Thesis: Kuwait Today in the Short Half-Century

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¶ … 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.

Economic Development

By any measure, Kuwait enjoys an abundance of oil reserves compared to its relatively small population and geographic size. The burgeoning economic powerhouses of fuel-hungry China, India and Brazil have helped contribute to the Kuwaiti government's ability to take its time in economic diversification initiatives in recent years. According to U.S. government analysts, "Kuwait experienced rapid economic growth over the last several years on the back of high oil prices and in 2008 posted its tenth consecutive budget surplus. As a result of this positive fiscal situation, the need for economic reforms was less urgent and the government did not push through new initiatives" (Kuwait 5). Even more significantly, though, is the fact that there still does not appear to be a sense of urgency involved on the part of the Kuwaiti leadership concerning the implications of current demographic and employment trends. In this regard, the CIA adds that the Kuwaiti leadership's plans are focused on stabilization rather than developmental initiatives: "The drop in oil prices in late 2008 will reduce Kuwait's fiscal surplus in 2009. The global financial crisis may slow the pace of investment and development projects, but Kuwait has vowed to use its considerable financial resources to stabilize the economy if necessary" (Kuwait 5-6).

This laissez-faire approach to fiscal and political administration is reflected in the observations made by Ford (2005), who reports that Kuwait may well be able to afford this luxury: "When it was unveiled, the Kuwaiti government's plan to boost production to 4m barrels a day (b/d) by 2020 was regarded as overly ambitious by many observers. Now, however, a combination of new discoveries, improved technology and weak OPEC discipline all make it seem far more attainable" (42). Based on these forecasts, the Kuwaiti leadership has elected to bring in even more hired help to facilitate any growth that is experienced in the country's oil revenues while ignoring the need for substantive diversification plans for the near-term. In this regard, Ford notes that, "Above all else, there now appears to be the political will in Kuwait to reverse long-standing government policy and hand foreign firms a far greater role in the development of the country's oil wealth" (42). In the final analysis, then, Kuwait's oil reserves may turn out to be yet another "resource curse" that delays economic diversification until it is too late. As Ford emphasizes, "The decoupling of the direct link between the oil industry and government could help to reduce Kuwait City's obsession with oil, which is easy to understand but more difficult to sustain when the government is attempting to embark upon a period of economic diversification" (43).

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… [END OF PREVIEW]

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