The New Face of Kuwaiti Business and its Special Relationship to Germany
Tuesday, April 24th, 2007
Right after independence from England on June 19, 1961, Kuwait appeared on the regional and international stages as an important financial and economic factor of the free global economy.
The tiny Arab land of 17,820 km2, sandwiched between Iraq, Saudi Arabia, and the Arabian Gulf, had previously lived mainly from fishing and pearl diving. Ever since the 1950s, Kuwait has been the Immigration land of choice on the Gulf for many workers, technicians, and specialists in the Service industry from other Arab countries as well as from countries in South Asia because of its oil wealth (10% of the world’s known reserves — 96 billion barreis). With the ratification of its constitution on November 11, 1962, the first “emirate” with a constitutional hereditary System on the Arabian Peninsula, “Dawlat Al-Kuwait,” was born.
In the course of the last forty year s, a modern new state was built up, whose Strategie importance at the head of the Arabian-Persian Gulf is not to be ignored. The basis of the rapid development was and is the oil industry, especially after the high rise in prices of the 1970s and the global economy’s increasingly immense need for oil and gas. While the 8.3 billion m3 gas produced is consumed solely by the omestic market (Kuwaiti reserves = 1.572 trillion m3), 95% of export revenues and 80% of state income are gained from oil. Kuwait pro-duces 2.418 million barreis a day, of which 1.97 million barreis are for export.
The climatic conditions in Kuwait hardly allow any agriculture worth mentioning; a meagre 0.4% of the gross domestic product for 2005. Instead, the Service sector made up 51.6% and industry 48% of the GNP in the same year. Industry today also includes, besides oil and petrochemicals, the production of cement and other building mater-ials, ship construction and repair, desalination facilities and food pro-cessing.1 Kuwait must import 75% of the palatable water necessary for its households or distil it from sea water. The growth of industrial production increased 13.1% in 2005 over 2004. The labor force in 2005 was 1,670,000, of which about 80% were non-Kuwaitis with a per person annual income of 28,000 U.S.$.
The funds that the majority of these workers2 transfer to their countries of origin is still an important factor of economic develop-ment. The State of Kuwait itself has frequently acted to aid the economic development of many of these countries (Arab and Islamic, in Asia and in Africa), many a time within the framework of the Golf Cooperation Council (GCC) as well.