With the exception of the important oil and natural gas sector, the industry is poorly developed. Its development is hampered by the limited domestic market and the lack of domestically trained labor and raw materials. Kuwait’s plans in recent years are to build for trade and transport linked to China’s expanding economy.
Consumer goods and almost all investment goods must be imported. The industrial sector is still largely owned by the state, which has meant limited competition.
Kuwait’s petrochemical industry, power plants and seawater desalination plants are state-owned, while the craft companies, including leather and wood processing, as well as the aluminum industries are found in the private sector.
The construction industry gained momentum during the rapid reconstruction following Iraq’s occupation in 1990. Even after that, the need for construction has remained high thanks to extensive infrastructure investments, a rapidly growing economy and housing shortage.
- COUNTRYAAH: List of top trading partners of Kuwait. Includes countries that imported most shipments from and exported most goods to the country.
In a free trade zone at the port of al-Shuwaykh there is some lighter manufacturing industry. A major venture called Madinat al-Harir (Silk City, in English Silk City) is planned in northern Kuwait and linked to China’s expansion of “new silk roads” for trade around the world. 2020, a newly built multi-lane long bridge (in French design and erected by the South Korean construction industry) is the most visible result, but the idea is that the City of Silk will house both trade and manufacturing as well as housing, sports and entertainment. If the mega project really goes away, after the global crisis caused by the covid-19 pandemic, it is about construction work that has been valued at $ 100 billion.
Kuwait has a relatively open economic system with low tariffs and free movement of goods, capital and labor. The country’s by far the most important commodity is oil and oil products, which account for about 94 percent of export revenue. However, these vary greatly with the oil price on the world market. At the same time, Kuwait has to import virtually everything else the country needs, including food. Despite this, Kuwait has a large surplus in the trade balance.
The United States has for a long time been Kuwait’s most important trading partner, but Asian countries such as South Korea and Japan, China and India are also increasingly doing great deals with Kuwait. When it comes to selling defense equipment, US companies dominate.
In 2003, a Customs Union was established between the countries of the GCC (Cooperation Council for the States around the Persian Gulf, which, in addition to Kuwait, also includes Saudi Arabia, Bahrain, Qatar, Oman and the United Arab Emirates), which after some delays would be fully implemented in 2015. In 2008, the countries had formed a joint market. However, attempts to introduce a single currency have been delayed in the future.
FACTS – FOREIGN TRADE
US $ 77,080 million (2018)
US $ 31 370 million (2018)
US $ 24,049 million (2018)
Commodity trade’s share of GDP
76 percent (2018)
Main export goods
crude oil and refined oil products, fertilizers
Largest trading partner
China, USA, Japan, United Arab Emirates, EU
Visa requirements and alcohol bans are what prevented Kuwait from becoming a major tourist country. There is, however, a lot to see, especially in the capital Kuwait City with its spectacular architecture, museums and restaurants as well as shopping in modern shopping malls and traditional bazaars (see also Culture).
The state is trying to develop domestic tourism as a way to get rid of the dependence on oil revenues; Among other things, large tourist facilities are being built on the islands of Bubiyan and Faylaka. As in many of the neighboring countries, the luxury hotel spreads out over the dunes.
FACTS – TOURISM
Number of foreign visitors per year
307 000 (2013)
831,000,000 US dollars (2016)
The share of tourist income from exports
1.6 percent (2016)
The head of government remains
Nasir is the first Kuwaiti prime minister ever to agree to a hearing, rather than, as before, submitting his resignation to avoid being questioned. As before, the allegations concern corruption and misuse of state funds. After the hearing, Parliament voted down a proposal to topple Nasir and his government.
Increased rights for women
The Constitutional Court decides that women should be able to obtain their own passports without first asking their men for permission. The court also says that female MPs do not have to wear a veil.
New election with historical element
The parliamentary election will be historic when women are first elected to Parliament – a US-trained economist, two professors and a former health minister. The Islamists, who dominated the old parliament, go back and the largest grouping becomes the so-called independence. Many members are re-elected, including some who have played a leading role in the confrontations with the government during the previous term of office. Nasir forms a new government. The new parliament’s first task will be to decide on a $ 5 billion reform package aimed at mitigating the effects of the global financial crisis on the country’s economy.
The government is leaving
Nasir submits his resignation when a few MPs initiate a process to hold him accountable for misuse of public funds. The king dissolves parliament and announces new elections in May.
The Foreign Minister is visiting Iraq
The Foreign Minister is traveling to Iraq. It is the first such high level meeting since Iraqi forces invaded Kuwait in 1990.
New old government is formed
Sheikh Nasir forms a new government in which most of the previous government ministers are present.