As the United States plans its reprisal attacks against international terrorism, Kuwait has pronounced its willingness to play a strategic role in any military action. At a time when national leadership is essential, the health of Kuwait’s 73-year-old Emir has taken a turn for the worse, and the question of his successor remains unanswered.
Just when strong and experienced leadership is acutely needed in the Gulf state, the Kuwaiti Emir has suffered a sudden brain hemorrhage. The 73-year-old leader, Shaikh Jabar Al-Ahmad Al-Sabah, is reportedly resting in stable condition, after being flown to London’s Cromwell Hospital for observation.
Nevertheless, the Emir’s health status should have minimal impact on Kuwait’s foreign policy, as Shaikh Jabar already plays little active role in the running of the state. The power is currently divided between the Foreign Minister Shaikh Sabah Al-Ahmad Al-Sabah, and the apparent heir to the thrown, Shaikh Sa’ad Al-Abdallah Al-Salim Al-Sabah, a 71-year old who has a history of health problems.
The most direct economic impact of the ruler’s illness has been noted on the Kuwaiti Stock Exchange, which fell almost four percent last Saturday. The market did, however, bounce back the next day, following assurances by ministers that the head of state was in better condition.
Nonetheless, local analysts assert that the health of the Kuwaiti leader had no effect on the bourse, and that recent tumbling should be attributed to “gloomy expectations” of world economy, following the US terror attacks.
In recent months, the Kuwaiti market has boomed, rallying past the 1,700-point barrier for the first time since December 1998, after plunging to a five-year low this past January. The rise has been attributed to a combination of government reform measures and to the strong oil price, which provides the emirate 90 percent of its revenues.
In late March, the national assembly approved the draft bill on foreign direct investment (FDI). Key features of this impressive bill include offering tax holidays to foreign investors for up to 10 years, allowing international involvement in core economic sectors and allowing majority foreign ownership in local ventures.
With the economy now open to foreign capital, lucrative opportunities have become apparent particularly in the country’s power sector. The ministry of electricity & water has formally appointed the American Parsons Brinckerhoff International firm as consultant for the construction project of three new power stations, at an estimated cost of 533 million Kuwaiti dinars ($2.2 billion). The largest of these is the $1.8 billion Al-Zur North project, which will be constructed near the existing Al-Zur South station, approximately 100 kilometers southeast of Kuwait City.
With buoyant growth rates expected for the medium-term future, Kuwait’s economic well-being appears to be in far better condition than that of its leader. Assuming political stability, the country will be an attractive venue for foreign investment, especially in light of recent financial reforms.
At present, however, geopolitical concerns trump economic considerations. While Kuwait plans to host up to 100 US fighter aircraft, the fragile leadership must be concerned about their subjects’ reaction if innocent citizens are killed in crossfire. — (Mena Report)
© 2001 Mena Report (www.menareport.com)
