Kuwait, the Petrol Station of the World
Kuwait covers an area of 17,818 square kilometres, located on the northwest coast of the Persian Gulf in western Asia, adjacent to Saudi Arabia and Iraq, the Persian Gulf to the east, and Iran across the sea. The vast majority of Kuwait’s land is desert, the terrain is relatively flat. Oil and gas reserves are abundant. Proven oil reserves stand at 101 billion barrels, 10% of the world’s reserves and the fourth largest in the world. Natural gas reserves are 1.5 trillion cubic meters, accounting for 1.1 per cent of the world’s reserves. Kuwait has a foreign population of 3.4 million, including 1,055 million Kuwaitis. Foreign nationals accounted for 67 per cent, mainly Egyptians, the rest from India, Iran, Pakistan and other countries. Kuwait is the world’s fourth-largest oil reserve; more than 90 per cent of its revenue comes from oil. The war between Russia and Ukraine and the COVID-19 pandemic has affected Kuwait’s economy. But in recent months, thanks to the government’s effective measures and the world economic recovery, experts have predicted a period of growth for Kuwait’s economy.
The oil and natural gas industry is the main pillar of the national economy, with its output value accounting for 56.8 per cent of GDP, 94.92 per cent of export revenue, and 43.2 per cent of the output value of non-oil projects. In recent years, while focusing on the development of petroleum and petrochemical industries, the government has emphasized the development of diversified economies, reduced the dependence on oil, and continuously increased foreign investment.
Despite future fluctuations in oil prices and market volatility, central bank reserves increased by 2.6 billion dinars to 14.7 billion dinars at the end of 2019, accounting for 45.2% of GDP and equivalent to 13.6 months of total goods and trade imports. In addition, the current account surplus is expected to recover in 2021 with the sharp increase in oil prices, the implementation of Opec’s decision to increase production and the growth of global demand for energy. Many experts see positive and optimistic trends in Kuwait’s economic development in the coming years.
NBK reports that despite the expansionary fiscal 2021-22 budget, spending cuts remain the most viable option. In fact, studies are under way to increase taxes to raise non-oil revenues, reduce subsidies and restructure the public sector. Revenue from excise and VAT is expected to reach about 1.5% of GDP by 2023. As a result, the report reduced the budget deficit to 4.2 billion dinars in the 2021-2022 fiscal year, nearly halving from the previous year and representing about 10.3 percent of GDP. It is projected to account for just 9.5% of GDP by 2024.
The report notes that with about $700 billion in the Kuwait Future Fund available, the government still has the wherewithal to do its job. But implementing structural reforms, increasing the role of the private sector and accelerating the energy transition remain the next priorities for the government.
The country’s growth prospects are improving, supported by higher oil prices and a smooth vaccination programme. In addition, Kuwait’s economy is slowly recovering from last year’s pandemic, with the latest data showing strong growth in consumer spending and personal credit, as well as the government’s accelerated implementation of infrastructure projects such as roads, hospitals and airports.
Kuwait is a tourism export country; many people go out for vacation every year, and tourism consumption is huge. The government intends to turn Kuwait into an attractive destination, not only to attract tourists but also to retain those who travel. At the same time, private enterprises play an important role in the development of tourism. In recent years, Kuwait’s tourism industry has achieved remarkable development, attracting a large number of tourists from all over the world.
Kuwait has great potential to develop cultural heritage tourism. Its traditional music and dance are influenced by maritime traditions and contain various cultural elements of India and Africa. It has a large number of museums, cultural relics and sites in the form of material cultural heritage and is known as the “Pearl of the Arabian Gulf “. In recent years, Kuwait has supported and encouraged the private sector to participate in the development of cultural heritage tourism, showcase local folk customs, music and art in commercial and semi-commercial ways, and change the perception of Kuwait through new marketing, branding, promotional activities and image promotion.
Built-in 1760, 1793 and 1920 among the historic sites, Kuwait’s old city walls illustrate the city’s evolution from a fishing village to a modern metropolis. After a series of damage, the only legacy of five gate castle – buner DE al Kamen, al gauze door, al mia door, the door page o ‘Hara, jose card Sabu and a four-door mosque (large market, khalifa mosque, Mr Bersani and Haddad mosque) is still a witness of the past. However, these gates are widely located at the confluence of main thoroughfares, and there is no parking nearby, so tourists are rarely known or difficult to reach. Qasr al-Ahmar, the original mud fort that embodies the spirit and character of Kuwait’s Day city, was built in 1897 to defend the local Jahara village. In 2003, the National Committee for Literature on Culture and Art transformed it into a museum displaying Japanese weapons. The fort is well maintained and is an excellent tourist destination not to be missed.
Many of Kuwait’s museums have grown out of private collections. The Tarek Rajab Museum, for example, has a large collection of Arabic and Islamic art, pottery, calligraphy, Korans and manuscripts that trace the development of Arabic manuscripts over the centuries; The Seif al-Marzouk-Samland Museum contains a large collection of pearl-inlaid documents and nautical paraphernalia, and the Beit al-Osman Museum exhibits the socio-economic and cultural traditions of old Kuwait. Among the public museums, the National Museum of Kuwait displays the life, customs and traditions of the old Kuwaiti people and displays archaeological finds, including artifacts from Faraka Island. The Maritime Museum and Kuwait Petroleum Corporation Exhibition Center showcase Kuwait’s history of navigation and oil development. The Kuwaiti people’s experience of the Gulf War is presented in the National War Museum, the Kulein Martyrs Museum and the newer memorial museum in the Martyrs’ Park, which recreates the battle scenes of the martyrs in the Gulf War through audio-visual presentations, models and photographs.
By Irving & Ovidiu
