Graph of Kuwaits Telecommunication GDP from 1995 to 2011
Graph of Kuwait’s Telecommunication GDP from 1995 to 2011
Graph of United Arab Emirates’ Telecommunication GDP from 1995 to 2011
Comparison of Kuwait’s and UAE’s Telecommunication GDPs
The Kuwait’s GDP was over 0.89 billion in 1994 and the values rose to 3.48 billion by January 2004. According to the graph, Kuwait has experienced progressive growth over the years. One reason is due to adjustments in Purchasing Power Parity (PPP) and increase or more than 160 billion of international dollars. Drawing a line of best fit, during these years, the GDP growth rate has been constant at nearly 0.29 billion yearly except 1999 and 2004 where the figures slightly dropped. The Kuwait’s nearly half of its GDP is composed of oil sector which constitutes 55% and other important contributors like private section which constitutes 34.8% of its GDP. The public sector contributes 34.7%, transport and communication constitutes 16.2%, financial sector contributes 24.5% and manufacturing only 9.8%. to reduce oil dependency, Kuwait strengthened other sectors apart from oil sector. As a result, Kuwait’s GDP grew by 14% between 2004 and 2008 and grew by 55.7% between 2009 and 2014. Based on the graph and Kuwait Economic Outlook 2011, the government’s push and strategies employed in reducing oil dependency is currently ongoing and the growth tends to be stable for several years to come (2013 index of economic freedom).
Additionally, as reported by index of economic freedom, Kuwait has had an economic freedom of 63.1 making it ranked number 66 free economy in 2013. The economic freedom has also increased by 0.6 compared to last year’s indicating an improvement in how government control investments and trade freedom. Kuwait is free country to invest in and so attracts many investors thus increasing the GDP. The free trade has also encouraged tourism in the country.
The other reason for the progressive GDP growth can be attributed by the fact that Kuwait government has reduced taxes and making the country suitable for investors. For example the Kuwait government does not tax a person’s salary. The government has a flat rate of 15% tax to corporate. This is low compared to other countries that charge as high as 17%.
The growth in GDP of Telecommunications sector in United Arab Emirates from 1995 to 2011 has been fluctuating. The graph shows a steady growth of the first three years (from 1994 to 1997) then suddenly shoots in the preceding years. One factor that might have contributed to the fluctuation is the inconsistencies in GDP value in some quarters. Due to the changes in climate, the production rate has various over the years. The other reason is the inconsistent tourism in United Arabs Emirate.
When a line of best fit is drawn, it will be nearly a horizontal line meaning the GDP fluctuates about a given point. This is an indication of stagnating economy and this might be contributed by various government and non-governmental factors. Unlike Kuwait which has a higher economic freedom, United Arab Emirates has restricted trade and so works with companies that originally operated in the country. There are no new investors and the fluctuation sis caused by internal factors. Additionally, the high taxes in United Arab Emirates also act as discouraging factor to investors. Salaries are taxed as well as corporate unlike Kuwait which taxes corporate alone.
References
2013 index of economic freedom. Retrieved from HYPERLINK “http://www.heritage.org/index/country/kuwait” http://www.heritage.org/index/country/kuwait on 10th, Nov, 2013.
