With 96.5 billion barrels of recoverable oil in reserves, the fourth-largest reserve in the world, the Kuwaiti government enjoys a strong economy. Kuwait's oil production capacity is estimated to be 2 million barrels per day, with plans to increase its capacity to 3.5 million per day by 2005.
However, Kuwait has prudently followed the policy of investing its oil income for the post-oil future. It has made substantial investments in the West in stocks, real estate, and downstream hydrocarbon activities. The government has shared the economic wealth with its citizens by becoming a highly developed welfare state, providing free education to all citizens and some foreigners from preschool to university levels. Eighty-two percent of Kuwaitis and 75% of foreigners living in the country are literate. Its extensive national comprehensive health care system is one of the best in the world. Employment is virtually guaranteed and citizens enjoy the benefits of retirement incomes. Housing is heavily subsidized, and there is no personal income tax.
Jabir has continued the welfare policies of his predecessors, which he helped formulate. Under his rule, Kuwait faced a major economic crisis in the collapse of the Souq al Manekh (unregulated securities market), which produced serious economic and political repercussions for Kuwait. Attempts to resolve this crisis led to disagreement between the National Assembly and Emir Sabah. The emir supported the policy of paying off the investor's debts from public funds while the National Assembly strongly opposed such measures, fearing possible corruption and the creation of a bad precedent for the use of public funds. Because of the conflict, the minister of finance and the governor of the Central Bank both resigned and were replaced by members of the Sabah family. The emir's policies prevailed and further strengthened the ruling family. Thus, the old system of benevolence prevailed over the institutionalized path of policy-making.
Another major domestic concern has been the Iranian influence over the Shiite minority. While the Shia merchant community has existed for a long time and has financial commitment to the country, a rash of terrorist attacks and discovery of a plot to overthrow the royal family in June 1989 led to severe measures to curb subversion. The Kuwaiti government has consistently refused to consider releasing Shiites in its prisons even when the U.S. government was willing to consider such arrangements in 1987.
Violent crime and threats from foreigners have under-scored the vulnerability of the Kuwaiti population as a minority in its own country. This situation has led to a program of "Kuwaitization" of the population. The objective is to achieve a majority of Kuwaitis in the population by the beginning of the next century. The Kuwaiti government has been successful in reducing the expatriate element in the public sector by shifting government jobs to native Kuwaitis. However, the private sector is still dominated by foreign expatriates.
In a rather surprising announcement in 1999, the emir proposed legislation to allow women to vote and run for the National Assembly in 2003. Liberals and others supported the proposal while conservative Islamic politicians opposed it, describing it as a Western-influenced move to erode Kuwaiti society. Parliament subsequently voted against the emir's decree to grant full political rights to women.
Some tensions have always existed between the Islamists, who lean towards the standards of shariah (Islamic law), and democratic liberals, who argue that such strict Islamic beliefs do not relate well to establishing a strong democracy. The battle of ideas has escalated following the shock of the 11 September 2001 attacks on the U.S. Pentagon near Washington, D.C. and the World Trade Center in New York carried out by Islamic extremists. In February 2002, Mohammed Jassem al-Saqer, chairman of the foreign affairs committee of Kuwait's national assembly, traveled to the United States as part of an 11-member delegation to offer support to the U.S.-initiated War on Terror, particularly as U.S. president George W. Bush contemplated actions against Iraq. The delegation asked for U.S. support for causes that favor democracy, secularism, and basic human rights and equality. Islamists in the Kuwaiti National Assembly had denounced the delegation's visit and accused the Kuwaiti government of encouraging the trip, though members of the delegation paid their own way.