Kuwait

Kuwait exemplifies the paradox of resource wealth managed with exceptional foresight. The Kuwait Investment Authority, founded in the 1950s as the Gulf's first sovereign wealth fund, now manages approximately $1 trillion—the fifth largest such fund globally. KIA's assets equal 601% of GDP, the highest ratio among Fitch-rated sovereigns. Public debt barely touches 10% of GDP. Few nations have converted extractive wealth into durable financial reserves with comparable discipline.

Yet dependence on the resource remains total. Oil and gas account for the majority of government revenue. When OPEC+ imposed production cuts in 2024, Kuwait's oil output dropped over 10% to its lowest levels since the pandemic, triggering a 2.8% GDP contraction. The economy functions as a petrodollar recycler: oil flows out, dollars flow in, and KIA deploys capital globally—in Britain, the US, Switzerland, Japan, China—while domestic economic diversification proceeds slowly.

The numbers create contradictions. GDP per capita ranks among the world's highest. The $11.25 billion sovereign bond issued in 2025 drew a $28 billion order book—the largest for any MENA issuer that year—after a decade-long absence from debt markets caused by parliamentary gridlock. Kuwait's credit quality approaches AAA by any measure of financial reserves. Yet population is small (4.3 million), non-oil GDP growth modest, and the economic structure largely unchanged since the 1970s petrodollar boom.

In July 2025, Kuwait announced a new sovereign wealth fund focused on domestic investment—a pattern emerging across the GCC as oil states try to convert financial reserves into sustainable domestic capacity before the hydrocarbon window closes.