Kuwaiti ships were renowned throughout the Indian Ocean. Regional geopolitical turbulence helped foster economic prosperity in Kuwait in the second half of the 18th century. Perhaps the biggest catalyst for much of Kuwait becoming prosperous was due to Basra’s instability in the late 18th century. In the late 18th century, Kuwait partly functioned as a haven for Basra’s merchants, who were fleeing Ottoman government persecution. Kuwaitis developed a reputation as the best sailors in the Persian Gulf.
British Protectorate (1899–1961):
In the 1890s, Kuwait was threatened by the Ottoman Empire. In a bid to address its security issues, ruler Sheikh Mubarak Al Sabah signed an agreement with the British government in India, subsequently known as the Anglo-Kuwaiti Agreement of 1899 and became a British protectorate. This gave Britain exclusivity of access and trade with Kuwait, and excluded Iraq to the north from a port on the Persian Gulf. The Sheikhdom of Kuwait remained a British protectorate from 1899 to 1961.
Following the Kuwait–Najd War of 1919–20, Ibn Saud imposed a trade blockade against Kuwait from the years 1923 until 1937. The goal of the Saudi economic and military attacks on Kuwait was to annex as much of Kuwait’s territory as possible. At the Uqair conference in 1922, the boundaries of Kuwait and Najd were set; as a result of British interference, Kuwait had no representative at the Uqair conference. Ibn Saud persuaded Sir Percy Cox to give him two-thirds of Kuwait’s territory. More than half of Kuwait was lost due to Uqair. After the Uqair conference, Kuwait was still subjected to a Saudi economic blockade and intermittent Saudi raiding.
The Great Depression harmed Kuwait’s economy, starting in the late 1920s. International trading was one of Kuwait’s main sources of income before oil. Kuwaiti merchants were mostly intermediary merchants. As a result of the decline of European demand for goods from India and Africa, Kuwait’s economy suffered. The decline in international trade resulted in an increase in gold smuggling by Kuwaiti ships to India. Some Kuwaiti merchant families became rich from this smuggling. Kuwait’s pearl industry also collapsed as a result of the worldwide economic depression. At its height, Kuwait’s pearl industry had led the world’s luxury market, regularly sending out between 750 and 800 ships to meet the European elite’s desire for pearls. During the economic depression, luxuries like pearls were in little demand. The Japanese invention of cultured pearls also contributed to the collapse of Kuwait’s pearl industry.
Historian Hanna Batatu explains how the British threatened to take the Kurdish area and Mosul out of Iraq provided that King Faisal granted Britain control of the oil in the region. In 1938 the Kuwaiti Legislative Council unanimously approved a request for Kuwait’s reintegration with Iraq. A year later an armed uprising which had raised the integration banner as its objective was put down by the British.
1962–1982: Golden Era:
With the end of the world war, and increasing need for oil across the world, Kuwait experienced a period of prosperity driven by oil and its liberal atmosphere. The period of 1946-82 is often termed “the golden period of Kuwait” by western academics. In popular discourse, the years between 1946 and 1982 are referred to as the “Golden Era”. However, Kuwaiti academics argue that this period was marked by benefits accruing only to the wealthier and connected ruling classes. It saw an increased presence of British, American and French citizens connected with the new oil industry, wealth transfer to people connected with the Emir, the creation of a new privileged upper class of educated Kuwaitis, bankers, and a vast majority of Kuwaitis living a life of penury. This resulted in a growing gulf between the wealthy minority and the majority of common citizens.