United States-Kuwait business update

Almost two years after allied forces liberated Kuwait, the Kuwaiti government and its people remain extremely grateful for the role played by the United States. The subsequent cooperation between Kuwait and the United States has further strengthened the ties between our two countries. While Kuwait is, and will continue to be, an extremely difficult market in which to do business, many firms have benefited from the excellent bilateral relations which exist.

Since the liberation of Kuwait in February 1991, American firms have been awarded over $5 billion in contracts by the Kuwait government. U.S. exports to Kuwait in 1992 should total $1.5 billion. Top U.S. exports to Kuwait in 1992 included: passenger vehicles, airplane and helicopter parts, pipe, carpets, water filtering or purifying machinery, computers, airconditioning equipment, wooden and metal office furniture, automobile parts, and military equipment.

The government of Kuwait is rebuilding the oil sector. in the oil industry, over $2.5 billion has been spent for reconstruction with another $6 billion to $7.5 billion in costs anticipated before all of the industry's fields, refineries, and export facilities are fully restored. Production has reached pre-war levels of 1.5 million barrels per day, and a capacity of 2.0 million barrels per day production is expected to be reached in 1993.

Meanwhile, in the non-oil sectors of Kuwait's economy, an initial trade boom, stimulated by the demands of restocking, petered out in late 1991 primarily because of the government's delay in approving and then implementing a bailout program for Kuwait's commercial banks. This situation prevented companies from preparing financial statements, banks from borrowing or lending freely, and delayed the re-opening of the stock market. The net result was a severe restriction on company access to capital.

The non-oil sector economy is now improving. American firms that have done their homework and figured out the opportunities for their product or service are successful. They also have had the patience and persistence to compete in the price sensitive and fiercely competitive Kuwaiti market.

American companies interested in exporting to Kuwait should consider participating in trade promotion events scheduled for 1993. The second annual Kuwait International Trade Fair will be held Feb. 10-15. Interested firms, especially smaller businesses with limited resources for international marketing, should consider participating in the trade fair through the catalog show being organized by Glahe International, the American agent for this fair. Catalog shows have done well in Kuwait since the liberation in February 1991, with over 500 American businesses participating in previous shows. For more information about this event, firms should contact Glahe International immediately at 1700 K Street, NW., Washington, D. C. 20006-3824, tel (202) 659-4557, fax (202) 457-0776.

The Department of Commerce is recruiting companies to participate in the Kuwait Pollution Control Equipment Catalog Show, scheduled for June 1993, and the Oil and Gas Field Machinery and Services and Mining Industry Equipment Catalog show, scheduled for May 1993. In November 1992, over 25 American firms participated in a highly successful oil and gas field matchmaker trade mission to Kuwait and Saudi Arabia. For further information about these shows, contact Elizabeth Ausberry or Louis Quay at tel. (202) 482-3973 or fax (202) 482-0115.

Businesses interested in other Gulf markets may wish to consider participating in the Department of Commerce Middle East Safety and Security Trade Mission to Saudi Arabia, Kuwait, and the United Arab Emirates, April 24-May 5. Prospects for increasing U.S. exports of safety and security equipment to the Gulf have never been higher. For further information about this mission, contact Dwight Umstead at tel. (202) 482-2410 or fax (202) 482-0975.

Additional information on the markets of the Near East may be obtained by utilizing the, 24-hour automated fax delivery system operated by the Office of the Near East. Call (202) 482-1064 to Access the system.

COPYRIGHT 1993 U.S. Government Printing Office
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