Kuwait : Fall and Rebirth

The recent history of the Kuwait economy has been inextricably bound up with the history of oil. Oil has been the main source of the nation's wealth, but the health and vitality of the national economy depends firstly on how that wealth is utilised, and secondly on the way in which the national and private institutions combine to ensure the efficient regulation of national economic affairs. Kuwait's legal and governmental systems are based on principles which guarantee the freedom of the individual to pursue his or her economic advancement with the minimum state interference, and the national wealth is distributed in such a way as to facilitate this pursuit. Occasional aberrations are part of the price necessary to maintain these freedoms, and the test of a nation's maturity lies not in whether such aberrations occur, but how its regulatory authorities are able to control them and limit their effects. During the past decade Kuwait's economic development has been affected by two severe shocks - a collapse in an unofficial stock market in 1982 and the invasion in 1990, coupled with the war of liberation in the following year. These shocks occurred during a period in which other adverse economic and political events were impinging on the region, the falling price of oil and the Iran/Iraq war being the most prominent. How these shocks affected Kuwait, and especially its economic future, and how they were managed in order to limit their effects form the subject of this book, which will be invaluable to those interested in stock market regulation and in the oil economies of the Gulf. The author has long experience in national economic affairs and remained in Kuwait throughout the occupation.


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