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***KUWAIT***
Stability in Kuwait is key to Iraqi stability
BI-ME 8 (Business Intelligence – Middle East, Nov 16 2008, http://www.bi-me.com/main.php?id=27376&t=1&c=33&cg=4&mset=)IM
INTERNATIONAL. Kuwait is seeking to exploit its position as gateway to Iraq after the Gulf Arab state stepped up diplomatic ties with Baghdad, opening the way for companies to play a leading role in reconstructing its larger neighbour. Top executives of Kuwaiti companies and experts told the Reuters Middle East Investment Summit they were setting their eyes on Iraq after Kuwait sent its first ambassador since 1990 and security is improving. Sandwiched between Iraq and Saudi Arabia, Kuwait is the main gateway to Iraq from the south, and the US military moves thousands of soldiers and most of its supplies for operations in Iraq through the small neighbor. Stability in Kuwait will ensure continued access to Iraq for the United States, and Iraqi stability. The Iraqi capital of Baghdad is also closer to Kuwait City than to Amman in Jordan, to the southwest. Kuwait's Prime Minister Sheikh Nasser al-Mohammad al-Sabah is expected to visit Iraq soon, which could pave the way for more deals for Kuwaiti companies spreading out of their home market. Commercial Bank of Kuwait, the country's third-largest lender by market value, is in talks with a Kuwaiti investment firm to buy an unnamed Iraqi lender, Chairman Abdulmajeed al-Shatti told the summit. "Iraq is always on our agenda," Shatti said. Smaller rival Burgan Bank just bought a stake in Baghdad Bank as part of plans to expand and diversify income. Meanwhile, Kuwait's Agility, the Gulf's biggest logistics firm, is setting up platforms in Iraq, betting goods will have to be moved when investors flock to the country after the security situation improves further. "When the security situation improves we will have more local partners to develop the business in Iraq. I think you can see it happening now," Agility Chairman Tarek Sultan said. Agility also wants to buy further into the Iraqi telecoms industry where Kuwait's biggest cell operator, Mobile Telecommunications Co (Zain), is already a big player. "If they have more stability....I think that Kuwait is in an excellent position to have an advantage from its [location]," said Amani Bouresli, a finance professor at Kuwait University.
Stability in Kuwait is key to Iraqi stability
Al-Ebraheem 6 (Yousef, Middle East Quarterly 3(3), Sept 2006, p. 17)IM
Kuwait has an estimated oil reserve of more than 94 billion barrels, translating into a per citizen oil wealth of 142,000 barrels, which at today's levels is worth $2.1 million per person. Nonetheless, this wealth is threatened by a range of factors, including high population growth (leading to a decline in per capita wealth), non-OPEC oil discoveries, advancement of oil extraction technology, and the uncertainty surrounding demand for oil, especially from the industrial world. The following major factors could affect the financial situation over the next decade: Political stability. Uncertainty and tension in the Gulf region has an immediate impact on Kuwait's financial situation. In October 1994, Saddam Husayn moved Republican Guards toward the Kuwaiti border, and the ensuing mini-crisis cost Kuwait around $500 million (a figure that includes payments to mobilize allied troops). Further, political problems affect capital outflow, domestic economic activity, and the flow of oil. Hence, Kuwait’s financial situation has a substantial effect on issues like the future of Iraq, relations with Iran, and the Arab-Israeli peace process. Oil revenues. Most energy forecast studies predict that oil prices will be stable at the $15 per barrel level in the short term.9 They also predict that world demand for oil, especially in Asia, will continue to increase. But these studies are narrowly based on quantitative models and virtually ignore political factors, thus making them of questionable value.
Stability in Kuwait is key to Iran relations
Al-Ebraheem 6 (Yousef, Middle East Quarterly 3(3), Sept 2006, p. 17)IM
Kuwait has an estimated oil reserve of more than 94 billion barrels, translating into a per citizen oil wealth of 142,000 barrels, which at today's levels is worth $2.1 million per person. Nonetheless, this wealth is threatened by a range of factors, including high population growth (leading to a decline in per capita wealth), non-OPEC oil discoveries, advancement of oil extraction technology, and the uncertainty surrounding demand for oil, especially from the industrial world. The following major factors could affect the financial situation over the next decade: Political stability. Uncertainty and tension in the Gulf region has an immediate impact on Kuwait's financial situation. In October 1994, Saddam Husayn moved Republican Guards toward the Kuwaiti border, and the ensuing mini-crisis cost Kuwait around $500 million (a figure that includes payments to mobilize allied troops). Further, political problems affect capital outflow, domestic economic activity, and the flow of oil. Hence, Kuwait’s financial situation has a substantial effect on issues like the future of Iraq, relations with Iran, and the Arab-Israeli peace process. Oil revenues. Most energy forecast studies predict that oil prices will be stable at the $15 per barrel level in the short term.9 They also predict that world demand for oil, especially in Asia, will continue to increase. But these studies are narrowly based on quantitative models and virtually ignore political factors, thus making them of questionable value.
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