Kuwait heals invasion scars but fails in modernization

By Omar Hasan

KUWAIT CITY (AFP): Although Kuwait has healed the scars of Iraq's invasion, the oil-rich emirate has yet to open up a decade later, with key economic reforms kept on hold against a backdrop of rising Islamic conservatism.

The Gulf state has spent tens of billions of dollars, at first to finance a U.S.-led multinational coalition that evicted Iraqi troops in February 1991 and then for a reconstruction program which has repaired most of the damage.

But economic experts and political analysts say the emirate has missed a golden opportunity to build a modern state and instead directed most of the funds on non-development projects and to buy political favors.

"We have rebuilt and renovated but failed in modernizing," economic expert Hajjaj Boukhdour said.

During the seven months of occupation after the Aug. 2, 1990 invasion, the government withdrew more than US$20 billion from a Future Generations Fund to finance the war and to support Kuwaitis who fled the country.

Some $10 billion further were spent on reconstruction and forgiving the bank debts of Kuwaiti nationals, and billions more on a rearmament drive.

Unofficial reports indicate that assets in Kuwait's reserve fund plunged from around $100 billion before the invasion to some $30 billion after liberation.

The government's post-war spending has been directed mainly at meeting public needs, ignoring capital investment and development projects, noted Boukhdour, who cited a figure of $30 billion.

He blamed government hesitation for the delay in implementation of key economic reforms and bills on privatization and foreign investment.

Kuwait announced last month that the reforms, which have been in the pipeline for several years, were being delayed anew until parliament reconvenes after its summer recess.

A leading liberal insists the political leadership is to blame.

"The current political administration is a failure and incapable," said Ahmad al-Dayeen, secretary general of the Kuwait Democratic Forum, a liberal pressure group.

"It's time to carry out real political reform that brings about a new political administration capable of confronting modern challenges," he said, sharing the progressive ambitions for Kuwait of its Western liberators.

The U.S. ambassador to Kuwait, James Larocco, has urged Kuwait to open up as a strategy to attract foreign investors.

"My message to Kuwaitis, as a friend of Kuwait, is simple: keep moving forward," he said. "I foresee a vibrant political system, embracing a wide sweep of ideas coming from all Kuwaiti citizens."

Dayeen pinned the blame for Kuwait's current problems squarely on a strategic alliance between the government and Islamic groups, dating back to the 1970s and strengthened after the invasion.

Over the past 10 years, a strong conservative coalition between Islamist and tribal MPs has comfortably passed a string of bills to ban co-education, music concerts and political rights for women.

"The tendency of Kuwaiti society toward political and social isolation after the invasion has led to the delay in decision- making. It has also placed the government under the influence of pressure groups," Boukhdour said.

Critics point to the delays in the privatization program and in passing a law to allow international oil companies into the emirate as clear examples of political paralysis and polarization.

Since the invasion, "Islamists have become more Islamist and the liberals are more liberal. The rest is a silent majority," commented Merza Hasan, dean of administrative sciences at Kuwait University.

The outlook on the economic front looks good at present because of a sharp rise in oil prices over the past year that has allowed Kuwait to post its best surplus for 15 years.

But this could further delay reforms if the government rests on its laurels.