Chapter 3- The Oil Economy Flashcards
What was the most important economical resource the early settlers have recognized?
Trade links to the outside world
Is it true that Kuwait’s dependence on the outside world is a relatively new phenomenon brought about by oil discovery?
No. The interdependence of Kuwait’s economy has been established since the earliest days, when there were trade links to distant lands across the desert and sea
T/F
Kuwait’s story climate and sandy soil meant that it was not possible to grow crops at all.
False.
While most areas were infertile, there are a few exceptional villages, such as Al Jahrah.
This was sufficient to supply Kuwait with veggies, but not grains.
What products were nurtured under the desert economy?
Products of sheep and camels; skins, wools, dairy, meat
Desert trade mostly by caravans to Baghdad & Aleppo Syria.
Which early tribe took advantage of the harbor?
Bani Utub, they send out boats to trade.
What was the first major Kuwaiti industry to flourish?
Pearl diving
The pearls banks of the Gulf are among the richest natural banks in the world!
When was Pearl diving near its peak?
Just before WW1
At what times of the year did pearl diving take place?
Mid May to Mid Sept
Briefly describe the structure of the boating industry
Highly Organized
Highly Hierarchical
Boat owners
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^
Captain (may also be owner)
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^
Crew members (include child apprentices)
Middle men who bought pearls directly from boats & pearl merchants who sold the pearls to foreign markets of { Iraq, India, and Europe} are also part of the Boating industry
Why one describe the financial structure of boat industry to be exploitative?
Crew members were tied to the merchants through a system of debt bondage. Money was lent to their family what they needed to survive for their duration of the crew members time at sea.
This often forced the crew members to work for the rest of their life to repay the loans, as their salary was rarely enough to allow the memebers to escape the system. Often, they may die an early death and their debt is passed on to the family where they would be forced to work!
What were amongst the most common causes of death at sea?
Shark attacks, drowning, and malnutrition (lack of fresh food)
What would most ships do during the non seasonal months of pearl diving?
Turn to local trade And long distant trade of other products. ( Kuwait. Being a channel for transit trade for cross Gulf & long dis trade)
Sometimes, they would continue to pearl fish near Sri Lanka in the winter months.
What items did -the gulf take from Kuwait? -Kuwait take from India and Sell -Kuwait take from Africa -Kuwait take from Europe And during what century did Kuwait become a conduit for transit trade between these areas?
Kuwait
-gave Dates & pearls to the gulf
-Brought Rice, Tea & coffee, Spices, wood, and cotton from India - sold Smuggled gold
-Brought Wood for construction of boats & houses from Africa
-Brought manufactured goods, such as guns from Europe
19th century
To what extent did fishing and Boat building have a role in the Kuwaiti pre oil Economy?
Boat building had a large, important, and significant role, while fishing had a small, but significant role.
Fishing fed the population as well as had a small surplus for Exportation.
Even AFTER the discovery of oil, shrimp remains one of the few non petroleum exports.
During which century did the Boat building, shipping, and fishing industries allow Kuwait to prosper?
The 19th century.
How did the population of Luwair increase in the last few decades of the 19th century?
Natural increase as well as migration from
- Central Arabia
- Eastern Arabia such as Qatar
- Persia
What had particularly strengthened due to the increase in trade links at the turn of thr 19th to 20th century?
Kuwait’s link and reliance on Europe.
Give an eg of proof that Kuwait always had ties to Europe
Greek Archeology discovered in Failakah Island that dated to 400 to 100 BC
What was a major driving force in Europe’s major spread of trade and economic links to the Gulf and Kuwait?
The newly development of Capitalistic states in Europe
This European expansion was first brought about by Portugal, Holland, France, and then Britain.
Britain’s presence in Kuwait’s economy transformed the economy from a x and y orientation to an a orientation.
Local and Regional orientation to an international orientation.
Which part of the economy was first felt clearly the impact of Britain’s role in Kuwait’s economy? Explain.
Trade
Britain’s ships propelled by steam (new technology brought about by capitalism and the industrial revolution) outcompeted Gulf vessels in many trade routes. Gulf vessels still managed to succeed in the niche trading routes, but Britain continued to obstruct the routes.
Did Kuwait get impacted by the change in economic orientation to the same extent as the sorrounding regions? If not, why?
Kuwait was able to cope better than the other Gulf countries
- Kuwait was better able to find niche trading sectors
- Britain’s primary interest in Kuwait was more strategic, (protecting its access to India)
Under the reign of which Sheikh was the economic impact of Britain most clearly greatly felt?
Sheikh Mubarak
He signed the 1899 treaty giving Britain control over foreign policy in exchange of protection from Ottoman rule.
This ultimately subordinated Kuwait to Britain and forced local traders to trade with subsistence products, marginalizing them and draining local capital to Europe.
True/False
The good thing about the change of local economic orientation to an international one is that this slowed down the polarization of third world and first world countries.
False.
This DEEPENED the divide between 3rd and 1st world countries
How did World War I result in injury to Kuwait’s economy?
Britain Banned Caravan trade at Kuwait in order to limit supplies reaching Ottoman forces.
After the War:
This injury deepened when Ibn Saud demanded a 7% transit tax on goods crossing Kuwait to central Arabia.
Kuwait refused, and Ibn Saud retaliated with an embargo (BAN)!
