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Kuwait Kuwait

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Kuwait

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EconomicPoliticalStructural

Kuwait – Quick View
ECR score70.47 (Mar 2011)
ECR rank32 (Mar 2011)
Economic
GDP at current prices 2009USD 108.75 billion
GNI 2009USD 116,426.61 million
FDI 2009USD 145 million
Inflation 201010.4%
Central Bank AssetsUSD 19,750.39 million
Unemployment rate 20101.64%
Government surplus 2009USD 38,913.27 million
Tax revenue 2009USD 1,446.71 million
Political
Government typeConstitutional Monarchy
Recent political crisisNA
Economic freedom score61st
Freedom of information score88th
Corruption perception index 201054th
Structural
Crude Birth rate 200818 per ‘000
Population BalanceUnder 14 – 23.4%
Population BalanceMen over 60 – 3.9%
Population BalanceWomen over 60 – 3.8%
Life expectancy years77.9 years
Mortality rate 20098 per '000
Literacy rate 200993.3%
Internet access39.4%

[Top] Economic Overview

Kuwait is an oil-rich nation located at the top of the Gulf. Kuwait's economy is driven by oil related business activities. There is limited scope for the development of agricultural activity in Kuwait.

(Source: Heritage.org)

Gross domestic product (GDP)

Kuwait GDP at current prices

 


(Source: National Bank)

Kuwait’s GDP increased from KD 32.5 billion in 2007 to KD 39.9 billion in 2008, however declining to KD 31.5 billion in 2009.

GDP Growth Rate

Kuwait GDP Growth Rate

 

(Source: National Statistics: pg 21)

Kuwait's GDP growth rate in 2007 was 10.6% and in 2008 it increased and reached 22.7%. In 2009, the GDP rate declined sharply to -21.2%.


Gross national income (GNI)

Kuwait GNI

(Source: National Statistics: pg 21)

Kuwait’s GNI increased from 2007 to 2008. GNI subsequently decreased from KD 42,879 million in 2008 to KD 33,723 million in 2009.

 

Inflation

 

Kuwait Inflation Rate

(Sources: National Statistics)

Kuwait’s inflation rate increased 9.2 percentage points from 2006 to 2008. In 2009, it fell sharply to 5.2% and then increased to 10.4% in 2010.  

Tax rate

There is no income tax and VAT in Kuwait. Corporate income tax is 15%. Corporate tax is levied only on joint-ventures and foreign-owned companies. Foreign firms are taxed up to 55%.

(Source: Heritage.org)

Foreign direct investment (FDI)
Kuwait FDI inflow in GCC countries

*GCC : Gulf Co-Operation Council (Saudi Arabia, Bahrain, Oman, Kuwait, Qatar and UAE)

(Source: UNCTAD, pg: 2)

In 2009, the FDI inflows to Kuwait was minimal amongst the GCC countries and accounted for a mere 0.2% of overall investments.

The government of Kuwait has imposed some limitations on foreign investors but there are laws that authorize foreign businesses to operate independently in a few economic sectors. In 2000, the Kuwait Stock Exchange was opened to foreigners.

(Source: ilo.org)

In 2009, FDI inflows to Kuwait reached USD 145 million.

(Source: unctad.org, pg: 206)

Central bank assets

 

Kuwait Central Bank Assets

 

 (Source: National Bank)

The Central Bank of Kuwait (CBK) is the regulatory authority of the banking sector. From 2005 to 2008, the bank’s total assets increased from KD 3,147.1 million to KD 5,565 million. From 2008 to 2010 (till Nov), the assets varied marginally between KD 5,500 million to KD 5,700 million.

[Top] Financial Indicators & Government Financial

Consumer price index CPI

Kuwait Consumer Price Index

(Sources: National Statistics)

CPI in Kuwait has increased from 108.8 in 2005 to 146.4 in 2010

Interest rates

Average Interest Rates on Customer Time Deposits with Local Banks (KD) (% per annum)

 

1 week

1month

3 month

6 months

12 months

Jan-2011

0.55

0.97

1.17

1.44

1.72

Jan-2010

0.68

1.34

1.52

1.75

1.95

Jan-2009

1.15

2.06

2.27

2.50

2.61

Jan-2008

2.68

4.17

4.33

4.51

4.60

Jan-2007

4.08

5.16

5.37

5.4

5.52

Jan-2006

2.17

4.33

4.42

4.60

4.7

(Source: National Bank)

From 2007 to 2010 the rates decreased substantially. Average rates on 12-month time deposits fell from 5.52% in 2007 to 1.72% in 2011. From 2007 to 2011, interest rates on weekly deposits decreased by 3.53%.

Money supply

Kuwait Money Supply

 

(Source: National Bank)

From 2005 to 2010, Kuwait’s money supply generally increased. M1 shows moderate fluctuations from 2005 to 2010. M2 and M3 have risen steadily since 2005.

Official exchange rate

Kuwait Exchange Rate

(Source: National Bank)

The exchange rate of the USD against the KD fell from 292.05 in 2006 to 273.14 in 2008. From 2008 to 2010 the rate increased up to 286.68. Since January 2011, the rate has been at 280.42.

Government finances

Fiscal balance (KD million)

 

2005

2006

2007

2008

2009

Revenue

10,791.66

16,401.65

17,926.00

21,347.38

23,025.58

Expenditure

5,643.98

6100.72

7692.91

8946.66

11,754.34

Balance

5,147.68

10,300.93

10,233.09

12,400.73

11,271.24

(Sources: National Bank, pg 42)

From 2005 to 2009, Kuwait’s fiscal balance witnessed a surplus. Revenue and expenditure increased at a growth rate of 20.86% and 20.13% respectively from 2005 to 2009.

Tax revenue (KD million)

 

2005

2006

2007

2008

2009

Income Tax

53.34

58.38

81.69

108.94

121.96

Taxes on Property Transfers

11.01

10.4

13.59

20.58

10.32

Taxes on goods and permission to perform activities

1.54

2.35

1.83

2.30

2.11

Taxes on international trade and transactions

166.48

175.82

190.30

223.90

214.43

Other taxes (stamp duties)

55.16

64.36

67.77

70.13

69.94

Total Tax Revenue

287.53

311.44

355.32

426.03

419.0

(Sources: National Bank,pg. 43)

The government’s tax revenue increased steadily from 2005 to 2008. From 2008 to 2009, total tax revenues fell marginally by KD 6.99 million. Income tax revenues increased steadily from 2005 to 2009.

Current account balance

Kuwait Current Account Balance

 

p=provisional

(Sources: National Bank)

Kuwait’s current account balance fluctuated between 2005 to 2009. The balance remained positive throughout this period increasing from KD 8,781 million in 2005 to KD 16,195 million in 2008, decreasing only marginally in 2007. In 2009, the balance fell to KD 8,232 million.

Balance of payments
Kuwait Balance of Payments

p=provisional

(Source: National Bank, pg: 2)

Kuwait was running a balance of payments surplus between 2005 and 2009. Between 2005 and 2006, there was a large increase in the trade balance of KD 874 million. The balance declined sharply from 2006 to 2008. It recovered steadily to reach KD 1,088 million in 2009.

[Top] Labour Force and Employment Overview

The Ministry of Labour and Social Affairs governs the social development and labour welfare. It was established in 1954. In 1960, the name was changed to the Division of Social Affairs and Labour.

The primary duties of this authority are: supporting Kuwaiti families and ensuring a basic minimum living standard, providing welfare service to all citizens, organizing labour in the oil industry and the private sector, guiding labour movements, private and public utility societies, workers' associations and employers' confederations, promoting children’s development through children’s clubs, supervising community development etc.

 (Sources: Ministry of Information) 

The minimum wage in the public sector is around KD 200 per month. There is no legal minimum wage in the private sector.

(Sources: emporikitrade)

Unemployment rate

Kuwait Unemployment Rate

e = estimate

(Source: IMF)

Kuwait’s unemployment rate was below 2% (of the total labour force) from 2005 to 2008. In 2010, the rate was estimated to be 1.64%. It is estimated to remain constant at 1.64% in 2011 and 2012.

Labour force

Kuwait Labour Force

 

(Source: Worldbank)

Kuwait’s Labour Force increased steadily from 2005 to 2008. In 2008, the total labour force was 1,428,972. 

Level of unionisation

‘Kuwait Chamber of Commerce and Industry’ (KCCI) is the representative body for employers. ‘Kuwait Trade Union Federation’ (KTUF), manages employees from the oil and petroleum sector and public sector. These organizations are assisted by the International Labour Organisation (ILO). ILO offers technical advisory services to trade unions.

Only Kuwaiti workers have the right to form unions. Union participation is very low amongst workers, accounting for a mere 5% of the total workforce.

(Sources: ilo.org, unhcr.org)

[Top] Political Stability

Kuwait has a constitutional monarchy and the government system is based on democratic principles.

The constitutional head is the Amir. Amir al-Ahmad al-Jaber al-Sabah is the current head of state. Under his government, foreign investments have been encouraged.

The country does not allow political parties. There can only be informal political groups. Some of the groups are the Islamist Salafist movement, the liberal Democratic Forum bloc, the Shi'ite-led National Islamic Coalition, the Islamist Ummah Party and Kuwait's Muslim Brotherhood, the Islamic Constitutional Movement and the liberal Popular Bloc. Amir has the authority to dissolve parliament.

Although it is the most developed democracy amongst the Arab states, Kuwait’s political system has had long periods of tension and disruption. Up until the 1990s there were many territorial disputes and militant violence across the nation.

(Sources: Ministry of Information, BBC, Reuters, press reference, internews.org)

Women gained the right to vote and participate in parliament in 2005. They also have the freedom to drive, travel unescorted and pursue a career, unlike other conservative Muslim countries. (Source: khaleej times) 

Freedom of information

In 2010, Kuwait was ranked 88th on the Press Freedom Index. The index contains countries with scores ranging from zero, having the most freedom, to about 105. Kuwait scores 23.75 points on this index indicating moderate regulations being in place on the media.

(Source: rsf.org)

The KUNA (Kuwait News Agency) is an independent agency, however, it does not operate freely. It also controls Radio Kuwait and Kuwait Television stations. The Ministry of Information, the regulatory authority of Kuwait’s media, gives a high level of freedom to the press compared to other Arab states.

The Press Laws of 1956 and 1961 impose fines, imprisonment and suspensions on the media for criticizing the law, government, leaders, allies of the nation and religious heads. All publications are only released  after the approval of the Ministry of Information. The Arabic newspapers are Al-Rai a-Aam, Al-Watan, Al-Anba, Al-Qabas and Al-Siyassah, and the two English-language newspapers are The Arab Times and The Kuwait Times. Some of the online news services are Kuwait Daily, Al Bawaba, Arabia and Zawya.

Foreign media agencies such as All India Radio, Pakistan Radio, BBC World Service and Voice of America are permitted in the country. But there have been cases of foreign journalists being banned due to violations of press laws. 

(Sources: Ministry of Communication,internews.org)

 

Corruption

The Corruption Perceptions Index (CPI) is a survey that measures the perceived level of corruption across countries worldwide. Kuwait is ranked 54th out of 178 countries in the 2010 index, indicating that it is perceived as moderately corrupt.

(Sources: Transparency.org)

Regulatory Environment

Kuwait Economic Freedom Indices

(Source: Heritage.org)

Kuwait is ranked 61st on the 2011 Economic Freedom Index with a score of 64.9. The country is ranked 8th amongst 17 countries of the Middle East/North Africa region.

Judicial System

Kuwait’s judiciary is one of the oldest among the Arab states. It is based on French civil law, British general law, Islamic and Egyptian law. The independence of the judiciary is guaranteed by the Constitution.

The judicial system hierarchy consists of the Supreme Court, the Court of Appeal and the Court of First Instance. The Court of First Instance comprises of courts of different judicial powers. It mainly deals with civil, commercial and personal status cases. 

Judges are appointed by the Amir (head of state). The Supreme Judicial Council advises the Amir on appointments of judges. The council is made up of the under secretary of the Ministry of Justice, president and vice - president of the Appeals Court, president and vice - president of the Supreme Court, the attorney general and the president of the High court.

(Source: Ministry of Information, undp)

[Top] Demographic Overview

In 2010, the population of Kuwait was 3.1 million. 98.4% of Kuwait’s population is classified as urban.

(Source: undp, pg 181)

Kuwait Population

(Source: Worldbank, undp, pg 181) 

Kuwait’s population shows a marginal year-on-year rise from 2005 to 2010. The population increased from 2.54 million in 2005 to 3.1 million in 2010.

The country’s gender ratio was 147.1 (men per 100 women) in 2009.

(Source: UN)

In 2010, the average life expectancy in Kuwait was 77.9 years and the median age is about 21 years. The sex ratio at birth (male births per 100 female births) for  2010 is 102.7.

(Source: undp, pg 181). 

In 2009, the infant mortality was 8 (per 1000 live births).

(Source: Worldbank)

 

   In 2009, the population below 14 years of age constituted 23.4%. Men above 60 years of age made up 3.9% of the total population and women 3.8%.

    (Source: un.org)

From 2005 to 2008, the crude birth rate was registered at 18 (per 1000 population)

(Source: Worldbank)

Kuwait’s literacy rate was 93.3% in 2009.

(Source: Guardian: UNESCO)

Human Development Index

The country is ranked 47th on United Nation’s Human Development Index. It falls in the category of ‘High Human Development.’ HDI integrates a country’s life expectancy, schooling and income. This signifies the overall social and economic development of a nation. A rank between 43 and 85 indicates ‘high human development’ on UNDP’s Index. (Source: undp)

[Top] Soft Infrastructure

Education

Kuwait’s public education consists of fourteen years of education. The primary and secondary stages of public education are compulsory. Religious education is also provided in schools. It focuses on the Arabic language and Shariah sciences. The ‘Ministry of Higher Education’ attends to the concerns of private education. Students can opt for vocational education after secondary education. Vocational institutes offer specialized training in areas like secretarial practice or communication. Students also have a choice of non-formal education where they can obtain training certificates through technical internships.

The University level education includes subjects such as engineering, management, social sciences, arts, medicine and Shariah. The average years of school attendance in Kuwaits are 6.1 years.

Kuwait's co-operative policies with UNESCO revolve around education. Some of the results of this alliance are: Kuwait’s Child and Motherhood Centre, Special Needs Education for the Mentally Disabledand The Arab Open University.

 (Sources: unes co, ibe.unesco, undp) 

Health

Public healthcare services are available free of charge to Kuwaitis. The governing body of the health sector is the ‘Ministry of Kuwait.’ It was established in 1936. All ministerial and administrative issues in the sector are handled by the ‘Medical Licensing Department.’

Public healthcare consists of Primary and Secondary health services. There are over 70 primary and 6 secondary healthcare centres in Kuwait. The secondary services are offered by six main hospitals: Sabah hospital, Farwaniya hospital, Amiri hospital, Jahra hospital, Adan hospital and Mubarak Al-Kabeer hospital.

There are specialized centres that provide treatment for pulmonary disorders, cancer, burns, allergies; and offer services such as neurosurgery, transplants, rehabilitation and physiotherapy.

Private clinics in Kuwait are under the regulation of ‘Ministry of Health’.

(Sources: Medical Licensing Department, Ministry of Information)

[Top] Hard Infrastructure

Public transport

Mass public tranportation in Kuwait primarily consists of buses. The Kuwait Public Transport Company offers public transport services across Kuwait. It has a fleet of over 400 buses, connected via wireless communication and tracking networks.

In 2011, Kuwait’s MoC (Ministry of Communication) suggested the creation of a transport authority to deal with Kuwait’s traffic problems.

Ports

There are three major ports in Kuwait located at Doha, Shuaiba and Shuwaikh. Kuwait & Gulf Link Transport Co. is a major private company based in Safat, Kuwait. It handles public and heavy transportation activities such as: container operations, cargo handling and other fuel haulage and heavy lift transport services. 

(Source: Kuwait Government, world port source, Kuwait Times, Business week)

Airports

Kuwait International airport is the single airport in the country. The airports runway length is 11,400 feet.

(Source: Aircraft-Charter-World)

Telecommunications               

The media in Kuwait is regulated by the ‘Ministry of Information.’ The different media include television, radio and press. All these follow a policy of non-interference in foreign matters.

There are four state-owned and a few other cable and satellite transmission television channels in the country.

There are 18 radio stations, with the major ones being Kabid, Al-Maqwa and Al-Jeewan. Others include Radio Kuwait and Super Station that broadcast music, talk shows and news.

Mobile operators functioning in the country are National Mobile Telecommunications Co (Wataniya), Mobile Telecommunications Co (Zain) and Saudi Telecom.

Since 2010, 1.1 million people accounting for 39.4% of the population are internet users. Major broadband expansions in Kuwait include development of: regional broadband penetration, xDSL, WiFi, fibre-to-home (FTTH) services.

 (Sources: Ministry of Communications, Internet World Stats, ITP.net, Internet World Stats, press reference)

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