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Kuwait

Beyond oil score(out of 100 points) 63.5
Index ranking(out of 26 countries ranked) 9
Overall status*  
General Economic Framework  
Political Framework  
Society and Future Skills  
(Beyond) oil related factors  


Kuwait's economy is mainly based on oil exports. Kuwait's ownership of the world's total oil reserves range from 8 % (minimum) - 10% (maximum). Kuwait has about 96.5 billion barrels of recoverable oil. 90% of Kuwait's export income and 75% of government revenue comes from the sale of oil. Such figures make the Kuwait economy one of the most oil dependent in the Gulf Co-operation Council Area.

Beyond-oil investments to drive future growth

Over the years, the Kuwaiti government has been trying to develop other sectors of its economy. Kuwait's non oil exports and products consist of Petrochemical related products, together with Agriculture, light manufacturing and fishing. However the volume and value of products and exports produced by these industries is quite small in comparison to the country's oil income, mainly due to lack of resources (water for agriculture, and land for building larger industrial facilities) and low monetary value of Fishing products.

Nevertheless the Kuwaiti government has taken other steps in order to diversify its economy away from oil. One of them is the creation of the Kuwait Fund for Future Generations (KFFG) which is a state reserve fund managed by the state-run Kuwait Investment Authority (KIA). According to law, 10% of Kuwait's oil income goes directly to the fund for investment elsewhere. In 2005 KFFG's value was estimated at USD $90 billion Dollars, most of it in overseas investments such as ownership of companies, stocks and bonds in the US, Europe and the Far East. Meanwhile the Kuwaiti government has been developing other important sectors of the economy such as Tourism, Banking, Transportation and Telecommunication. Today Kuwait boasts one of the region’s biggest Telecomm companies. MTC Touch is a regional powerhouse, with expanding reach in Africa. Kuwait’s Banks are also becoming increasingly profitable through introduction of best practices and latest products in IT. Last but not least, Kuwait has recently started developing its gas sector. This sector will ensure that the Kuwaiti economy will continue its growth for a number of years after oil runs out.

Beyond Oil Summary

Kuwait was one of the first countries of the Middle East region to start planning for its Beyond Oil future. According to present Kuwaiti plans, gas, and income from investments abroad will lead the way in terms of producing the largest Beyond Oil incomes. This will be followed by income from investments abroad.

There are however shortfalls in the Kuwaiti Beyond Oil plan which have reduced the country’s standing in the Beyond Oil Index. One of the main shortfalls is the limited range of Beyond Oil industries at home. This carries the danger that in the Beyond Oil era, Kuwait’s economy will depend more on the economy’s of foreign countries, rather than factors and industries on its own soil. This lack of control and increased dependency reduces the viability of Beyond Oil plans.

  Indicates high preparedness   Indicates deficits but potential for development   Indicates unfavourable preconditions.
 
     
   
 
 
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