OFFICIAL NAME:
State of Kuwait

Geography
Area: 17,820 sq. km. (6,880 sq. mi.); approximately the size of the State of New Jersey.
Cities: Capital--Kuwait City.
Terrain: Almost entirely flat desert plain (highest elevation point--306 m).
Climate: Summers are intensely hot and dry with average highs ranging from 42^o-49^oC (108^o-120^oF); winters are short (Dec.-Feb.) and cool, averaging 10^o-30^oC (50^o-80^oF), with limited rain.

People
Nationality: Noun and adjective--Kuwaiti's).
Population (June 2008 est.): 3,399,637 including approximately 1.05 million Kuwaiti citizens and 2.34 million non-Kuwaiti nationals.
Annual growth rate (2008 est.): 3.591%.
Ethnic groups: Kuwaiti 45%, other Arab 35%, South Asian 9%, Iranian 4%, other 7%.
Religion: Muslim estimated 85% (Sunni 70%, Shi'a 30% among Kuwaitis), with sizable Hindu, Christian, Buddhist, and Sikh communities.
Languages: Arabic (official), English is widely spoken.
Education: Compulsory from ages 6-14; free at all levels for Kuwaitis, including higher education. Adult literacy (age 15 and over)--93.3% for the total population (male 94.4%, female 91%) (2005 census).
Health: Infant mortality rate (2008 est.)--9.22 deaths/1,000 live births. Life expectancy (2008 est.)--76.38 yrs. male, 78.73 yrs. female.
Work force (2007 est.): 2.093 million (76% male; 24% female; 20% Kuwaiti citizens).

Government
Type: Constitutional hereditary emirate.
Independence: June 19, 1961 (from U.K.).
Constitution: Approved and promulgated November 11, 1962.
Branches: Executive--Amir (head of state); prime minister (head of government); Council of Ministers (cabinet) is appointed by prime minister and approved by the Amir. Legislative--unicameral National Assembly (Majlis al-'Umma) of 50 elected members who serve 4-year terms plus all ministers, who serve as ex officio members. Judicial--High Court of Appeal.
Administrative subdivisions: Six governorates (muhafazat): Al 'Asimah, Hawalli, Al Ahmadi, Al Jahra', Mubarak Al-Kebir, and Al Farwaniyah.
Political parties: None; formal political parties have no legal status, although de facto political blocs exist.
Elections: There are no executive branch elections; the Amir is hereditary; prime minister and crown prince are appointed by the Amir. National Assembly elections were last held May 17, 2008. Municipal Council elections were held on April 4, 2006.
Suffrage: Adult males and since May 16, 2005, adult females who are 21, have been citizens for 20 years, and are not in the security forces. In June 2006, women participated as voters and candidates in parliamentary elections for the first time.

Economy
GDP (official exchange rate, 2007 est.): $111.3 billion.
Real GDP growth rate (2007 est.): 4.6%.
Natural resources: Oil, natural gas, fish.
Agriculture (about 0.5% of GDP): With the exception of fish, most food is imported. Cultivated land--1%.
Industry (about 48% of GDP): Types--petroleum extraction and refining, fertilizer, chemicals, desalination, construction materials.
Services (about 52% of GDP): public administration, finance, real estate, trade, hotels, and restaurants.
Trade (2007 est.): Exports--$61.43 billion f.o.b.: oil (93%). Major markets--Japan 20.4%, South Korea 16.2%, Taiwan 10.8%, Singapore 9.7%, U.S. 9%, Netherlands 5.3%, China 4.1% (2006 est.). Imports--$19.4 billion f.o.b.: food, construction materials, vehicles and parts, clothing. Major suppliers--U.S. 14.1%, Japan 7.8%, Germany 7.7%, Saudi Arabia 6.8%, China 5.7%, United Kingdom 5.4%, Italy 4.6% (2006 est.).

PEOPLE
Over 90% of the population lives within a 500-square kilometer area surrounding Kuwait City and its harbor. Although the majority of people residing in the State of Kuwait are of Arab origin, fewer than half are originally from the Arabian Peninsula. The discovery of oil in 1938 drew many Arabs from nearby states. Following the liberation of Kuwait from Iraqi occupation in 1991, the Kuwaiti Government undertook a serious effort to reduce the expatriate population by specifically limiting the entry of workers from nations whose leaders had supported Iraq during the Gulf War. Kuwait later abandoned this policy, and it currently has a sizable foreign labor force (approximately 68% of the total population is non-Kuwaiti).

Of the country's total population of 3.4 million, approximately 85% are Muslims, including nearly all of its 1.05 million citizens. While the national census does not distinguish between Sunni and Shi'a adherents, approximately 70-75% of citizens, including the ruling family, belong to the Sunni branch of Islam. The remaining Kuwaiti citizens, with the exception of about 100-200 Christians and a few Baha'is, are Shi'a. The expatriate Christian population is estimated to be more than 400,000 residents. There also are communities of Hindus, Buddhists, and Sikhs.

Kuwait's 93.3% literacy rate, one of the Arab world's highest, is the result of extensive government support for the education system. Public school education, including Kuwait University, is free, but access is restricted for foreign residents. The government sponsors the foreign study of qualified students abroad for degrees not offered at Kuwait University. In 2004, approximately 1,720 Kuwaitis were enrolled in U.S. universities, down 6.8% from the previous year.

HISTORY
Archaeological finds on Failaka, the largest of Kuwait's nine islands, suggest that Failaka was a trading post at the time of the ancient Sumerians. Failaka appears to have continued to serve as a market for approximately 2,000 years, and was known to the ancient Greeks. Despite its long history as a market and sanctuary for traders, Failaka appears to have been abandoned as a permanent settlement in the 1st century A.D. Kuwait's modern history began in the 18th century with the founding of the city of Kuwait by the Uteiba, a subsection of the Anaiza tribe, who are believed to have traveled north from Qatar.

Threatened in the 19th century by the Ottoman Turks and various powerful Arabian Peninsula groups, Kuwait sought the same treaty relationship Britain had already signed with the Trucial States (UAE) and Bahrain. In January 1899, the ruler Sheikh Mubarak Al Sabah--"the Great"--signed an agreement with the British Government that pledged himself and his successors neither to cede any territory, nor to receive agents or representatives of any foreign power without the British Government's consent, in exchange for protection and an annual subsidy. When Mubarak died in 1915, the population of Kuwait of about 35,000 was heavily dependent on shipbuilding (using wood imported from India) and pearl diving.

Mubarak was succeeded as ruler by his sons Jabir (1915-17) and Salim (1917-21). Kuwait's subsequent rulers have descended from these two brothers. Sheikh Ahmed al-Jabir Al Sabah ruled Kuwait from 1921 until his death in 1950, a period in which oil was discovered and in which the government attempted to establish the first internationally recognized boundaries; the 1922 Treaty of Uqair set Kuwait's border with Saudi Arabia and also established the Kuwait-Saudi Arabia Neutral Zone, an area of about 5,180 sq. km. (2,000 sq. mi.) adjoining Kuwait's southern border.

Kuwait achieved independence from the British under Sheikh Ahmed's successor, Sheikh Abdullah al-Salim Al Sabah. By early 1961, the British had already withdrawn their special court system, which handled the cases of foreigners resident in Kuwait, and the Kuwaiti Government began to exercise legal jurisdiction under new laws drawn up by an Egyptian jurist. On June 19, 1961, Kuwait became fully independent following an exchange of notes with the United Kingdom.

Kuwait enjoyed an unprecedented period of prosperity under Amir Sabah al-Salim Al Sabah, who died in 1977 after ruling for 12 years. Under his rule, Kuwait and Saudi Arabia signed an agreement dividing the Neutral Zone (now called the Divided Zone) and demarcating a new international boundary. Both countries share equally the Divided Zone's petroleum, onshore and offshore. The country was transformed into a highly developed welfare state with a free market economy.

In August 1990, Iraq attacked and invaded Kuwait. Kuwait's northern border with Iraq dates from an agreement reached with Turkey in 1913. Iraq accepted this claim in 1932 upon its independence from Turkey. However, following Kuwait's independence in 1961, Iraq claimed Kuwait, arguing that Kuwait had been part of the Ottoman Empire subject to Iraqi suzerainty. In 1963, Iraq reaffirmed its acceptance of Kuwaiti sovereignty and the boundary it agreed to in 1913 and 1932, in the "Agreed Minutes between the State of Kuwait and the Republic of Iraq Regarding the Restoration of Friendly Relations, Recognition, and Related Matters."

Following several weeks of aerial bombardment, a UN-mandated coalition led by the United States began a ground assault in February 1991 that liberated Kuwait. During the 7-month occupation by Iraq, the Amir, the Government of Kuwait, and many Kuwaitis took refuge in Saudi Arabia and other nations. The Amir and the government successfully managed Kuwaiti affairs from Saudi Arabia, London, and elsewhere during the period, relying on substantial Kuwaiti investments available outside Kuwait for funding and war-related expenses.

Following liberation, the UN, under Security Council Resolution 687, demarcated the Iraq-Kuwait boundary on the basis of the 1932 and the 1963 agreements between the two states. In November 1994, Iraq formally accepted the UN-demarcated border with Kuwait, which had been further spelled out in UN Security Council Resolutions 773 and 883.

GOVERNMENT AND POLITICAL CONDITIONS
Kuwait is a constitutional, hereditary emirate ruled by princes (Amirs) who have been drawn from the Al Sabah family since the middle of the 18th century. The 1962 constitution provides for an elected National Assembly and details the powers of the branches of government and the rights of citizens. Under the Constitution, the National Assembly has a limited role in approving the Amir's choice of the Crown Prince, who succeeds the Amir upon his death. If the National Assembly rejects his nominee, the Amir then submits three names of qualified candidates from among the direct descendants of Mubarak the Great, the founder of modern Kuwait, from which the Assembly must choose the new Crown Prince. Successions have been orderly since independence. In January 2006, the National Assembly played a symbolically important role in the succession process, which was seen as an assertion of parliament's constitutional powers.

For almost 40 years, the Amir appointed the Crown Prince as Kuwait's Prime Minister. However, in July 2003, the Amir formally separated the two positions and appointed a different ruling family member as Prime Minister.

Kuwait's first National Assembly was elected in 1963, with follow-on elections held in 1967, 1971, and 1975. From 1976 to 1981, the National Assembly was suspended. Following elections in 1981 and 1985, the National Assembly was again dissolved. Fulfilling a promise made during the period of Iraqi occupation, the Amir held new elections for the National Assembly in 1992. In May 1999 and once again in May 2006, the Amir dissolved the National Assembly, but complied with the constitution by holding new elections within 60 days. In the wake of a collective resignation of the members of the cabinet, the Amir dissolved the National Assembly again in March 2008. The most recent general election, held in May 2008, was considered free and fair. Women participated for the second time as voters and candidates. Women candidates fared well compared to the 2006 elections but failed to win any seats in the National Assembly. The 2008 parliamentary election was the first under a new five-constituency system. Observers noted that the outcomes of these elections reflected gains for tribal and sectarian influences. The government does not officially recognize political parties; however, de facto political blocs, typically organized along ideological lines, exist and are active in the National Assembly. Although the Amir maintains the final word on most government policies, the National Assembly plays a real role in decision-making, with powers to initiate legislation, question ("grill") cabinet ministers, and express lack of confidence in individual ministers. For example, in May 1999, the Amir issued several landmark decrees dealing with women's suffrage, economic liberalization, and nationality. The National Assembly later rejected all of these decrees as a matter of principle and then reintroduced most of them as parliamentary legislation. In July 2005, the Prime Minister appointed Kuwait's first female minister, Masouma Al-Mubarak, as Planning Minister and Minister of State for Administrative Development Affairs, and later as Minister of Health. Following the March 2007 resignation of the cabinet, Masouma was joined by a second woman, Nouriya Subih, who was named Minister of Education in the new cabinet. Masouma resigned from her post in August 2007, but in May 2008 Nouriya Subih was joined by another woman in the cabinet, Moudhi Abdulaziz Al-Houmoud, who became Minister of State for Housing Affairs and Minister of State for Development Affairs.

Principal Government Officials
Amir--His Highness Sheikh Sabah Al-Ahmed Al-Jaber Al Sabah
Crown Prince--His Highness Sheikh Nawaf Al-Ahmed Al-Jaber Al Sabah
Prime Minister--His Highness Sheikh Nasser Al-Mohammed Al Sabah
First Deputy Prime Minister, Minister of Defense, and Minister of Interior--Sheikh Jaber Al-Mubarak Al Sabah
Deputy Prime Minister and Minister of State for Cabinet Affairs--Faisal Mohammed Al-Hajji
Deputy Prime Minister and Foreign Minister--Sheikh Mohammad Sabah Al-Salim Al Sabah
National Assembly Speaker--Jassem Al-Khorafi
Ambassador to the United States--Sheikh Salim Al-Abdullah Al-Jaber Al Sabah
Permanent Representative to the United Nations--Ambassador Abdullah Al-Murad

Kuwait maintains an embassy in the United States at 2940 Tilden Street NW, Washington, DC 20008 (tel. [1] (202)-966-0702).

ECONOMY
Kuwait has a small, relatively open economy dominated by the oil industry and government sector. Approximately 90% of the Kuwaiti citizen labor force works in the public sector, and 90% of private sector workers are non-Kuwaitis. Kuwait's proven crude oil reserves of about 100 billion barrels--9% of world reserves--account for nearly 45% of GDP, 95% of export revenues, and 90%-95% of government income. Kuwait puts 10% of its annual oil revenue in a Fund for Future Generations in preparation for the transition to the period after its oil resources are depleted. Kuwait’s economy has benefited from high oil prices in recent years, as well the economic activity generated following Operation Iraqi Freedom (Kuwait is a major logistical and transit hub for Coalition operations in Iraq). Non-oil sectors such as banking, financial services, logistics, telecommunications, and construction have enjoyed strong growth in the past three to four years. The global financial crisis affected Kuwait in late 2008, with the Kuwait Stock Exchange--the region’s second-largest bourse--losing almost 40% of its market capitalization during 2008. High oil prices in recent years have resulted in large budget surpluses in 2005-2008.

The Kuwait National Assembly passed a law on December 26, 2007, amending the Income Tax Decree No. 3 of 1955 and setting the current tax range, from 0% up to 55%, to a flat rate 15%.

On January 9, 2008, the Kuwait Government approved the sale of 40% of Kuwait Airways in a domestic public placement and another 35% to a long-term investor within two years. The government will hold 20% and employees will take the remaining 5%.

Oil
In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil Company (KOC), jointly owned by the British Petroleum Company and Gulf Oil Corporation. In 1976, the Kuwaiti Government nationalized KOC. The following year, Kuwait took over part of onshore production in the Divided Zone between Kuwait and Saudi Arabia. Kuwait Gulf Oil Company (KGOC) produces jointly there with Saudi Arabian Chevron, which, by its 1984 purchase of Getty Oil Company, acquired the Saudi Arabian onshore concession in the Divided Zone. Saudi Arabia renewed Chevron's concession in the Divided Zone for another 30 years effective from February 2009. KGOC also manages offshore production operations, while Aramco Gulf Oil Company (AGOC) manages the Saudi portion of the offshore Divided Zone.

Kuwait Petroleum Corporation (KPC), an integrated, state-owned oil company, is the parent company of the government's operating companies in the petroleum sector, and includes Kuwait Oil Company, which produces oil and gas; Kuwait National Petroleum Company, which manages refining and domestic sales; Petrochemical Industries Company, which produces ammonia, urea, ethylene, propylene, and styrene and participates in a number of successful joint ventures with Dow Chemical within Kuwait and abroad; Kuwait Foreign Petroleum Exploration Company, which is responsible for exploration and upstream production outside Kuwait (in several developing countries and Australia); Kuwait Oil Tanker Company.; Kuwait Gulf Oil Company, responsible for exploration and production in the Kuwait portions of the offshore and onshore Divided Zone; and Kuwait Petroleum International, which manages refining and retail operations outside Kuwait (in Europe and East Asia).

According to official Organization of Petroleum Exporting Countries (OPEC) figures, Kuwait has approximately 101.5 billion barrels of proven oil reserves, including the Kuwaiti share of proven reserves in the Divided Zone, the fifth-largest oil reserves in the world after Saudi Arabia, Canada, Iran, and Iraq. Kuwait recently began limited production from a 35 trillion cubic feet natural gas field discovered in 2006. By 1993 Kuwait had restored its production capacity to its pre-occupation levels of 2.4 million bpd. Kuwait's current oil production capacity is estimated to be 2.8 million bpd. Kuwait plans to increase its capacity to 3.5 million bpd by 2015 and 4.0 million bpd by 2020. Many analysts question whether these goals are feasible. Oil revenues comprise about 95% of exports and 95% of total government revenues. Kuwaiti export crude averaged about $66/barrel in 2007.

KPC purchased from Gulf Oil Co. refineries in the Netherlands and Italy and service stations in the Benelux nations, Italy, and Scandinavia. In 1987, KPC bought a 19% share in British Petroleum, which was later reduced to 10%. KPC markets its products in Europe under the brand name Q8. In 2006, KPC announced plans to participate in a joint venture to build and operate a refinery and associated petrochemical plant in China. In April 2008, KPC signed a joint venture agreement with Idemitsu Kosan - Japan to hold a 35.1% stake, worth $6 billion, of Vietnam's second refinery.

On May 12, 2008, KPC awarded a $14 billion project to construct a fourth refinery to several international firms. The project would increase refining capacity from the current 930,000 barrels/day to 1.5 million barrels/day by 2012. As of January 2009, the project was stalled in the face of parliamentary opposition.

Social Benefits
The government has sponsored many social welfare, public works, and development plans financed with oil and investment revenues. Among the benefits for Kuwaiti citizens are retirement income, marriage bonuses, housing loans, virtually guaranteed employment, free medical services, and education at all levels. By Amiri decree, the government occasionally disburses a portion of its budget surplus as a grant to all Kuwaiti citizens. In 2006, an Amiri grant of 200 Kuwaiti dinars (approximately $700) was paid to every citizen who applied. In 2007, the government implemented a debt forgiveness scheme for Kuwaiti citizens amounting to just over U.S. $1 billion. Foreign nationals residing in Kuwait do not have access to these welfare services. The right to own stock in publicly traded companies, real estate, and banks or a majority interest in a business is limited to Kuwaiti citizens and citizens of Gulf Cooperation Council (GCC) states under limited circumstances.

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