Economy of Kuwait

According to cheeroutdoor, the economic prosperity of Kuwait is associated with oil production. Kuwait’s GDP, calculated at the purchasing power parity of currencies, amounted to $30.9 billion; GDP per capita – $15,100 (2001). Real GDP growth 4% (2001). The share of Kuwait in the world economy is small, much less than 1%, but Kuwait provides approx. 10% of world oil production. Labor force approx. 1.3 million people (more than 1/2 of the able-bodied population are immigrants). Unemployment 1.6% (1996). Inflation 2.7% (2002).

Sectoral structure of the economy in terms of contribution to GDP (2000): industry 60%, services 40%, agriculture 0%. The structure of GDP by employment (1995): extractive industry 2.06%, manufacturing 5.36%, agriculture 2.05%, construction 15.41%, the rest of the population is employed in various sectors of the service sector.

Large oil fields in the country were discovered as early as 1938, but their development began only after World War II. Kuwait now ranks third in the Middle East in terms of oil production (after Saudi Arabia and Iran). Large state-owned companies operate in the industry – the Kuwait Oil Company, the Kuwait National Oil Company. Approx. 100 million tons of oil (2000 – 99.08 million tons) and approx. 9 billion m3 of gas. In 2001, oil production exceeded the OPEC quota by 2.14 million barrels. per day.

The leading branches of the manufacturing industry are oil refining and petrochemistry. The largest oil refineries are Mina al-Ahmadi, Mina Abdallah, Shuaiba (refining 400,000, 245,000 and 155,000 barrels per day, respectively). In 2000, refining capacity exceeded 720 thousand barrels. in a day. Oils, gasoline, liquefied gas are produced. The petrochemistry of Kuwait has a modern, developed structure, covers domestic needs and creates export surpluses of products. One of the world’s largest petrochemical complexes has been created in Ash-Shuaib, capable of producing approx. 600 thousand tons of sulfur, 165 thousand tons of sulfuric acid, 1 million tons of nitrogen fertilizers, 790 thousand tons of urea, 650 thousand tons of ethylene, 450 thousand tons of polyethylene, 350 thousand tons of ethylene glycol, aromatic resins, etc. Energy in Kuwait is based on fossil fuels. Approx. 31,

The building materials industry and construction are well developed (in 1999, about 950 thousand tons of cement, 302.8 thousand m3 of bricks, etc.), the production of consumer goods, and the food industry (flour-grinding, confectionery, etc.) are developed. Industrial desalination of sea water before the Iraqi occupation was approx. 600 million liters per day. With an increase in the quality of education, such a science-intensive industry as the electronics industry is also developing.

Limited arable land (0.4% of the country’s territory) and water resources significantly limit the opportunities for agricultural development. Livestock is bred and vegetables are grown in the country. Fishing is developed (production satisfies 25% of domestic demand), shrimp fishing.

There are no railways in Kuwait. The length of paved roads is 3590 km (1999). Pipelines include 877 km of oil pipelines, 40 km of pipelines for oil products, 165 km of gas pipelines. Maritime transport has 202 ships (1997). Vessels with a gross tonnage of 1 thousand tons and above – 38, including 19 oil tankers, 6 gas tankers, 13 transport ships, their total gross tonnage is 3.63 million tons. Major ports: Shuvaikh, Shuaiba, Doha, oil port Mina el Ahmadi. In 1999, 2.88 million tons of cargo was received by sea, 7 million tons were sent. There are several airports in the country. Kuwait International Airport is designed for 5 million passengers a year. In 1999, 1.86 million passengers arrived and 1.83 million departed.

The country has a modern communication system, incl. satellite. There are more than 412 thousand fixed telephone lines and 210 thousand mobile phones (1997), 200 thousand Internet users (2002). The governmental Kuwait Information Agency (since 1976), the Kuwait Radio Broadcasting Service, and Kuwait Television operate. Mass circulations are published apprx. 10 daily and weekly newspapers, several magazines. The largest publication is the monthly magazine “Al-Arabi” (“Arab”, about 350 thousand copies), covering political, scientific and other problems.

Trade and the service sector are traditional areas of economic activity of the population. Tourism is developing. In general, about 1.5 million people visit Kuwait a year, most of them come to work. In 2000, 273 thousand people stayed in hotels.

Modern socio-economic policy combines the policy of redistributing oil revenues for the purpose of industrialization and social security of the population with efforts to diversify the economy and remove an excessive burden from the country’s budget. Various types of social benefits are paid. The monetary system consists of a limited number of banks and is divided into commercial and specialized, as well as insurance companies. The Central Bank maintains a stable exchange rate of the national currency with the help of foreign exchange reserves, the currency regime is generally liberal. In Kuwait, the securities market and the stock exchange are well developed. After the collapse of stock prices in 1982, measures were taken to strictly regulate the stock market. 90% of export foreign exchange earnings and 75% of state budget revenues are generated by the oil industry. Taxes still play a minor role. Revenues were $11.5 billion, expenses $17.2 billion (2001/02). The main budget expenditure items are: defense and security 32.6%, transfers to state organizations – 31%, education – 14.7%, energy and water supply – 11.2% (2000). The external debt of the country is 6.9 billion US dollars (2000).

The standard of living of the population of Kuwait is quite high. The average wage in industry is 8757.17 USD per year (2000). In 1997, the GDP was 9212 million cu. dinars, final private consumption spending – 4344 million dinars, net savings – 3093 million dinars.

The country’s trade balance is active. Export (2001, billion US dollars) 16.2, import 7.4. Main export commodities: oil and oil products, fertilizers, shrimp. Main export partners: Japan (23%), USA (14%), South Korea (13%), Singapore (7%), Netherlands (6%), Pakistan (6%). Industrial goods, foodstuffs, etc. are imported. The main import partners are: USA (12%), Japan (8%), Great Britain (8%), Germany (7%), China (5%), France (4%).

Economy of Kuwait