Kuwait: economic development and modern challenges since independence

¶ … Kuwait Today

In the short half-century since the country gained its independence from the United Kingdom, Kuwait has experienced its fair share of violence when it was invaded by Iraq in 1990 but it has also enjoyed the benefits of numerous economic and social developmental initiatives that have contributed to the state's current enviable standard of living. Notwithstanding the global economic crisis that continues to adversely affect the energy-consuming countries of the world, Kuwait appears to be well situated to take advantage of its oil reserves, particularly if it continues on its path to diversification of its economy and employment training initiatives for its citizens. To gain some further insights into current trends and conditions in Kuwait, this paper provides an overview of the country, a description of its physiographic and cultural landscape, and population trends. An analysis of current and future economic development projects is following by a discussion of major current events. An annotated works cited page of the sources consulted is also provided.

Review and Discussion

Kuwait: On the Country

Today, Kuwait is a modern nation that enjoys oil reserves that account for fully 8% of the world's reserves, a resource that also accounts for almost all (95%) of the country's export revenues and for a majority of the funding (80%) for Kuwait's governmental operations (Kuwait 2009). Having gained its independence from Britain in 1961, the Kuwaiti leadership has capitalized on the country's vast oil reserves to leap-frog its way into the 21st century. Indeed, with its oil reserves, an average per capita income of $57,400 and a miniscule 2.2% unemployment rate, Kuwait would appear to be well poised to play a role in international affairs that far outweighs its size in terms of population and geography. Notwithstanding these advantages, though, Kuwait is faced with some profound challenges to its social and economic development and these issues are discussed further below following an overview of the country's physiographic landscape.

Physiographic Landscape

Kuwait is a desert nation, with "intensely hot summers; short, cool winters [and a terrain that is] flat to slightly undulating desert plain" (Kuwait 8). Less than one percent of Kuwait's lands are arable, and permanent crops occupy just 0.17% of the landscape (Kuwait 8). In addition, Kuwait is a relatively small country at 17,820 square kilometers (rank 164th in the world and slightly smaller than New Jersey), all of which is land (Kuwait 8). A concise description of the country physiographic landscape is also provided by the country's official Web site thusly: "Located in the north-east corner of the Arabian Peninsula, Kuwait is one of the smallest countries in the world in terms of land area. The flat, sandy Arabian Desert covers most of Kuwait. Kuwait is the only country in the world which has no natural lake or water reservoir. There is little difference in the country's altitude with the highest point in the country being 306 m above sea-level" (Kuwait Geography 2009:3).

Cultural Landscape

In several ways, the cultural landscape of Kuwait resembles that of many of its neighbors in the region in being "fragile and largely authoritarian regardless of the formal structure of the government. In broad terms, Kuwait has not managed to create a secular political culture that provides effective pluralism"(Cordesman 108). Even though one-third of the Kuwaiti population (2,691,158) is comprised of non-nationals (1,291,354), the country is still overwhelmingly Muslim at 85% (Kuwait 4, 6). The cultural landscape of Kuwait, then, directly relates to the practice of this religion and recent trends reflect the same type of fundamentalist views being espoused elsewhere in the Middle East. In this regard, Cordesman adds that, "In fact, traditional monarchies often interfere less in human rights and normal social conduct than titular democracies. As for Islam, the fact that much of the population has turned back to more traditional social structures and religion is scarcely surprising" (108).

Population Trends

On the one hand, the overwhelming majority of the working population of Kuwait appears to be actively employed, with an enviable 2.2% unemployment rate reported most recently (this is based on a 2004 estimate, though) (Kuwait 4). There are some difficulties assessing precise demographics for the country's population but Kuwait also appears to be characterized by an increasing number of young citizens who will need jobs in the future and fully 80% of the country's employment is currently occupied by non-nationals (Kuwait 5). The country's current 3.5% population growth rate is not truly reflective of overall trends since this figure includes recent repatriated citizens who returned following the cessation of hostilities in the immediate region (Kuwait 7). According to a recent report from a staff writer for the Kuwait Times, Zahreddine (2009) notes that, "When compared to previous years, the past year's financial slowdown has forced fewer expats to spend holidays abroad. In a bid to cut down on travel budget, the majority of the workforce have chosen to keep their families here in Kuwait" (3).

On the other hand, the country's older demographic segment of 2.9% (e.g., 65 years+) is tiny by comparison to the country's 15-64-year-old group (70.7%) (Kuwait 3), and the country's leadership is likewise comprised of older individuals who will be replaced in the foreseeable future. For example, Cordesman (2004) emphasizes that, "The age of many of the region's leaders is a cliche in the political analysis of the Middle East. Age is a growing factor in any calculation about the future leadership of Kuwait" (108). Given these fundamental shifts in the Kuwaiti population, it would seem reasonable to suggest that the Kuwaiti government has taken aggressive steps to ensure that the up-and-coming segment of the population that will need meaningful employment in the future. Unfortunately, the Kuwaiti leadership has squandered some of the time it has to prepare for the inevitable simply because economic times were good and there was no urgency perceived and these issues are discussed further below.

Major Current Events

Sine if the major current events in Kuwait are also major events on the global front. For example, Ford reports that the Kuwait National Petroleum Company (KNPC) is proceeding with the construction of an enormous 615,000 b/d refinery at Al Zour; the cost of this single project is estimated at $6.3 billion. According to Ford, "The plant, which will be the biggest in the Middle East, is expected to be completed by 2010, while KNPC's three existing refineries at Mina Al Ahmadi, Mina Abdullah and Shuaiba are expected to undergo a $3.5 billion overhaul over the same period" (44). Moreover, Kuwaiti women are gaining access to governmental leadership positions in ways that will undoubtedly affect the overall acceptance of females in the workplace in the future. For instance, four women were recently elected to the Kuwaiti National Assembly in May 2009, an event that was deemed historic by U.S. government analysts (Kuwait 5-6).

Annotated Works Cited

Cordesman, Anthony H. Energy Developments in the Middle East. Westport, CT: Praeger, 2004.

Author makes the point that in an increasingly energy-starved world, smaller oil-exporting countries such as Kuwait are going to play an important role in the Middle East region as well as in global events in the coming years. Cordesman also makes the alarming argument that many of the nations in the Middle East, including Kuwait, have vastly overstated their self-reported oil reserves in ways that have skewed predictions about global energy needs in the future.

Ford, Neil. 2005. "Project Kuwait on the Brink: A Turnaround in Kuwaiti Policy Could See

Major Oil Projects Developed by Foreign Companies for the First Time since

Nationalisation, over 30 Years Ago." 2005, December. The Middle East 362, 42-44.

Author maintains that the increased use of foreign national expertise in promoting

Kuwaiti oil development will provide the Kuwaiti leadership with the time it needs to diversify the country's economy, but time is running out.

Kuwait. 2009. U.S. Government: CIA World Factbook. July 11, 2009 .

This entry is maintained by the U.S. Central Intelligence Agency and is a valuable tool in developing useful insights and current facts concerning the 200 or so countries of the world. The analysis provided includes most recent estimates for population breakdowns, economic indicators, transnational agreements and controversies and so forth. The Web site was recently updated to include a country comparison feature.

Kuwait Geography. 2009. Al-Diwan Al-Amiri: Official Web site -- State of Kuwait. July 11,

2009. .

A "one-stop shopping" Web site for Kuwait. The official Web site contains information on Kuwaiti history, its political leadership and their genealogy, various facts and figures as well as a "Kuwait at a Glance" feature. The Web site also provides a map, a recording of the national anthem and links to other useful sites about Kuwait.

Zahreddine, Nisreen. 2009, July 12. Kuwait Times. July 11, 2009 .

Staff writer provides an insightful recent analysis of weather conditions in Kuwait

(extremely hot) and how the climate affects people's behaviors and vacation plans.

Author notes that Kuwaitis enjoy water theme parts and malls, and there is a growing demand for these resources with more and more Kuwaiti nationals staying home rather than vacationing abroad due in part to the downturn in the global economy. Author also notes that there has been an concomitant increase in spending throughout the Kuwaiti economy during this period of the year in ways that may reflect what can be expected in years to come.