, such as oil field equipment and services, electric power generation and distribution equipment, telecommunications gear, consumer goods, and military equipment. In 1993, Kuwait publicly announced abandonment of the secondary and tertiary aspects of the Arab boycott of Israel (those aspects affecting U.S. firms).

Kuwait also is an important partner in the current U.S.-led campaign against terrorism, providing assistance in the military, diplomatic, and financial arenas.

Principal U.S. Officials
Ambassador--Richard H. Jones
Deputy Chief of Mission--Frank C. Urbancic
Political Affairs--Richard K. Bell
Political/Military Affairs--Norman T. Roule
Commercial Affairs--Patricia Gonzalez
Economic Affairs--Todd P. Schwartz
Consular Affairs--Sean Murphy
Administrative Affairs--John D. Lavelle
Public Affairs--John G. Moran
Chief, Office of Military Cooperation--BGEN Thomas Csrnko USA

The U.S. Embassy in Kuwait is located at Al Masjeed Al Aqsa Street. Plot 14, Block 14, Bayan Plan 36302. The mailing address is P.O. Box 77, SAFAT, 13001 SAFAT, Kuwait; or Unit 69000 APO AE 09880.

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