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WEEKLY NEWSLETTER
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Kuwait
Index
In the eighteenth and nineteenth centuries, Kuwait's
economy
was based on trade. The city of Kuwait rivaled Basra in
Iraq as
an entrepĂ´t for trade between India and parts of the
Middle East.
Kuwait became a conduit for commerce from the gulf to
Asia,
Africa, and Europe. It was Kuwait's fine natural harbor
that
first attracted the Bani Utub settlers, and they made much
of
this maritime advantage. In the nineteenth and early
twentieth
centuries, the economy relied primarily on pearl diving,
and
merchants and sailors harvested the gulf's natural pearl
banks,
which were among the richest in the world. In the first
decades
of the twentieth century, Kuwait had about 700 boats,
employing
approximately 15,000 men. When the pearl-diving season
(mid-May
to mid-September) ended, Kuwaiti merchants used their
ships for
long-distance trade. From this trade, a shipbuilding
industry
developed, and Kuwaiti craft became known throughout
coastal
Arabia for their quality. Fishing was also a small but
important
industry. The tradition of seafaring and trade gave Kuwait
a
thriving merchant class and an outward orientation that
remained
important into the 1990s.
Although prosperous by regional standards, Kuwait's
economy
offered only a meager existence to most of the population,
especially those outside the ruling families and the
merchant
families. Even this meager existence began to suffer with
the
decline of pearling. That industry, the basis of Kuwait's
economy, came to a sudden end in the 1920s with the
development
of the process of making cultured pearls in Japan and then
the
Great Depression. Fortuitously, the pearl industry
declined just
as a new source of revenue was emerging. In 1938 oil was
discovered in Kuwait. Once oil exports began in the
immediate
post-World War II years, economic development became
nearly
continuous.
Data as of January 1993
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