Page 139 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Silicon from Sand: Essential Background on the GCC 123

including free, high-quality education, free medical services, hous-
ing loans, and retirement income. There is even a marriage bonus
for Kuwaitis who marry, providing an incentive for (and greater
means) to marry. Unemployment is minimal—barely 2 percent. 25
Many Kuwaitis study abroad on government scholarships. Overall,
Kuwaitis enjoy a remarkably high standard of living.
Kuwait has developed sophisticated investment channels for
the large budget surpluses it achieves each year. The government
has created a Fund for Future Generations, in addition to its
General Reserve Fund, as an endowment whose purpose is to sus-
tain Kuwaiti society in the future. Kuwait is also a substantial donor
nation, through the Kuwait Fund for Arab Economic Development.
This fund has now broadened its mandate and provides assistance
to non-Arab nations as well. Kuwait’s banking sector and invest-
ment management firms are well developed: investment managers
have long been making international investments for both the
public and private sectors. One leading investment firm, Global
Investment House, was founded by Maha Al-Ghunaim in 1998. In
2006, Al-Ghunaim was listed number 91 in Forbes’s global ranking
26
of Most Powerful Women. Kuwaiti banks have long maintained
foreign offices in order to serve traveling or expatriate Kuwaitis,
and the banks now increasingly look abroad for new customers.
Kuwait Finance House, the country’s leading Sharia-compliant
bank, is aggressively pursuing a growth strategy in Malaysia.
Tiny Kuwait is sandwiched between two much larger states:
Saudi Arabia and Iraq. Kuwait’s conflict with Iraq stems from a
long history of territorial disputes. For decades, Iraq has claimed
that Kuwait is rightfully part of Iraq. The matter was so serious that
it appeared before the UN in the early 1960s (at Kuwait’s request)
after Iraq became increasingly belligerent. When Saddam Hussein
invaded Kuwait in 1990, Kuwait was unable to resist on its own and
required a US-led and UN-sanctioned international coalition to
reclaim its territory. All GCC countries sided with Kuwait, as did
most Arab and Muslim nations. The Kuwaiti ruler and leadership
remained operational from Saudi Arabia, the UK, and elsewhere
during the crisis and dug into Kuwait’s substantial reserves to fund
the government while oil revenue was unavailable. Since Kuwait
was reclaimed and the government reinstalled, Kuwait’s foreign
policy has largely been shaped by its interest in showing loyalty to