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The Socioeconomic Background of Kuwait - Essay Example

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Kuwait lies on the northwestern shore of the Arabian Gulf. Saudi Arabia abuts to the south and west. Iraq also borders Kuwait on its northwest. The country of Kuwait covers 17,818 km2 or about 7,000 mi2. Its mainland terrain is mostly flat desert, but Kuwait also owns several islands in the Gulf such as Bubian, Warba, and Filikah…
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The Socioeconomic Background of Kuwait

Download file to see previous pages... Kuwait's official language is Arabic, but English is widely spoken. The Kuwaiti Dinnar (KD) is the official currency, and it is further divided into 1,000 Fils. The average exchange rate is 0.3KD:$1.00US.
Kuwait is an Islamic country. Most of her citizens worship in mosques around the country and follow the principles of Islam which also provides a legal foundation for the country. Kuwait adopted a democratic constitution in 1962 that guarantees freedom of liberty, speech, press, and worship. Kuwait is governed by an emir of the al-Sabah dynasty and a fifty-member National Assembly. The National Assembly holds much of the power and has played a critical role in the political, economic and social development of Kuwait. Much of Kuwait's importance derives from its geographical location as the gateway to the Arabian peninsula. Linking the desert and the ocean, its strategic position has led to Kuwait's development as a significant trading center.
At the beginning of the 1700s, immigrants from Saudi Arabia came to the area that is now Kuwait. They settled in small villages and at that time only a few thousand people lived there. They took advantage of Kuwait's strategic location and began trading goods. In 1756, the leader of the al-Sabah family became the first Emir of Kuwait, and his ancestors have ruled continuously to the present day; the current Emir is sheik Sabah al-Sabah, the thirteenth in the line.
Kuwait continued to grow as a commercial center in part because of political turmoil and war between Persia and the Ottoman Empire. This caused a number of trading families to relocate, and these families played anbig role in the commercial development of Kuwait (Alsabah 1980). England's East India Company also fled the instability in Basra, Iraq and set up a new headquarters in Kuwait to act as a terminal and staging area for goods from east India to England. In 1875, the Suez Canal opened, and the East India Company left Kuwait, but by then, the country had grown and developed. The economy had also diversified somewhat.
Pearl diving, fishing, and sea transportation became the foundation of the Kuwait economy. Small family-run businesses carried out these activities without large amounts of working capital; income on a per capital basis was low. The most important industry was pearling which was the economic base of Kuwait and the entire Arabian Gulf. Pearls were exchanged for primary products and consumer goods from India and Bahrain. Pearling employed the most people and also contributed the most to the economy. For example in 1920, 25% of the population was employed in pearling (Al-Fraih, 1993). The industry declined in the 1930s when Japanese pearls overtook the world market.
Kuwait's strategic location was also conducive to seafaring and trade. Kuwaiti vessels plied the entire Indian Ocean carrying passengers and cargo among Iraq, India, and the east coast of India. One of the principle commodities was date; they were loaded in Basra Iraq and traded throughout the Arabian Gulf and India. Of course to carry out this trade and collect pearls, the Kuwaitis became excellent boat builders. Indeed, Kuwait became the boat-building hub for the entire Gulf. Woods for construction was imported from the coast of Africa and south Asia. Fishing -- another related activity - ...Download file to see next pagesRead More
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