Kuwait

The State of Kuwait is a sovereign Arab emirate bordered by Saudi Arabia and Iraq. The name is a diminutive of an Arabic word meaning "fortress built near water. Kuwait is a constitutional monarchy with a parliamentary system of government.

Kuwait has the world's fifth largest oil reserves and is the fourth richest country in the world per capita. Petroleum and petroleum products account for nearly 95% of export revenues, and 80% of government income. Kuwait is regarded as the most developed country in the Arab League.

Recorded history of the State of Kuwait goes back to the year 1613. Tribes from central Arabia settled in Kuwait in the 17th-century after experiencing a massive drought in their native land. Kuwait used to be a major center for spice trading between India and Europe. By late 18th-century, most of the local people made a living selling pearls. Up until the advent of Japanese pearl farming, Kuwait had one of the largest sea fleets in the Persian Gulf region and a flourishing pearling industry.

As the influence of the Ottoman Empire increased in the region, Kuwait was assigned the status of a caza of the Ottomans. After the signing of the Anglo-Ottoman Convention of 1913, then emir of Kuwait was diplomatically recognized by both the Ottomans and British as the ruler of the autonomous caza of the city of Kuwait and the hinterlands. Oil was first discovered in Kuwait in the 1930s and the government became more proactive in establishing internationally recognized boundaries. After World War I, the Ottoman Empire was financially crippled and the invading British Indian Army invalidated the Anglo-Ottoman Convention, declaring Kuwait to be an "independent sheikdom under British protectorate".

On 19 June 1961, Kuwait became fully independent following an exchange of notes between the United Kingdom and the then emir of Kuwait. The discovery of large oil field, triggered a large influx of foreign investments into Kuwait. The massive growth of the petroleum industry transformed Kuwait into one of the richest countries in the Arabian Peninsula and by 1952, the country became the largest exporter of oil in the Persian Gulf region. After a brief stand-off over boundary issues, Iraq formally recognized Kuwait's independence and its borders in October 1963.

Kuwait had heavily funded Iraq's eight year-long war with Iran. After the war ended, Kuwait declined an Iraqi request to forgive its US$65 billion debt. An economic warfare between the two countries followed after Kuwait increased its oil production by 40 percent. Tensions between the two countries increased further after Iraq alleged that Kuwait was slant drilling oil from its share of the Rumaila field.

In 1990, Kuwait was invaded and annexed by neighboring Iraq. The seven month-long Iraqi Occupation came to an end after a direct military intervention by United States-led forces. Nearly 750 Kuwaiti oil wells were set ablaze by the retreating Iraqi army resulting in a major environmental and economic catastrophe. Kuwait's infrastructure was badly damaged during the war and had to be rebuilt.