Invasion Is End of Era for ‘Gulfies’ : Gulf states: The lesson of the past two weeks for the five nations is that their wealth brought neither power nor security.

For 30 years, the Arabs of the Persian Gulf lived a gold-plated fairy tale, awash with money that transformed their backward little kingdoms into a razzle-dazzle of desert opulence.

Other Arabs called them “Gulfies,” disdainful of their windfall wealth and recent Bedouin heritage. But the 4.2 million people of the gulf paid the critics no heed. For they, along with the Saudis of the Arabian Peninsula, were the real Arabs--descendants of the tribes and clans that brought Islam to the world--and together they formed the richest collection of neighbors in the world. Vulnerable and isolated--over the centuries, parts of the Persian Gulf have been ruled by the Portuguese, Persians, Turks and British--the region’s five city-states saw only two potential obstacles to their pell-mell rush into the 21st Century: a collapse in oil prices or an Iranian-inspired Shiite Muslim revolution against the royal families, who ran their countries like family corporations.

That the fairy tale would end with the invasion of Kuwait by ally Iraq was never even a subject of whispered speculation.

The painful lesson of the past two weeks for the California-sized cluster of gulf states is that their awesome wealth brought neither power nor security. They had bought off enemies and courted friends with lavish generosity--more than $600 million a year to subsidize the Palestine Liberation Organization and some $30 billion to bankroll Iraq in its war against Iran--and in the end, the Iraqis had simply walked in and taken what they wanted.

In grabbing Kuwait, the largest, wealthiest and most literate of the gulf states, Iraqi President Saddam Hussein in effect made himself the ruler of the Persian Gulf. Among the prizes at stake is Kuwait’s Fund for Future Generations, a kitty of more than $50 billion that Kuwait invested in the West to prepare for the eventual depletion of its oil reserves.

Whatever future now awaits the gulf states, the occupation of Kuwait ends a chapter of Middle East history that in its own way was no less dramatic than the building of the Panama Canal or the settlement of the American West.

Although they remained the poor rich--people with money but not skills--the gulf Arabs had traveled farther and faster than any society the world had known.

Less than 60 years ago, the Persian Gulf sheikdoms were nothing more than medieval frontiers. Bahrain had no paved roads, electricity, flush toilets or radios. Doha, the capital of Qatar, was a fishing village with a literacy rate of zero. The emir of Abu Dhabi lived in a mud palace.

As recently as 1970, the year after Neil Armstrong walked on the moon, the wooden gates to Muscat, Oman’s capital, swung shut each evening at dusk. Those walking the streets had to carry a lantern at arm’s length and continually announce themselves to avoid being shot as strangers. The country had three miles of paved road and 12 telephones.

The first sheikdom to strike oil was Bahrain, in 1932. “We didn’t think it was any big event at the time,” a millionaire Bahraini merchant and former pearl diver, Mohammed Khajah, recalled some time ago. “Who needed oil? We didn’t even have any cars on Bahrain then. We’d have been more excited if Socal (Standard of California) had struck water.”

But the wild escalation of oil prices in the 1970s--from $3 a barrel in 1973 to $39 on the spot market six years later--turned the gulf topsy-turvy. Modern cities of marble and glass sprung out of fishing villages. A huge army of foreign workers was imported from Egypt, Pakistan and the Philippines to staff everything from hospitals to construction crews.

Meanwhile, the gulf’s underground riches spawned the world’s most generous welfare system: There were no taxes, no charges for medical care, education or public land, and anyone who wanted a free house needed only to ask a king or prince.

Men who had known no world beyond their tent suddenly thought nothing of flying first-class to London. A new school opened in Saudi Arabia every three weeks. Freeways twisted across the desert, and the sheik of Dubai got so exited over happenings in his little emirate that he used to ride construction booms up the sides of buildings every morning to personally inspect daily progress.

For the gulf states, the 1970s became the Disposable Decade. Some wealthy residents tossed out the household furniture every six or seven months and changed wardrobes whenever a new line of designs arrived from Europe.

The Sabahs of Kuwait and the other royal families who run the neighboring states kept what they wanted for themselves, but made sure the immense surplus of oil money trickled down to all levels of society. Prosperity bought peace, and peace enabled the rulers to continue an incestuous brand of leadership that brought an unusual degree of stability to the gulf.

Until Iraq’s attack, the Sabah family had ruled Kuwait since 1751. Sabahs occupied government positions of prime minister, deputy prime minister, minister of foreign affairs, minister of interior, minister of defense, minister of oil, minister of information, minister of social affairs and ambassador to the United States.

The Sabahs’ cousins, the Khalifas from the Otoub tribe, captured Bahrain from the Persians in 1783 and have governed the island ever since. In Qatar, so many members of the royal family are in prominent positions, it is said that if one Thani gets a nosebleed, every other nose in the country bleeds as well.

Although the excesses of the gulf Arabs attracted negative attention in the West, many Mideast watchers believe that the Sabahs and the other rulers deserve credit for a great deal of responsible development.

They built an infrastructure of roads and air links and hospitals and universities that provides a foundation for the next generation. They developed desalination plants and secondary industries, and Saudi Arabia even became a wheat exporter (with the government paying Saudi farmers $978 a ton, about five times the world market price).

Exactly who will derive the benefit of that infrastructure is suddenly far from clear.