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... other forces drove them out. In the aftermath of the Iraqi occupation, Kuwait is trying to reform its own government. As mentioned earlier, women are not allowed to vote in Kuwait at this time. Kuwait's cultural and political practices have brought a great amount of criticism from the rest of the world, especially the West. Many Americans were not happy with the fact that American troops were fighting for the freedom of Kuwait, while many of the Kuwaiti elite were partying all over Europe.
Kuwait has also experienced some turnabouts in its foreign relations within the Arab world. Kuwait has always been a traditional supporter and ally to Palestinians and the Palestinian cause against Israeli occupation (Al Mani, 167). As a result of the Iraqi occupation in 1990, and the Persian Gulf War in 1991, Kuwait has not been on very good terms with the PLO and the Palestinians. The reason for this switch is that the PLO, along with the Palestinian people, supported Iraq in its attempt to annex Kuwait.
Many Palestinians who were working in Kuwait during this time were expelled from Kuwait because of the PLO's official stand on the side of Iraq. Kuwait also learned some other hard lessons as a result of the Persian Gulf War. Despite being a very generous foreign aid provider for many of the Arab states, this did not buy popularity or support for Kuwait during the Persian Gulf War. Jordan, Sudan, and Yemen, who were recipients of some of the largest amounts of Kuwaiti aid, did not support Kuwait when Iraq invaded it.
Kuwait has not been at all forgiving since Iraq was dispelled. They stopped all forms of financial aid to the countries that aligned with Iraq, and have forged partnerships economically and politically with many of the participants in the coalition to free Kuwait. Kuwait and the United States signed an agreement that calls for American weapons to be stationed in Kuwait, and for military exercises to be performed on Kuwaiti soil, in preparation for defending against any future attack. Kuwait has forged defense agreements with Britain and France, and is looking to do so with Russia and China as well. Kuwait remains in close relations to Saudi Arabia. And Kuwait's foreign relationship with Iran has improved considerably since the Persian Gulf War.
But there still is conflict in the Kuwait-Iran relationship. Kuwait wants to maintain a visible and high profile level of American support in the region, and Iran wants to limit American influence in the Middle East. Despite these differences, both nations can rely on their common experiences at the hand of Iraqi aggression. Since the invasion of Kuwait in 1990, the main focus of Kuwait's foreign policy has been the recovery from the trauma it incurred from the Iraqi occupation. Kuwait is making great efforts to build on the relationships with the nations that aligned on the side of the liberators. Particular focus is being paid to the Arab states that were allied in the defense of Kuwait.
The Gulf Cooperation Council (GCC) is one very important group of Kuwait allies. The GCC consists of the nations of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Other friendly Arab states that Kuwait is nurturing for the future is Syria, Egypt, Morocco, and Lebanon. Relations with the Arab states that sided with Iraq during the Persian Gulf War; Jordan, Yemen, Sudan, Tunisia, and the PLO, remain strained.
Although economic relations with these pro-Iraq Arab states have now resumed with Kuwait, normal diplomatic relations have been restored with most (Al Mani, 171). Kuwait has also significantly expanded its efforts to deepen relationships with the international community. Particular focus has been focused on the United States, Great Britain, France, China, Russia, as well as other Western and Asian powers (Davis, 27). Kuwait is also expanding its own influence on the world stage by being a major donor to the World Bank, the International Monetary Fund (IMF), and other multilateral agencies.
Traditionally, Kuwait contributes about 5 -percent of its GDP to economic development in other countries (Davis, 29). This gives Kuwait a lot of influence in world affairs as it is near the top of the list of donor countries around the world. Economy of Modern Kuwait The economy of Kuwait, third largest of the Gulf Cooperation Council (GCC) states, is in good condition, basically due to the significant increase in international oil prices. Real gross domestic product (GDP) growth dilated by four per cent in 2000. However, the non-oil economy sector growth was marked with 2. 8 per cent growth, largely due to the government's fiscal stringency, i. e.
caps on capital spending programs. During last years, government financing policy remained healthy comparing to significant budget deficits during 1990 s. In fiscal year 2003 - 04 the budget balance constituted a surplus of 14 per cent in GDP. Simultaneously, Kuwait's external debt, which equals to over Kuwaiti Dinar 4 million and represents some 34 per cent of GDP, is characterized as manageable (Siddiqi, 38).
In business sector, a combination of lower borrowing costs, Kuwait's strong liquidity and buoyant trading conditions across the Gulf region have increased business confidence. Trading on the Kuwait Stock Exchange expanded by 15 per cent in the second half of 2004, but share prices remain below the indicators of November 1997. A decrease in oil production, caused by OPEC's supply-restraints, potentially has negative consequences on growth (CIA, Handbook, 93). However, Kuwait's significant oil export revenues obtained 1999 and 2000 have vastly increased the government's capacity for funding new capital investments. Consequently it stimulated growth in non-oil sectors, particularly construction and the services industries. Some extensive projects aiming to develop infrastructure, notably new power stations and water treatment plants, are being revived.
The country's petroleum and petrochemical industry constitutes 47 - 50 per cent of GDP, and begets on average over 90 per cent and 80 per cent respectively of economy exports and budgetary revenues, which puts Kuwait on the top rank among the GCC states on this indicator (Siddiqi, 38). However, the significant lack of economic diversification causes Kuwait to experience periodic fluctuations in oil prices. Therefore, the need for important structural and institutional reforms is evident. The International Monetary Fund (IMF) in its World Economic Outlook report, of May 2001, observed: "Recent oil price volatility underscores the need for further reforms to promote economic diversification in the oil exporting countries (Siddiqi, 37).
Social Aspect of Kuwait: Facing the Past The retirement policy in Kuwait has influenced the young and the old, college graduates and less-educated Kuwaiti manpower to leave the government sector. It did not reach the government objective of downsizing the government organizations only by losing the old and the less educated. The total number of the retirees who are still living in July 1999 was 24, 164 of which 22, 188 are from the government sector alone. The Iraqi invasion of Kuwait in August 1990 devastated the country's economic, political and social structure, changing the country's manpower composition dramatically. Before the invasion, the population had been 2. 2 million, of whom 72 per cent were non-Kuwaitis, and 60 per cent of Kuwait's manpower were government employed (Rosen & Jerdee, 406).
Over 70 per cent of these government employees, and more than 95 per cent of the employees in private and semi-private organizations, were non-Kuwaitis. The 1976 retirement law gives six reasons for eligibility for retirement. Four of these reasons relate to mandatory retirement and two to "early" or "voluntary" retirement. Those who can be considered for "early" retirement are married females who have completed 15 years of service, and males or unmarried females in accordance with one of the following conditions: (1) completion of not less than 20 years of service for those not yet 50 years of age; or (2) completion of not less than 15 years for those who have attained the age of 50. In October 1992, a new retirement law was enacted to deal with many issues of retirement in general and the issue of early retirement in particular.
The new law set age 50 as the minimum age for early retirement and this was the only change intended to offset the early retirement trends in the new law. It is clear that retirement benefits are not the only factors encouraging Kuwaitis to retire early. Factors such as government management style and organizational climate are additional reasons. Government organizations in Kuwait are described by many as organizations with central decision making, lack of a clear career path for qualified individuals, lack of job descriptions for most positions, and giving promotions based on a personal rather than professional basis (Rosen & Jerdee, 412). The majority of Kuwaitis who have retired from government jobs go into private business, either to establish their own or join other businesses. It might be that factors related to the nature of private business motivate them to do so.
It is, perhaps, the sense of accomplishment that private business offers. It offers clear goals and objectives, and a timely feedback on their performance in the form of monetary and other tangible rewards. Incomes in private sectors are far larger than those in government. When employees retire from government service, they lose a minor portion of their government income. When the cost is not high, it is worth it for them to try a new professional career.
Bibliography M. A. Cook. Studies in the Economic History of the Middle East, New York: Oxford University Press, 1970 United States Department of State, Country Reports on Human Rights Practices for 2002, Washington DC: US Government Printing Office, 1995 Central Intelligence Agency, Handbook of International Economic Statistics 1997, Washington DC: US Government Printing Office, 1998 Rex Broken, Bahgat Korean, and Paul Noble, Political Liberalization and Democratization in the Arab World, Boulder: Lynne Render Publishers, 1999 Gregory Game, Oil Monarchies, New York: Council on Foreign Relations Press, 1994 M. Jane Davis, Politics and International Relations in the Middle East, Aldershot, UK: Edward Elgar, 2001 Saleh A. Al Mani, "Gulf Security and Relations with Our Neighbors, " Security Dialogue, Vol. 27, No. 3, Fall 1998 Siddiqi, Moin.
A KICK STARTING THE REFORMS, Middle East, Jul/Aug 2001, Issue 314 Rosen, B. and Jerdee, T. H. , "Retirement Policies: Evidence of the Need for Change", Human Resource Management, Vol. 25, 1999
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