ABSTRACT
Oil has made Kuwait rich. Oil is Kuwait’s largest productive sector by a long way, and oil rents are the foundation of even the non-oil economy. But wealth does not lead automatically to economic and social development. Kuwait’s achievement is that it has, for the most part, used its oil income to provide a high standard of living for full Kuwaiti citizens, while to a much lesser extent also benefiting non-Kuwaitis. Oil wealth has transformed the country within decades from a modest trade-based desert emirate to a modern city-state. It has also created a relatively egalitarian economy based on an extensive distributive system that provides Kuwaiti citizens with essential services including free healthcare, education and social security. Therefore the most important fact about Kuwait’s oil wealth is that it has been successfully used to benefit its citizens. This feat has been achieved through a broad distributive welfare state, developed over the decades since oil was discovered.
