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Kuwait has been a part of the Abbasid empire from the 8th century, and was later incorporated in the Ottoman Empire (16th century), where it was eventually granted some degree of autonomy as a principality; the current ruling family are descendants from these princes.
The 17th century saw the Arabian Peninsula in tumultuous times. What is now Kuwait was land occupied by tribes being used for spice trades in India. In the 18th century, most locals made a living selling pearls. However, as pearl farming developed in Japan during the 1930s, Kuwait became impoverished. In 1899, growing British influence led to Kuwait becoming a British protectorate. Oil turned Kuwait into one of the richest countries in the Arab peninsula; in 1953 the country became the largest exporter of oil in the gulf, attracting many immigrant laborers who were rarely granted citizenship. Kuwait, having ammassed great wealth, was the first of the Gulf-Arab states to declare independence in 1961. This declaration was challenged by Iraq until 1963.
After being allied with Iraq during the Iran-Iraq War, Kuwait was invaded and annexed by Iraq in August 1990. The monarchy was deposed and an Iraqi governor was installed. An American-led alliance repelled the Iraqi forces and reinstated the emir.
Chief of state is the Emir, a semi-heriditary title. The emir appoints the prime minister, who until recently was also the crown prince. A council of ministers aids the prime minister in his task as head of government. The parliament, or Majlis al-Umma, consists of 50 members, who are chosen in elections held every four years. As Kuwaiti citizenship is very restricted, only 10% of the population is eligible to vote.
In January 2006, there was a brief succession crisis, which was resolved when the ailing Emir agreed to step down in favor of his prime minister Sheik Sabah al-Ahmad al-Sabah.
Kuwait consists mostly of desert, with little altitude difference. The climate is dry and hot. On the north coast of the Persian Gulf, an number of islands is situated, largest of which is Bubiyan. It is considered to be one of the fifteen lands that comprise the so-called "Cradle of Humanity"
The major cities are the capital Kuwait, Salmiya (most inhabitants) and Hawalli.
Kuwait is a small, rich, relatively open economy with proved crude oil reserves of 94 billion barrels (15 km³) - 10% of world reserves. Petroleum accounts for nearly half of GDP, 90% of export revenues, and 75% of government income. Kuwait's climate limits agricultural development. Consequently, with the exception of fish, it depends almost wholly on food imports. About 75% of potable water must be distilled or imported. Higher oill prices put the FY99/00 budget into a $2 billion surplus. The FY00/01 budget covers only nine months because of a change in the fiscal year. The budget for FY01/02 envisioned higher expenditures for salaries, construction, and other general categories.
For decades Kuwait prohibited any private company from drilling for oil; however, it has begun debating whether to allow foreign oil companies to develop fields in the northern part of the country. This debate started after an announcement in November, 2005, that Burgan, its largest field, had reached a peak of production. There have also been reports that the Kuwait Oil Company has cut its internal estimate of remaining reserves in half.
About 80% of the Kuwaiti population is Arab; the non-Kuwaiti Arabs contain a large group of Egyptians and also stateless Arabs, locally known as Bidoon (an Arabic word meaning without and different from Bedouin). Other large groups of immigrants include Indians, Bangladeshis, Pakistanis, and Filipinos. Kuwait formerly had a large Palestinian population, though most of them were forced out of the country after PLO leader Yassir Arafat's support of Iraq during the Iraqi occupation of Kuwait.