Doing Business in the Middle East: Kuwait

Table of contents

1.0 introduction

2.0 Kuwait economy

3.0 Kuwait ethical issues

4.0 International relations

4.1 Kuwait and the US

4.2 Kuwait and its neighbours

5.0 Global organisations membership

5.1 Arab Fund for Economic and Social Development (AFESD)

5.2 Organisation of the Petroleum Exporting Countries (OPEC)

5.3 Permanent Court of Arbitration (PCA)

6.0 The future- Kuwait

7.0 References

1.0 introduction

The state of Kuwait was settled by Arab Tribes in the early 18th century and has been under the constitutional monarchy of the Al-Sabah dynasty since its inception. It is situated to the Northern end of the Persian Gulf, South of Iraq and North-East of Saudi Arabia. Kuwait has predominantly sandy and infertile low-lying desert land and it is roughly twice the size of Cyprus. It however is known to be one of the largest oil exporting countries in the world and its commercial export of crude oil started in 1946 (OPEC, 2011). The name Kuwait is derived from the Arabic "akwat", the plural of "kout", meaning fortress built near water.

I have chosen this country because of its large oil fields which where discovered in the 1930s and some countries have been trying to colonise the state for this reason but have not succeeded. It got independence from the United Kingdom in 1961, was invaded and occupied by neighbouring Iraq, at the hand of Saddam Hussein, in the early 1990s for about seven months before the direct intervention of the United States – led armed forces.

2.0 Kuwait economy

As indicated by the Organisation of the Petroleum Export Countries (OPEC), 2011, an international organisation with which Kuwait is a member of, Kuwait has the fifth largest oil reserves which are over one hundred billion barrels of proven crude oil reserves. This is about 9% of the world's oil reserves.

Petroleum accounts for almost half of Kuwait's GDP, about 95% of export revenue as well as 95% of government income (CIA, 2011). Kuwaiti officials, according to the same source, are committed to extensively increase the oil production to four million barrels per day by the year 2020. Unfortunately though, Kuwait hasn't done much to diversify its economy