Kuwait's GDP for 1999 was US$29.713 billion, up 17.4 percent from the 1998 level of US$25.305 billion. The rise was almost exclusively due to historically strong international oil prices, and saw the contribution from the oil and gas sector to Kuwait's GDP rise from 31 percent in 1998 to about 37 percent in 1999. Per capita income for Kuwaitis rose 18.2 percent year-to-year, from US$11,143 in 1998 to US$13,176 for 1999, again, almost exclusively attributable to improving oil prices. Kuwait should show positive growth of about 25 percent in GDP for 2000, provided international oil prices remain in the US$23-25 per barrel range. The United States is Kuwait's second largest trading partner, after Japan. Excellent quality, reliability and service help the United States maintain a strong position in this very competitive market, although the strong dollar continues to hurt our price competitiveness vis-a-vis third country suppliers. When compared to 1998, U.S. exports to Kuwait decreased 38.5 percent to US$909 million in 1999.
American companies are engaged in more than 15 industrial and non-industrial joint ventures in Kuwait, accounting for more than US$1 billion of direct investment. The largest venture is Union Carbide's petrochemical project EQUATE, a joint venture with Kuwait's Petrochemical Industries Company and a group of private investors. Kuwait imports a wide variety of U.S. military, industrial and consumer products. Leading military imports over the past five years include aircraft and parts, air defense systems, radar systems and tanks. Leading industrial imports include oil field equipment/parts, aircraft parts, medical equipment and generators. Significant consumer imports include passenger vehicles and trucks and processed food products.
Kuwait is a highly price-competitive market with low tariffs (generally only four percent ad-valorem), few import barriers and no exchange controls. Procurement for large public sector projects continues to dominate the business scene, as Kuwait accounts for little or no manufacturing and non-oil exports.
High value U.S. food products with strong market potential in Kuwait include frozen chicken parts, processed fruits and vegetables, cheeses, frozen beef, snack foods, almonds, fresh apples and pears, breakfast cereals, fresh carrots and lettuce, packaged rice and miscellaneous food products, particularly hot sauces, salad dressings, catsup, mayonnaise, vinegar, iodized salt, ice cream, frozen dough mixes, Tex-Mex foods and coffee whiteners. Also, growth in the local food processing industry is driving up demand for semi processed products such as vegetable oils, including corn, soybean and sunflower-seed oils, beverage bases, dried pulses and a variety of food ingredients, particularly for the snack food and bakery industries. Finally, demand for U.S. forestry products, particularly hardwoods, is on the increase, fueled by a robust housing construction market.
As Kuwait's young population (48 percent less than 15 years of age, 70 percent under 24) matures, U.S. exporters will find a broad range of marketing opportunities. Also, recent passage of an improved Copyright Protection Law should generate additional opportunities for U.S. suppliers of computer software, audio-visual entertainment products and books.
