THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Kuwait

Ranked 71st of 149

At a glance

Ranks

71 st on the Legatum
Prosperity Index™

59th
94th
97th
95th
31st
39th
108th
35th
99th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Kuwait performs best on Health and Social Capital and scores lowest on the Personal Freedom sub-index.

Visit our Rankings table to see how Kuwait compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Kuwait, alongside its Gulf peers, has one of the largest prosperity deficits in the world. While its deficit has closed slightly since 2013, its size remains significant, being larger than the deficits of Bahrain, Qatar, and the UAE.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

The Prosperity Index indicates that Kuwait is managing a trade-off between internal and external stability. Even by Gulf standards, it has a low level of Governance, ranking above only Iraq and Yemen, countries mired in conflict. In terms of Safety & Security, however, it ranks below only the UAE and Oman.

Safety & Security and Governance scores (level of Safety & Security & Governance) in Kuwait and the Gulf
The average level of Governance in Kuwait is low compared to its all its peers except Iraq and Yemen, but its Safety & Security level is far above the Gulf average

While Kuwait’s political relations with Iraq remain difficult due to territorial disputes around the Kuwaiti Mubarak al-Kabeer Port and the Iraqi Al-Faw Port, Iraq has meaningfully improved relations with Kuwait by resolving the dispute over Iraqi debts owed to Kuwait related to the First Gulf War. Similarly, relations with Iran have improved thanks to the election of the more centrist president Hassan Rowhani in 2013. Further, stabilising relations between Iran and the US, an old Kuwaiti ally, make managing regional affairs easier for Kuwait. Altogether, these changes have acted to keep Kuwait’s Political Terror Scale and casualties related to war and terrorism low and stable.

Looking to Kuwait’s internal affairs, we can see that the country enjoys a level of Governance that is above the Gulf average. However, this is only because Iraq and Yemen’s scores are so much lower than the Gulf average. In fact, Iraq and Yemen, two countries mired in conflict, are the only two countries that rank below Kuwait in terms of Governance. While the situation has improved since the 2013 elections, the current parliament often conflicts with the executive branch, the al Sabah family. The Prime Minister’s popularity appears to be waning and lawmakers continue to use interrogation requests to erode the al Sabah’s dominance of the Cabinet. Within the al Sabah family, there is currently competition for the crown prince position. Each faction in the family uses its allies in parliament to block laws sponsored by rivals, while accusations of corruption are used to tar MPs and senior officials. This state of internal affairs has, since 2013, led to deterioration in Kuwait’s rule of law, government effectiveness, judicial independence, and regulatory quality.

Business Environment is another area of concern for Kuwait. While Kuwait has seen improvements across the board in this sub-index since 2013, its overall performance remains at a low level. Of all its Gulf peers, Kuwait only ranks above Iraq and Yemen in Business Environment. Its rank of 94th is a considerable distance below the UAE’s at 23rd. Still, this is an improvement from its 2013 rank of 102nd. The government’s aim to diversify away from oil and become a regional trade and financial hub was formalised in its new five-year Development Plan (2015-19), which was passed in parliament recently having faced heavy criticism. The plan envisages heavy expenditure on infrastructure, but other areas are in need of reform. Contracts between foreign firms and the Kuwaiti government are often delayed and outright cancelled, resulting in persistently low FDI (around 1% of GDP). It remains to be seen whether the plan’s focus can move from populist measures like infrastructure spending and public sector pay increases to improving the country’s business environment to attract more diverse foreign investment.


Ways to make a change

Click on the Tweets to help make a change in your nation.


Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.