Gulf Nation in Grip of Crisis in Confidence

The outraged public response to Kuwait’s new ruling Cabinet has underscored a mounting crisis in confidence among many Kuwaitis in the government’s ability to turn the country around from its seven months of occupation by Iraq.

In the two months since the liberation of Kuwait, an estimated 105,000 Kuwaitis--more than half the citizens remaining in Kuwait at the end of the occupation--have left the country, and only 4,000 of the 60,000 Kuwaitis exiled in Saudi Arabia and the United Arab Emirates have applied for permits to return home.

“Everybody wants out of here,” said a foreign consular official who handles visa requests from Kuwaitis and foreign nationals living in Kuwait. “When the visas open up, it’s going to be historic, it’s going to be maddening.”

Street crime, automobile thefts, shop break-ins and home burglaries in Kuwait city have risen in recent weeks; human rights organizations have accused police and army officials of beating and torturing foreign nationals; merchants complain that they are paralyzed by the banking system’s failure to begin granting credit to restart businesses; firefighters say they have been slowed in battling hundreds of blazing oil well fires by the government’s delay in clearing the way for supplies and labor; some clinics have had to close because there are not enough staff members to run them.

“I think if one is to limit the responsibility of the government to fixing faucets, then the government has succeeded and done a wonderful job. But I don’t think the government was sitting in exile for seven months trying to plan the fixing of faucets,” said Suleiman Mutawa, Kuwait’s minister of planning until the new Cabinet was named Saturday.

“The main task of the government is to have the country back in motion and in action, and this is not happening,” he said.

“Nobody seems to be in charge of the state of Kuwait to this date,” said Abdulaziz Sultan, chairman of the board of Gulf Bank. “What is the program of the government? What are their objectives? What are their priorities? What is their platform, politically, economically, socially? None of this is specified. . . . To me, it’s a crisis of leadership.”

In recent days, even many of the former defenders of the emir, Sheik Jabbar al Ahmed al Sabah, have painted a picture of frustration and confusion in the ranks of the Kuwaiti government, of critical supply and repair contracts delayed by haggling and intramural backbiting, of failure to exercise adequate control of the police forces and a lack of any overall planning to restart the country’s wrecked financial sector.

“The government is a bureaucracy, and it doesn’t do things very well. It never has. Now, when it’s got to do the impossible, it can’t,” said a senior Western diplomat. “They didn’t take the advice that they were given by people who know how to deal with emergencies. . . . They did a lot to prepare, but they didn’t do anything to put it together.”

There are definite signs that Kuwait is coming back to life. Electricity has been restored to 90% of the country, and running water is available in most areas. About a third of the schools are scheduled to open in September. Several retail shops, a large, full-service grocery store and a few hotels have reopened.

But only about 10% of the outgoing international telephone lines have been restored. It is often difficult to call across town, fax machines are unheard of, there is no postal service, garbage collection is intermittent. Banking transactions other than simple withdrawals, deposits and currency exchanges are so limited they are almost non-existent.

Shwaikh, the fashionable neighborhood that is Kuwait city’s equivalent of Beverly Hills--and whose residents can afford to live abroad when times are tough--is a virtual ghost town. On a recent morning on the main street of the downtown business district, the site of the Kuwait Stock Exchange and most major financial clearinghouses and bank headquarters, only a few cars were seen.

“We don’t have even the most basic infrastructure. We can’t communicate with our suppliers, they can’t communicate with us. We don’t have a fax, we don’t have a telephone,” said Mahmoud Ghanim, a prominent businessman from one of Kuwait’s oldest merchant families.

“When your car battery’s dead, you need to jump-start the battery. Currently, the battery is dead, and it’s not getting charged,” added Kutayba Youssef Ghanim, a well-known Kuwait city automobile dealer.

Ghanim has been unable to reopen the multimillion-dollar line of credit he held before the occupation and thus has had difficulty ordering new cars to sell.

Mahmoud Ghanim has had to order wholesale furniture on credit from Italian suppliers based on the reputation he built up through 20 years of previous business dealings.

Letters of credit and guarantee have been available through only one or two of Kuwait’s banks, and current regulations limit withdrawals to 4,000 Kuwaiti dinars, or $11,600, a month--even for corporate customers--without written approval from the Central Bank.

“How can I meet a payroll on 4,000 K.D. a month?” demanded Salah Marzook, a director of the Kuwait Chamber of Commerce and owner of a building machinery company and financial consulting firm.

Government and banking officials predict that the banking sector should open up over the next two months, but businessmen say there are other equally pressing questions the government has failed to address which prevent any wide-scale resurrection of the private sector.

First, they say, businessmen are reluctant to sweep out and open up their shops without any indication of what kind of compensation the government plans to pay for damage from the Iraqi invaders. Moreover, in a local economy heavily dependent on real estate, landlords are unsure what to do with shop space and apartments vacated during the occupation by tenants whose goods remain behind.

The Chamber of Commerce estimates there are more than 30,000 vacant apartments in Kuwait city, many of them formerly rented by foreign workers. Now, the government’s announced intention of phasing out the large number of foreigners who formerly bolstered the Kuwaiti work force has left uncertainties among not only landlords but employers as well.

Who will be allowed to return, and who will not? In a previously undisclosed memorandum, the Central Bank shortly after liberation directed all of Kuwait’s banks to fire all employees of Arab nationalities deemed not friendly to the Kuwaiti government, including Palestinians, Jordanians, Mauritanians, Yemenis, Iraqis and Sudanese.

The large number of Palestinians who held technical and middle-management jobs in the banking sector have forced many banks to ignore the memorandum, banking and government sources said.

But even employers who are able to obtain visas to bring foreign workers into the country face difficulties in getting them into Kuwait. “We were issued permits to get labor, but how do we get them into the country? There are no flights,” complained Mahmoud Ghanim, who said 90% of his labor force is still out of the country. Moreover, the Saudi government is refusing to issue transit visas that would allow foreign workers to travel overland into Kuwait, he said.

Kuwait has long had a huge resident population of foreign workers. Most of the working class are Pakistanis, Egyptians, Indians, Filipinos, Thais and Palestinians.

The government on Monday began requiring all foreign nationals in the country to begin registering, a prelude to measuring the labor supply in the country and, presumably, how close Kuwait is to meeting its goal of reducing dependence on foreign labor.

“The goddamn forms are in Arabic,” said Mutawa with a sigh. “Have we come to this ridiculous stage of mismanagement? Couldn’t we have made it in the language that everyone speaks? English? Urdu?”

The delivery of basic supplies into Kuwait was delayed over the first several weeks of liberation because of the government’s slowness in signing contracts and failure to oversee them, said many officials who worked with the Kuwaitis to get the process started.

Contracts for oil well firefighting weren’t signed until March 15--after the fires had been raging for weeks--and subsequent supplies were held up by similar delays, they said.

“When it got into coordination, management and the glue that held it together, they just simply didn’t do it,” said a close adviser to the government.

“What we had, for example, was millions of dollars worth of food purchased, sitting in Saudi Arabia, even the truck contracts signed to be able to transport it in, and there was no dispatcher and distributor and organizer. No handler to offload trucks and send them up. So you had food, warehouses, trucks, and people who needed food, and the minister saying, ‘Get it there! Get it there!’ and somebody else saying, ‘Where is it? Where is it? I thought we bought it.’ Well, we did buy it. But it doesn’t walk its way into Kuwait, and it doesn’t put itself on the table.”

Kuwaiti officials, the government adviser said, balked at the idea of hiring project managers, “worrying about a project manager taking over the country.”

At the same time, many U.S. contractors and Western diplomats said, Kuwaitis delayed critical contracts needlessly by haggling over prices and always awarding contracts to the lowest bidder.

“They have a habit of agonizing over every contract, whittling down and taking the lowest bidder no matter whether they doubt that he can perform or not,” said one American who worked with the government. “They get themselves in trouble, and then they start questioning the validity of the contract almost from the time it’s signed. This makes a lot of people antsy.”

Many Kuwaitis are even more concerned about increasing security problems in the country: a growing number of lootings, burglaries, thefts and rapes, apparently committed not by Iraqis and Palestinians, as some government officials allege, but by Kuwaitis. These and reports of law enforcement officials abusing Palestinians and other foreign nationals have prompted human rights organizations and many Kuwaitis to fear that Kuwait’s security structure still is not firmly in place.

What many officials fear is that the people, fresh from challenging the Iraqi occupiers, will take matters into their own hands if public confidence in the police erodes any further.

“The minute people lose confidence in the government’s ability to maintain security, law and order . . . and when something happens in a neighborhood or two that’s rather dramatic, then the next thing that happens, my guess is the neighborhood is going to put their little militia back together, put their roadblocks back up, and they’ll start running their own checkpoints,” said one Western diplomat. “And what’s the government going to do about it? Send its army and its police to go tear the checkpoints down? No.”

Some Kuwaitis familiar with the government say they doubt the crown prince’s pronouncements that Kuwaiti officers who acted harshly against the Palestinians were acting without government authority. The government, said one Kuwaiti close to the crown prince, told its officers not to retaliate against the Palestinians but did nothing to show it was serious about the command.

One day a few weeks ago, he said, the emir was visiting a family in the Rumaithiya district who had lost a relative to the Iraqis. The elder head of the family related how he and his neighbors had gotten hold of the Iraqi officer responsible for the man’s death and executed him.

“The audience in that house expected the emir to say something to the effect of, ‘You shouldn’t take the law into your own hands,’ ” the man related. “But there was silent approval.” He paused. “That is not acceptable.”

The reprisals against Palestinians, said one member of the recently deposed Cabinet, “would have happened whether in Kuwait or anywhere as an immediate reaction. But it could have been checked--had the government planted itself in the middle of all the streets and all the checkpoints and had given specific instructions: ‘You carry your gun to defend yourself, not to offend.’

“It is like if I tell someone not to come into a room, and he comes in and sits down, and I throw up my hands and say, ‘I told him he is not supposed to come in,’ ” he said. “That is not authority. That is abdication. Authority is not saying it. Authority is practicing it.”

Many Kuwaitis say it is frustration with the slow progress of reconstruction and renewal that has prompted many to leave the country. Of an estimated 200,000 Kuwaiti citizens who remained in Kuwait at the time of liberation, 105,000 have obtained permits to leave the country and have presumably done so, according to the Ministry of Interior.

Many, officials say, have left simply to make brief visits with friends or family in Saudi Arabia, or to holiday in Europe or the United States after seven months of virtual imprisonment in Kuwait, and have either returned already or will return soon. But “disillusionment” is a factor on the part of many who have left, said Mahmoud Ghanim.

“What is here is not a very inviting situation,” he said.

Kuwaiti government officials say the real test will be when the government’s program to repatriate Kuwaitis in exile begins on May 4, after which Kuwait Airways will attempt to fly in up to 16,000 Kuwaitis a week. The government has forbidden exiled citizens to return until the emirate’s war-stricken facilities are capable of handling them.

Diplomats in other Gulf countries with large Kuwaiti populations report that many Kuwaitis have expressed some reluctance to go home. “They’re saying, ‘Why would we want to go back there when there’s no water and power? When they get it fixed, we’ll go home,’ ” said one Western envoy.

“You and I, of course, would roll up our sleeves, take off our shirt and try to figure out how to fix the power line. They just want a contractor hired to get the damned thing fixed so they can come home. Now, if you want to criticize that for not being American work ethics, that’s absolutely right. But I’m not so sure. They’ve got the money; they can do it the way they want to do it.”

More Kuwaitis will begin flowing back into the country, many officials predicted, near the beginning of September, when the fabled summer heat of the Persian Gulf abates, when the schools reopen, when the physical infrastructure is better established.

But in some ways, said one official close to the government, the public’s flight from Kuwait mirrors a vacuum in leadership since liberation and the return of the government to Kuwait city.

Although Cabinet ministers returned almost immediately, the crown prince didn’t return until about a week after Iraqi forces withdrew; the emir was delayed several weeks.

“How can you accept a country being liberated, and a crown prince and prime minister who doesn’t get back until the 3rd or 4th of March, and the country’s liberated on the 26th of February?” the official said. “For many of us, it really epitomizes the absence of authority.

“You see,” he said, “there are three basic ingredients that governments must summon in crisis or disasters: These are wisdom, authority and understanding. Wisdom to create balance, authority to check whoever takes the law into their own hands, and understanding for whoever says, ‘That beast raped my sister,’ to say, ‘Are you sure? Do you have any witnesses?’ And then say, ‘Thank you very much; we will handle it.’

“These three ingredients were not available to us. Because the government was not there. There was no one to handle it. And these three ingredients are missing still.”