Kuwait has a petroleum-based economy, petroleum is the main export product. The Kuwaiti dinar is the highest-valued unit of currency in the world.According to the World Bank, Kuwait is the fourth richest country in the world per capita. Kuwait is the second richest GCC country per capita (after Qatar). Petroleum accounts for half of GDP and 90% of government income. Non-petroleum industries include financial services.
In the past five years, there has been a significant rise in entrepreneurship and small business start-ups in Kuwait. The informal sector is also on the rise, mainly due to the popularity of Instagram businesses.
Kuwait is a major source of foreign economic assistance to other states through the Kuwait Fund for Arab Economic Development, an autonomous state institution created in 1961 on the pattern of international development agencies. In 1974, the fund’s lending mandate was expanded to include all developing countries in the world.
Kuwait has proven crude oil reserves of 104 billion barrels, estimated to be 10% of the world’s reserves. According to the constitution, all natural resources in the country are state property. Kuwait currently pumps 2.9 million bpd and its full production capacity is a little over 3 million bpd.
The Kuwait Investment Authority (KIA) is Kuwait’s sovereign wealth fund specializing in foreign investment. The KIA is the world’s oldest sovereign wealth fund. Since 1953, the Kuwaiti government has directed investments into Europe, United States and Asia Pacific. As of 2015, the holdings were valued at $592 billion in assets. It is the 5th largest sovereign wealth fund in the world.
Kuwait has a leading position in the financial industry in the GCC; the abyss that separates Kuwait from its Gulf neighbors in terms of tourism, transport, and other measures of diversification is absent in the financial sector. The Emir has promoted the idea that Kuwait should focus its energies, in terms of economic development, on the financial industry.
The historical preeminence of Kuwait (among the Gulf monarchies) in finance dates back to the founding of the National Bank of Kuwait in 1952. The bank was the first local publicly traded corporation in the Gulf. In the late 1970s and early 1980s, an alternative stock market, trading in shares of Gulf companies, emerged in Kuwait, the Souk Al-Manakh.At its peak, its market capitalization was the third highest in the world, behind only the U.S. and Japan, and ahead of the UK and France.
Kuwait has a large wealth-management industry that stands out in the region. Kuwaiti investment companies administer more assets than those of any other GCC country, save the much larger Saudi Arabia. The Kuwait Financial Centre, in a rough calculation, estimated that Kuwaiti firms accounted for over one-third of the total assets under management in the GCC. The relative strength of Kuwait in the financial industry extends to its stock market.For many years, the total valuation of all companies listed on the Kuwaiti exchange far exceeded the value of those on any other GCC bourse, except Saudi Arabia. In 2011, financial and banking companies made up more than half of the market capitalization of the Kuwaiti bourse; among all the Gulf states, the market capitalization of Kuwaiti financial-sector firms was, in total, behind only that of Saudi Arabia.
In recent years, Kuwaiti investment companies have invested large percentages of their assets abroad, and their foreign assets have become substantially larger than their domestic assets.