Due to the natural conditions and the desert environment of Kuwait, trade was the chief profession practiced by the Kuwaiti people in the yesteryear. It is noted that the economic system of Kuwait in both the eighteenth and 19th centuries, was chiefly based on trade where the City of Kuwait was a strong challenger to Albasra the celebrated Iraqi trade centre at that clip. Kuwait turned to be a conduit for trade from the Arabian Gulf to Asia, Africa, and Europe. Kuwait ‘s economic system was based on trade.
The trade of pearl become the chief beginning of income for Kuwait, where the Kuwaiti subjects extracted pearl from the Arabian Gulf and traded it with other states in the part. India was the chief finish for all Kuwaiti bargainers in the eighteenth and 19th centuries. In 1904 Kuwait had more than 500 vass and more than 460 boots were engaged in pearl -diving using more than 9.000 work forces. ( Y.S. Al Sobah, 1980 ) .
In India that was a commercial centre at that clip. In India, Kuwaiti bargainers would purchase fabrics, silk, spices and aromas to sell in Kuwait. Kuwait besides had trade relation with Iran, Egypt and Syria. With the find of oil in the first half of the 19th century Kuwait entered a new economic epoch. Oil exports had brought accumulated wealth to Kuwait and improved the quality of life of all the Kuwaiti subjects.
Due to the considerable fiscal excesss generated from oil exports, the society developed inordinate ingestion tendency that depends mostly on imports coming from outside universe. In this essay I shall look into Kuwait ‘s exports and imports with the universe every bit good as the chief characteristics of Kuwait foreign trade.
Kuwait Trade with the World
Kuwait is neither industrial nor agricultural state. It is income depends on the oil grosss. As a consequence Kuwait chiefly satisfies its industrial and agricultural demands from trade with other states in the universe. Having little domestic fabrication sector, the imports of Kuwait for high-income economic system are finished merchandises. ( Y.S. Al Sobah,1980 ) .
On the one manus, heavy equipment, machinery, electronics, furniture, IT devices, telecom equipment, warming and chilling contraptions, manufactured nutrient etc are the chief imported points by Kuwait. On the other manus, oil, petrochemicals, fertilisers, refined oil merchandises are the chief exports of Kuwait. Its trade with the universe includes Asia, Africa, North America, Australia, North Africa and the Arab universe. The United States comes on the top of Kuwait ‘s foreign spouses with regard to exports and imports.
Kuwait trade with the Arab universe is rather limited because the bulk of these states are n’t industrial 1s. They about import the same type of points and merchandises imported by Kuwait from the developed state. However, Kuwait has trade relation with about the Arab universe. Saudi Arabia, Egypt, Jordan and Syria are the major commercial spouses of Kuwait in the part. Most of Kuwait ‘s imports from the Arab universe come in signifier of agricultural points, dairy merchandises, fruits and natural stuff. The following tabular array shows the development of Kuwait trade with the Arabic since 2003 to 2007 in Numberss.
Imports of Kuwait from the Arab universe in US $ 1000000s
United arab republic
Beginning: Arab Monetary Fund: Kuwait Foreign Trade Statisticss
It is obvious that Kuwait trade with the Arab states is holding upward tendency. There is a considerable addition of Kuwait ‘s imports from the Arab states since 2003 to 2007. Kuwait ‘s entire imports from the Arab states were US $ 1,077.52 1000000s in 2003 increased to US $ 3,021.45 1000000s in 2007. ( Arab Monetary Fund ) . Yemen comes on top of these states with entire exports to Kuwait about US $ 721.22 1000000s, so UEA with entire exports to Kuwait US $ 528.98 1000000s, Saudi Arabia with about US $ 435.58 and Egypt with entire exports to Kuwait US $ 264.24 ( Arab Monetary Fund )
As for Kuwait ‘s exports to the Arab universe, they chiefly consist of oil, petrochemicals and oil-based merchandises. These exports go chiefly to Yemen, Saudi Arabia, UEA, Egypt, Syria, Tunis and Lebanon. The following tabular array shows the development of Kuwait ‘s exports to the Arab universe since 2003 to 2007.
Exports of Kuwait to the Arab universe in US $ 1000000s
United arab republic
Beginning: Arab Monetary Fund: Kuwait Foreign Trade Statisticss
Kuwait ‘s entire exports to the Arab universe were US $ 647.55 1000000s in 2003 developed to US $ 1,787.75 in 2007. As it shown in the tabular array the bulk of these exports goes to UEA ( $ 309.54 1000000s ) , Yemen ( $ 422.02 1000000s ) , Saudi Arabia ( $ 254.88 1000000s ) , Syria ( $ 288.73 1000000s ) and Egypt ( $ 154.62 1000000s ) . The volume of Kuwait ‘s exports to the Arab states is still low in comparing to other states. In general due to the similarity of the construction of the economic activities in the bulk of the Arab states, trade exchange among these states is really limited.
Kuwait has a different trade tendency with US. Bing the major spouse of Kuwait foreign trade, US has the largest portion of Kuwait foreign trade. Kuwait exports extremely advanced engineering from US such as machinery, digital contraptions, equipment, IT engineering, vehicles and arms. Kuwait besides exports baccy, drink, manufactured nutrient and natural stuffs.
US chiefly imports from Kuwait include rough oil and petrochemicals. Trade balance has ever been in favour of Kuwait due to its considerable oil exports to US. The following tabular array shows Kuwait ‘s exports and imports from US throughout 2009.
Beginning: Beginning: U.S. Census Bureau, Foreign Trade Division, Data Dissemination Branch, Washington, D.C. 20233
Entire imports from US reached US $ 1.951.8 million in 2009 against US $ 3.782.6 million entire imports from US holding 1.830.8 million trade balance in favour of Kuwait. However, the volume of Kuwait trade with US has well diminution compared to old old ages. For illustration in 2008 Kuwait ‘s imports from US were US $ 2.719.3 million against US $ 7.093.0 million exports with US $ 4,373.6 million trade balance in favour of Kuwait.
EU is an of import trade spouse to the province of Kuwait. United Kingdom – Kuwait trade has well developed during the last few old ages. United kingdom has play an of import function in the release of Kuwait from the Iraqi Invasion. Therefore the relation between the two states is strategic and achieves common involvements. In 2009, the volume of trade between UK and Kuwait increased compared to 2008. “ Kuwaiti exports to the EU in 2008 totalled 5.222 billion euro and imports from the EU totaled 4.603 billion euro go forthing a balance of 619 million euro in favour of Kuwait. ” ( Kuwait Times Newspaper,2009 )
Kuwait besides trades with Spain, Germany, France and other EU states. Its exports to Spain in 2009 were 227 million euro while its imports from Spain for the same twelvemonth were 135 million euro. Kuwait exports to Germany in 2009 were 85 million euro and its imports from Germany for the same twelvemonth were 952 million euro.
In 2009, Italy entire exports to Kuwait were exports 628 million euro and its imports from Kuwait were 75 million euro. ( KUNA ) The construction of the exports of Kuwait to EU consists of rough oil and petrochemical while the construction of the imports of Kuwait from EU consists of Machinery, manufactured merchandises, chemicals, nutrient and drinks. Unlike Kuwait trade with UK, the trade balance between Kuwait and EU states is in the favour of EU particularly in 2009.
In Asia, Kuwait has built strong commercial dealingss with states such as China, India, Indonesia and South Korea. Kuwait has been the path of trade between the Arabian Gulf and India for so many old ages. It is distinguished commercial dealingss with India began in the 19th century. “ Indo-Kuwaiti dealingss have ever had a trade-bias.
While Indian companies did good until the 80s in footings of undertaking exports, there has non been any important discovery on the investing forepart since the 90s. The bilateral trade between India and Kuwait has, nevertheless, risen steadily in the station release period. ” ( Embassy of India, Kuwait ) . The following tabular array shows the bilateral trade relation between Kuwait and India from 2003 to 2008.
In US $ Million
Indian Exports to Kuwait
A A 513.73
A A 613.87
A A 682.12A
Indian Imports from Kuwait
A A 461.85
A A 5,987.46
A A 7,693.63
A A 8,375.75
Beginning: Directorate General of Commercial Intelligence & A ; Statisticss ( DGCI & A ; S ) , Kolkata
It is singular that the entire volume of trade between Kuwait and India has developed greatly since 2003 to 2008. The entire volume of trade between the two states in 2003 was US $ 461.57 million increased to US $ 8.375.75 in 2008. The great portion of this addition in the volume of trade between Kuwait and India began in 2006 with US $ 6.601.33 million entire volume of trade.
The chief trade goods imported by Kuwait from India include meat, bird ‘s eggs, honey, boilers, sound recording equipments, Fe and steel, atomic reactors, dairy merchandises, vehicle, reproducers, parts, tea, spices and machinery and mechanical parts. While the chief exports to India include petroleum oil organic chemicals ; salt, Earths and rock, stick oning stuff, calcium hydroxide, cement ; fertilisers. ( Embassy of India, Kuwait ) .
Kuwait has commercial dealingss with China that can be tracked back to the 2nd half of the 19th century. In 2008, the volume of trade between Kuwait and China was US $ 6.78 billion, of which the Chinese export was US $ 1.74 billion, and import US $ 5.04 billion. ” ( www.kw.china-embassy.org ) . Kuwait has besides commercial relation with other states in Asia such as South Korea, Japan and Philippine.
In decision, Kuwait has bilateral trade relation with most of the universe states. Kuwait does n’t hold complacency of heavy equipment, IT and digital engineering, electronics and machinery. Crude oil dominates Kuwait ‘s exports to the universe. The major portion of Kuwait trade with the universe is concentrated in US, EU and Asia. The volume of Kuwait with either the GCC or the Arab universe is really limited. Domestic investings in industry are limited as most of these investings are directed to the service sector. The authorities has to promote domestic every bit good as foreign investings in Kuwait to concentrate on the production sector in order to minimise the volume of Kuwait ‘s imports from the universe.