Abstract :
The paper addresses the issue of economic diversification as a necessary, but not sufficient condition to enhance economic development process in the state of Kuwait, and oil exporting countries alike. A number of diversification indices are calculated, and an Input-Output based diversity index is provided. The latter measured with reference to the Norwegian economy as a benchmark for a well-diversified oil producing country. Moreover, an econometric model is estimated based on pooled analysis. This is important to draw some conclusions on the main determinants of diversification in the group of a selected oil producing countries: Indonesia, Iran, Kuwait, Oman, and Venezuela. Investment, and other few variables, is turn to be one of the most important determinants. The paper concludes by a set of policy recommendations.
