Kuwait

Kuwait

Rengin Ak (Kırklareli University, Turkey) and Berna Ak Bingül (Kırklareli University, Turkey)
DOI: 10.4018/978-1-5225-2939-2.ch014
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Abstract

Kuwait is such a significant country that it is necessary to examine its socio-economic structure and its relations with other countries. In this study, Kuwait's demographic, socio-political, sectoral, political and institutional structure, economic potential, financial relations are examined in general. According to this study, Kuwait's socio-political, demographic structure and its relations with other countries seems quite significant and decisive in the country's developing process. It has also been shown that petroleum has an important role in its economy and majority of the labour force is being employed in this sector. Relations of Turkey with Kuwait have been shaped upon the basis of friendship and brotherhood.
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Introduction

On 22nd February 1938, Oil was first discovered in Kuwait and production started in 1948. In 1961, Kuwait became an independent political state and, due to many socio-economic and political reasons, became one of the fastest developing countries in the region. Although the discovery of oil accelerated the changes and helped shaping rapid socio economic change, Kuwait's comprehensive socio-economic development is the product of many factors. So, based on these changes, many young Kuwaitis were encouraged to go abroad for further education. Since then, this heterogeneous society has experienced an increase in the incidence of heterogeneous marriages, not only in terms of nationality, but also in terms of religion, sect, age and other social variables. Therefore, the whole society was, to some extent, exposed to and influenced by foreign cultures (Al Naser, 1996:5). A new period began in 1975 with the Nationalization of Kuwait’s oil industry. In 1975, an agreement was signed by the State of Kuwait and the two oil companies (British Petroleum and Gulf) were awarded the complete control of Kuwait’s oil resources (KPC, 2016)

Kuwaiti nationals are entitled to free social services such as healthcare and education, the quality of which are somewhat deficient. Kuwait’s government is not legitimized by democratic elections involving a majority vote within the unicameral National Assembly. The National Assembly has certain monitoring rights over the executive power. It can overturn decrees made by the Emir when the National Assembly is not in session and can veto the appointment of the prime minister. Furthermore, it can remove ministers by a majority vote. These control mechanisms are however mitigated by the fact that government ministers are, by office, members of parliament and entitled to vote.

Iraq invaded neighbouring Kuwait amid tense macroeconomic and geopolitical conditions involving petroleum and territorial disputes, the war caused a systematic destruction of the Kuwaiti petroleum industry as Iraqi forces set fire to Kuwaiti petroleum wells. This situation has affected the capital-intensive production and the labour market. However, Kuwait recovered in 2 years and has come in a better condition than before (Shehabi, 2015, p. 1-2).

Kuwait’s pre-oil economy was marked by three main features (El- Katiri, Fattouh and Segal, 2011:2):

  • 1.

    The accumulation of early wealth in Kuwait during the eighteenth and nineteenth centuries through trade and trade based activities, largely in the hands of the merchant families;

  • 2.

    The political stabilization of the emirate of Kuwait under the family of the Al-Sabah, which provided the stability needed for successful trade and;

  • 3.

    The virtual absence in any form of the welfare state known in Kuwait today.

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Population And Demographic Structure

Kuwait is a small but wealthy country. Kuwait is the third largest oil producer in the Middle East, after Saudi Arabia and Iraq. The Middle Eastern Nation comprises an area of around 18 thousand square kilometres and has a population of just over four million. Density of population is calculated as permanently settled population of Kuwait divided by total area of the country. Total area is the sum of land and water areas within international boundaries and coastlines of Kuwait.

Kuwait is now the world's fourth-largest oil exporter which holds 7% of the world’s proven oil reserves; equivalent to more than 100 years of its current production levels. Kuwait’s proven natural gas reserves are modest at just 1% of the world total. The state-managed oil sector accounts for around half of GDP, over 80% of general government revenue and 75% of total foreign currency revenues. Structural shortages of water and arable land imply that the prospects for Kuwait's manufacturing and agricultural sectors are extremely limited (Matabadal, 2012: 2).

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