Kuwait Rides the Eye of a Gathering Storm

The political deck is being reshuffled in the Arab world. The oil-boom era has come to an end, and governing is a different game in times of economic contraction. The pressures vary from country to country--a shrinking economy, a population of questionable loyalty, regional hostilities (and one declared war), terrorism, Islamic fundamentalism. In one country, Kuwait, all these pressures, combined with an Iranian military advance close to the border, caused the dissolution of the National Assembly in July.

Kuwait is a very small and closed political system. It is governed by the amir, Sheik Jabbar al Ahmad al Sabah. He shares some of his powers with the inner councils of the ruling family and the elders of the leading merchant families, mainly Sunni Muslims, although a couple of Shia families also have access to the inner circles of decision-making. The press is controlled by the government, and although the National Assembly served as a safety valve for the political system, its actions were subject to the amir’s veto power.

Three members of the opposition Nationalist group, and eight who share some Nationalist views, sat in the now-defunct Assembly and spoke out against the government’s failure to regulate and supervise the financial system. It is said that the government saw to it that the Nationalists were represented in the Assembly to balance the power of the Islamists, although it contends that Islamic fundamentalism is on the wane. However, while the government has a handle on “Establishment� Islam, it does not control the general social and political movement generated from below--populist Islam.

The Iran-Iraq war has been a constant concern. In response to threats from both sides, Kuwait ordered large-scale deportations of Iranians, Iraqis and other foreigners. That engendered a climate of insecurity in the expatriate community in Kuwait, and many thousands of skilled workers, professionals and entrepreneurs have since left. The results are visible in the marketplace: 30,000 apartments are for lease, rents are dropping fast, and prime retail locations stand empty.

Kuwait is still host to 300,000 Palestinians, most of them Sunni Muslims. Both the Palestine Liberation Organization and Fatah have offices in the country and enjoy generally cordial relations with the Al Sabahs.

Kuwait’s economy is suffering from an acute lack of business confidence and a shift of consumers’ liquidity, which is escaping overseas. There also continues to be a massive erosion of private and public wealth as a result of the steadily falling prices on the Kuwait stock exchange, and the banking system is in serious trouble.

The Al Sabahs have managed to keep this witches’ brew from boiling over so far. But will their luck last?

For U.S. policy-makers, Kuwait’s stability is part of a long-term strategy in an area of vital interests. Kuwaiti elites recognize the need for U.S. support in the face of possible Iranian military encroachment. Yet it is recognized, too, that the United States will finally come to terms with the revolution in Iran at the expense of less strategic assets in the gulf. As a hedge against over-dependence on the United States, Kuwait maintains cordial relations with the Soviet Union. The Kuwaitis and the Soviets have a protocol on economic cooperation, which promises joint oil projects, oil trading and banking cooperation. Kuwait offered its expertise in developing offshore oil through its wholly owned company Santa Fe. Moscow in turn is offering sophisticated weaponry at a time when Kuwait sees Washington as an increasingly unreliable ally.

The strains have been building ever since Congress’ rejection of arms sales to Kuwait, Jordan and the Saudis. The overwhelming votes in the House and Senate last year against a $354-million arms sale to Saudi Arabia greatly damaged U.S. chances for building credibility in the Arab world, even with the President’s veto. For it followed legislation for a free-trade zone for Israel in the United States and U.S. aid that amounts to approximately $1,200 annually for each person in Israel.

Every U.S. Administration has to balance its interests in the Middle East with both its special relationship with Israel and an undercurrent of popular resentment against the Arabs, ranging back to the 1973 oil boycott up to recent terrorist attacks against Americans and Europeans and real or imagined threats of further terrorism. Meanwhile Kuwait must walk the tightrope between strategic dependence on the United States and an increasing resentment of the United States on the mass and elite levels. Chaos is at the door.