Redirected from Kuwait/Economy
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In the closing hours of the Gulf War in February 1991, the Iraqi occupation forces set ablaze or damaged 749 of Kuwait's oil wells. All of these fires were extinguished within a year. Production has been restored, and refineries[?] and facilities have been modernized. Oil exports surpassed their pre-invasion levels in 1993 with production levels only constrained by OPEC quotas.
Offshore the Divided Zone, the Arabian Oil Co.--80% owned by Japanese interests and 10% each by the Kuwaiti and Saudi Governments--has produced on behalf of both countries since 1961. The original concession agreements will expire in January 2003; negotiations to replace the concession with a technical service agreement should be completed in 2002.
The Kuwait Petroleum Corp. (KPC), an integrated international oil company, is the parent company of the government's operations in the petroleum sector, and includes Kuwait Oil Company, which produced oil and gas; Kuwait National Petroleum Co., refining and domestic sales; Petrochemical Industries Co., producing ammonia and urea; Kuwait Foreign Petroleum Exploration Co., with several concessions in developing countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp. The latter, purchased outright in 1982, gives KPC a worldwide presence in the petroleum industry.
KPC also has purchased from Gulf Oil Co. refineries and associated service stations in the Benelux nations and Scandinavia, as well as storage facilities and a network of service stations in Italy. In 1987, KPC bought a 19% share in British Petroleum, which was later reduced to 10%. KPC markets its products in Europe under the brand Q8 and is interested in the markets of the United States and Japan.
Kuwait has about 94 billion barrels of recoverable oil; Saudi Arabia is the only single country which has larger reserves. Estimated capacity, before the war, was about 2.4 million barrels per day (b/d). During the Iraqi occupation, Kuwait's oil-producing capacity was reduced to practically nothing. However, tremendous recovery and improvements have been made. Oil production was 1.5 million b/d by the end of 1992, and pre-war capacity was restored in 1993. Kuwait's production capacity is estimated to be 2.5 million b/d. Kuwait plans to increase its capacity to 3.5 million b/d by 2005.
Government revenues are dependent on oil revenues. Kuwait's fiscal surplus in 2000 was some 15% of GDP, while it reversed to a deficit of more that 2% of GDP in 2001 on sliding oil prices.
The government's two reserve funds: the Fund for Future Generations and the General Reserve Fund, which totaled nearly $100 billion prior to the invasion in 1990, were the primary source of capital for the Kuwaiti Government during the war. While these funds were depleted to $40-$50 billion after the war, they currently are estimated around $80 billion. The bulk of this reserve is invested in the United States, Germany, the United Kingdom, France, Japan, and Southeast Asia. In order of importance, foreign assets are believed to be invested in stocks and bonds, fixed yield instruments (mostly short term), and real estate. Kuwait follows a generally conservative investment policy.
Kuwait has been a major source of foreign economic assistance to other states through the Kuwait Fund for Arab Economic Development, an autonomous state institution created in 1961 on the pattern of Western and international development agencies. In 1974, the fund's lending mandate was expanded to include all-not just Arab-developing countries.
Over the years aid was provided to Egypt, Syria, and Jordan, as well as the Palestine Liberation Organization. During the Iran-Iraq war, significant Kuwaiti aid was given to the Iraqis. The Kuwait fund issued loans and technical assistance grants totaling over $520 million during its fiscal year ending June 30, 2000.
revenues:
$10 billion
expenditures:
$13 billion, including capital expenditures of $NA (1999 est.)
Industries: petroleum, petrochemicals, desalination, food processing, construction materials, salt, construction
Industrial production growth rate: 1% (1997 est.)
Electricity - production: 26.995 billion kWh (1998)
Electricity - production by source:
fossil fuel:
100%
hydro:
0%
nuclear:
0%
other:
0% (1998)
Electricity - consumption: 25.105 billion kWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: practically no crops; fish
Exports: $13.5 billion (f.o.b., 1999 est.)
Exports - commodities: oil and refined products, fertilizers
Exports - partners: Japan 24%, India 16%, US 13%, South Korea 11%, Singapore 8% (1997)
Imports: $8.1 billion (f.o.b., 1999 est.)
Imports - commodities: food, construction materials, vehicles and parts, clothing
Imports - partners: US 22%, Japan 15%, UK 13%, Germany 8%, Italy 6% (1997)
Debt - external: $9.27 billion (1998 est.)
Economic aid - recipient: $27.6 million (1995)
Currency: 1 Kuwaiti dinar (KD) = 1,000 fils
Exchange rates: Kuwaiti dinars (KD) per US$1 - 0.3042 (January 2000), 0.3044 (1999), 0.3047 (1998), 0.3033 (1997), 0.2994 (1996), 0.2984 (1995)
Fiscal year: 1 July - 30 June
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