The State of Kuwait, an Arab constitutional monarchy that gained its independence from Britain in 1961, is endowed with 96 billion barrels of oil reserves – roughly 10 percent of the world’s oil supply. Kuwait covers an area of about 17,818 square kilometers of mostly flat desert in the northwestern corner of the Arabian Gulf (Persian Gulf). To the south and southwest Kuwait is bordered by Saudi Arabia and to the north and northwest by Iraq. Iran lies to the east, across the Arabian Gulf.

Oil accounts for nearly 50 percent of GDP and 95 percent of the export revenues. The Al-Sabah dynasty has used state-owned oil revenues to build modern infrastructure and cradle-to-grave welfare system for Kuwait’s small population. Former Prime Minister Sabah Al-Ahmed al-Jabr al-Sabah was chosen as Amir in January 2006.

Kuwait lacks water and has practically no arable land, thus preventing development of agriculture. With the exception of fish, it depends almost wholly on food imports. About 75% of potable water must be distilled or imported. Because of its high per capita income, comparable with Western European incomes, Kuwait provides its citizens with extensive health, educational, and retirement benefits. Per capita military expenditures are among the highest in the world. The economy improved moderately since 1994, with the growth in industry and finance. The World Bank has urged Kuwait to push ahead with privatization, including in the oil industry, but the government will move slowly on this front.