Kuwait, officially the State of Kuwait i// (Arabic: دولة الكويت Dawlat al-Kuwayt ), is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It lies on the north-western shore of the Persian Gulf and is bordered by Saudi Arabia to the south (at Khafji) and Iraq to the north (at Basra). The name Kuwait is derived from the Arabic أكوات ākwāt, the plural of كوت kūt, meaning "fortress built near water". The country covers an area of 17,820 square kilometers (6,880 square miles) and has a population of about 3.5 million.
Historically, the region was the site of Characene, a major Parthian port for trade between Mesopotamia and India. The Bani Utbah tribe were the first permanent Arab settlers in the region, laying the foundation for the modern emirate. By the 19th century, Kuwait came under the influence of the Ottoman Empire. After World War I, it emerged as an independent sheikhdom under the protection of the British Empire. Kuwait's large oil fields were discovered in the late 1930s.
After Kuwait gained independence from the United Kingdom in 1961, the state's oil industry saw unprecedented economic growth. In 1990, Kuwait was invaded and annexed by neighboring Iraq. The seven month-long Iraqi occupation came to an end after a direct military intervention by United States-led forces. Around 773 Kuwaiti oil wells were set ablaze by the retreating Iraqi army, resulting in a major environmental and economic catastrophe. Kuwait's infrastructure was badly damaged during the war and had to be rebuilt.
Kuwait is a constitutional emirate with a parliamentary system of government. Kuwait City serves as the country's political and economic capital. The country has the world's fifth largest oil reserves and petroleum products now account for nearly 95% of export revenues and 80% of government income. Kuwait is the eleventh richest country in the world per capita and, in 2007, had the highest human development index (HDI) in the Arab world. Kuwait is classified as a high income economy by the World Bank and is designated as a major non-NATO ally of the United States.
In the 4th century BC, the ancient Greeks colonized an island off Kuwait's coast, naming it "Ikaros". It is now known as Failaka. By 123 BC, the region came under the influence of the Parthian Empire and was closely associated with the southern Mesopotamian town of Charax. In 224 AD, the region fell under the control of Sassanid Empire and came to be known as Hajar. By the 14th century, the area comprising modern-day Kuwait had become a part of the Islamic caliphate.
The first permanent settlers in the region came from Bani Khalid tribe of Nejd and established the state of Kuwait. In 1756, the people elected Sabah I bin Jaber as the first Emir of Kuwait. The current ruling family of Kuwait, al-Sabah, are descendants of Sabah I. During the rule of the Al-Sabah, Kuwait progressively became a center of trade and commerce. It now served as a hub of trade between India, the horn of Africa, the Nejd, Mesopotamia and the Levant. Until the advent of Japanese pearl farming, Kuwait had one of the largest sea fleets in the Persian Gulf region and a flourishing pearling industry. Trade consisted mainly of pearls, wood, spices, dates and horses.
In 1899, Kuwait entered into a treaty with the United Kingdom that gave the British extensive control over the foreign policy of Kuwait in exchange for protection and annual subsidy. This treaty was primarily prompted by fears that the proposed Berlin-Baghdad Railway would lead to an expansion of German influence in the Persian Gulf. After the signing of the Anglo-Ottoman Convention of 1913, then Emir of Kuwait, Mubarak Al-Sabah, was diplomatically recognized by both the Ottomans and British as the ruler of the autonomous caza of the city of Kuwait and the hinterlands. However, soon after the start of World War I, the British invalidated the convention and declared Kuwait an independent principality under the protection of the British Empire. The 1922 Treaty of Uqair set Kuwait's border with Saudi Arabia and also established the Saudi-Kuwaiti neutral zone, an area of about 5,180 km² adjoining Kuwait's southern border.
On 19 June 1961, Kuwait became fully independent following an exchange of notes between the United Kingdom and the then Emir of Kuwait, Abdullah III Al-Salim Al-Sabah. The Gulf rupee, issued by the Reserve Bank of India, was replaced by the Kuwaiti dinar. The discovery of large oil fields, especially the Burgan field, triggered a large influx of foreign investments into Kuwait. The massive growth of the petroleum industry transformed Kuwait from a poor pearl farming community into one of the richest countries in the Arabian Peninsula and by 1952, the country became the largest exporter of oil in the Persian Gulf region. This massive growth attracted many foreign workers, especially from Egypt and India.
Kuwait settled its boundary disputes with Saudi Arabia and agreed on sharing equally the neutral zone's petroleum reserves, onshore and offshore. After a brief stand-off over boundary issues, Iraq formally recognized Kuwait's independence and its borders in October 1963. During the 1970s, the Kuwaiti government nationalized the Kuwait Oil Company, ending its partnership with Gulf Oil and British Petroleum.
In 1982, Kuwait experienced a major economic crisis after the Souk Al-Manakh stock market crash and decrease in oil price. However, the crisis was short-lived as Kuwait's oil production increased steadily to fill the gap caused by decrease in Iraq's and Iran's oil production levels following the events of the Iran–Iraq War. In 1983, a series of six bomb explosions took place in Kuwait killing five people. The attack was carried out by Shiite Dawa Party to retaliate Kuwait's financial support to Iraq during its war with Iran.
Kuwait had heavily funded Iraq's eight year-long war with Iran. After the war ended, Kuwait declined an Iraqi request to forgive its US$65 billion debt. An economic warfare between the two countries followed after Kuwait increased its oil production by 40 percent. Tensions between the two countries increased further after Iraq alleged that Kuwait was slant drilling oil from its share of the Rumaila field.
On 2 August 1990, Iraqi forces invaded and annexed Kuwait. A long-time ally of Saddam Hussein, Yemen's President, Ali Abdullah Saleh was quick to back Saddam Hussein's invasion of Kuwait. Saddam Hussein, then President of Iraq, deposed the Emir of Kuwait, Jaber Al-Sabah, and initially propped up a puppet régime before annexing Kuwait and installing Ali Hassan al-Majid as the new governor of Kuwait.
During the Iraqi occupation, about 1,000 Kuwaiti civilians were killed and more than 300,000 residents fled the country. After a series of failed diplomatic negotiations, the United States-led coalition of thirty-four nations fought the Gulf War to remove the Iraqi forces from Kuwait. On 26 February 1991, the coalition succeeded in driving out the Iraqi forces, restoring the Kuwaiti Emir to power. Kuwait paid the coalition forces US$17 billion for their war efforts.
During their retreat from the coalition, the Iraqi armed forces carried out a scorched earth policy by damaging 737 oil wells in Kuwait, of which approximately 600 were set on fire. It was estimated that by the time Kuwait was liberated from Iraqi occupation, about 5 to 6 million barrels (950,000 m3) of oil was being burned in a single day because of these fires.
Oil and soot accumulation had affected the entire Persian Gulf region and large oil lakes were created holding approximately 25 to 50 million barrels (7,900,000 m3) of oil and covering 5% of Kuwait's land area. In total, about 11 million barrels (1,700,000 m3) of oil was released into the Persian Gulf and an additional 2% of Kuwait's 96 billion barrels (1.53×1010 m3) of crude oil reserves were burned by the time the oil fires were brought under control. The fires took more than nine months to extinguish fully and it took Kuwait more than 2 years and US$50 billion in infrastructure reconstruction to reach pre-invasion oil output. Kuwait has since largely recovered from the socio-economic, environmental, and public health effects of the Persian Gulf War.