The State of Kuwait WT/TPR/S/258 
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I. ECONOMIC ENVIRONMENT 
(1) MAJOR FEATURES OF THE ECONOMY  
1. The State of Kuwait has a population estimated at 3.6 million, of which almost 70% are non-
nationals.1  GDP per capita is estimated at around US$55,000;  Kuwait ranks 47th (out of 
169 countries) in the UNDP's Human Development Index.2 
2. Kuwait's economy is based heavily on its ener gy sector, particularly crude oil production 
(Chapter IV(2)).  Kuwait's crude oil reserves are estim ated at 8% of global reserves, among the largest 
in the world, and its oil fields are projected by  the Government to remain productive for at least 
another 70 years at or around current production levels.  Kuwait is ranked 18th in global natural gas 
reserves (1,784 billion cubic meters).3  Although gas production is limited at present, the Government 
plans to expand production significantly in the co ming years.  Crude oil and gas production account 
for about half of Kuwait's GDP, 95% of expor t revenues, and 84% of government revenue. 
3. In 2010, outside the crude oil and gas sector, the main contributors to GDP were: community, 
social and personal services (15.2%);  financial services (9.7%);  transportation, storage, and communication (8.5%);  trade, hotels, and restau rants (4.8%);  real estate services (3.4%);  
manufacturing, excluding petroleum refini ng (2.2%);  and construction (1.6%).
4  Less than 1% of 
Kuwait's land is arable, leavi ng agriculture a minimal role in the economy (Chapter IV(1)).  The 
public sector is dominant in most activities (Chapter  III(3)(ii)), with the private sector accounting for 
only about 25% of the economy. 
4. Notwithstanding Kuwait's extraordinarily rich o il and gas reserves, the Government views the 
economy as being too dependent on the energy sector.  Under Kuwait Vision 2035 and Kuwait 
Development Plan 2010-145, the authorities aim to promote a more diversified economy with world-
class infrastructure attracting business and investment, and private-sector-led, but with continued state support, that can develop Kuwait into a financial a nd services centre in the region while consolidating 
values, maintaining social identity and rea lizing human development (section (4) below). 
5. Kuwait started applying the Gulf Cooperation Council (GCC)
6 common external tariff in 
2003 (Chapter III(1)(ii)).  Since May 2007, the Kuwaiti dinar (KD) has been pegged to an undisclosed 
currency basket, reverting to the exchange system before January 2003.7  In December 2009, Kuwait 
ratified an agreement with Saudi Ar abia, Qatar, and Bahrain to establis h a monetary union, details of 
which (including the target date for the union) ar e currently under discussion in the Gulf Monetary 
Council.8 
(2) RECENT ECONOMIC DEVELOPMENTS  
6. The size and growth of Kuwait's GDP depends heavily on conditions on the world oil market.  
Fairly steady crude oil production in Kuwait of about 2.5 (mmbd) on average since 2006 and the 
                                                      
1 Expatriates are employed mostly in the private sector (59%) or as domestic workers (31%), while 
Kuwaitis work primarily in the public sector (76%). 
2 UNDP (2011). 
3 OPEC (2011). 
4 National Bank of Kuwait (2011). 
5 Kuwait's previous Development Plan was passed in 1986. 
6 The other GCC members are:  Bahrain, Oman, Qa tar, Saudi Arabia, and th e United Arab Emirates. 
7 Between 2003 and May 2007, the KD was pegged to the U.S. dollar (IMF, 2011a). 
8 Oman and the UAE are not joining the monetary union. WT/TPR/S/258 Trade Policy Review 
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increase in world oil prices betw een 2003 and 2008, peaking at an average of US$91 per barrel in 
2008, generated very significant growth of nominal GDP, led by public investment and consumption. 
Real GDP grew, on average, at 5% a year between  2006 and 2008.  However, productivity growth in 
non-oil sectors of the economy remained sluggish a nd there was little diversification away from oil 
and little expansion of the private sector.  
7. Inflation rose above 5% in 2007 and accelerated into double digits in 2008 (Table I.1), 
reflecting imported inflation as well as the effect s of excess liquidity in Kuwait's economy, which 
fuelled high salary increases and booming stock-market prices and real-estate prices. 
8. Kuwait's GDP growth was slower from the thir d quarter of 2008 with the onset of the global 
financial crisis and of global economic recession,  which saw Kuwait's crude oil production fall to 
about 2.3 mmbd and the average export price fall to US$61 per barrel in 2009.  The result was a 
contraction of 20% in nominal GDP and of 5.2% in real GDP in 2009, with a sharp correction also in 
the rate of inflation to around 4% (Table I.1).   
9. Preliminary data for 2010 point to a return to real GDP growth of about 3.4%, based on 
increased oil production and higher world oil prices a nd driven by fiscal policies.  The IMF projects 
that real GDP growth will return to pre-crisis levels of around 5.7% in 2011, while inflation is 
estimated at 6.2% (up from 4.1% in 2010).  For 2012, real GDP growth and inflation are estimated at 4.5% and 3.4%, respectively.
9 
10. In response to this slower growth, the Government budget for 2008-09 was sharply 
expansionary, with total expenditure rising from 28. 1% to 47.9% of GDP and more than doubling in 
absolute terms to KD 16.5 billion.  The bulk of the increase in public spending was directed in 
subsidies and social benefits, in particular the recapitalization of the soci al security fund.  The 
Government did not bail-out troubled banks dir ectly, although in March 2009 Kuwait enacted its new 
Financial Stability Law, which aims to provide a form of bankruptcy protection and credit provision 
for financial services companies that have solvency problems but are otherwise deemed to be healthy 
(Chapter IV(3)(ii)).   
11. The strength of the oil sector has enabled the Kuwait Government to consistently accumulate 
large fiscal surpluses, although these have varied co nsiderably in recent years, from a high of 39.7% 
of GDP in 2007 to a low of 15.5% in 2008, reflecti ng primarily variations in the level of government 
expenditure (Table I.1).  The surpluses have been used, in part, to finance social welfare policies 
including subsidized public utilities (notably electricity and water) a nd housing.  There are concerns 
that pricing policy for these servi ces reduces incentives to introduce e fficiencies and cut waste, and 
promotes higher consumption than would otherwi se be the case.  Non-oil revenues (other than 
investment income) contribute only 6% to total fiscal revenue, leaving Kuwait's fiscal position 
vulnerable to volatility in world oil markets.  Kuwa it is taking steps to cr eate a sound and sustainable 
fiscal position and reduce the proportion of the go vernment budget generated by oil revenues by 
increasing other sources of revenue.  A new comprehens ive income tax law is in the pipeline, as well 
as the possible introduction of VAT by 2014. Gradually phasing out of government subsidies is also critical. 
                                                      
9 IMF (2011c). The State of Kuwait WT/TPR/S/258 
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Table I.1 
Selected economic indicators, 2006-11 
 2006 2007 2008 2009 2010a 2011b 
Miscellaneous       
GDP per capita (US$) 36,560 40,232 50,976 36,683 43,461 55,096 
GDP at current prices (KD billion) 29.5 32.6 40.0 31.5 38.0 48.4 
GDP at current prices (US$ b illion) 101.6 114.7 148. 8 109.5 132.6 171.9 
Real GDP (percentage change) 5.3 4.5 5.0 -5.2 3.4 5.7 
Unemployment rate (Kuwaiti nationa ls;  %) 4.0 6.1 4.9 3.6 2.9 .. 
Consumer price index (average;  percen tage change) 3.1 5.5 10.6 4.0 4.1 6.2 
Monetary sector       
Broad moneyc 21.7 19.3 15.6 13.4 3.0 16.3 
KD 3-month deposit rate (year average; %) 5.0 5.2 3.3 1.4 0.8 .. 
Stock market index (annua l percentage change)d -12.0 24.7 -38.0 -10.0 -0.7 .. 
Public financese  (percentage of GDP)       
Revenue 66.6 67.8 63.4 61.5 59.2 61.6 
   Oil 48.0 51.5 52.1 50.1 48.5 51.6 
Non-oil 18.6 16.3 11.4 11.5 10.7 9.9 
Expenditure 34.0 28.1 47.9 33.6 38.4 35.5 
Balance 32.6 39.7 15.5 28.0 20.7 26.1 
Investment and savings (percentage of GDP)       
Investment 15.9 20.5 18.4 13.9 14.1 14.9 
   Public 2.8 3.3 3.5 4.6 4.7 4.9 
   Privatef 13.1 16.9 14.9 9.3 9.5 10.0 
Gross national savings 60.6 57.2 58.9 37.6 42.0 48.4 
   Public  60.2 55.2 46.4 47.1 45.8 46.2 
   Privatef 4.5 2.1 12.5 -10.3 -3.8 2.1 
Savings/investment balance 44.6 36.8 40.5 23.6 27.8 33.5 
External sector       
Exchange rate (US$ per KD, period average) 3.45 3.52 3.72 3.48 3.49 .. 
Real effective exchange rate (percenta ge change) 0.9 0.3 8.4 -0.5 .. .. 
Current account (percentage of GDP) 44.6 36.8 40.5 23.6 27.8 33.5 
International reserve assets (US$ billion) 11.8 15.9 16.7 17.7 18.7 23.1 
   in months of imports of goods and services  5.3 5.9 5.3 6.8 6.9 7.0 
Oil production (million barrels;  daily average)g 2.7 2.6 2.7 2.3 2.3 2.3 
Crude oil exports (million barrels;  da ily average) 1.7 1. 6 1.7 1.3 1.4 1.4 
Kuwait's oil export price (US$, average) 58.88 66.35 91.16 60.68 76.32 104.1 
 
.. Not available. 
 
a Preliminary. b Estimates. 
c  Changes in % of broad money stock. 
d Unweighted. e Kuwaiti fiscal year ending 31 March, e. g. 2007 refers to fiscal year 2007/08. 
f Also includes government entities. 
g Includes share of production from the Neut ral Zone between Kuwait and Saudi Arabia. 
 
Source:  IMF (2011b), Kuwait:  Statistical Appendix, Country Report No. 11/219.  Viewed at:  
 http://www.imf.org/external/  pubs/f t/scr/2011/cr11219.pdf;  and information pr ovided by the Kuwaiti authorities.  WT/TPR/S/258 Trade Policy Review 
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(3) TRADE PERFORMANCE AND INVESTMENT  
(i) Trade in goods and services 
12. Kuwait's external accounts reflect  the dominance of oil production and exports in the structure 
of the economy and display the volatility created by its reliance on world oil markets.  During the 
period under review, oil and ot her fuel products accounted for around 90% of total merchandise 
exports (Chart I.1).  Imports of goods and services grew strongly and varied around 25-28% of GDP.  
This produced a large and sustained current account  surplus of between 24% and 45% of GDP during 
the period under review (Table I.1). 
13. Kuwait's economy is highly dependent on intern ational trade: the ratio of merchandise and 
services trade (exports and imports) to GDP averag ed 86.6% during 2007-09.  In 2010, Kuwait ranked 
29th among world merchandise exporters and 45th among importers (considering the countries of the 
EU together and excluding intra-EU trade).  In services trade, Kuwait ranked 38th among exporters 
and 32nd among importers.10 
14. In 2009, oil exports shrank sharply, by 40%, and even though imports of goods and services 
fell also, by almost 25%, Kuwait 's current account surplus declin ed from 40.5% to 23.6% of GDP. 
The return to growth in 2010, and to higher oil prices and output, saw the current account surplus 
increase again, to 27.8% of GDP.  The IMF projects th at this share will continue to rise in 2011, to 
33.5% of GDP (Table I.1), and to 30.4% for 2012.11 
15. Since 2006, over 75% of Kuwait's exports (mainly oil and other fuels) have been destined for 
Asian markets, led by Korea (Rep. of), Japan, India, and China (Chart I.2).  Non-oil exports, 
representing around 5% of the total in normal years, are composed primarily of petrochemicals and 
some re-exports of automotive products to other GCC countries. 
16. Manufactured goods make up the bulk (around 80%) of Kuwait's merchandise imports, with 
the composition of imports reflecting Kuwait's high  per capita income and comprising in particular 
automotive products, machinery, office machines a nd telecommunication equipment, and inputs for 
Kuwait's booming construction industry. Kuwait im ports practically all of its food and other 
agricultural needs, which account for around 16. 5% of the value of merchandise imports.  
17. In 2010, Kuwait sourced 63.8% of its merchandi se imports from Asia and Europe (Chart I.2), 
although their respective shares have changed in the past  five years;  imports from Asia have become 
increasingly important and those from Europe have dec lined in terms of percentage share.  Imports 
from other GCC countries also represent a sizeable share. 
18. Balance of payments data indicate that Kuwait is, increasingly, a net importer of services, 
with a deficit that rose from about US$2.2 b illion in 2006 to an estimated US$7.2 billion in 2011 
(Table I.2).  Transportation services went from a surplus of 0.2 billion to a deficit of US$2 billion 
during the same period, while the deficit of  travel services averaged US$6.7 billion. 
 
                                                      
10 WTO Statistics database, "Trade Profiles:  Kuwait".  Viewed at:  http://stat.wto.org 
/CountryProfiles/KW_e.htm. 
11 IMF (2011c). The State of Kuwait WT/TPR/S/258 
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Chart I.1
Composition of merchandise  trade, 2006 and 2009
2006 2009
(a)    Exports, including re-exports  (f.o.b.)
Other fuel
33.4
Total:   US$56.0 billion Total:  US$51.9 billion  
(b)    Imports (c.i.f.)
Chemicals
8.6Iron and steel
9.9
Manufactures
80.7Office machines 
& tele-
communication 
equipment
4.9Other electrical 
machines
4.8
Automotive 
products
16.1Other 
agriculture
0.8Food
14.4
Other consumer 
goods
9.3Other 
manufactures
7.4
Other consumer 
goods
10.5Agriculture
16.5Food
16.0
Other 
agriculture
0.5
Automotive 
products
13.4
Non-electrical 
machinery
10.6Other semi-
manufactures
9.2Other 
manufactures
9.1Iron and steel
4.7Other
0.6
Office machines & 
telecommunication 
equipment
6.7Agriculture
15.3
Chemicals
9.7Manufactures
79.2
Total:   US$17.2 billion Total:   US$20.3 billionPer cent
Crude oil
65.4
Other
0.4Manufactures
9.0Manufactures 
4.6
Other electrical 
machines
5.4Crude oil
57.1Agriculture
0.4
Non-electrical 
machinery
8.8
Source :  UNSD, Comtrade database (SITC Rev.3); and information provided by the Kuwaiti authorities.Mining
3.7
Other semi-
manufactures
10.8Mining
3.7Other
0.1
Other fuel
29.6Agriculture
0.3
 WT/TPR/S/258 Trade Policy Review 
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Chart I.2
Direction of merchandise trade, 2006 and 2010 
2006 2010
(a)    Exports (f.o.b.)
Other Asia  
4.8Asia
76.1India
12.8China
10.1
Total:   US$46.9 billion Total:  US$60.5 billion
(b)    Imports (c.i.f.)
Other
0.3India
3.9
EU27
30.6U.A.E.
3.5
United States
14.2Europe
34.1
America
16.5Other Middle East 4.6 Africa
0.8
EU27
22.4Europe
26.5
America
15.9Other Europe
4.1Africa
1.9Syria
2.5
Japan
6.9U.A.E.
3.5
Other Asia
8.4
United States
13.4
Total:   US$16.6 billion Total:   US$22.8 billionPer cent
Asia
77.2
Other Asia  
3.8Middle East
3.7Japan
18.4
Other Middle 
East
4.7
Korea, Rep. of
5.1Korea, Rep. of
4.4United States
8.1Chinese Taipei
9.2
India
8.0United States
8.4
Source :  IMF, "Direction of Trade".  IMF online database, August 2011.China
8.9EU27
6.1Middle East   
3.1
Asia
37.3 Asia
30.9China 5.7
Other
0.8Pakistan
3.5
EU27
9.7Indonesia 2.9Japan
15.5
Africa
3.6
Japan 7.9Syria 2.5Africa
2.6Korea, Rep. of
16.3Korea, Rep. of   
15.8
Other America
2.3Other America
2.5Other Asia
8.9Pakistan  3.1Singapore  8.7Chinese Taipei
9.7
Singapore  4.0
Indonesia  2.1
Saudi 
Arabia  
6.9
Saudi Arabia 
6.9Other Europe
3.5Middle 
East
17.5Middle 
East
17.5Other
0.9Other
0.4India
8.9China
3.7
 The State of Kuwait WT/TPR/S/258 
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Table I.2 
Balance of payments, 2006-11 
(US$ billion) 
  2006 2007 2008 2009 2010a 2011b 
Current account 45.3 42.2 60.2 25.9 36.9 57.6 
Goods (trade balance) 40.2 43.4 64.0 34.4 47.9 69.4 
Exports 56.5 62.6 87.0 51.7 67.0 92.5 
Oil exports 53.2 59.1 82.6 46.6 61.7 85.9 
Non-oil exports including re-exportsc 3.3 3.5 4.4 5.1 5.3 6.6 
Of which:  re-exports 0.9 1.2 1.7 1.6 1.8 2.7 
Imports -16.2 -19.1 -22.9 -17.3 -19.1 -23.1 
Services -2.2 -3.2 -3.8 -2.5 -5.9 -7.2 
Transportation 0.2 -0.1 -0.6 -1.4 -1.7 -2.0 
Insurance -0.1 -0.1 -0.1 -0.2 -0.2 -0.3 
Travel -5.4 -6.4 -7.3 -6.1 -6.5 -7.9 
Other services 3.0 3.4 4.3 5.1 2.6 3.0 
Investment income 11.0 12.4 10.7 7.0 7.9 9.2 
Receipts 12.5 16.3 14.0 8.6 9.6 10.4 
General governmentd 7.1 8.5 8.8 6.3 7.4 7.8 
Other sectorse 5.4 7.8 5.1 2.3 2.2 2.5 
Payments -1.5 -3.9 -3.2 -1.6 -1.8 -1.2 
General government 0.0 0.0 0.0 0.0 0.0 0.0 
Other -1.5 -3.9 -3.2 -1.6 -1.8 -1.2 
Current transfersf -3.7 -10.5 -10.7 -13.0 -13.0 -13.8 
Capital and financial account -48.8 -33.4 -49.6 -25.3 -32.6 -53.3 
Capital accountg 0.7 1.5 1.7 1.1 2.2 2.3 
Financial account -49.6 -34.9 -51.3 -26.4 -34.7 -55.5 
Direct investment -8.1 -9.7 -9.1 -7.5 -2.0 -8.0 
Abroadh -8.2 -9.8 -9.1 -8.6 -2.1 -8.0 
In Kuwait 0.1 0.1 0.0 1.1 0.1 0.1 
Portfolio investment -29.1 -34.9 -28.1 -8.2 -7.7 -29.9 
Other investment (net) -12.4 9.7 -14.1 -10.7  -25.0  -17.7 
Net errors and omissionsi 7.1 -5.5 -10.0 1.2 -3.3 0.0 
Overall balance 3.6 3.3 0.7 1.7 1.0 4.4 
 
a Preliminary. b Projection. 
c Also includes unrecorded oil exports. 
d Kuwait Investment Authority, Kuwait Petr oleum Corportation, Kuwait Fund for Arab Economid Development, Public Institute 
for Social Security. 
e CBK, local banks, investment companies, exchange companies,  insurance companies, and the non-financial private sector. 
f From 2007, based on a new, more comprehensive meth odology to estimate outward workers' remittances. 
g Includes UN war compensation. 
h For 2010, includes a projection of the net inflow from the sale for US$10.6 billion of a foreign asset owned by a Kuwaiti 
company. 
i Includes other unclassified private sector flows. 
 
Source : IMF (2011b) Kuwait:  Statistical Appendix,  Country Report No. 11/219, July.  Viewed at:  
 http://www.imf.org/external /pubs/ft/scr/2011/cr11219.pdf. 
(ii) Foreign direct investment 
19. During the last few years, Kuwait has invested increasingly in the rest of the world, with 
annual FDI outflows averaging over US$7.5 billion in  2006-10.  Some of Kuwait's leading companies 
investing abroad are:  Kuwait Foreign Petr oleum Exploration Company (KUFPEC), Kuwait 
Petroleum International (KPI), Petroche mical Industries Company (PIC), Zain 
(telecommunications)12, Agility Public Warehousing Company (logistics), and National Industries 
Group Holdings SAK (industry holding company).13 
                                                      
12 Zain is 24.6% owned by Kuwait Investment Authority. 
13 UNCTAD (2011);  and informati on provided by the authorities. WT/TPR/S/258 Trade Policy Review 
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Table I.3 
Foreign direct investment, 2006-10 
(US$ million and %) 
 2006 2007 2008 2009 2010 
FDI inflows 121 112 -6 1,114 81 
FDI inward stock 778 940 943 6,301 6,514 
FDI inward stock (% of GDP) 0.8 0.8 0.6 5.8 5.0 
FDI outflows 8,211 9,784 9,091 8,636 2,069 
FDI outward stock 4,616 16,884 15,385 19,340 18,676 
FDI outward stock (% of GDP) 10.7 12.8 10.4 17.7 14.2 
 
Source : UNCTAD (2011), World Investment Report , Geneva. 
20. Kuwait's annual FDI inflows rose from an average of US$31 million during 1995-04 to 
US$284 million over 2006-10, but are still well below other countries in the region and worldwide. 
Moreover, the stock of inward FDI, as percentage of  GDP, is only 5% (albeit up from 0.8% in 2008).  
On the basis of UNCTAD's Inward FD I Performance Index, Kuwait ranked 135th out of 
141 economies in 201014, while its position in UNCTAD's In ward FDI Potential Index was 37th in 
2009.15 
21. FDI in Kuwait has been inhibited by several fact ors that have limited the role of the private 
sector (local and foreign) in the economy. Under th e Foreign Investment Law, foreign investors have 
been allowed to own up to 100% of business since 2001. Nonetheless, seeking approval is reportedly 
a lengthy procedure;  the law does not apply to  certain economic activities (Chapter II(3)(i)); and 
foreign portfolio investment through the Kuwait stock exchange may not exceed 49% in any listed 
company (Chapter II(3)(i)). 
22. It is recognized that attention also needs to be given to improving the business environment in 
Kuwait if the Government is to succeed in increasi ng the role of the private sector in the economy.16  
Kuwait ranks 67th (out of 183 economies) in the World Bank's Ease of Doing Business 2012 Index, 
but its ranking is lower for "trading across bor ders" and lower still for "starting a business".17 
23. A positive sign of the Government's determinati on to increase FDI inflows and the role of the 
private sector in the economy has b een the recent decision to allow fore ign participation in the energy 
sector for the first time, specifically in the developm ent of natural gas production.  This is aimed at 
facilitating the acquisition of the technology and know-how necessary to exploit Kuwait's energy 
resources more effectively.  Moreover, a new priv atization law passed in mid-May 2010, sets out a 
process of transferring ownership to the private sector (build-operate-transfer (BOT) schemes) by 
identifying suitable partners from home and abroad  and issuing shares thr ough initial public offerings, 
while maintaining a public share ownership (in principle 24%) through the Kuwait Investment 
                                                      
14 UNCTAD's Inward FDI Performance Index measures  the extent to which host countries receive 
inward FDI, and ranks countries by the amount of FDI they receive relative to th eir economic size.  It is 
calculated as the ratio of a country's share in global FDI inflows to its share in global GDP. 
15 UNCTAD's Inward FDI Potential Index measures the extent to which host countries receive inward 
FDI, and ranks countries by the amount of FDI they receive relative to their potential.  It is calculated on the basis of structural variable s, such as country risk, and trade-related measures. 
16 Kuwait National Competitiveness Committee (2010). 
17 The index is based on ten topics (Kuwait's ranking in parenthesis):  starting a business (142);  dealing 
with construction permits (121);  getting electricity (5 7);  registering property (88);  getting credit (98);  
protecting investors (29);  paying taxes (15);  trading across borders (112);  enforcing contracts (117);  and 
resolving insolvency (48).  World Bank Group online information.  Viewed at:  http://www.doingbusiness. 
org/data/exploreeconomies/kuwait/. The State of Kuwait WT/TPR/S/258 
 Page 9 
 
 
Authority (KIA) (Chapter III(3)(ii)).  However, a number of amendments to the law might reduce its 
impact:  the healthcare, education,  and energy sectors have been excluded and the Government is to 
retain an important share in all newly privatized companies;  and the sale of major stakes in public 
holdings is expected to take place slowly.  New laws are in place also to reform capital markets, and 
there are plans for new laws to deregulate the insu rance industry and to revise the legal environment 
for commercial enterprises, where current laws  are in many cases decades old and not suited to 
current business conditions. 
24. The influential Kuwait Chamber of Commerce and Industry (KCCI) considers that the 
Government is taking important steps to improve the country's business environment.  The KCCI has 
welcomed the new laws on privatization and BOT, but considers that for them to succeed more 
attention is needed in improving infrastructure and logistics, making the leasing of land more predictable over the long-term, and facilitating the establishment of new businesses. 
(4) O
UTLOOK  
25. Under its 2010-14 Development Plan, Kuwait aims to foster the participation of the non-oil 
sector in the economy and achieve minimum annual real GDP growth of 5%.  The Plan involves 
increased participation of the private sector, main ly through BOT schemes, and projected public 
expenditure of KD 31-37 billion (US$ 108-130 billion).  It includes the new business hub (Silk City) 
with an estimated cost of KD 22 billion;  KD 20 billi on is earmarked for expansion of the oil sector, to 
increase crude oil production to 3.5 million barrels per day (mmbd) by 2015 and to 4 mmbd by 2020;  
and KD 10 billion on infrastructural projects, including increased capacity at ports and airports, a 
railway and metro system, and a fourth oil re finery to satisfy domestic demand for fuels 
(Chapter IV(2)(i)). 
26. Given that the oil sector is not labour-intensive and increasing public-sector employment is 
not sustainable in the long-run, another key objectiv e under the Development Plan is to encourage the 
participation of Kuwaitis in the private sector through the "Kuwaitizati on" programme (minimum 
sectoral quotas for the participation of Kuwaitis).  This objective is supporte d by Law 19 of 2000, 
which sets out generous government-p rovided benefits to Kuwaitis in the private sector.  Nonetheless, 
public-sector wages and benefits remain very attractive. 
27. Kuwait's long-term strategy also aims to en sure intergenerational economic equity in the 
exploitation of its non-renewable natu ral wealth, by saving part of th e oil and gas revenues into funds, 
notably the General Reserve Fund (GRF)18 and the Future Generation Fund (FGF)19 managed by KIA.  
Accumulated transfers to the FGF totalled KD 9.3 billion during 2003/04-2009/10.20 
                                                      
18 The GRF, established in 1953, is the main treas urer for the Government;  it receives all revenues 
(including all oil revenues) from which all State budg etary expenditures are paid.  The GRF also holds all 
government assets, including Kuwait’s participation in public enterprises and international organizations (KIA 
online information.  Viewed at:  http://www.kia.gov.kw/En/About_KIA/ Overview_of_Funds/Pages/default. 
aspx). 
19 The FGF was created in 1976 with a by transfer of  50% of the GRF at that time;  10% of all state 
revenues are transferred to the FGF annually and all inve stment income is reinvested (KIA online information. 
Viewed at:  http://www.kia.gov.kw/En/About_K IA/Overview_of_Funds/Pages/default.aspx). 
20 Global Investment House (2011).