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National Flag of Kuwait

The State of Kuwait (Arabic: دولة الكويت) is a constitutional monarchy on the coast of the Persian Gulf, enclosed by Saudi Arabia to the south and Iraq to the north and west. The name is a diminutive of an Arabic word meaning "fortress built near water.

 

The current rulers of the country (the Al-Sabah family) are descended from Sabah I, who was chosen by the community, which was composed mainly of traders. The duties of the rulers include administering the affairs of the State, including foreign affairs and taxation/duties.

 

Oil later transformed Kuwait into one of the richest countries in the Arab peninsula and in 1953 the country became the largest exporter of oil in the Persian Gulf. This massive growth attracted many immigrant labourers and foreign workers. Having amassed great wealth, Kuwait was the first of the Persian Gulf Arab states to achieve independence, on June 19, 1961. Its independence was challenged by Iraq which claimed that Kuwait was an integral part of Iraqi territory. It threatened to invade Kuwait but was deterred by the British, who flew in troops, and the Arab League. In October 1963 Iraq recognized Kuwait's independence and its borders.

Kuwait is a highly industrialized country with a GDP (PPP) of US$ 88.7 billion and a per capita income of US$ 29,566.  Kuwait's human development index (HDI) stands at 0.871, the second highest in Middle East and the highest in the Arab world. Kuwait has a proven crude oil reserves of 96 billion barrels (15 km³), estimated to be 10% of the world's reserves.

Petroleum and petrochemicals accounts for nearly half of GDP, 95% of export revenues, and 80% of government income. Other major industries include shipping, construction and financial services. Kuwait's climate limits agricultural development. Consequently, with the exception of fish, it depends almost wholly on food imports. About 75% of potable water must be distilled or imported. Higher oil prices put the FY99/00 budget into a €1.7 billion ($2 billion) surplus. The FY00/01 budget covers only nine months because of a change in the fiscal year. The budget for FY01/02 envisioned higher expenditures for salaries, construction, and other general categories. Kuwait continues its discussions with foreign oil companies to develop fields in the northern part of the country. By 1990, the country earned more from foreign investment than from oil exports. The expenses of the Iraqi invasion and post-war reconstruction placed a heavy economic burden on the country, but by the mid-1990s Kuwait had resumed its pre-invasion prosperity. The Central Bank of Kuwait issues Kuwait’s currency, the Kuwaiti dinar. The dinar is currently the highest valued currency unit in the world.  Major trading partners include Japan, United States, People's Republic of China, United Kingdom, Saudi Arabia, Singapore, Pakistan and India.

 

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