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Continuing rising crude prices could see exports total at least $70bn in 2008. Kuwait's surplus will also be augmented by the country's increasing income from foreign assets and investments.
Overseas assets
The Kuwait Investment Authority (KIA) is believed to manage overseas assets of at least $225bn, but the actual sum may be considerably higher. The Institute of International Finance estimates the KIA's foreign assets at $400bn.
The authority has been making investments in major foreign businesses for the past 50 years, including global players such as Daimler-Benz and BP, and continues to do so. In 2006 the KIA bought a $720bn stake in Industrial and Commercial Bank of China, making it the bank's largest investor.
Shares are also held in chemical ventures in Bahrain, Turkey, Tunisia and China as well as a stake in Aventis, the merged company of Germany's Hoechst and France's Rhone-Poulenc.
The government continues to diversify its revenue sources. KIA recently bought shares in the US' Citigroup valued at $3bn and a further $2bn in Merrill Lynch.
It has been rumoured that the KIA is interested in investing in Visa's forthcoming $18bn initial public offering.
Long-term crude markets
Last year, Kuwait Petroleum Company (KPC) also agreed to take a 50% shareholding in Dow Chemical Company's commodity plastics unit for $9.5bn, its biggest ever foreign investment. The two companies are to co-operate in future ventures both in Kuwait and Asia.
KPC is looking to increase investments in Asian refineries to guarantee long term markets for its crude and has agreed a $5bn joint venture in China to build a $5bn refining and petrochemicals complex in Guangdong province.
Even though it has a small indigenous population of less than1 million and is one of the region's richest countries, Kuwait has long recognised a need to diversify its economy from oil production and to reduce the dominant role of the state as the main driver of economic activity.
The government is keen to press ahead with infrastructure development and mega projects delayed by extended debate between the administration and Kuwait's parliament.
Economic potential
Kuwait has an outspoken press and a vociferous parliament that makes for lively if sometime fractious debate. While this has delayed some decisions, accountability and transparency in the country have been enhanced.
This has also meant that there is substantial potential. Observers believe that a favourable tax regime, booming economy and infrastructure projects all provide good opportunities for foreign investment.
The reconstruction of Iraq has also provided Kuwait with substantial business opportunities for supply, storage and as a logistics centre. As a result, the country's services sector, particularly financial services, retail and logistics, is growing at 8% a year.
Liberalisation has been boosted with recent approval on a framework for build-own-operate contracts as well as a decision to cut taxes on foreign companies to 15% from 55%. A bill was also passed by parliament allowing Kuwait Airways to finally be privatised.
Privatisation programme
Kuwait has an ambitious, if slow moving, privatisation programme that includes the ports, public transport and the country's power sector as well as the national airline.
Staff
