The Economy of Kuwait
Kuwait, as with other Middle Eastern countries, has an economy fueled by fuel, literally. Petroleum and petroleum related product exports account for 80% of total income for the Kuwaiti government. It has been reported that Kuwait’s oil reserves can reach up to 104 billion barrels which is about 8% of the world’s total reserves.
During the Persian Gulf crisis, when Iraq invaded this oil-rich emirate, the economy of Kuwait was in utter ruin as the retreating Iraqi soldiers torched about 750 oil wells and as a result destroyed important Kuwaiti structures. The cost of rebuilding those structures and the cost of lost sale from the crude oil that went up in flames was enough to cripple Kuwait’s economy for 2 years. During this dark hour of Kuwait, $50 billion was billed just to rebuild destroyed infrastructures. But because the government had fiscal surpluses before the invasion, Kuwait needed only two years to go back to pre-invasion production levels.
Basically, the main industry of the country is obviously petroleum and petrochemicals, surprisingly, Kuwait also produces cement and is also known for shipbuilding and repair, food processing, water desalination and construction materials.
As of 2008, Kuwait’s GDP reached $149.5 billion which translates to $57,500 per capita, making Kuwaiti citizens the 6th richest people in the world on the average if the GDP was to be distributed equally among all Kuwaiti nationals.
Indeed, Kuwait is a rich kingdom because it exports oil throughout the world. However, the setback in this is that an alternative source of power may be developed somewhere at any given time which would surely cause prices of oil to plunge. So that’s why, right now, the government has initiated steps to develop other avenues of income once oil is no longer a priced commodity.