Kuwait: Developing a mini-economy

Abstract

This study examines the changes that occurred in the Kuwaiti economy as a result of rapid growth, and the regional economic implications of public policies of a small developing state. It is a case of rapid growth and accumulation of finance in excess of productive capacity. Affluence is derived from oil. One cannot pretend that the economic analysis emphasizing allocation of resources is satisfactory. Yet unfortunately the core of development’ economics has failed to present an adequate analysis of the main aspects of the development process. The thesis can be loosely divided into two parts. The first part is concerned with the behavioural characteristics of the economy. Chapter 2, discusses the dualism of the economy as represented by its factoral imbalance. The discussion of the trends, terms, and composition of foreign trade in Chapter 3 develops the theme of the economy's levels of growth and degrees of sectoral imbalance. Chapter 4» surveys the present industrial structure in Kuwait, pointing out the importance of complementarities, and external economies. The second part of the thesis reviews Kuwait's industrialization plans given the present state of the country's economic development. Kuwait's industrialization plans take note of the present dominant characteristics of the economy and suggest industrial development along the lines of unbalanced growth (Chapter 5). Chapter 6, uses static analysis to discuss Kuwait's cooperation endeavours. The dynamics of regional integration, and the availability of elements of complementary and diversified industrial structure in an active Arab Common Market, suggest the favourable long-run implications of this market, and cooperation in general, for Kuwait's industrial development. Statistically, it is more feasible to study long periods. However, to avoid breaks in the series or incomplete or provisional data, the period 1961 to 1973 has been used, almost exclusively. A number of statistical tables, being only available in a fragmented form and scattered in a diversity of sources, were compiled and reorganised by the candidate. This is stated where it occurs.