About the CBI

February 2006
Background Note: Kuwait

Flag of Kuwait is three equal horizontal bands of green - top - white, and
red, with black trapezoid based on hoist side.

PROFILE

OFFICIAL NAME:
State of Kuwait

Geography
Area: 17,820 sq. km. (6,880 sq. mi.); approximately the size of the State of
New Jersey.
Cities: Capital--Kuwait City, pop. (2002 est.) 413,170. Other cities--Ahmadi,
Jahra, Fahaheel.
Terrain: Almost entirely flat desert plain (highest elevation point--306 m).
Climate: Summers are intensely hot and dry with average highs ranging from
42o-46oC (108o-115oF); winters are short (Dec.-Feb.) and cool, averaging
10o-30oC (50o-80oF), with limited rain.

People
Nationality: Noun and adjective--Kuwaiti(s).
Population (Dec. 2004 est.): 2.8 million, including about 1.8 million
non-Kuwaiti citizens.
Annual growth rate: 4.8%.
Ethnic groups: Kuwaiti 35%, other Arab 22%, non-Arab (primarily Asian) 39%,
stateless 4%.
Religion: Muslim 75% (Sunni 70%, Shi'a 30% among Kuwaitis), with small Hindu,
Christian and Sikh communities.
Languages: Arabic (official), English is widely spoken.
Education: Compulsory from ages 6-14; free at all levels for Kuwaitis,
including higher education. Adult literacy (age 15 and over)--83.5% for the
overall population (male 85.1%, female 81.7%), 91.2% for Kuwaitis (male
91.4%, female 90.8%).
Health: Infant mortality rate--11 deaths/1,000 live births. Life
expectancy--75 yrs. male, 77 yrs. female.
Work force (2002 actual): 1.364 million (of which about 19% are Kuwaiti
nationals. 62.7% male; 37.3% female).

Government
Type: Constitutional hereditary emirate.
Independence: June 19, 1961 (from U.K.).
Constitution: Approved and promulgated November 11, 1962.
Branches: Executive--Amir (head of state); prime minister (head of
government); Council of Ministers (cabinet) is appointed by prime minister
and approved by the Amir. Legislative--unicameral elected National Assembly
(Majlis al-'Umma) of 50 members who serve 4-year terms. Judicial--High Court
of Appeal.
Administrative subdivisions: Six governorates (muhafazat): Al 'Asimah,
Hawalli, Al Ahmadi, Al Jahra', Mubarak Al-Kebir, and Al Farwaniyah.
Political parties: None; formal political parties are not officially
recognized although de facto political blocs exist.
Elections: There are no executive branch elections; the Amir is hereditary;
prime minister and deputy prime ministers are appointed by the Amir.
Legislative branch elections were last held July 5, 2003 (next National
Assembly election is due in 2007).
Suffrage: Adult males and as of May 16, 2005, adult females, who have been
citizens for 20 years and are not in the security forces (about 14% of all
citizens).

Economy
GDP (2004 est.): $48 billion.
Real GDP growth rate (2004): 6.8%.
Natural resources: Oil, natural gas, fish.
Agriculture (about 0.3% of GDP): With the exception of fish, most food is
imported. Cultivated land--1%.
Industry (about 60% of GDP): Types--petroleum extraction and refining,
fertilizer, chemicals, desalination, construction materials.
Services (about 39% of GDP): public administration, finance, real estate,
trade, hotels and restaurants
Trade (2004): Exports --$27.42 billion: oil (91.3%). Major markets--Japan
25%, South Korea 13%, U.S. 12%, Singapore 10%, Netherlands 4.5%.
Imports--$11.12 billion: food, construction materials, vehicles and parts,
clothing. Major suppliers--U.S. 13%, Japan 11%, Germany 9%, U.K. 6%, Saudi
Arabia 6%.

PEOPLE
Over 90% of the country's estimated 2.8 million population lives within a
500-square kilometer area surrounding Kuwait City and its harbor. Although
the majority of people residing in the State of Kuwait are of Arab origin,
less than half are originally from the Arabian Peninsula. The discovery of
oil in 1938 drew many Arabs from nearby states. Following the liberation of
Kuwait from Iraqi occupation in 1991, the Kuwaiti Government undertook a
serious effort to reduce the expatriate population by specifically limiting
the entry of workers from nations whose leaders had supported Iraq during the
Gulf War. Kuwait later abandoned this policy, and it currently has a sizable
foreign labor force (over 60% of the total population).

Of the country's total population, approximately 2.1 million are Muslims,
including nearly all of its 956,000 citizens. While the national census does
not distinguish between Sunni and Shi'a adherents, the majority of citizens,
including the ruling family, belong to the Sunni branch of Islam. The total
Sunni Muslim population is approximately 1.7 million, 669,000 of whom are
citizens. The remaining 30% of Muslim citizens (approximately 287,000) are
Shi'a, as are approximately 100,000 noncitizen residents. Estimates of the
Christian population range from 250,000-300,000 residents, including about
200 citizens. There also are communities of Hindus (estimated at 100,000) and
Sikhs (estimated at 10,000).

Kuwait's 83% literacy rate, one of the Arab world's highest, is the result of
extensive government support for the education system. Public school
education, including Kuwait University, is free, but access is restricted for
foreign residents. The government sponsors the foreign study of qualified
students abroad for degrees not offered at Kuwait University. In 2004,
approximately 1,720 Kuwaitis were enrolled in U.S. universities, down 6.8%
from the previous year.

HISTORY
Archaeological finds on Failaka, the largest of Kuwait's nine islands,
suggests it was a trading post at the time of the ancient Sumerians. Failaka
appears to have continued to serve as a market for approximately 2,000 years,
and was known to the ancient Greeks. Despite its long history as a market and
sanctuary for traders, Failaka appears to have been abandoned as a permanent
settlement in the 1st century A.D. Kuwait's modern history began in the 18th
century with the founding of the city of Kuwait by the Uteiba, a subsection
of the Anaiza tribe, who are believed to have traveled north from Qatar.

Threatened in the 19th century by the Ottoman Turks and various powerful
Arabian Peninsula groups, Kuwait sought the same treaty relationship Britain
had already signed with the Trucial States (UAE) and Bahrain. In January
1899, the ruler Sheikh Mubarak Al Sabah--"the Great"--signed an agreement
with the British Government that pledged himself and his successors neither
to cede any territory, nor to receive agents or representatives of any
foreign power without the British Government's consent, in exchange for
protection and an annual subsidy. When Mubarak died in 1915, the population
of Kuwait of about 35,000 was heavily dependent on shipbuilding (using wood
imported from India) and pearl diving.

Mubarak was succeeded as ruler by his sons Jabir (1915-17) and Salim
(1917-21). Kuwait's subsequent rulers have descended from these two brothers.
Sheikh Ahmed al-Jabir Al Sabah ruled Kuwait from 1921 until his death in
1950, a period in which oil was discovered and in which the government
attempted to establish the first internationally recognized boundaries; the
1922 Treaty of Uqair set Kuwait's border with Saudi Arabia and also
established the Kuwait-Saudi Arabia Neutral Zone, an area of about 5,180 sq.
km. (2,000 sq. mi.) adjoining Kuwait's southern border.

Kuwait achieved independence from the British under Sheikh Ahmed's successor,
Sheikh Abdullah al-Salim Al Sabah. By early 1961, the British had already
withdrawn their special court system, which handled the cases of foreigners
resident in Kuwait, and the Kuwaiti Government began to exercise legal
jurisdiction under new laws drawn up by an Egyptian jurist. On June 19, 1961,
Kuwait became fully independent following an exchange of notes with the
United Kingdom.

Kuwait enjoyed an unprecedented period of prosperity under Amir Sabah
al-Salim Al Sabah, who died in 1977 after ruling for 12 years. Under his
rule, Kuwait and Saudi Arabia signed an agreement dividing the Neutral Zone
(now called the Divided Zone) and demarcating a new international boundary.
Both countries share equally the Divided Zone's petroleum, onshore and
offshore. The country was transformed into a highly developed welfare state
with a free market economy.

In August 1990, Iraq attacked and invaded Kuwait. Kuwait's northern border
with Iraq dates from an agreement reached with Turkey in 1913. Iraq accepted
this claim in 1932 upon its independence from Turkey. However, following
Kuwait's independence in 1961, Iraq claimed Kuwait, arguing that Kuwait had
been part of the Ottoman Empire subject to Iraqi suzerainty. In 1963, Iraq
reaffirmed its acceptance of Kuwaiti sovereignty and the boundary it agreed
to in 1913 and 1932, in the "Agreed Minutes between the State of Kuwait and
the Republic of Iraq Regarding the Restoration of Friendly Relations,
Recognition, and Related Matters."

Following several weeks of aerial bombardment, a UN-mandated coalition led by
the United States began a ground assault in February 1991 that liberated
Kuwait. During the 7-month occupation by Iraq, the Amir, the Government of
Kuwait, and many Kuwaitis took refuge in Saudi Arabia and other nations. The
Amir and the government successfully managed Kuwaiti affairs from Saudi
Arabia, London, and elsewhere during the period, relying on substantial
Kuwaiti investments available outside Kuwait for funding and war-related
expenses.

Following liberation, the UN, under Security Council Resolution 687,
demarcated the Iraq-Kuwait boundary on the basis of the 1932 and the 1963
agreements between the two states. In November 1994, Iraq formally accepted
the UN-demarcated border with Kuwait, which had been further spelled out in
UN Security Council Resolutions 773 and 883.

GOVERNMENT AND POLITICAL CONDITIONS
Kuwait is a constitutional, hereditary emirate ruled by princes (Amirs) who
have been drawn from the Al Sabah family for over 200 years. The 1962
constitution provides for an elected National Assembly and details the powers
of the branches of government and the rights of citizens. Under the
Constitution, the National Assembly has a limited role in approving the
Amir's choice of the Crown Prince, who succeeds the Amir upon his death. If
the National Assembly rejects his nominee, the Amir then submits three names
of qualified candidates from among the direct descendants of Mubarak the
Great, from which the Assembly must choose the new Crown Prince. Successions
have been orderly since independence.

For almost 40 years, the Amir has appointed the Crown Prince as Kuwait's
Prime Minister. However, in an unprecedented development, the Amir formally
separated the two positions and appointed a new Prime Minister in July 2003.

Kuwait's first National Assembly was elected in 1963, with follow-on
elections held in 1967, 1971, and 1975. From 1976 to 1981, the National
Assembly was suspended. Following elections in 1981 and 1985, the National
Assembly was again dissolved. Fulfilling a promise made during the period of
Iraqi occupation, the Amir held new elections for the National Assembly in
1992. On May 4, 1999, the Amir once again dissolved the National Assembly.
This time, however, it was done through entirely constitutional means, and
new elections were held on July 3, 1999. The most recent general election,
held in July 2003, was considered free and fair, although there were some
credible reports of vote buying by the government and the opposition.

The government does not officially recognize political parties; however, de
facto political blocs, typically organized along ideological lines, exist and
are active in the National Assembly. Although the Amir maintains the final
word on most government policies, the National Assembly plays a real role in
decision-making, with powers to initiate legislation, question Cabinet
ministers, and express lack of confidence in individual ministers. For
example, in May 1999, the Amir issued several landmark decrees dealing with
women's suffrage, economic liberalization, and nationality. The National
Assembly later rejected all of these decrees as a matter of principle and
then reintroduced most of them as parliamentary legislation. In May 2005, the
National Assembly approved legislation granting women full political rights.
Subsequently the Prime Minister appointed Kuwait's first female minister, Dr.
Massouma al-Mubarak, as Planning Minister and Minister of State for
Administrative Development Affairs, and the government appointed two women to
Kuwait's Municipal Council. Women will be eligible to vote and run for office
in the 2007 parliamentary elections, and in the 2009 municipal council
elections.

Principal Government Officials
Amir--His Highness Sheikh Jabir al-Ahmad al-Jabir Al Sabah
Crown Prince--His Highness Sheikh Saad al-Abdullah al-Salim Al Sabah
Prime Minister--His Highness Sheikh Sabah al-Ahmad al-Jabir Al Sabah
First Deputy Prime Minister and Minister of Interior--Sheikh Nawwaf al-Ahmad
al-Jabir Al Sabah
Deputy Prime Minister and Minister of Defense--Sheikh Jabir Mubarak al-Hamad
Al Sabah
Deputy Prime Minister and Minister of State for Cabinet Affairs and National
Assembly Affairs--Muhammad Dhayfallah al-Sharar
Foreign Minister--Sheikh Dr. Muhammad Sabah al-Salim Al Sabah
National Assembly Speaker--Jassem Al Khorafi
Ambassador to the United States--Sheikh Salim al-Abdullah al-Jabir Al Sabah
Permanent Representative to the United Nations--Ambassador Nabila Al Mulla

Kuwait maintains an embassy in the United States at 2940 Tilden Street NW,
Washington, DC 20008 (tel. [1] (202)-966-0702).

ECONOMY
Kuwait has a small, relatively open economy dominated by the oil industry and
government sector. Its proven crude oil reserves of about 98 billion
barrels--10% of world reserves--account for nearly half of GDP, 95% of export
revenues, and 80-90% of government income. During the 1970s, Kuwait benefited
from the dramatic rise in oil prices, which Kuwait actively promoted through
its membership in the Organization of Petroleum Exporting Countries (OPEC).
The economy suffered from the triple shock of a 1982 securities market crash,
the mid-1980s drop in oil prices, and the 1990 Iraqi invasion and occupation.
The Kuwaiti Government-in-exile depended upon its $100 billion in overseas
investments during the Iraqi occupation in order to help pay for the
reconstruction. Thus, by 1993, this balance was cut to less than half of its
pre-invasion level. The wealth of Kuwait is based primarily on oil and
capital reserves, and the Iraqi occupation severely damaged both. Kuwait has
enjoyed a limited economic boom following Operation Iraqi Freedom as many
companies working in Iraq have established offices in Kuwait and procured
goods through Kuwaiti companies. The banking and construction sector, in
particular, have grown in the last year. The sustained high oil price has
also provided the Kuwaiti government with a substantial windfall in 2003 and
2004.

In the closing hours of the Gulf War in February 1991, the Iraqi occupation
forces set ablaze or damaged 749 of Kuwait's oil wells. Kuwait spent more
than $5 billion to repair oil infrastructure damage. Oil production was 1.5
million barrels per day (bpd) by the end of 1992, and pre-war capacity was
restored in 1993. Kuwait's current production capacity is estimated to be 2.5
million bpd. Kuwait plans to increase its capacity to 3.5 million bpd by
2008.

Oil
In 1934, the ruler of Kuwait granted an oil concession to the Kuwait Oil
Company (KOC), jointly owned by the British Petroleum Company and Gulf Oil
Corporation. In 1976, the Kuwaiti Government nationalized KOC. The following
year, Kuwait took over onshore production in the Divided Zone between Kuwait
and Saudi Arabia. KOC produces jointly there with Texaco, Inc., which, by its
1984 purchase of Getty Oil Company, acquired the Saudi Arabian onshore
concession in the Divided Zone.

Offshore, the Divided Zone, the Arabian Oil Company (AOC)--80% owned by
Japanese interests and 10% each by the Kuwaiti and Saudi
Governments--produced on behalf of both countries from 1961 until 2000, when
its concession in the Saudi zone expired. AOC gave up its drilling rights in
the Kuwaiti sector 3 years later. The Kuwait Gulf Oil Company (a wholly-owned
subsidiary of the Kuwait Petroleum Company--KPC) has assumed AOC's offshore
operations.

The KPC, an integrated international oil company, is the parent company of
the government's operations in the petroleum sector, and includes Kuwait Oil
Company, which produced oil and gas; Kuwait National Petroleum Co., refining
and domestic sales; Petrochemical Industries Co., producing ammonia and urea;
Kuwait Foreign Petroleum Exploration Co., with several concessions in
developing countries; Kuwait Oil Tanker Co.; and Santa Fe International Corp.
The latter, purchased outright in 1982, gives KPC a worldwide presence in the
petroleum industry.

KPC also has purchased from Gulf Oil Co. refineries and associated service
stations in the Benelux nations and Scandinavia, as well as storage
facilities and a network of service stations in Italy. In 1987, KPC bought a
19% share in British Petroleum, which was later reduced to 10%. KPC markets
its products in Europe under the brand Q8 and is interested in the markets of
the United States and Japan.

Kuwait has about 96.5 billion barrels of recoverable oil; only Saudi Arabia
and Iraq have larger proven reserves. Estimated capacity before the
occupation was about 2.4 million bpd. During the Iraqi occupation, Kuwait's
oil-producing capacity was reduced to practically nothing. However,
tremendous recovery and improvements have been made. Oil production was 1.5
million bpd by the end of 1992, and pre-war capacity was restored in 1993.
Kuwait's production capacity is estimated to be 2.5 million bpd. Kuwait plans
to increase its capacity to 3.5 million bpd by 2008. Oil revenues comprise
91% of total government revenues. 2004 saw a 31% increase in the average
price of crude oil. Kuwaiti export crude averaged $32.7 for the year.

Social Benefits
The government has sponsored many social welfare, public works, and
development plans financed with oil and investment revenues. Among the
benefits for Kuwaiti citizens are retirement income, marriage bonuses,
housing loans, virtually guaranteed employment, free medical services, and
education at all levels. Foreign nationals residing in Kuwait do not have
access to these welfare services. The right to own stock in publicly traded
companies, real estate, and banks or a majority interest in a business is
limited to Kuwaiti citizens, and citizens of GCC states under limited
circumstances.

Industry and Development
Industry in Kuwait consists of several large export-oriented petrochemical
units, oil refineries, and a range of small manufacturers. It also includes
large water desalinization, ammonia, desulphurization, fertilizer, brick,
block, and cement plants. During the invasion, the Iraqis looted nearly all
movable equipment of value, especially high-technology items and small
machinery. Much of this has been replaced with newer equipment. The Kuwaiti
Government has promoted the Trade and Investment Framework (TIFA) agreement,
signed with the U.S. in 2004, as a means to attract additional foreign
investment into Kuwaiti industries and enhance the country's diversification
from a purely oil-based economy.

Agriculture
Agriculture is limited by the lack of water and arable land. The government
has experimented in growing food through hydroponics and carefully managed
farms. However, most of the soil which was suitable for farming in south
central Kuwait was destroyed when Iraqi troops set fire to oil wells in the
area and created vast "oil lakes." Fish and shrimp are plentiful in
territorial waters, and large-scale commercial fishing has been undertaken
locally and in the Indian Ocean.

Shipping
The Kuwait Oil Tankers Co. has 35 crude oil and refined product carriers and
is the largest tanker company in an OPEC country. Kuwait also is a member of
the United Arab Shipping Company.

Trade, Finance, and Aid
The Kuwaiti dinar is a strong currency pegged, since 2003, to the U.S.
dollar. Kuwait ordinarily runs a balance-of-payments surplus, estimated as
high as $24 billion for 2004. Government revenues are dependent on oil
revenues. In 2004, Kuwait's fiscal surplus was some 16% of GDP; government
expenditures increased by about 14%, the most rapid rise in over 20 years.

The government's two reserve funds--the Fund for Future Generations and the
General Reserve Fund--which totaled nearly $100 billion prior to the invasion
in 1990, were the primary source of capital for the Kuwaiti Government during
the war. While these funds were depleted to $40-$50 billion after the war,
they currently are estimated around $75 billion. The bulk of this reserve is
invested in the United States, Germany, the United Kingdom, France, Japan,
and Southeast Asia. In order of importance, foreign assets are believed to be
invested in stocks and bonds, fixed yield instruments (mostly short term),
and real estate. Kuwait follows a generally conservative investment policy.

Kuwait has been a major source of foreign economic assistance to other states
through the Kuwait Fund for Arab Economic Development (KFAED), an autonomous
state institution created in 1961 on the pattern of Western and international
development agencies and chaired by the Foreign Minister. In 1974, the fund's
lending mandate was expanded to include all non-Arab-developing countries.
Since its inception, KFAED has disbursed $11 billion in concessionary loans
and technical grants to 102 countries worldwide. KFAED is responsible for
administering the disbursal of at least $500 million in concessionary loans
to Iraq in support of reconstruction efforts.

Over the years aid Kuwait has provided aid to Egypt, Syria, and Jordan, as
well as the Palestinian Authority. During the Iran-Iraq war, Kuwait also gave
significant aid to the Iraqis. The Kuwait fund issued loans and technical
assistance grants totaling over $419 million during its fiscal year ending
March 31, 2003. Kuwaiti provided unparalleled assistance during Operation
Iraqi Freedom by establishing and operating the Humanitarian Operations
Center for Iraq.

At the 2003 Madrid Conference, the Government of Kuwait pledged $1.5 billion
in assistance to Iraq. KFAED is responsible for disbursing and overseeing as
much as $560 million of that assistance through grants. In 2005, KFAED
contributed $50 million to Pakistan earthquake relief, pledged $500 million
for Hurricane Katrina relief, and made significant contributions to tsunami
relief efforts.

FOREIGN RELATIONS
Following independence in June 1961, Kuwait faced its first major foreign
policy problem arising from Iraqi claims to Kuwait's territory. The Iraqis
threatened invasion but were dissuaded by the U.K.'s ready response to the
Amir's request for assistance. Kuwait presented its case before the United
Nations and preserved its sovereignty. U.K. forces were later withdrawn and
replaced by troops from Arab League nations, which were withdrawn in 1963 at
Kuwait's request.

On August 2, 1990, Iraq invaded and occupied Kuwait. Through U.S. efforts, a
multinational coalition was assembled, and, under UN auspices, initiated
military action against Iraq to liberate Kuwait. Arab states, especially the
other five members of the Gulf Cooperation Council (Saudi Arabia, Bahrain,
Qatar, Oman, and the United Arab Emirates), Egypt, and Syria, supported
Kuwait by sending troops to fight with the coalition. Many European and East
Asian states sent troops, equipment, and/or financial support.

After liberation, Kuwait concentrated its foreign policy efforts on
development of ties to states which had participated in the multinational
coalition. Notably, these states were given the lead role in Kuwait's
reconstruction. Kuwait's relations with those nations that supported Iraq,
among them Jordan, Sudan, Yemen, and Cuba, were slow to recover. Palestine
Liberation Organization (PLO) Chairman Yasir Arafat's support for Saddam
Hussein during the war also affected Kuwait's attitudes toward the PLO though
Kuwait supports the Arab-Israeli peace process.

The Government of Kuwait has abandoned its previous policy of limiting the
entry of workers from nations whose leaders had supported Iraq during the
Gulf War. In August 2001, the Interior Minister announced that there were no
longer any special restrictions or permits required for Palestinian workers
wishing to return to the country. At the end of 2002, there were
approximately 30,000 to 40,000 Palestinians, 30,000 to 40,000 Jordanians, and
5,000 Yemenis resident in Kuwait.

Since liberation from Iraq, Kuwait has made efforts to secure allies
throughout the world, particularly UN Security Council members. In addition
to the United States, defense arrangements have been concluded with the
United Kingdom, Russia, and France. Ties to other key Arab members of the
Gulf War coalition--Egypt and Syria--also have been sustained.

During the 2002-03 buildup to and execution of Operation Iraqi Freedom (OIF),
Kuwait was a vital coalition partner, reserving a full 60% of its total land
mass for use by coalition forces and donating significant assistance in kind
to the effort. Kuwait continues to provide generous assistance in kind to
ongoing coalition operations in Iraq. Kuwait has been consistently involved
in reconstruction efforts in Iraq, pledging $1.5 billion at the October 2003
international donors' conference in Madrid, and consulting closely with Iraqi
officials, including Prime Minister Ibrahim Jaffari, who visited Kuwait most
recently in late October 2005. Kuwait has been an active and vocal public
supporter of the political process in Iraq, welcoming the January 2005
elections and praising Iraq's October 2005 successful constitutional
referendum.

Kuwait is a member of the UN and some of its specialized and related
agencies, including the World Bank (IBRD), International Monetary Fund (IMF),
World Trade Organization (WTO), General Agreement on Tariffs and Trade
(GATT); African Development Bank (AFDB), Arab Fund for Economic and Social
Development (AFESD), Arab League, Arab Monetary Fund (AMF), Council of Arab
Economic Unity (CAEU), Economic and Social Commission for Western Asia
(ESCWA), Group of 77 (G-77), Gulf Cooperation Council (GCC), INMARSAT,
International Development Association (IDA), International Finance
Corporation, International Fund for Agricultural Development, International
Labor Organization (ILO), International Maritime Organization, Interpol, IOC,
Islamic Development Bank (IDB), International Federation of Red Cross and Red
Crescent Societies, Non-Aligned Movement, Organization of Arab Petroleum
Exporting Countries (OAPEC), Organization of the Islamic Conference (OIC),
Organization of Petroleum Exporting Countries (OPEC), and the International
Atomic Energy Agency (IAEA).

DEFENSE
Before the Gulf War, Kuwait maintained a small military force consisting of
army, navy, and air force units. The majority of equipment for the military
was supplied by the United Kingdom. Aside from the few units that were able
to escape to Saudi Arabia, including a majority of the air force, all of this
equipment was either destroyed or taken by the Iraqis. Much of the property
returned by Iraq after the Gulf War was damaged beyond repair. Iraq retained
a substantial amount of captured Kuwaiti military equipment in violation of
UN resolutions.

Since liberation, Kuwait, with the help of the United States and other
allies, has made significant efforts to increase the size and modernity of
its armed forces. These efforts are succeeding. The government also continues
to improve defense arrangements with other Arab states, as well as UN
Security Council members. During Operation Iraqi Freedom, in 2003, Kuwaiti
military elements successfully operated missile defense systems.

A separately organized National Guard maintains internal security. The police
constitute a single national force under the purview of civilian authorities
of the Ministry of Interior.

U.S.-KUWAITI RELATIONS
The United States opened a consulate in Kuwait in October 1951, which was
elevated to embassy status at the time of Kuwait's independence 10 years
later. The United States supports Kuwait's sovereignty, security, and
independence, as well as its multilateral diplomatic efforts to build greater
cooperation among the GCC countries.

Strategic cooperation between the United States and Kuwait increased in 1987
with the implementation of a maritime protection regime that ensured the
freedom of navigation through the Gulf for 11 Kuwaiti tankers that were
reflagged with U.S. markings.

The U.S.-Kuwaiti strategic partnership intensified dramatically again after
Iraq's invasion of Kuwait. The United States spearheaded UN Security Council
demands that Iraq withdraw from Kuwait and its authorization of the use of
force, if necessary, to remove Iraqi forces from the occupied country. The
Untied States also played a dominant role in the development of the
multinational military operations Desert Shield and Desert Storm that
liberated Kuwait. The U.S.-Kuwaiti relationship has remained strong in the
post-Gulf War period. Kuwait and the United States worked on a daily basis to
monitor and to enforce Iraq's compliance with UN Security Council
resolutions, and Kuwait also provided the main platform for Operation Iraqi
Freedom in 2003.

Since Kuwait's liberation, the United States has provided military and
defense technical assistance to Kuwait from both foreign military sales (FMS)
and commercial sources. All transactions have been made by direct cash sale.
The U.S. Office of Military Cooperation in Kuwait is attached to the American
embassy and manages the FMS program. There are currently 98 FMS contracts
between the U.S. military and the Kuwait Ministry of Defense totaling $6.84
billion. Principal U.S. military systems currently purchased by the Kuwait
Defense Forces are Patriot Missile systems, F-18 Hornet fighters, the M1A2
main battle tank, and the Apache helicopter.

Kuwaiti attitudes toward American products have been favorable since the Gulf
War. In 1993, Kuwait publicly announced abandonment of the secondary and
tertiary aspects of the Arab boycott of Israel (those aspects affecting U.S.
firms). The United States is currently Kuwait's largest supplier of goods and
services, and Kuwait is the fifth-largest market in the Middle East. U.S.
exports to Kuwait totaled $902 million in 2002. Provided their prices are
reasonable, U.S. firms have a competitive advantage in many areas requiring
advanced technology, such as oil field equipment and services, electric power
generation and distribution equipment, telecommunications gear, consumer
goods, and military equipment.

Kuwait also is an important partner in the ongoing U.S.-led campaign against
international terrorism, providing assistance in the military, diplomatic,
and intelligence arenas and also supporting efforts to block financing of
terrorist groups. In January 2005, Kuwait Security Services forces engaged in
gun battles with local extremists, resulting in fatalities on both sides in
the first such incidents in Kuwait's history.

Principal U.S. Officials
Ambassador--Richard LeBaron
Deputy Chief of Mission--Matthew Tueller
Political Affairs--Natalie E. Brown
Political/Military Affairs--Joseph Forcier
Commercial Affairs--Erik Hunt
Economic Affairs--Stephen Carrig
Consular Affairs--Charles Glatz
Management--Marjorie Phillips
Public Affairs--Tanya Anderson
Chief, Office of Military Cooperation--BG Mark Solo USAF

The U.S. Embassy in Kuwait is located at Al Masjed Al Aqsa Street. Plot 14,
Block 14, Bayan Plan 36302. The mailing address is P.O. Box 77, SAFAT, 13001
SAFAT, Kuwait; or PSC 1280 APO AE 09880.