`BUSINESS as usual" is a phrase commonly used by managers of
Kuwait's enormous financial and commercial interests, now forced to
operate offshore while the war in the Gulf goes on.
In an apparent sign of confidence and determination, plans are
being laid to rebuild Kuwait and put it back in business as one of
the world's largest oil producers. The Kuwait authorities are
reported to have printed fresh dinar banknotes, ready for issue as
soon as the Iraqis leave.
But behind the scenes, as the battle-damaged emirate's huge
wealth continues to be administered in other world capitals, notably
London, a political struggle is developing. It is pitting members of
the ruling al-Sabah family against powerful indigenous democratic
groups determined that once Kuwait is liberated, the kingdom will
cease to be an autocracy.
The "constitutionalists" differ also with the al-Sabahs over how
Kuwait's accumulated wealth should be invested. The royal family,
led by Sheikh Jaber al-Ahmed, the emir, want heavy investment in
Western companies to continue. Their critics say the emphasis should
switch as quickly as possible to funding the reconstruction of
Internationally, there are fears among bankers that if the
emirate's wealth is liquidated too rapidly, many foreign companies
in which Kuwait has a stake will be adversely affected.
Since Iraq's seizure of Kuwait last August there have been
accumulating signs of a tug-of-war between the al-Sabahs and a
technocratic elite for future control of the country and the wealth
The London-based Kuwait Investment Office (KIO) is the main
battle ground. It administers a large chunk of the country's
estimated $100 billion foreign assets. For years before the Iraqi
invasion, Kuwait salted away 10 percent of its petroleum earnings
against the day when oil ran out. The money was placed in a "Reserve
Fund for Future Generations." The KIO handles the RFFG.
Over the last decade, earnings from Kuwait's overseas investments
were higher than from oil revenue.
Difficulties at the KIO began to develop soon after Iraq's Aug. 2
invasion. Members of the ruling family began arriving in London and
made it clear that they wanted to play a more hands-on part in
running the KIO. Early in January, 12 mid-level executives resigned
A British banker who does regular business with the KIO described
the atmosphere in its cramped London office as "still simmering."
John Roberts, of the magazine Energy Compass, considers that the
technocrats see themselves as Kuwaiti nationalists who must take
account of democratic forces.
"They view the recovery of Kuwait as their top priority, and they
want the immense wealth that has been piled up down the years plowed
into reconstruction. …