The Rich History of Kuwait

Finally, oil prices have fallen in 1998 to levels as low as $10 per barrel from an average for 1997 of about $18 per barrel. This was due to falling demand from the Asia Pacific region. This region has been the fastest growth area in the world and as soon as it recovers and gets back on track, the demand for oil will begin to recover as well as the price. The forecast of the International Monetary Fund is that the Asia Pacific region economies will begin to pick up in 1999 and continue to grow very strongly once again. The World Bank are forecasting that the average price of oil in 1999 will be around $14 per barrel. Kuwait and the Gulf region have very low costs of oil recovery and production at under $2 per barrel compared to other oil producers’ costs which vary from $7 to $20 per barrel. This means that it will be the high cost producers that will suffer during this short period of low oil prices.




	The public sector runs the Government’s affairs and comprises over 30 ministries, public authorities and institutes. The major ministries are defense, oil, public works, finance and planning, interior, health, education, communications and electricity and water.

	A number of major projects are under way within the various ministries. Current projects include extensions to the highway system, construction of three electricity sub-stations, redevelopment of the Kuwait University campuses and a very large construction project of an industrial water treatment




		Factory Mina Abdulla

plant in Sulaibiya with a capacity of 16 million gallons per day. Five consortia have been approved in the pre-tender qualification and bids for the water treatment project which is valued at upwards of $250 million are expected to be submitted in early 1999. This list continues to grow and is by no means exhaustive, but serves to illustrate the scale and variety of current projects.


	One of the largest public authorities is the Public Housing Authority, which is responsible for meeting the increasing demand for housing. A number of projects are on the drawing board, including a new city at Subiya in the north eastern part of Kuwait. This will involve the construction of a multi-lane causeway across Kuwait bay. It is very likely that this project will involve private sector participation which will help to reduce the growing demands on the budget.


			Oil Pipeline Shuaiba