Kuwait: 26 th Ranked by per capita Exports of Manufactures in 2002 (UNIDO 2005) Fifth Developing Economy Domestic Activity Level Close to Malaysia Diversification discernible Korea 25 th Hong Kong SAR 27 th UAE just behind US/before Mexico & Australia Oman before Poland, Saudi Arabia slightly behind Tunisia, Algeria, and Libya among UNIDO’s top 50

Past Volatility and Shocks : Oil Exporters Absorbed Shocks Perceptibly Stronger than Oil Price Increase on OECD- Countries Political Shocks in the 1990s (Lost Decade) OECD “oil shock” on average around 2 % of GSP Saudi GDP halved between 1981 and 1987 Except in 1984 (- 5.6%), GDP Decreased by More than 10% Each Year e.g.: % between 1981 and 1982

Encouraging & Important Differences vis-à-vis Earlier Booms  Prudent Use of Oil Revenues (sterilised/used to repay public debts/funds to cushion against future shocks)  Prudent and Responsible Supply Reactions  Increased, Apparently Successful Diversification Efforts  Courageous International Commitments PROBLEM: Prudent Use of Large Current Account Surpluses Coming Under Attack