State of Kuwait
LOCATION AND SIZE.
Kuwait lies at the northwestern corner of the Persian Gulf. With a total area of 17,820 square kilometers (11,073 square miles), it covers an area slightly smaller than the state of New Jersey. To the south and southwest, it shares a 222-kilometer (138-mile) border with Saudi Arabia. To the north and west, there is a 242-kilometer (150-mile) borderline with Iraq. Most major towns, including the capital, Kuwait City, are located along the Gulf, toward the south.
Kuwait's population totaled 2,041,961 in July 2001, of which almost 60 percent were foreign residents. The population increased 1.6 percent per year between 1980 and 1997. The population growth rate was estimated by the CIA to be 3.38 percent in 2001. Most of the growth stems from the arrival of foreign immigrants who come to Kuwait looking for jobs, rather than from a high birth rate. Nevertheless, an estimated 70 percent of the population is under the age of 24.
In 1998, the population density of Kuwait was 102 inhabitants per square kilometers (264 per square mile), with most people living in towns; the urbanization rate is 97 percent. The majority is Muslim (85 percent), with an almost equal split between Sunni Muslims (45 percent) and Shiites (40 percent). Christian, Hindu, Parsee, and other religious minorities make up the remaining 15 percent.
INFRASTRUCTURE, POWER, AND COMMUNICATIONS
Kuwait's infrastructure is modern and well developed. Within a few years after liberation from the Iraqi occupation, Kuwait managed to restore facilities and services to pre-war standards.
A network of 3,800 kilometers (2,361 miles) of good paved roads and modern multi-lane expressways link all areas of the country, extending south and west from Kuwait City to neighboring cities and to Iraq and Saudi Arabia. The ports—Shuwaykh, Shuaybah, and Mina Al-Ahmadi—handle commercial shipping and petroleum exports.
Kuwait has several major electric power-generating plants. These incorporate desalination operations, which remove salt from seawater to provide the country with drinking water. Currently, the country has enough electric capacity from plants fired by natural gas or oil, but with demand rapidly rising as the population increases, expansion projects are already underway to increase capacity. To meet demand, the Middle East Eco-
|Country||Newspapers||Radios TV Sets a Cable subscribers a||Cable Cable subricribers a||Mobile Phones a||Fax Machines a||Personal Personal Computers a||Internet Hosts b||Internet Users b|
|a Data are from International Telecommunication Union, World Telecommunication Development Report 1999 and are per 1,000 people.|
|b Data are from the Internet Software Consortium ( http://www.isc.org ) and are per 10,000 people.|
|SOURCE: World Bank. World Development Indicators 2000.|
nomic Digest (MEED) estimates that Kuwait will need to spend US$3.6 billion over the next 10 years to install 5,000 megawatts (MW) of generating capacity to add to the 6,900 MW that was already available at end-1999.
Before 1990-91, the telephone system had more than 250,000 subscribers, with work under way to increase this number to more than 500,000. Since demand is running at only 400,000 lines, the emphasis is on upgrading rather than expanding the system. There is a mobile cellular system in operation, which had 150,000 subscribers in 1996. By 2000, Kuwait had 3 Internet service providers and 5,000 hosts registered under their own domain. The Ministry of Communications retains control over these services and access is expensive, but the Internet is hugely popular and, according to the U.S. State Department's Country Commercial Guide for 2001 , the number of individual users is expected to jump to 300,000 by 2003.
Industrial development in Kuwait has faced formidable obstacles. The country, so rich in oil, is poor in most other resources. The small domestic market restricts production for local consumption to small-scale operations, while the small Kuwaiti labor force , possessing limited skills, and high labor costs are further constraints.
Kuwait's oil production of 2.095 million barrels per day (bpd) in 1998 accounted for 3 percent of total world output. Although Iraqi forces set fire to over 60 percent of Kuwaiti oil wells and thus destroyed about 2 percent of Kuwait's total reserves, the country holds about 10 percent of known world reserves. The U.S. Department of Energy estimates that Kuwait's importance as a world oil producer will steadily increase. Kuwait and Saudi Arabia hold about 80 percent of the world's excess production capacity, which means that the 2 countries can easily produce more or less oil at will, thus influencing the prices in the world markets. The emirate plans to invest US$15 billion over the period 1995-2005 to increase its output capacity to 3.5 million bpd. There are also plans to modernize 3 refineries to increase total domestic processing capacity from 800,000 barrels per day (bpd) to 1 million bpd and to allow for environmentally cleaner products. At present, Kuwait produces about 2 million barrels of crude oil per day. With oil prices remaining high throughout 2000, earnings amounted to an estimated KD5.4 billion (US$17.5 billion).
The emirate also ranks among the nations with the world's largest natural gas reserves. Most of its gas is used for domestic needs rather than export, but Kuwait estimates that it has 1.5 trillion cubic meters, or 1.1 percent of global reserves.
Most industry is concentrated in petrochemicals and production of fertilizers. The Petro-chemical Industries Company (PIC), a subsidiary of the Kuwait Petroleum Company (KPC) and the leading industrial enterprise, is involved in the production of petroleum-based fertilizers. Kuwait's capacity to produce fertilizer stands at approximately 1.65 million tons per year. In recent years, however, the market has been hit by technical problems, weak prices, and the imposition of European Union (EU) tariffs . Other light industries include chemicals, food processing, textiles, furniture, paper, mineral and metallic products, cement, sulphur processing, detergents, and construction materials.
Aside from oil, services dominate the Kuwaiti economy. Most people are employed by the government, whose over-staffed bureaucracy and generous welfare system provides most Kuwaitis with their income. Since there is hardly any tourism, banks and financial services are the only commercial services involving the private sector .
By the 1980s, Kuwait's banks were among the Gulf region's largest financial institutions. Because of the high oil revenue in the 1970s, many private individuals with money to dispose began to speculate. This action prompted a small crash in the official stock market in 1977 and a much larger crash in the alternative stock market, the Souq al-Manakh in 1986. The debts from the crash (US$64 billion) left all but one bank in Kuwait technically insolvent and held up only by support from the Central Bank. A government imposed reform program for the banking sector was still incomplete in 1990 when the Iraqi invasion changed the entire financial picture.
After liberation, new plans were announced for reform, which involved the government purchase of the banks' outstanding debts, but the reform has not yet been completed. Only the National Bank of Kuwait (NBK), the largest commercial bank, which handled the exiled government's finances during the crisis, survived both crises intact. The NBK, with current assets of over US$12 billion, is one of the 5 biggest banks in the Arab world and ranks in the top 250 banks worldwide. the jointly owned Bank of Bahrain and Kuwait and 6 other Kuwaiti banks are also in the top 1,000.
Kuwait has no territories or colonies.
Chalk, Nigel Andrew, and others. Kuwait: From Reconstruction to Accumulation for Future Generations , Washington, D.C.: IMF Occasional Papers No. 150, April 1997.
Cordesman, Anthony H. Kuwait: Recovery and Security after the Gulf War. Boulder, CO: Westview Press, 1997.
Crystal, Jill. Kuwait: The Transformation of an Oil State. Boulder, CO: Westview Press, 1992.
Economist Intelligence Unit. Country Profile: Kuwait. London: Economist Intelligence Unit, 2001.
U.S. Central Intelligence Agency. World Factbook 2001. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed October 2001.
U.S. Department of State. FY 2001 Country Commercial Guide: Kuwait . <http://www.state.gov> . Accessed August 2001.
U.S. Library of Congress, Federal Research Division. Kuwait: A Country Study. < http://lcweb2.loc.gov/frd/cs/kwtoc.html> . Accessed January 2001.
—Markus R. Bouillon
Kuwaiti dinar (KD). One Kuwaiti dinar is divided into 1000 fils. Bills come in denominations of 1 / 4 , 1 / 2 , 1, 5, 10, and 20KD. There are coins of 5, 10, 20, 50, and 100 fils.
Oil and oil-related products and fertilizers.
Food and livestock, construction materials, vehicles and parts, clothing.
GROSS DOMESTIC PRODUCT:
US$29.3 billion (purchasing power parity, 2000 est.).
BALANCE OF TRADE:
Exports: US$23.2 billion (f.o.b., 2000). Imports: US$7.6 billion (f.o.b., 2000).