Once nothing more than a fishing and trading town and a desert sparsely populated with nomads, today Kuwait is a rich, internationally influential modern state. Kuwait City is a fast-developing modern metropolis and business hub with increasing numbers of corporate buildings, hotels and luxury shopping malls. Kuwaiti nationals enjoy a per capita income that is among the highest in the world, pay no taxes and benefit from a cradle-to-the-grave welfare system in one of the freer and most democratic societies in the Arab world.

Kuwait’s destiny was transformed by the discovery of oil just before the Second World War. Exports began in 1946. The emirate lays claim to proved crude oil reserves of around 100 billion barrels – 10 per cent of world reserves. Petroleum accounts for nearly half of the GDP, 90 per cent of export revenues and 75 per cent of government income. With recent surges in the price of crude in international markets, petrodollars have been pouring into the state coffers.

Substantial foreign reserves and investment income are being spent on ambitious projects such as the building of a new commercial port and a plan to turn Kuwait into a regional centre for health services.

Under the leadership of its emir, Sheikh Sabah Al-Ahmad Al-Sabah, formerly its Prime Minister, the emirate has adopted a more liberal economic system manifested by welcoming foreign companies and banks to operate in the country and liberalising its communications sector.

Kuwait has long recognised the need to reduce its reliance on a single finite resource, and 10 per cent of oil revenues are transferred annually into the Reserve Fund for Future Generations. Kuwait’s prosperity rests on its combination of huge oil reserves and small population.