Analisis Keadaan Ekonomi Internasional K

International Economics
Kuwait

Name

: Abdurahman

NIM

: 0111003006

Dept

: Accounting

Lecture

: Drs. Zulkarnain Ishak, M. Sc

Economic Faculty
Sriwijaya University, Indralaya

2011-2012

Chapter 1
Brief Information of Country

Main Country
Kuwait

Country information

Area

: 17,820 km2

Population

: 3.6 million (2011 Est.)

Capital City

: Kuwait City

People

: Kuwaitis (est. 33% of population), Egyptians, Syrians,
Iranians, Palestinians, Asians (Indians, Sri Lankans,
Bangladeshis, Pakistanis,

Filipinos, Afghanis, Chinese),

Americans and Europeans
Language(s)

: Arabic (official); English (the official second language)

Religion(s)

: Kuwait is an Islamic society and the overwhelming majority
(85%) of its citizens are Muslim (Sunni 70%, Shi’a 30%).
There are Christian churches in Kuwait. The practice of other

religions is restricted.

Currency

: Kuwaiti Dinar. (KWD)

Major political parties

: None. Parties are illegal.

Government

: Constitutional Hereditary Emirate

Head of State

: HH the Amir, Sheikh Sabah Al Ahmad Al Jaber Al Sabah

Heir Apparent

: HH the Crown Prince, Sheikh Nawwaf Al-Ahmed Al-Jaber
Al-Sabah

Prime Minister

: HH Sheikh Jaber Al-Mubarak Al-Sabah

Foreign Minister

: HE Sheikh Sabah Al-Khaled Al-Hamad Al-Sabah

Membership of
international organizations : Most international organisations, including: The
Gulf Co-operation Council (GCC); Organisation of the
Islamic Council (OIC); Arab League; United Nations; OPEC;
WTO.

Brief Information About Kuwait
1.

General information

The State of Kuwait is situated in the north-east corner of the Arabian Peninsula,
Kuwait, officially the State of Kuwait /kuːˈweɪt/ (Arabic: ‫ دولة الكويت‬Dawlat 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
‫ أكوات‬ākwāt, the plural of ‫ كوت‬kūt, meaning "fortress built near water".[5] The country covers
an area of 17,820 square kilometers (6,880 square miles) and has a population of about 3.5
million.[2]
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.

2.

Political overview

Kuwait is a constitutional monarchy with a parliamentary system of government. The
head of state, the Emir, is chosen from the ruling Al-Sabah family and confirmed by the
National Assembly (Majlis Al-Umma). The Emir has the power to appoint the Prime
Minister, dissolve the Parliament and suspend certain parts of the Constitution. The current
Emir is HH Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah, who acceded to the throne in
February 2006.

Kuwait's constitution is regarded as one of the most liberal in the region and Kuwait
was the first member of the Gulf Cooperative Council (GCC) to establish a directly elected
parliament. Established in 1963, the National Assembly is comprised of 50 directly elected
members who serve four-year terms. The Assembly has the power to question and dismiss
ministers, including the Prime Minister. Although political parties are banned, there are
various interest groupings or 'blocs'.
The Council of Ministers (cabinet) forms the executive level of government and
advises and assists the Prime Minister, who is appointed by the Emir. The current Prime
Minister is HH Sheikh Nasser Al-Mohammed Al-Ahmed Al-Jaber Al-Sabah, who was
appointed in 2006. Cabinet members are also ex-officio members of the National Assembly
with the same voting rights as elected MPs, except in cases of no confidence motions. The
most recent parliamentary election was held in May 2009, Kuwait's third since 2006. This
election resulted in four women elected for the first time since women were granted the right
to vote in 2005. The next election is scheduled for May 2013.
In addition to being a member of the GCC, which includes Bahrain, Oman, Qatar, the
United Arab Emirates (UAE) and Saudi Arabia, Kuwait is also a member of: the Arab
League; the Organization of the Islamic Conference (OIC); the Organization of Petroleum
Exporting Countries (OPEC); the World Trade Organization (WTO); and the United Nations
(UN) and its various agencies. Kuwaiti foreign policy is founded on a long-standing strategic
alliance with the United States.

3.

Economic overview

Kuwait has a geographically small, but wealthy, relatively open economy with crude
oil reserves of about 104 billion barrels - about 7% of world reserves. Petroleum accounts for

nearly half of GDP, 95% of export revenues, and 95% of government income. Kuwaiti
officials have committed to increasing oil production to 4 million barrels per day by 2020.
The rise in global oil prices throughout 2011 is reviving government consumption and
economic growth. Kuwait has experienced a 20% increase in government budget revenue,
which has led to higher budget expenditures, particularly wage hikes for many public sector
employees. Kuwait has done little to diversify its economy, in part, because of this positive
fiscal situation, and, in part, due to the poor business climate and the acrimonious relationship
between the National Assembly and the executive branch, which has stymied most movement
on economic reforms. In 2010, Kuwait passed an economic development plan that pledges to
spend up to $130 billion over five years to diversify the economy away from oil, attract more
investment, and boost private sector participation in the economy.
4.

Geography And Climate

Located in the north-east corner of the Arabian Peninsula, Kuwait is one of the
smallest countries in the world in terms of land area. It lies between latitudes 28° and 31° N,
and longitudes 46° and 49° E. The flat, sandy Arabian Desert covers most of Kuwait. The
country is generally low lying, with the highest point being 306 m (1,004 ft) above sea-level.
It has nine islands, all of which, with the exception of Failaka Island, are uninhabited. With
an area of 860 km2 (330 sq mi), the Bubiyan is the largest island in Kuwait and is connected
to the rest of the country by a 2,380 m (7,808 ft) long bridge. The land area is considered
arable and sparse vegetation is found along its 499 km long coastline. Kuwait City is located
on Kuwait Bay, a natural deep-water harbor.
Kuwait has some of the world's richest oil fields with the Burgan field having a total
capacity of approximately 70 billion barrels (1.1×1010 m3) of proven oil reserves. During the
1991 Kuwaiti oil fires, more than 500 oil lakes were created covering a combined surface
area of about 35.7 km2 (13.8 sq mi). The resulting soil contamination due to oil and soot
accumulation had made eastern and south-eastern parts of Kuwait uninhabitable. Sand and oil
residue had reduced large parts of the Kuwaiti desert to semi-asphalt surfaces. The oil spills
during the Gulf War also drastically affected Kuwait's marine resources.
The spring season in March is warm and pleasant with occasional thunderstorms. The

frequent winds from the northwest are cold in winter and spring and hot in summer.
Southeasterly winds, usually hot and damp, spring up between July and October; hot and dry

south winds prevail in spring and early summer. The shamal, a northwesterly wind common
during June and July, causes dramatic sandstorms.

Country as Comparison
United States

Country information

Area

: The total area is over 9.8 million km2

Population

: 313.2 million (July 2011 est.)

Capital City

: Washington, District of Columbia

People

: The United States is a multicultural country with people from
all over the world who have now made the USA their home.
The Ethnic Groups are: White 79.96%, Black 12.85%, Asian
4.43% American Indian and Alaska native 0.97%, Native
Hawaiian and Other 0.18%.

Language

: The main language is English although Spanish is spoken by a
sizeable minority.

Religion(s)

: Protestant 51.3%, Roman Catholic 23.9%, Mormon 1.7%,
Jewish 1.7%, Muslim 0.6%, Others 2.5%, no religious
affiliation 12.1%

Currency

: Dollar: 1 US Dollar is made up of 100 cents.

Major Political Parties

: There are two main political parties: the Democratic Party and
the Republican Party, both organised at State and Federal

level.
Government

: Constitution-based Federal Republic with a strong democratic
tradition.

Head of State

: President Barack Obama (January 2009); Vice President Joe
Biden (January 2009).

Foreign Minister

: Hillary Rodham Clinton (January 2009).

Membership of
international
groups/organizations: UN, NATO, NAFTA.

Saudi Arabia

Country Information

Area

: 2.15 million km2

Population

: 28 million (UN, 2011)

Capital City

: Riyadh

People

: Arabs; 8.5m of the total population are foreigners.

Languages

: The official language is Arabic, although English is widely
spoken in business circles.

Religion

: Islam; about 90% of the Muslim population is Sunni and 10%
is Shi’a. Publicly practising any other religion is illegal

Currency

: Saudi Riyal (SR)

Major political parties

: Political parties are not permitted

Government

: Islamic Absolute Monarchy

Head of State and Prime
Minister

: King Abdullah bin Abdul Aziz Al Saud, Custodian of the
Two Holy Mosques

First Deputy Prime
Minister

: HRH Crown Prince Salman bin Abdul Aziz Al Saud

Second Deputy Prime
Minister

: Vacant

Foreign Minister

: HRH Prince Saud al Faisal bin Abdul Aziz

Membership of
international
groups/organizations: World Trade Organisation, Arab League,
Gulf Co-operation Council, Organisation of the Islamic
Conference, United Nations, Organisation of Petroleum
Exporting Countries, International Monetary Fund and World
Bank.
Flag

: The flag of Saudi Arabia bears the Muslim creed: 'There is no
God but God: Muhammad is the Messenger of God.' The
official emblem is a date palm, representing vitality and
growth, and two crossed swords, symbolising justice and
strength rooted in faith

Chapter 2
The Economy of Kuwait
Gross Domestic Product
a.

Gross Domestic Product and Others
GDP
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Kuwait

United States

$
34,890,773,740
$
38,138,801,497
$
47,875,837,662
$
59,440,511,982
$
80,797,945,205
$
101,561,153,806
$
114,721,830,986
$
147,402,413,798
$
105,911,338,608
$
124,348,317,665
$
176,590,075,215
406.12%

$
10,233,900,000,000
$
10,590,200,000,000
$
11,089,300,000,000
$
11,797,800,000,000
$
12,564,300,000,000
$
13,314,500,000,000
$
13,961,800,000,000
$
14,219,300,000,000
$
13,898,300,000,000
$
14,419,400,000,000
$
14,991,300,000,000
46.49%

Saudi Arabia
$
183,012,268,442
$
188,551,196,399
$
214,572,800,000
$
250,338,933,333
$
315,580,048,571
$
356,630,440,587
$
384,891,141,942
$
476,304,800,000
$
376,693,333,333
$
450,792,000,000
$
576,824,000,000
215.18%

Sources : Country Metadata – World Bank Data
From data above, Kuwait was increased its Gross Domesitc Product (GDP) by
406.12% during 2001-2011. In 2009, the GDP was decreased by 28% through the USA
Moneter Crisis and also United States and Saudi Arabia were decreased respectively 2.26%
and 20.91%. In 2011, Kuwait got the impressive increase of GDP around 42.01%. But, if it’s
compared with United States and Saudi Arabia, the GDP of Kuwait is the lowest one while
United States is holding the biggest one.

b.

Population
Year

Kuwait

United States

Saudi Arabia

2001

2,009,588

284,968,955

20,681,576

2002

2,069,816

287,625,193

21,463,072

2003

2,126,786

290,107,933

22,334,371

2004

2,189,485

292,805,298

23,213,767

2005

2,264,014

295,516,599

24,041,116

2006

2,351,441

298,379,912

24,799,436

2007

2,447,818

301,231,207

25,504,176

304,093,966

26,166,639

2008

2,548,351

2009

2,646,286

306,771,529

26,809,105

2010

2,736,732

309,349,689

27,448,086

2,818,042
40.23%

311,591,917
9.34%

28,082,541
35.79%

2011
Growth

Sources : Country Metadata – World Bank Data
If we compare the population among the three countries, Kuwait has the lowest one
and USA has the biggest one. But during 2001-2011, the growth of the population is highly
dominated by Kuwait followed by Saudi Arabia and United States respectively 40.23%,
9.34% and 35.79%.
c.

GDP per Capita
GDP Per Capita
Year
2001

Kuwait
$
17,362.15

United States
$
35,912.33

Saudi Arabia
$
8,849.05

2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

$
18,426.18
$
22,510.89
$
27,148.17
$
35,687.92
$
43,191.03
$
46,866.98
$
57,842.27
$
40,022.63
$
45,436.79
$
62,664.10
260.92%

$
36,819.45
$
38,224.74
$
40,292.30
$
42,516.39
$
44,622.64
$
46,349.12
$
46,759.56
$
45,305.05
$
46,611.98
$
48,111.97
33.97%

$
8,784.91
$
9,607.29
$
10,784.07
$
13,126.68
$
14,380.59
$
15,091.30
$
18,202.75
$
14,050.95
$
16,423.44
$
20,540.31
132.12%

Sources : Kuwait Country Metadata – World Bank Data

From the previous data of the three countries, United States holds the biggest GDP
and also many people live there. However, Kuwait holds the smallest GDP and has small
population while Saudi Arabia has standard population and GDP. it results a fact the biggest
GDP per Capita is held by Kuwait that reaches sixty millions USD in 2011. It’s quite big

compared Saudi Arabia and United States that respectively reach twenty and fourty millions
USD.
It means that one person that live in Kuwait earns sixty millions a year. It’s big
enough for one person and can be categorized as the wealth nation. So, we conclude that
eventhough Kuwait has lower GDP than United States and Saudi Arabia but if we see from
the wealth side, Kuwait is more wealth than them where it’s showed with its big GDP per
Capita
d.

Openness
To know, how interactive Kuwait in trading their commodities include the exports and
the imports in the world (or we can say that how much contribution Kuwait’s trade
influencing the world trade , we just have to find the openness by using this formula :
Openness = Total Export + Total Import
GDP
Openness in Million US$
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Kuwait
0.87
0.81
0.87
0.89
0.92
0.90
0.92
0.93
0.89
0.86
0.87
0%

United
States
0.24
0.23
0.23
0.25
0.27
0.28
0.29
0.31
0.26
0.29
0.32
34%

Saudi
Arabia
0.64
0.65
0.70
0.79
0.89
0.95
1.03
1.05
0.97
0.97
0.96
50%

Sources : Country Metadata – World Bank Data

From the graph above, Saudi Arabia had been more open than Kuwait since 2005.
These two countries have big openness that reach at point 0.8 , and even Saudi Arabia ever
reached it over point 1 in 2007 and 2008 that reflect Saudi Arabia to have tendency to trade to
be contributed to GDP. While, United States isn’t too open in which it just reach at point 0.2.
It means GDP of United States isn’t fully contributed by not only trade, but also other
elements that may affectable to enhance their economy.
e.

Remmitances
A remittance is a transfer of money by a foreign worker to his or her home country.
Remittance is one of potential income that can be able to increase the economy in one
country, and even the remittance become the major income that is very contibutable in some
countries. The amount of Remittances in which Kuwait, United States, and Saudi Arabia just
had during 2001 until 2010 will be shown by this table below.
Remittance Receipts
Year
2001
2002
2003
2004
2005
2006

Kuwait
$
$
$
$
$
$
-

In Million Dollar
United States
$
4,513,000,000
$
4,570,000,000
$
4,672,000,000
$
4,734,000,000
$
4,795,000,000
$
5,013,000,000

Saudi Arabia
$
$
$
$
$
93,939,731
$
105,740,988

2007
2008
2009
2010
2011
Growth

$
$
$
$
$
0%

$
5,101,000,000
$
5,181,000,000
$
5,478,000,000
$
5,641,000,000
$
5,810,000,000
28.74%

$
123,542,239
$
216,186,667
$
214,400,000
$
236,480,000
$
243,733,333
259.46%

Sources : Country Metadata – World Bank Data

Having big population, United States is very consistent to use remittances as a
potential income that may be contributable to GDP. It’s shown by the data of remittances
received by United States during 2001 until 2011. And also, remittances of United States get
increase in each year. In other side, Saudi Arabia started to take the remittances since 2005
but the remittances of Saudi Arabia is too small if it’s compared with United States has.
Different with the two countries, Kuwait has no remittances during the period. It’s
categorized as normal condition in Kuwait as they have little population there.

Chapter 3
Kuwait’s Partners In Trading Commodities
A.


The Most Export and Import Partners of Kuwait
The Most Export Partners of Kuwait (1990-2011 (Average))
No

County Partner

Value in Million U.S Dollar

1
2
3
4
5
6
7
8
9
10

Japan
Korea, Repubilc Of
India
United States
Singapore
China, P.R. Mainland
Netherlands
Pakistan
Indonesia
United Kingdom

8935.27
7075.76
5157.97
4747.61
3436.59
2483.73
2244.81
1788.89
1213.50
971.65

Sources : Direction of Trade Statistics (DOTS) – www.imf.org

From the table above, we can conclude that Kuwait is more intensive to export their
goods and services to Japan during 1990 until 2011 followed by Korea, Republic of , India,
United States and Singapore. The most proportion of Kuwait’s Income, especially for export
side comes from the big country, that is Japan. Asian still becomes the big proportion of
export’s income to Kuwait including Japan, Korea, India, Singapore, China, Pakistan, and
Indonesia.


The Most Export Partners of Kuwait (2011)
No

County Partner

Value in Million U.S Dollar

1
2
3
4
5
6
7
8
9
10

Korea, Repubilc Of
India
Japan
China, P.R. Mainland
United States
Singapore
Netherlands
Pakistan
Egypt
Indonesia

15415.94
13315.70
11931.65
8335.10
7281.91
3273.94
2893.72
2719.76
2527.70
1279.90

Sources : Direction of Trade Statistics (DOTS) – www.imf.org

The latest export of Kuwait (2011) is mostly distributed to Republic of Korea
followed by India and Japan. It is still hold by Asian. Due to the background of Kuwait’s
export, Kuwait sent out its commodities to the nearest country. However, little country
outside Asian like United States and Netherland still takes out some commodities from
Kuwait.



The Most Import Partners of Kuwait (1990-2011 (Average))
No

County Partner

Value in Million U.S Dollar

1
2
3
4
5
6
7
8
9
10

United States
Japan
Germany
Saudi Arabia
China, P.R. Mainland
United Kingdom
Italy
France
India
Korea, Repubilc Of

2987.67
2042.49
1735.84
1378.08
1235.34
1098.68
1097.46
927.61
869.42
834.27

Sources : Direction of Trade Statistics (DOTS) – www.imf.org

Kuwait is mostly depend on United States in the Import side during 1990-2011. From
the data above, we conclude that averagely, Kuwait imports commodities from the big
country (Familiar with their each technologies) like United States and Japan.



The
No

County Partner

Value in Million U.S Dollar

1
2
3
4
5
6
7
8
9
10

United States
China, P.R. Mainland
Saudi Arabia
Korea, Repubilc Of
India
Japan
Germany
United Arab Emirates
Italy
Australia

3000,25
2342,91
2023,40
1579,77
1557,17
1489,37
1205,80
1031,22
871,38
698,69

Most
Import
Partners of
Kuwait
(2011)

Sources : Direction of Trade Statistics (DOTS) – www.imf.org

As the recent import’s data (2011), still United States is the major target of import for
Kuwait, followed by China and Saudi Arabia. Now, Kuwait tends to take some commodities
from the nearest country than taking in them from the big country. May be, Kuwait try to
minimize their cost, by limiting or focusing the import’s activities to little big country or just
one like United States, and the rest it would be the nearest countries that’re available for
fulfilling Kuwait’s needs.

Chapter 4
Prime Commodity Trade
a.

Commodity Intensive by comparing the three main product (Agriculture, Fuel
and mining, Manufactured Product)
Commodity (In Million USD)
Kuwait

Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Agriculture
Prod
$
70
$
89
$
110
$
118
$
160
$
151
$
180
$
245
$
231
$
338
$
290
314.29%

Fuels and Mining
Prod
$
14,964
$
14,105
$
19,069
$
26,746
$
42,553
$
53,243
$
59,325
$
82,850
$
47,020
$
61,986
$
96,999
548.22%

Manufacture Prod
$
1,106
$
1,175
$
1,499
$
1,735
$
2,155
$
2,569
$
3,166
$
4,360
$
4,683
$
4,794
$
5,160
366.55%

Sources : http://stat.wto.org/StatisticalProgram/WSDBViewData.aspx?Language=E

Kuwait is more intensive with its fuel and mining products as their main commodity
followed by Manufactured Products. However, as Kuwait’s land isn’t fertile enough to plant,
Agriculture products are not familiar there. Kuwait just get them outside country (By
importing them).

Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Commodity (In Million USD)
Saudi Arabia
Fuels and Mining
Agriculture Prod
Prod
$
$
527
58,678
$
$
639
63,989
$
$
979
82,502
$
$
1,208
110,968
$
$
1,410
161,715
$
$
1,637
189,019
$
$
2,240
206,250
$
$
687
280,998
$
$
1,031
162,951
$
$
3,186
215,673
$
$
5,884
293,686
1016.51%
400.50%

Manufacture
Prod
$
7,450
$
7,781
$
9,541
$
13,561
$
17,098
$
20,142
$
24,838
$
21,489
$
18,662
$
31,907
$
64,799
769.79%

Sources : http://stat.wto.org/StatisticalProgram/WSDBViewData.aspx?Language=E

Almost the same with Kuwait, Saudi Arabia also produce more fuels and mining
products than others. The other potential commodity they have is manufacture product. They
have little agriculture products, but if we compare with Kuwait, their Agriculture Products are

bigger than Kuwait one. As the result, Saudi Arabia still produces effective Agriculture
Products like kurma that’s very familiar in the world.

Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Commodity (In Million USD)
USA
Agriculture
Fuels and Mining
Prod
Prod
$
$
70,017
26,534
$
$
68,757
24,688
$
$
76,244
28,201
$
$
79,567
37,527
$
$
82,674
50,400
$
$
92,664
70,679
$
$
113,628
84,186
$
$
140,161
125,955
$
$
119,737
88,141
$
$
142,538
127,726
$
$
168,208
185,397
140.24%
598.71%

Manufacture
Prod
$
602,372
$
570,965
$
589,168
$
668,672
$
732,470
$
828,620
$
909,276
$
973,394
$
724,902
$
870,180
$
966,486
60.45%

Sources : http://stat.wto.org/StatisticalProgram/WSDBViewData.aspx?Language=E

As developed countries, United States is always associated with the technology, that’s
why one main commodity they have comes from Manifactured Company, followed by
Agriculture and Fuels and Mining Products.
In this case, from previous data, among Kuwait, Saudi Arabia, and United States can
fulfill their need by trading like export and import their each potential commodity. For
example (Based on data export-import partners), Kuwait exports their fuels to United States
and imports manufacture products from United States.

b.

Revealed Comparative Advantage (RCA)
The RCA index is defined as the ratio of two shares. The numerator is the share of a

country’s total exports of the commodity of interest in its total exports. The denominator is
share of world exports of the same commodity in total world exports.

These table shows the RCA of Kuwait, United States, and Saudi Arabia
during 2006-2010.
Year

Kuwait

2006
2007
2008
2009
2010
Growth

6.66
6.70
5.37
6.42
6.13
-7.93%

United
States
0.24
0.26
0.33
0.37
0.42
78.70%

Saudi
Arabia
6.26
6.25
5.08
6.02
5.71
-8.74%

Sources : http://legacy.intracen.org
From data above, we conclude that Kuwait hold bigger RCA than Saudi Arabia in
2010. In this case, Saudi Arabia has the biggest value in its Fuels Production compared with
Kuwait’s production in fuel. But, the denominator of fuel’s export is taken by Kuwait. Why
this can be happen?. In this case, almost the whole export activities of Kuwait is hold by Fuel
in other case Saudi Arabia not only focus the Fuel but may be others. However, Kuwait got
decrease from 2006 to 2010 while Saudi Arabia wa getting fluctuation. Unlike them, United
States has lower RCA of fuel, because basicly Factor Endowment of United States doesn’t
support it.
B.

Specialization
Every country has their each potential commodity that can be their strength to trade.

These data will show us what commodity in every country to be specialized (data 2010).
Country

Commodity

Percentage
(%)

Value In
Million USD

Kuwait

Mineral fuels, oils,
distillation products, etc.

91.98

59,387

Saudi Arabia

Mineral fuels, oils,
distillation products, etc.

85.71

215,249

United States

Boilers, machinery;nuclear
reactors, etc.

14.38

183,681

Sources : http://legacy.intracen.org

Almost 91,98% of their trade comes from Mineral fuels, oils, distillation products,
etc. Based on the factor endowment, Kuwait is rich in fuel besides other country in East Asia
like Saudi Arabia, Qatar, etc. Moreover, the fuel is the big contribution for Kuwait in
increasing their export and import that effect to higer GDP. The big rival of this commodity is
Saudi Arabia. Compared with Kuwait, Saudi Arabia really has big amount for their fuel, but
Saudi Arabia doesn’t specialize it specificly. That’s why Saudi Arabia just specialize that
commodity only around 85.71%. On the other hand, United States specializes Machine
(Manufactured Products) as their main commodity to be traded.

Chapter 5
FDI and Exchange Rate
a.

FDI
Foreign direct investment (FDI) is direct investment into production in a country by a

company in another country, either by buying a company in the target country or by
expanding operations of an existing business in that country. Foreign direct investment is
done for many reasons including to take advantage of cheaper wages,and/or for special
investment privileges such as tax exemptions offered by the country as an incentive to gain
tariff-free access to the markets of the country or the region
US$ Dollars in Millions
FDI
Year
2001
2002
2003

Kuwait
$
1,802,194,458
$
80,285,804
$

United States
$
24,670,000,000
$
(70,087,000,000)
$

Saudi Arabia
$
19,640,000
$
(614,133,333)
$

2004
2005
2006
2007
2008
2009
2010
2011
Growth

4,892,763,859
$
(2,557,516,118)
$
(4,907,876,712)
$
(8,089,222,334)
$
(9,672,642,456)
$
(9,096,510,277)
$
(7,521,862,602)
$
(1,987,514,351)

(85,814,000,000)
$
(170,256,000,000)
$
76,402,000,000
$
(1,772,000,000)
$
(192,876,000,000)
$
(18,990,000,000)
$
(145,024,000,000)
$
(115,125,000,000)
$
(178,377,000,000)
-210%
-823%

(586,506,667)
$
(334,320,000)
$
12,456,888,691
$
18,356,141,522
$
24,468,633,650
$
35,958,651,563
$
34,280,396,667
$
17,653,324,667
$
13,238,388,000
67305%

Sources : Country Metadata – World Bank Data

FDI in Kuwait has been inhibited by several factors that have limited the role of the
private sector (local and foreign) in the economy. Under the Foreign Investment Law, foreign
investors have been allowed to own up to 100% of business since 2001. Nonetheless, seeking
approval is reportedly a lengthy procedure; the law does not apply to certain economic

activities and foreign portfolio investment through the Kuwait stock exchange may not
exceed 49% in any listed company. That’s why FDI in Kuwait grew unsignificantly, even the
people in Kuwait prefer to invest in abroad that effect the FDI outward exceeds FDI inward
(Minus FDI).
On the other hand, United States got unstable FDI during 2001-2011. It had ever
reached the lower point at $ (192,876,000,000) in 2007. That’s caused by unfix ecomomic climate
there. So, sometimes Investors are very heavy to invest their fund there, but sometimes they dn’t do
the same.
Unlike them, Saudi Arabia just get stable FDI and moreover the growth are positive that’s
showed by the increase of net FDI around 67305% during 2001-2011.

b.
Exchange Rate
These are the exchange rate of Kuwait with its partner
Exchange Rate for 1 KWD Dinnar (Kuwait)
US$ Dollar (United States) and SAR Riyadh (Saudi Arabia) to
USD

Year

Kuwait

United States

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

0.307
0.304
0.298
0.295
0.292
0.290
0.284
0.269
0.288
0.287
0.276
-10.10%

1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
0.00%

Saudi Arabia
3.750
3.750
3.750
3.750
3.747
3.745
3.748
3.750
3.750
3.750
3.750
0.00%

Sources : Country Metadata – World Bank Data

In this case, By detetermining US Dollar as the basic currency, Saudi Arabia get the
biggest exchange rate. The exchange rate between Riyadh (Saudi Arabia) with Dollar (USA)
reaches at point 3.75 and the growth is constant during 2001-2011.
Kuwait has lower exchange rate than the two countries. Compared with Dollar (USA),
Dinnar (Kuwait) just reaches at point between 0.2 and 0.3. and along 2001-2011, the Growth
decreases as much as 10.10%.

c.

Tariff
Tariff rate, applied, simple mean
Kuwait
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Manufactured Prod

Primary Prod

All Prod

3.98

1.47

3.53

4.28
4.27
4.4
4.31
4.21

3.21
3.21
3.48
3.33
3.36

4.13
4.13
4.29
4.17
4.09

United States
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Manufactured Prod
3.64
3.65
3.53
3.31
3.26
3.21
2.93
3.28
3.09
2.98

Primary Prod
2.88
2.96
2.95
2.86
2.72
2.7
3.07
2.63
2.66
2.55

All Prod
3.51
3.53
3.43
3.23
3.17
3.12
2.94
3.17
3.01
2.9

Primary Prod

All Prod

Saudi Arabia
Year
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Manufactured Prod

6.67
6.65
4.28
4.28
4.13
4.13
4.13

6.28
6.62
3.23
3.26
3.38
3.28
3.53

6.61
6.64
4.13
4.14
4.02
4.01
4.05

Sources : Country Metadata – World Bank Data

Chapter 6
Balance Of Payment
a.

Balance Of Payment
The Balance of Payment accounts summarize international transactions for a specific

period, usually a year, and are prepared in a single currency, typically the domestic currency
for the country concerned. Sources of funds for a nation, such as exports or the receipts of
loans and investments, are recorded as positive or surplus items. Uses of funds, such as for
imports or to invest in foreign countries, are recorded as negative or deficit items. In this
case, we will analyze the BoP of Kuwait both Current Account and Capital Account.

The Comparison of Current Account BoP in Each Country in Million USD
Current Account is the sum of the balance of trade (like net revenue on exports
minus payments for imports), factor income (earnings on foreign investments minus
payments made to foreign investors) and cash transfers.
Current Account
Year/Cou
ntry
2001
2002
2003

Kuwait
$
8,323,614,606
$
4,264,689,770
$
9,424,132,295

United States
$
(396,598,894,289)
$
(457,250,096,629)
$
(519,090,322,629)

Saudi Arabia
$
9,353,446,133
$
11,873,093,333
$
28,047,946,667

2004
2005
2006
2007
2008
2009
2010
2011
Growth

$
15,507,974,211
$
30,070,547,945
$
45,311,775,629
$
41,330,130,543
$
60,239,349,741
$
25,774,064,878
$
36,821,982,839
$
342.38%

$
(628,523,736,614)
$
(745,779,979,478)
$
(800,618,466,000)
$
(710,298,754,000)
$
(677,140,573,000)
$
(376,554,079,000)
$
(470,902,198,000)
$
(473,441,151,000)
-18.74%

$
51,925,973,333
$
90,060,713,889
$
99,066,129,916
$
93,379,454,661
$
132,313,570,234
$
20,954,610,933
$
66,751,011,167
$
158,493,852,800
613.65%

Sources : Country Metadata – World Bank Data

From the data above, we see the comparison of current account among three
countries. A current account surplus increases a country's net foreign assets by the
corresponding amount, and a current account deficit does the reverse. So, in this case, Kuwait
always get the surplus current account during 1980-2010 and has increased their foreign
assets as much as 342.38%. However, United States that got high deficit current account in
2006 but it’s corrected during 2007-2009 and it’s still in deficit condition. Saudi Arabia
increases their current account but ever fell in 2009 because of America Economic Crisis, yet
it had grew up since 2009.



The Comparison of Capital Account BoP in Each Country in Million USD
Net capital account includes government debt forgiveness, investment grants in cash

or in kind by a government entity, and taxes on capital transfers. Also included are migrants'
capital transfers and debt forgiveness and investment grants by nongovernmental entities.
Data are shown below ( in current U.S. dollars ).

Capital Account
Year/Cou
ntry
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growth

Kuwait
$
2,931,378,356
$
1,672,182,194
$
1,431,488,281
$
348,489,990
$
709,931,507
$
743,686,014
$
1,487,611,666
$
1,728,612,221
$
1,065,453,571
$
2,158,031,315
$
-26.38%

United States
$
13,198,250,000
$
(141,276,000)
$
(1,820,610,000)
$
3,048,951,000
$
13,115,856,522
$
(1,787,903,000)
$
383,556,000
$
6,010,173,691
$
(140,127,000)
$
(152,347,000)
$
(1,159,706,000)
-101.15%

Saudi Arabia
$
$
$
$
$
$
$
$
$
$
$
0.00%

Sources : Country Metadata – World Bank Data

United States gets unstable capital account (Fluctuation). It ever reached the highest
capital account as much as $ 13,198,250,000 in 2005. Also, it ever reached the lower
capital account as much as $ (1,820,610,000) in 2003. The condition of capital account in
United States is almost the same with the condition of its FDI in which there is fluctuation
climate.
Kuwait has normal capital account and always get the surplus condition during the
2001 and 2010 but there is a decrease as much as 26.38% while there is no capital account in
Saudi Arabia.
b.

Debt Ratio

36.33%
32.25%
24.54%
18.55%
14.14%
10.57%
11.83%
9.77%
11.33%
10.53%
7.53%

Saudi
Arabia
93.70%
96.90%
82.00%
65.00%
38.90%
27.30%
18.50%
13.20%
15.90%
9.90%
7.50%

United
States
56.40%
58.80%
61.60%
62.90%
67.90%
66.60%
67.20%
69.40%
89.90%
98.50%
103.00%

-79.27%

-92.00%

82.62%

Year

Kuwait

2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Growt
h

Sources : http://www.tradingeconomics.com

We compares the debt among four countries (Kuwait, United States, and Saudi
Arabia), and we conclude the most debtholder is taken by United States in which the debt
increases 82.62% along 2001-2011 . Unlike United States, Kuwait and Saudi Arabia just
decrease their debt 79.27% and 92% respectively during the period.

Chapter 7
Trade Agreements and Arrangements
World Trade Organization

Kuwait became a GATT signatory on 3 May 1963 and has been a WTO Member since
1 January 1995. In its schedule of commitments on goods, Kuwait bound all agricultural and
industrial products at an MFN rate of 100%, with the exception of crude oil, petroleum, and
petrol-chemical products, which are unbound.

Kuwait scheduled commitments in eight

services sectors (business, construction and related engineering services, distribution,
environmental, health related and social services, tourism and travel related services,
recreational and sporting services, and financial services). It maintains two MFN exemptions
under Article II of the GATS, in the areas of air transport services, and the promotion and
protection of investment.

So far, Kuwait has participated in one dispute settlement proceeding at the WTO, as a
third party. Based on information from the WTO Central Registry of Notifications (CRN), as
of 30 June 2011, Kuwait had 22 outstanding notifications.
As a small and trade-dependent nation, Kuwait values highly its membership in the
multilateral trading system. Liberal trade means greater access to world markets, a higher
level of employment and a better living standard for Kuwait's population. The authorities
considered that Kuwait must participate in international trade negotiations to pursue its
commercial interests, enhance the negotiation leverage, and protect its existing rights.
Furthermore, Kuwait considers it better to protect its rights through the WTO than through
regional and bilateral arrangements. The authorities stated that for a small economy, absence
from negotiations would mean Kuwait could not influence the content of the rules affecting
its trade relations, nor ensure that its rights are fully respected.
In the Doha Round, Kuwait supports a UAE proposal that emphasizes tariff
elimination for products of substantive interest to developing countries. In particular, Kuwait
considers that the primary aluminium industry, which is one of the most important emerging
industries in some GCC countries, would benefit from tariff eliminations as suggested in the
UAE proposal. In the area of intellectual property rights, Kuwait does not import or export
any alcohol, for religious reasons, and considers that participation in the registration system
for GIs should be voluntary and without any legal effect.
In September 2010, Kuwait joined the WTO Information Technology Agreement.
Kuwait is not a party, nor an observer, to the WTO plurilateral Agreement on Government
Procurement.
Regional Trade Agreements
Kuwait's view is that regional trade agreements and arrangements should be
complementary, and not compete with the multilateral trading system. They should be
building blocks for liberalization of international trade and must be in conformity with the
provisions of Article XXIV of the GATT 1994, the Enabling Clause, and Article V of GATS.
Kuwait participates actively in regional trade agreements through its membership in
the Gulf Cooperation Council (GCC) and the Greater Arab Free Trade Area (GAFTA). As a
group, the GCC has signed free-trade agreements with the EFTA states and Singapore (Table

II.1), and is preparing to review the legal text of an FTA with New Zealand. It has ongoing
negotiations with Australia, China, the EU, India, Japan, Korea, MERCOSUR, Pakistan, and
Turkey. Further, the GCC has received requests for FTA negotiations from ASEAN,
Azerbaijan, Cambodia, COMESA (Common Market for Eastern and Southern Africa),
UEMOA (West African Economic and Monetary Union), Georgia, Hong Kong, China,
Indonesia, Malaysia, Peru, Philippines, Thailand, Ukraine, and Viet Nam.
In the resolution of the first Arab Economic and Development Summit held in Kuwait
in January 2009, Arab countries decided to create an Arab Customs Union, and accomplish
all the necessary requirements by 2015, with the objective of establishing an Arab common
market.
However, all current negotiations of free-trade agreements have been suspended. In
September 2010, the GCC decided that negotiations need to be on hold pending completion
of an internal study. According to the authories, this study is in its final stage, and is expected
to be submitted to the GCC Ministerial Council for consideration before end 2011. The
regional organization followed by Kuwait is presented below.

I.

Gulf Cooperation Council (GCC)
The GCC was created on 25 May 1981, by Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and
the United Arab Emirates. The main objectives were regional cooperation and integration in all
economic, social, and cultural affairs, including trade, industry, investment, finance, transport,
communications, and energy. One of the GCC's first achievements was an agreement for free trade
among member states in 1983, whereby originating goods have been exempt from customs tariffs.

II.

GAFTA
The Greater-Arab Free Trade Agreement entered into force on 1 January 1998. Its members
include the six GCC countries, as well as Egypt, Iraq, Jordan, Lebanon, Libya, Morocco, Palestinian
Authority, Sudan, Syria, Tunisia, and Yemen. In 2005, Algeria participated as the 18 th member.
GAFTA contains provisions relating to trade in goods. Duties and other restrictions on substantially
all trade between the signatories were to be eliminated by 31 December 2007; in practice duties on all
products were eliminated as of 1 January 2005.

III.

GCC–EFTA
Trade between the European Free Trade Association (EFTA) and GCC grew rapidly, on
average 25% annually, between 2003 and 2008. A Free Trade Agreement was signed in June 2009,
covering trade in goods and services, competition, government procurement, and intellectual property
rights. GCC and each EFTA state concluded bilateral agreements on trade in agricultural products.
These agreements form part of the instruments establishing the free-trade area. According to t he
authorities, the EFTA–GCC Agreement has not entered into force, although Kuwait ratified it in 2011.

IV.

GCC–Singapore
The GCC–Singapore FTA, signed on 15 December 2008, covers trade in goods, rules of
origin, customs procedures, trade in services, and government procurement. This agreement has not
entered into force yet, although Kuwait ratified it in 2011. Under the Agreement, GCC countries
abolish customs duties on 99% of Singaporean exports, with key benefiting sectors comprising
telecommunications, electrical and electronic equipment, petrochemicals, jewellery, machinery, and
iron and steel-related industry. Tariffs are either eliminated immediately, or after a five-year transition
period. The remaining 1% of Singapore's exports are prohibited from entering the GCC market for
health, safety, security and religious reasons.

V.

Other bilateral or preferential trade agreement
Kuwait has signed a number of economic and commercial agreements with its trading
partners, of which, 33 were trade cooperation agreements intended to promote and diversify bilateral
trade in goods and services, such as by providing necessary facilities to participate in trade fairs and
international markets . The authorities stated that these agreements contain no discriminatory or
preferential commitments.

Balance of payments, 2006-11 (US$ billion)

Appendix

2006

2007

2008

2009

2010a

45.3

42.2

60.2

25.9

36.9

57.6

40.2

43.4

64.0

34.4

47.9

69.4

56.5

62.6

87.0

51.7

67.0

92.5

53.2

59.1

82.6

46.6

61.7

85.9

3.3

3.5

4.4

5.1

5.3

6.6

0.9

1.2

1.7

1.6

1.8

2.7

-16.2

-19.1

-22.9

-17.3

-19.1

-23.1

-2.2

-3.2

-3.8

-2.5

-5.9

-7.2

0.2

-0.1

-0.6

-1.4

-1.7

-2.0

Insurance

-0.1

-0.1

-0.1

-0.2

-0.2

-0.3

Travel

-5.4

-6.4

-7.3

-6.1

-6.5

-7.9

3.0

3.4

4.3

5.1

2.6

3.0

Current account
Goods (trade balance)
Exports
Oil exports
Non-oil exports including reexportsc
Of which: re-exports
Imports
Services
Transportation

Other services

2011b

Investment income

11.0

12.4

10.7

7.0

7.9

9.2

12.5

16.3

14.0

8.6

9.6

10.4

General governmentd

7.1

8.5

8.8

6.3

7.4

7.8

Other sectorse

5.4

7.8

5.1

2.3

2.2

2.5

-1.5

-3.9

-3.2

-1.6

-1.8

-1.2

0.0

0.0

0.0

0.0

0.0

0.0

-1.5

-3.9

-3.2

-1.6

-1.8

-1.2

-3.7

-10.5

-10.7

-13.0

-13.0

-13.8

-48.8

-33.4

-49.6

-25.3

-32.6

-53.3

0.7

1.5

1.7

1.1

2.2

2.3

-49.6

-34.9

-51.3

-26.4

-34.7

-55.5

-8.1

-9.7

-9.1

-7.5

-2.0

-8.0

Abroadh

-8.2

-9.8

-9.1

-8.6

-2.1

-8.0

In Kuwait

0.1

0.1

0.0

1.1

0.1

0.1

-29.1

-34.9

-28.1

-8.2

-7.7

-29.9

Receipts

Payments
General government
Other
Current transfersf
Capital and financial account
Capital accountg
Financial account
Direct investment

Portfolio investment
Other investment (net)

-12.4

9.7

-14.1

-10.7

-25.0

-17.7

Net errors and omissionsi

7.1

-5.5

-10.0

1.2

-3.3

0.0

Overall balance

3.6

3.3

0.7

1.7

1.0

4.4

Foreign direct investment, 2006-10
(US$ million and %)

FDI
FDI
FDI
FDI
FDI
FDI

inflows
inward stock
inward stock (% of GDP)
outflows
outward stock
outward stock (% of GDP)

2006

2007

2008

2009

2010

121
778
0.8
8,211
4,616
10.7

112
940
0.8
9,784
16,884
12.8

-6
943
0.6
9,091
15,385
10.4

1,114
6,301
5.8
8,636
19,340
17.7

81
6,514
5.0
2,069
18,676
14.2

Source: UNCTAD (2011), World Investment Report, Geneva.
Overview of Kuwait's regional trade agreements, October 2011
GCC

Agreement in force

Title

Gulf Cooperation Council (GCC)

Parties

Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates

Coverage and type

Goods and services, customs union

Date of signature/entry into
force

Free-trade agreement adopted in March 1983, Economic Agreement
adopted on 31 December 2001, Customs Union effective 1 January 2003,

and Common Market launched on 1 January 2008
Transition for full
implementation (goods)

The transition period expires by 2015

Kuwait-specific exclusions

No

Services covered

Yes

Kuwait's merchandise trade
(2009)

11% of Kuwait's imports were from other GCC member states, and 2% of
its exports went to other GCC member states in 2009

WTO document series

WT/REG276, and WT/COMTD/N/25

GAFTA

Agreement in force

Title

Greater-Arab Free Trade Area Agreement

Parties

Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libyan Arab Jamahiriya,
Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syrian Arab Republic, Tunisia,
United Arab Emirates, Yemen, and later joined by the Palestinian Authority
of the West Bank and the Gaza Strip, and Algeria

Coverage and type

Goods, free-trade agreement

Date of signature/entry into
force

19 February 1997/1 January 1998

Transition for full
implementation (goods)

10 years, but shortened to 8 years (full implementation realized in 2005
instead of 2007)
Some products excluded for health, religious, or security reasons

Main products excluded from
liberalization (Kuwait)
Services covered

On-going negotiations among Kuwait, Egypt, and Jordan

Kuwait merchandise trade
(2010)

13% of Kuwait's imports were from other GAFTA member states, and 3% of
its exports went to other GAFTA member states

WTO document series

WT/REG223

GCC–EFTA

Agreement signed but not in force

Title

EFTA–GCC

Parties

GCC 6 members, and Iceland, Liechtenstein, Norway, Switzerland

Coverage and type

Goods and services, free-trade agreement

Date of signature

FTA signed on 22 June 2009

Date foreseen to enter into
force

2011, pending completion of internal procedures by the parties. According
to the authorities, Kuwait ratified in 2011

Transition for full
implementation (goods)

10 years

Services covered

Yes

Main products excluded from
liberalization (Kuwait)

Includes: mixtures of odoriferous substances, retreaded or used
pneumatic tyres of rubber, hides and skins of swine; prohibited items
include mainly cocaine and crocidolite, and materials containing asbestos

GCC merchandise trade (2010)

1.6% of GCC’s imports were from the EFTA, and 0.0% of its exports went to
the EFTA

GCC–Singapore

Agreement signed but not in force

Title

Singapore–GCC

Parties

GCC 6 members, and Singapore

Coverage and type

Goods and services, free-trade agreement

Date of signature

15 December 2008
Not in force, although Kuwait ratified in 2011

Date foreseen to enter into
force
Transition for full
implementation (goods)

5 years

Main products excluded from
liberalization (Kuwait)

Some products excluded for health, safety or religious reasons

Services covered

Yes

GCC merchandise trade (2010)

0.5% of GCC’s imports came from Singapore, and 0.1% of its exports went
to Singapore

Source: WTO Secretariat; WTO RTA Database; and information provided by the Kuwaiti authorities.

Summary analysis of the MFN tariff, 2003, 2007, 2011
(%)
2003

2007

2011

99.5

99.5

99.5

5.0
5.4

4.7

4.8

5.4

5.4

4.6

4.6

5.7

5.7

4.9

4.6

4.6

ISIC 1 - Agriculture, hunting, forestry, and fishing

3.3

3.2

3.2

ISIC 2 – Mining and quarrying

5.0

4.9

4.9

ISIC 3 - Manufacturing

5.1

4.8

4.9

First stage of processing

4.0

3.9

3.9

Semi-processed products

4.9

4.8
4.9

4.8

0.3

0.6

0.6

Bound tariff lines (% of all tariff lines)
Simple average rate
Agricultural products (HS 01-24)

4.9

Industrial products (HS 25-97)

5.7

WTO agricultural productsa
WTO non-agricultural productsb
By ISIC sector

c

By stage of processing

5.2

Fully processed products
Domestic tariff "spikes" (% of all tariff lines)

d
e

4.9

0.3

0.6

0.6

Overall standard deviation of tariff rates

5.2

5.3

5.3

Coefficient of variation of tariff rates

1.0

1.1

1.1

Tariff quotas (% of all tariff lines)

0.0

0.0

0.0

Duty-free tariff lines (% of all tariff lines)

5.8

10.6

Non-ad valorem tariffs (% of all tariff lines)

1.1

1.3

9.4
1.4

Non-ad valorem tariffs with no AVEs (% of all tariff
lines)

1.1

1.3

Nuisance applied rates (% of all tariff lines)f

0.0

0.0

7,154

7,121

98.9

98.7

1.1

1.3

Specific

0.0

0.0

Compound

0.0

0.0

Mixed

0.3

0.3

Others (prohibited and special goods)

0.8

1.0

International tariff "peaks" (% of all tariff lines)

Number of lines
Ad valorem
Non-ad valorem

1.4
0.0
7,100
98.6
1.4
0.0
0.0
0.3
1.1

Memo: some comparisons
By WTO definitiong
WTO Agriculture

5.7

Live animals and products thereof

2.8

Dairy products

5.0

Coffee and tea, cocoa, sugar, etc.

4.0

Cut flowers and plants

4.5

5.7

5.7

2.7

2.7

5.0

5.0

4.0

4.0

4.5

4.5

2003

Fruit and vegetables

3.5

Grains

0.5

Oil seeds, fats, oils, and their products

4.9

Beverages and spirits

5.0

Tobacco

100.0

Other agricultural products

4.4

WTO Non-agriculture (excluding petroleum)
Fish and fishery products

4.9
3.2

Mineral products,