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46-717: To the middle of the 20th century, the Indian rupee was also used as the official currency in the emirates on the eastern Arabian Peninsula, namely Kuwait , Bahrain , Qatar , the Trucial States , and Oman . That meant, in effect, that the Indian rupee was the common currency in those territories as well as in India. The Indian rupee was pegged to the British pound at a rate of 13 1 ⁄ 3 Indian rupees = 1 pound. The Government of India had complained of gold traffickers in

92-429: A cosmopolitan elite, they traveled extensively to India, Africa and Europe. The elite educated their sons abroad more than other Gulf Arab elite. Western visitors noted that Kuwait's elite used European office systems, typewriters and followed European culture with curiosity. The richest families were involved in general trade. The merchant families of Al-Ghanim and Al-Hamad were estimated to be worth millions before

138-556: A protest against Mubarak by making Bahrain their main trade point, which negatively affected the Kuwaiti economy. However, Mubarak went to Bahrain and apologised for raising taxes and the three business men returned to Kuwait. In 1915, Mubarak the Great died and was succeeded by his son Jaber II Al-Sabah , who reigned for just over one year until his death in early 1917. His brother Sheikh Salim Al-Mubarak Al-Sabah succeeded him. Under

184-405: A radius of 80 kilometres (50 mi) from the capital. This region was marked by a red circle and included the islands of Auhah , Bubiyan , Failaka , Kubbar , Mashyan , and Warba . A green circle designated an area extending out an additional 100 kilometres (62 mi) in radius, within which the kaymakam was authorised to collect tribute and taxes from the natives. In the first decades of

230-574: A serious depletion in the foreign cash reserves at the Indian Reserve Bank and was causing economic damage arising directly from the smuggling operations. As a result of the strain on India's foreign reserves, in 1959 the Indian government created the Gulf rupee, initially at par with the Indian rupee. It was introduced as a replacement for the Indian rupee for circulation exclusively outside

276-660: A substantial amount at that time. Kuwait's pre-oil population was ethnically diverse. The population consisted of Arabs , Persians , Africans , Jews and Armenians . Kuwait was the center of boat building in the Persian Gulf region in the nineteenth century until the early twentieth century. Ship vessels made in Kuwait carried the bulk of international trade between the trade ports of India, East Africa, and Red Sea . Boats made in Kuwait were capable of sailing up to China . Kuwaiti ship vessels were renowned throughout

322-563: The Bahraini dinar in 1965, at the rate of 1 dinar = 10 rupees. Qatar and most of the Trucial States (after 1971, United Arab Emirates) adopted the Qatar and Dubai riyal , which was equal to the Gulf rupee prior to its devaluation, effectively the Indian rupee value. Abu Dhabi used the Bahraini dinar until 1973. Oman continued to use the Gulf rupee until 1970, with the government backing

368-750: The British Government in India , primarily as a defensive measure against threats from the Ottoman Empire . After 1961, the sheikdom became the state of Kuwait . In the early to mid 1700s, Kuwait was a small fishing village known as Grane (Kureyn). The region originally came under the rule of the Bani Khalid Emirate in 1670 after the expulsion of the Ottomans from Eastern Arabia ( Lahsa Eyalet ) by Barrack bin Ghurayr, Emir of

414-542: The Indian Ocean for quality and design. Kuwaitis also developed a reputation as the best sailors in the Persian Gulf. Kuwait was divided into three areas: Sharq , Jibla and Mirqab . Sharq and Jibla were the most populated areas. Sharq was mostly inhabited by Persians (Ajam) . Jibla was inhabited by immigrants from Saudi Arabia, Iraq and Bahrain . Mirgab was lightly populated by butchers. Kuwait

460-847: The Kuwait Red Fort at Al-Jahra, defended by 2,000 Kuwaiti men. The Kuwaitis were largely outnumbered by the Ikhwan of Najd. In response to the various Bedouin raids, the British High Commissioner in Baghdad, Sir Percy Cox , imposed the Uqair Protocol of 1922 which defined the boundaries between Iraq, Kuwait and Nejd. On 1 April 1923, Shaikh Ahmad al-Sabah wrote the British Political Agent in Kuwait, Major John More , "I still do not know what

506-484: The Ottoman Empire , who was in the Central Powers . The British economic blockade heavily damaged Kuwait's economy. The Great Depression negatively impacted 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 European decline of demand for goods from India and Africa,

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552-812: The Uqair Protocol of 1922 . Kuwait was not permitted any role in the Uqair agreement, the British and Al Saud decided modern-day Kuwait's borders. After the Uqair agreement, relations between Kuwait and Najd remained hostile. The Battle of Jahra was a battle during the Kuwait-Najd Border War. The battle took place in Al Jahra , west of Kuwait City on October 10, 1920, between Salim Al-Mubarak Al-Sabah ruler of Kuwait and Ikhwan followers of Ibn Saud of Saudi Arabia , king of Saudi Arabia. A force of 4,000 Saudi Ikhwan, led by Faisal Al-Dawish , attacked

598-467: The 1940s. However, Kuwait immensely declined in regional economic importance, mainly due to many trade blockades and the world economic depression. Before Mary Bruins Allison visited Kuwait in 1934, Kuwait lost its prominence in long-distance trade. During World War I , the British Empire imposed a trade blockade against Kuwait because Kuwait's ruler (Salim Al-Mubarak Al-Sabah) supported

644-712: The Bani Khalid, who successfully besieged the Ottoman governor Umar Pasha who surrendered and gave up his rule as the fourth Ottoman governor of al-Hasa. After Al-Hasa Expedition 1871 Kuwait become nominal vassal of the Ottoman Empire in 1875 and was included in the Basra Vilayet . The families of the Bani Utbah arrived in Kuwait sometime in the mid-1700s and settled after receiving permission from

690-483: The British Foreign Office. However, under Abdullah II Al-Sabah , Kuwait pursued a general pro-Ottoman foreign policy, formally taking the title of Ottoman provincial governor, this relationship with the Ottoman Empire did result in Ottoman interference with Kuwaiti laws and selection or rulers. In May 1896, Shaikh Muhammad Al-Sabah was assassinated by his half-brother, Mubarak, who, in early 1897,

736-731: The British Government's consent. In essence, this policy gave Britain control of Kuwait's foreign policy. The treaty also gave Britain responsibility for Kuwait's national security. In return, Britain agreed to grant an annual subsidy of 15,000 Indian rupees (£1,500) to the ruling family. In 1910, Mubarak raised taxes. Therefore, three wealthy business men Ibrahim Al-Mudhaf , Helal Al-Mutairi , and Shamlan Ali bin Saif Al-Roumi (brother of Hussain Ali bin Saif Al-Roumi), led

782-633: The Emir of Al Hasa. During this time as well, the power in governance was split between the Al Sabah, Al Khalifa, and Al Jalahma families in which the Al Sabah will have control over the reins of power whereas the Al Khalifa were in charge of trade and the flow of money, and the Jalahma would be in charge over work in the sea. Sometime in the 1750s, the sheikdom of Kuwait emerged after an agreement between

828-549: The Emir of Bani Khalid Sa'dun bin Muhammad. The Utubs did not immediately settle in Kuwait, however, roaming for half a century before finally settling in Kuwait. They first left the region of central Arabia and settled in what is now Qatar . After a quarrel between them and some inhabitants of the region, they departed and settled near Umm Qasr in December 1701, living as brigands, raiding passing caravans and levying taxes over

874-599: The European elite's need for luxuries 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 pearling industry. Following the Kuwait–Najd War of 1919–1920, Ibn Saud imposed a tight trade blockade against Kuwait from the years 1923 until 1937. The goal of the Saudi economic and military attacks on Kuwait

920-461: The Gulf region whose base of operations was constantly being broadened, especially in Kuwait, Bahrain and Dubai. Smugglers used to take gold to the Indian sub-continent and return with Indian rupees which were valid for circulation in the region and were exchanged for more valuable foreign currencies to be used by the smugglers to buy more gold. Towards the end of the 1950s, the volume of gold trafficking had become so large that it inevitably precipitated

966-532: The Kuwaiti government's desire to either be independent or under British protection, in the Anglo-Ottoman Convention of 1913 , the British concurred with the Ottoman Empire in defining Kuwait as an autonomous kaza of the Ottoman Empire and that the Sheikhs of Kuwait were independent leaders as well as kaymakams (provincial sub-governors) of the Ottoman government. The independence of Kuwait

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1012-478: The Persian Gulf at 58 km of mostly marshy and swampy coastline. As this would make it difficult for Iraq to become a naval power (the territory did not include any deepwater harbours), the Iraqi King Faisal I (whom the British installed as king of Iraq) did not agree to the plan. However, as his country was under British mandate, he had little say in the matter. Iraq and Kuwait would formally ratify

1058-419: The Persian Gulf, with a military intervention in 1871—which was not effectively pursued—where family rivalries in Kuwait were breeding chaos. The Ottomans were bankrupt and when the European banks took control of the Ottoman budget in 1881, additional income was required from Kuwait. Midhat Pasha, the governor of Iraq, demanded that Kuwait submit financially to Ottoman rule. The al-Sabah found diplomatic allies in

1104-621: The Sheikh of Kuwait and the Emir of Bani Khalid in which Al Hasa recognised Sabah I bin Jaber 's independent rule over Kuwait and in exchange Kuwait would not ally itself or support the enemies of Bani Khalid or interfere in the internal affairs of Bani Khalid in any way. After the arrival of the Bani Utbah, Kuwait gradually became a principal commercial centre for the transit of goods between India , Muscat , Baghdad , Persia, and Arabia . By

1150-484: The banknotes issued in all denominations were prefixed by a Z . Sheikhdom of Kuwait The Sheikhdom of Kuwait ( Arabic : مشيخة الكويت , romanized :  Mashīkhat al-Kuwayt ) was a sheikhdom during the pre-oil era. The sheikhdom became a British protectorate between 1899 and 1961 following the Anglo-Kuwaiti agreement of 1899. This agreement was made between Sheikh Mubarak Al-Sabah and

1196-499: The basis for Kuwait's northern border. In Iraq's 1932 application to the League of Nations it included information about its borders, including its border with Kuwait, where it accepted the boundary established in 1923. The 1920s and 1930s saw the collapse of the pearl fishery and with it Kuwait's economy. This is attributed to the invention of the artificial cultivation of pearls. The discovery of oil in Kuwait, in 1938, revolutionised

1242-517: The border between Iraq and Kuwait is, I shall be glad if you will kindly give me this information." Major More, upon learning on 4 April that al-Sabah claimed the outer green line of the Anglo-Ottoman Convention, relayed knowledge of the claim to Sir Percy. On 19 April, Sir Percy stated that the British government recognised the outer line of the convention as the border between Iraq and Kuwait. This decision limited Iraq's access to

1288-454: The border in August. The border was re-recognised in 1932. In 1913, Kuwait was recognised as a separate province from Basra Vilayet and given autonomy under Ottoman suzerainty in the draft Anglo-Ottoman Convention, however this was not signed before the outbreak of the first World War. The border was revisited by a memorandum sent by the British high commissioner for Iraq in 1923, which became

1334-453: The country. Effectively, the common currency area now did not include India. On 6 June 1966, India devalued the Gulf rupee against the Indian rupee. Following the devaluation, several of the states still using the Gulf rupee adopted their own currencies. Kuwait had adopted the Kuwaiti dinar in 1961, pegged to the Indian rupee, which was still pegged to the pound sterling. Bahrain created

1380-561: The currency at its old peg to the pound, when it adopted the Omani rial . Notes were issued in denominations of ₹1 by the Indian government and ₹5, ₹10 and ₹100 by the Reserve Bank of India. The notes were in designs very similar to the standard Indian notes but were printed in different colours. While the ₹1 and ₹10 notes were printed in red, the ₹5 notes were printed in orange and the ₹100 notes were printed in green. The serial numbers of

1426-443: The economy of Kuwait suffered. The decline in international trade resulted in an increase in gold smuggling by Kuwaiti ships to India. Some Kuwaiti merchant families became rich due to gold smuggling to India. Kuwait's pearling industry also collapsed as a result of the worldwide economic depression. At its height, Kuwait's pearling industry led the world's luxury market, regularly sending out between 750 and 800 ship vessels to meet

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1472-554: The late-1700s, Kuwait had already established itself as a trading route from the Persian Gulf to Aleppo . During the Persian siege of Basra in 1775–1779, Iraqi merchants took refuge in Kuwait and were partly instrumental in the expansion of Kuwait's boatbuilding and trading activities. As a result, Kuwait's maritime commerce boomed. Between the years 1775 and 1779, the Indian trade routes with Baghdad, Aleppo, Smyrna and Constantinople were diverted to Kuwait. The English Factory

1518-470: The pearl trade continues to decline, and by land, where the blockade established by Saudi Arabia now harms the merchants. Some prominent merchant families left Kuwait in the early 1930s due to the prevalence of economic hardship. At the time of the discovery of oil in 1937, most of Kuwait's inhabitants were impoverished. The Kuwait–Najd War erupted in the Aftermath of World War I , when the Ottoman Empire

1564-537: The region and so agreed. This led to what is known as the First Kuwaiti Crisis , in which the Ottomans demanded that the British stop interfering within what they believed to be was their sphere of influence. In the end, the Ottoman Empire backed down, rather than go to war. In January 1899, Mubarak signed an agreement with the British which pledged that Kuwait would never cede any territory nor receive agents or representatives of any foreign power without

1610-463: The rule of Mubarak, Kuwait was dubbed the " Marseille of the Gulf" because its economic vitality attracted a large variety of people. In a good year, Kuwait's annual revenue actually came up to 100,000 riyals, the governor of Basra considered Kuwait's annual revenue an astounding figure. A Western author's account of Kuwait in 1905: Kuwait was the Marseilles of the Persian Gulf. Its population

1656-430: The second half of the 18th century. Kuwait became wealthy 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 fleeing Ottoman government persecution. Economic prosperity in the late 18th century attracted many immigrants from Iran and Iraq to Kuwait. By 1800, it was estimated that Kuwait's sea trade reached 16 million Bombay rupees,

1702-651: The sheikdom's economy and made it a valuable asset to Britain. In 1941 on the same day as the German invasion of the USSR (22 June) the British took total control over Iraq and Kuwait. (The British and Soviets would invade the neighbouring Iran in September of that year). Basra Vilayet Too Many Requests If you report this error to the Wikimedia System Administrators, please include

1748-598: The shipping of the Shatt al-Arab . Due to these practices, they were driven out of the area by the Ottoman Mutasallim of Basra and later lived in Sabiyya, an area bordering the north of Kuwait Bay, until finally requesting permission from the Bani Khalid to settle in Kuwait. The head of each family in the village of Kuwait gathered and chose Sabah I bin Jaber as the Sheikh of Kuwait, a governor of sorts under

1794-413: The twentieth century, Kuwait had a well-established elite: wealthy trading families who were linked by marriage and shared economic interests. The elite were long-settled, urban, Sunni families, the majority of which claim descent from the original 30 Bani Utubi families. The wealthiest families were trade merchants who acquired their wealth from long-distance commerce, shipbuilding and pearling. They were

1840-457: Was a central part of the trade in frankincense from Oman, textiles from China , and Indian spices , all destined for lucrative European markets. Kuwait was also significant in the horse trade , horses were regularly shipped by the way of sailing boats from Kuwait. In the mid 19th century, it was estimated that Kuwait was exporting an average of 800 horses to India annually. In the 1870s, Ottoman officials were reasserting their presence in

1886-547: Was also highlighted by the statement made by Sheikh Mubarak Al-Sabah to the German team who requested an audience with him over the extension of the Berlin–Baghdad railway to Kuwait. Mubarak said he would not sell or rent any piece of his land to a foreigner and that he did not acknowledge the authority of the Ottomans over Kuwait. The convention ruled that Sheikh Mubarak had independent authority over an area extending out to

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1932-476: Was defeated and the British invalidated the Anglo-Ottoman Convention, declaring Kuwait to be an "independent sheikhdom under British protectorate". The power vacuum, left by the fall of the Ottomans, sharpened the conflict between Kuwait and Najd ( Ikhwan ). The war resulted in sporadic border clashes throughout 1919–1920. Several hundreds of Kuwaitis died. The border of the Najd and Kuwait was finally established by

1978-575: Was diverted to Kuwait in 1792, which consequently expanded Kuwait's resources beyond fishing and pearling. The English Factory secured the sea routes between Kuwait, India and the east coasts of Africa . This allowed Kuwaiti vessels to venture all the way to the pearling banks of Sri Lanka and trade goods with India and East Africa . Kuwait was also the center for all caravans carrying goods between Basra, Baghdad and Aleppo during 1775–1779. Kuwait's strategic location and regional geopolitical turbulence helped foster economic prosperity in Kuwait in

2024-521: Was good natured, mixed, and vicious. As it was the outlet from the north to the Gulf and hence to the Indies, merchants from Bombay and Tehran , Indians , Persians, Syrians from Aleppo and Damascus , Armenians, Turks and Jews, traders from all the East , and some Europeans came to Kuwait. From Kuwait, the caravans set out for Central Arabia and for Syria. H. C. Armstrong , Lord of Arabia Despite

2070-443: Was recognized, by the Ottoman sultan, as the qaimmaqam (provincial sub-governor) of Kuwait. Mubarak's seizure of the throne via murder left his brother's former allies as a threat to his rule, especially as his opponents gained the backing of the Ottomans. In July, Mubarak invited the British to deploy gunboats along the Kuwaiti coast. Britain saw Mubarak's desire for an alliance as an opportunity to counteract German influence in

2116-547: 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. Kuwait had no representative at the Uqair conference. After the Uqair conference, Kuwait was still subjected to a Saudi economic blockade and intermittent Saudi raiding . In 1937, Freya Stark wrote about the extent of poverty in Kuwait at the time: Poverty has settled in Kuwait more heavily since my last visit five years ago, both by sea, where

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