U.S. DEPARTMENT OF STATE
BACKGROUND NOTES:  KUWAIT, NOVEMBER 1994
PUBLSIHED BY THE BUREAU OF PUBLIC AFFIARS
 
 
November 1994 
Official Name: State of Kuwait 
 
PROFILE 
 
Geography 
Area:  17,820 sq. km. (about 6,880 sq. mi.); slightly smaller than New 
Jersey.   
Cities:  Capital-Kuwait (pop. about 700,000).  Other towns-Ahmadi, 
Jahra, Fahaheel.   
Terrain:  Flat to slightly undulating desert plain.   
Climate:  Intensely hot and dry in summers; short, cool winters with 
limited rain. 
 
People 
 
Nationality:  Noun and adjective-Kuwaiti(s).   
Population (1993):  1.8 million, including non-Kuwaiti citizens. 
Annual growth rate (including immigration):  8.7%.   
Ethnic groups:  Arab 84%, South Asian, Iranian, Southeast Asian.   
Religion: Islam 85% (Kuwaiti citizens are 100% Muslim).   
Languages:  Arabic (official); English widely spoken.   
Education (free through high school):  Years compulsory--8.  Literacy--
male 78%, female 69% over age of 15.   
Health:  Infant mortality rate--13 deaths/1,000 births.  Life 
expectancy--72 yrs. male, 76 yrs. female.   
Work force (1993):  731,600. 
 
Government 
 
Type:  Constitutional Monarchy. 
Independence:  June 19, 1961.   
Constitution:  1962. 
Branches:  Executive--Amir (head of state).  Legislative--elected 
National Assembly (Majlis al-'Umma) of 50 members.  Judicial--High Court 
of Appeal. 
Political Parties:  None.   
Suffrage:  Adult males who resided in Kuwait before 1920, their male 
descendants over 21, and Kuwaiti-born sons of naturalized citizens over 
21 (eligible voters-over 100,000). 
Subdivisions:  Government is centralized, but for administrative 
purposes there are five governorates: Kuwait City, Hawalli, Ahmadi, 
Jahra, and Farwaniya. 
 
Economy* 
 
GDP (1993):  $24.7 billion.  
Annual growth rate:  35%.   
Per capita GDP (1993):  $17,000. 
Natural resources:  Petroleum, fisheries. 
Agriculture:  Most food is imported.  Cultivated land--1%. 
Industry:  Types-petroleum extraction and refining, fertilizer, 
chemicals, some construction materials.  Water desalinization capacity:  
215 million gallons per day. 
Trade (1993):  Exports and re-exports--$11.4 billion: oil (90%).  Major 
markets--Japan 19%, Netherlands 9%,  
U.S. 8%, Pakistan 6%.  Imports--$6.6 billion: food, construction 
materials, vehicles and parts, clothing.  Suppliers--U.S. 15%, Japan 
12%, Germany 8%,  
U.K. 7%. 
Official exchange rate (Oct. 1994):  0.30 Kuwaiti dinars=U.S.$1.   
 
*Note:  Some economic data reflect the disruptive 1992 period of the 
post-invasion reconstruction and recovery. 
 

PEOPLE 
 
The people residing in the State of Kuwait are primarily Arab in origin, 
but less than half of them are from the Arabian Peninsula.  Many Arabs 
from nearby states took up residence in Kuwait because of the prosperity 
brought by oil production after the 1940s.  However, following the 
liberation of Kuwait from Iraqi occupation in 1991, the Kuwaiti 
Government undertook a serious effort to reduce the expatriate 
population.  Kuwait still has a sizable Iranian and Indian population.  
Seventy percent of native Kuwaitis are Sunni Muslims and 30% are Shi'a 
Muslims.  There are very few Kuwaiti Christians.  The 74% literacy rate, 
one of the Arab world's highest, is due to extensive government support 
for the education system.  Public school education, including Kuwait 
University, is free, but access is restricted for foreign residents.  
The government sends qualified students abroad for degrees not offered 
at Kuwait University.  About 1,000 Kuwaitis are currently studying in 
U.S. universities. 
 

HISTORY 
 
Kuwait's modern history began in the 18th century with the founding of 
the city of Kuwait by the Uteiba section of the Anaiza tribe, who 
wandered north from Qatar.  Its first definite contact with the West was 
between 1775 and 1779, when the British-operated Persian Gulf-Aleppo 
Mail Service was diverted through Kuwait from Persian-occupied Basra (in 
Iraq). 
 
During the 19th century, Kuwait tried to obtain British support to 
maintain its independence from the Turks and various powerful Arabian 
Peninsula groups.  In 1899, the ruler Sheikh Mubarak Al Sabah--"the 
Great"--signed an agreement with the United Kingdom pledging 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.  Britain agreed to grant an annual subsidy to support the 
Sheikh and his heirs and to provide its protection.  Kuwait enjoyed 
special treaty relations with the U.K., which handled Kuwait's foreign 
affairs and was responsible for its security.   
 
Mubarak was followed as ruler by his son Jabir (1915-17) and another son 
Salim (1917-21).  Subsequent amirs descended from these two brothers.  
Sheikh Ahmed al-Jabir Al Sabah ruled from 1921 until his death in 1950, 
and Sheikh Abdullah al-Salim Al Sabah from 1950 to 1965.  By early 1961, 
the British had 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. 
 
The boundary with Saudi Arabia was set in 1922 with the Treaty of Uqair 
following the Battle of Jahrah.  This treaty 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.  In December 1969, 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.   
 
Kuwait's northern border with Iraq dates from an agreement made 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, under the pretense 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." 
 
In August 1990, Iraq nevertheless invaded Kuwait, but was forced out 
seven months later by a UN coalition led by the United States.  
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.  Although the demarcation is 
final and reaffirmed under Chapter VII of the UN Charter by UNSCR 833,  
Iraq has refused to accept and continues to make claims to Kuwait. 
 

GOVERNMENT AND POLITICAL CONDITIONS 
 
The State of Kuwait has been ruled by the Sabah family since 1751.  The 
1962 constitution contains detailed provisions on the powers and 
relationships of the branches of government and on the rights of 
citizens.  Upon the death of an amir, the crown prince assumes his 
position.  A new crown prince is then selected by members of the Sabah 
family from among the direct descendants of Mubarak the Great.  Under 
the constitution, the designation is subject to the approval of the 
National Assembly.  Since independence, successions have been orderly, 
both in 1965 and 1978. 
 
Kuwait experienced an unprecedented era of prosperity under Amir Sabah 
al-Salim Al Sabah, who died in 1977 after ruling for 12 years, and under 
his successor, Amir Jabir Ahmed el-Jaber Al Sabah.  The country was 
transformed into a highly developed welfare state with a free market 
economy.  During the seven-month occupation by Iraq, the Amir, the 
Government, and many Kuwaitis took refuge in Saudi Arabia or 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.  His return after the liberation in 
February 1991 was relatively smooth. 
 
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.  No political parties exist in Kuwait, 
although there are groupings (such as extended families) that function 
like parties.  The ideological representation in the Kuwaiti National 
Assembly is broad, with a majority of the 1992 Assembly members being 
considered as "opposition" in their orientation.  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 government ministers, and express lack of 
confidence in individual ministers.  Five of the elected National 
Assembly members were selected to serve as cabinet ministers. 

 
Principal Government Officials 
 
Amir--His Highness Sheikh Jabir al-Ahmad al-Jabir Al Sabah 
Crown Prince and Prime Minister--His Highness Sheikh Saad al-Abdullah 
al-Salim Al Sabah 
First Deputy Prime Minister and Minister of Foreign Affairs--Sheikh 
Sabah al-Ahmed al-Jaber Al Sabah 
 
Ambassador to the United States--Mohammad Sabah Salim Al Sabah 
Ambassador to the United Nations--Mohammad K. Abdalhasan 
 
Kuwait maintains an embassy in the United States at 2940 Tilden Street 
NW., Washington, D.C. 20008 (tel. 202-966-0702). 

 
ECONOMY 
 
Kuwait is a small country with massive oil reserves, whose economy has 
been traditionally dominated by the state and its oil industry. 
 
During the 1970s, Kuwait benefited from the dramatic rise in oil prices, 
which Kuwait actively promoted through its membership in the 
Organization of Petroleum Exporting Countries (OPEC).  More recently, 
the economy has suffered from the triple shock of a 1982 securities 
market crash, the mid 1980s drop in oil prices, and the 1990 Iraqi 
invasion and occupation.  The Kuwaiti Government-in-exile depended upon 
its $100 billion in overseas investments during the occupation in order 
to help pay for the reconstruction.  Thus, by 1993, this balance was cut 
to less than half of its pre-invasion level.  The wealth of Kuwait is 
based primarily on oil and capital reserves, and the Iraqi occupation 
severely damaged both.  In the closing hours of the Gulf war in February 
1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait's 
oil wells.  All of these fires were extinguished within a year.  
Production has been restored, and refineries and facilities have been 
modernized.  Oil exports surpassed their pre-invasion levels in 1993 
with production levels only constrained by OPEC quotas. 
 
Oil 
 
In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil 
Co. (KOC), jointly owned by the British Petroleum Co. and Gulf Oil Corp.  
In 1976, the Kuwaiti Government nationalized KOC.  The following year, 
Kuwait took over onshore production in the Divided Zone between Kuwait 
and Saudi Arabia.  KOC produces jointly there with Texaco, Inc., which, 
by its 1984 purchase of Getty Oil Co., acquired the Saudi Arabian 
onshore concession in the Divided Zone. 
 
Offshore the Divided Zone, the Arabian Oil Co., 80% owned by Japanese 
interests and 10% each by the Kuwaiti and Saudi Governments, has 
produced on behalf of both countries since 1961. 
 
The Kuwait Petroleum Corp. (KPC), an integrated international oil 
company, is the parent company of the government's operations in the 
petroleum sector, and includes Kuwait Oil Company, which produced oil 
and gas; Kuwait National Petroleum Co., refining and domestic sales; 
Petrochemical Industries Co., producing ammonia and urea; Kuwait Foreign 
Petroleum Exploration Co., with several concessions in developing 
countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp.  The 
latter, purchased outright in 1982, gives KPC a worldwide presence in 
the petroleum industry. 
 
KPC has also purchased from Gulf Oil Co. refineries and associated 
service stations in the Benelux nations and Scandinavia, as well as 
storage facilities and a network of service stations in Italy.  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 Q8 and is 
interested in the markets of the United States and Japan. 
 
Kuwait has about 77 billion barrels of recoverable oil; Saudi Arabia is 
the only single country which has larger reserves.  Estimated capacity, 
before the war, was about 2.4 million barrels per day (b/d).  During the 
Iraqi occupation, Kuwait's oil producing capacity was reduced to 
practically nothing.  However, tremendous recovery and improvements have 
been made.  Oil production was 1.5 million b/d by the end of 1992, and 
pre-war capacity was restored in 1993.  Kuwait's OPEC quota in August 
1994 is 2 million b/d. 
 
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.  Foreign nationals residing in Kuwait 
obtain some, but not all, of the 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 
GCC states under limited circumstances. 
 
Industry and Development 
 
Industry in Kuwait consists of several large export-oriented 
petrochemical units, oil refineries, and a range of small manufacturers.  
It also includes large water desalinization, ammonia, desulfurization, 
fertilizer, brick, block, and cement plants.  During the invasion, the 
Iraqis looted nearly all movable items of worth, especially high 
technology items and small machinery.  Much of this has been replaced 
with newer equipment. 
 
Agriculture 
 
Agriculture is limited by the lack of water and arable land.  The 
government has experimented in growing food through hydroponics and 
carefully managed farms.  However, most of the soil which was suitable 
for farming in south central Kuwait was destroyed when Iraqi troops set 
fire to oil wells in the area and created vast "oil lakes."  Fish and 
shrimp are plentiful in territorial waters, and large-scale commercial 
fishing has been undertaken locally and in the Indian Ocean. 
 
Shipping 
 
The Kuwait Oil Tankers Co. has 35 crude oil and refined product carriers 
and is the largest tanker company in an OPEC country.  Kuwait is also a 
member of the United Arab Shipping Company. 
 
Trade, Finance, and Aid 
 
The Kuwaiti dinar is a strong currency pegged to a basket of currencies 
in which the U.S. dollar has the most weight.  Kuwait ordinarily runs a 
balance-of-payments surplus. 
 
Government revenues are dependent on oil revenues.  Revenues for Kuwaiti 
fiscal year ending in June 1992 were $3 billion, down from a pre-war 
level of nearly $6 billion.  Expenditures, mainly in costs of 
reconstruction and residual costs of the war, as well as major increases 
in defense spending, soared to nearly $40 billion, from a pre-war norm 
of about $10 billion.  In 1993, Kuwait resumed pre-war spending levels. 
 
The government's two reserve funds, the Fund for Future Generations and 
the General Reserve Fund, which totaled nearly $100 billion prior to the 
invasion in 1990, were the primary source of capital for the Kuwaiti 
Government during the war.  Currently, these funds have been depleted to 
$40-$50 billion.  The bulk of this reserve is invested in the United 
States, Germany, the United Kingdom, France, Japan, and Southeast Asia.  
In order of importance, foreign assets are believed to be invested in 
stocks and bonds, fixed yield instruments (mostly short term), and real 
estate.  Kuwait follows a generally conservative investment policy. 
 
Kuwait has been a major source of foreign economic assistance to other 
states through the Kuwait Fund for Arab Economic Development, an 
autonomous state institution created in 1961 on the pattern of Western 
and international development agencies.  In 1974, the fund's lending 
mandate was expanded to include all-not just Arab-developing countries.  
Over the years aid was provided to Egypt, Syria, and Jordan, as well as 
the Palestine Liberation Organization.  During the Iran-Iraq war, 
significant Kuwaiti aid was given to the Iraqis.  Due to sizable post-
war expenditures, Kuwaiti foreign assistance was limited to $350 million 
in 1992, but this is expected to rise slowly as budget deficits 
continue.  From 1979-1989, bilateral aid to less developed countries 
totaled about $18 billion. 

 
FOREIGN RELATIONS 
 
Following independence in June 1961, Kuwait faced its first major 
foreign policy problem arising from Iraqi claims to Kuwait's territory.  
The Iraqis threatened invasion, but were dissuaded by the U.K.'s ready 
response to the Amir's request for assistance.  Kuwait presented its 
case before the United Nations and preserved its sovereignty.  U.K.  
forces were later withdrawn and replaced by troops from Arab League 
nations, which were withdrawn in 1963 at Kuwait's request. 
 
On August 2, 1990, Iraq invaded and occupied Kuwait.  Through U.S. 
efforts, a multinational coalition was assembled, and, under UN 
auspices, initiated military action against Iraq to liberate Kuwait.  
Arab states, especially the other five members of the Gulf Cooperation 
Council (Saudi Arabia, Bahrain, Qatar, Oman, and the United Arab 
Emirates), Egypt, and Syria, supported Kuwait by sending troops to fight 
with the coalition.  Many European and East Asian states sent either 
troops, equipment, or financial support. 
 
After liberation, Kuwait concentrated its foreign policy efforts on 
development of ties to states which had participated in the 
multinational coalition.  Notably, these states were given the lead role 
in Kuwait's reconstruction.  Conversely, Kuwait's relations with those 
nations that supported Iraq, among them Jordan, Sudan, Yemen, and Cuba, 
remain strained or non-existent.  Palestine Liberation Organization 
(PLO) Chairman Yasir Arafat's support for Saddam Hussein during the war 
has also affected Kuwait's attitudes toward the PLO and the peace 
process. 
 
Since the conclusion of the Gulf war, Kuwait has made efforts to secure 
allies throughout the world, particularly United Nations Security 
Council members.   In addition to the United States, defense 
arrangements have been concluded with the United Kingdom, Russia, and 
France.  Close ties to other key Arab members of the Gulf war coalition-
-Egypt and Syria--have also been sustained. 
 
Kuwait is a member of the UN and some of its specialized and related 
agencies, including the World Bank (IBRD), International Monetary Fund 
(IMF), World Trade Organization (WTO), General Agreement on Tariffs and 
Trade (GATT); African Development Bank (AFDB), Arab Fund for Economic 
and Social Development (AFESD), Arab League, Arab Monetary Fund (AMF), 
Council of Arab Economic Unity (CAEU), Economic and Social Commission 
for Western Asia (ESCWA), Group of 77 (G-77), Gulf Cooperation Council 
(GCC), INMARSAT, International Development Association (IDA), 
International Finance Corporation, International Fund for Agricultural 
Development, International Labor Organization (ILO), International 
Marine Organization, Interpol, INTELSAT, IOC, Islamic Development Bank 
(IDB), League of Red Cross and Red Crescent Societies (LORCS), Non-
Aligned Movement, Organization of Arab Petroleum Exporting Countries 
(OAPEC), Organization of the Islamic Conference (OIC), Organization of 
Petroleum Exporting Countries (OPEC), and the International Atomic 
Energy Agency (IAEA). 
 

DEFENSE 
 
Before the Gulf war, Kuwait maintained a small military force consisting 
of army, navy, and air force units.  The majority of equipment for the 
military was supplied by the United Kingdom.  Aside from the few units 
that were able to escape to Saudi Arabia, including a majority of the 
air force, all of this equipment was either destroyed or taken by the 
Iraqis.  Much of the property returned by Iraq after the Gulf war was 
damaged beyond repair.  Iraq still retains a substantial amount of 
captured Kuwaiti military equipment in violation of UN resolutions. 
 
Since the war, Kuwait, with the help of the U.S. and other allies, has 
made significant efforts to increase the size and modernity of their 
armed forces.  These efforts are succeeding.  The government also 
continues to improve defense arrangements with other Arab states, as 
well as UN Security Council members. 
 
A separately organized National Guard maintains internal security.  
Police forces are under the authority of the Ministry of Interior. 
 

U.S.-KUWAITI RELATIONS 
 
A U.S. consulate was opened at Kuwait in October 1951 and was elevated 
to embassy status at the time of Kuwait's independence 10 years later.  
The United States supports Kuwait's sovereignty, security, and 
independence as well as closer cooperation among the GCC countries.   
 
In 1987, cooperation between the United States and Kuwait increased due 
to the implementation of the maritime protection regime to ensure 
freedom of navigation through the Gulf for 11 Kuwaiti tankers that were 
reflagged with U.S. markings. 
 
The U.S.-Kuwaiti partnership reached dramatic new levels of cooperation 
after the Iraqi invasion.  The United States assumed a leading role in 
the implementation of Operation Desert Shield.  The United States led 
the UN Security Council to demand Iraqi withdrawal from Kuwait and 
authorize the use of force, if necessary, to remove Iraqi forces from 
the occupied country.   The United States played a major role in the 
evolution of Desert Shield into Desert Storm, the multinational military 
operation to liberate the State of Kuwait. 
 
Eventually, the U.S. provided the bulk of the troops and equipment that 
were used by the multinational coalition that liberated Kuwait.  The 
U.S.-Kuwaiti relationship has remained strong in the post-war period. 
 
The United States has provided military and defense technical assistance 
to Kuwait from both foreign military sales (FMS) and commercial sources.  
All transactions have been made by direct cash sale.  The U.S. Office of 
Military Cooperation in Kuwait is attached to the American Embassy and 
manages the FMS program.  U.S. military sales to Kuwait total $3.1 
billion, $1.6 billion of which has been purchased since the close of the 
Gulf war.  Principal U.S. military systems currently purchased by the 
Kuwait Defense Forces are Patriot missile system, F-18 Hornet fighters, 
and the M1A2 Main Battle Tank. 
 
The United States is currently Kuwait's largest supplier, and Kuwait is 
the fifth-largest market in the Middle East for U.S. goods and services.  
U.S. exports to Kuwait totaled $1.2 billion in 1991.  Since the Gulf 
war, Kuwaiti attitudes toward Americans and American products have been 
excellent.  Provided their prices are reasonable, U.S. firms have a 
competitive advantage in many areas requiring advanced technology, such 
as oil field equipment and services, electric power generation and 
distribution equipment, telecommunications gear, consumer goods, and 
military equipment.  In 1993, Kuwait publicly announced abandonment of 
the secondary and tertiary aspects of the Arab boycott of Israel (those 
aspects affecting U.S. firms). 
 

Principal U.S. Officials 
 
Ambassador--Ryan C. Crocker 
Deputy Chief of Mission--Georgia DeBell 
Political Officer--Margaret Scobey 
Commercial Officer--Johnny Brown 
Economic Officer--Paul H. Tyson 
Consular Officer--Kevin Richardson 
Public Affairs Officer (USIS)--Millie McCoo 
Chief, Office of Military Cooperation--Gen. Robert Ivany USA 
 
The U.S. embassy in Kuwait is located at Bneid al-Gar, Kuwait (opposite 
the Safir Hotel).  The mailing address is P.O. Box 77, SAFAT, 13001 
SAFAT, Kuwait; or Unit 69000 APO AE 09880. 

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Published by the U.S. Department of State  Bureau of Public Affairs -- 
Office of  Public Communication -- Washington, DC  20520 --  
Managing Editor:  Peter A. Knecht 
 
Department of State Publication 7855 -- Background Notes Series -- This 
material is in the public domain and may be reprinted without 
permission; citation of this source is appreciated. 
 
For sale by the Superintendent of Documents, U.S. Government Printing 
Office, Washington, DC 20402. 
 
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