KUWAIT — For almost four decades Sheikh Sabah Ahmad Al-Jaber has been a key player in Kuwaiti politics, often as deputy prime minister and minister for foreign affairs. Earlier this year Sheikh Sabah was at the center of what looked like a major political crisis when he handed in his resignation to the emir. Little is known of the behind-the-scenes discussions that followed. But almost all observers of the Kuwaiti scene see the formation of a new Cabinet, in which Sheikh Sabah was reinstated as deputy prime minister and foreign minister, as a victory for the veteran politician. As head of the High Council of Oil and president of several other key organs of state many now regard Sheikh Sabah as the key decision-maker in Kuwait.

“It is clear that Sheikh Sabah is now in charge of the government,” says Walid Al-Nusuf, editor of the daily Al-Qabas. “This is his Cabinet, with men with whom he can work in harmony.” The natural life of the new Cabinet is two years, that is to say, until just after the next parliamentary election in Kuwait. Thus Sheikh Sabah has two years in which to persuade the emir and the country that his policies can make a difference. This is why his Cabinet has hit the road running with a series of domestic and foreign policy initiatives that may or may not work.

In an interview Sheikh Sabah took a series of questions.

Q: You have just formed a new government that is said to be closer to your views and temperament. What are the priorities of this new government and what makes you hope that the new government will be more successful than the previous one?

Sheikh Sabah: There are two priorities. The first is the further strengthening of our national defenses that is closely linked to the second, that is to say, the reform of our economy. Kuwait needs to modernize its economy in order to have a solid base for its national defense.

Q: In the economic field you have 13 percent budget deficit, slow growth and little private investment. Not a very rosy picture?

Sheikh Sabah: The budget deficit has been taken care of by the increase in oil prices: we now have a surplus. In the case of a country like Kuwait, a budget deficit over a year or two is largely notional. This is because there are no structural reasons for a deficit. Our gross domestic product (GDP) is estimated to have risen by 17 percent in the year 2000. Our economy is neither sick nor weak but has massive reserves of strength. As for private investment, you know that what is needed is confidence. We have passed many difficult years as you know. Now, however, I feel that hope and confidence are returning. Not only are we witnessing a significant upturn in investment by the Kuwaitis but also we are encouraged by the interest shown in foreign investments.

Q: You are also facing an unemployment problem, perhaps, for the first time. I have met university graduates who cannot find jobs.

Sheikh Sabah: Once again you must remember Kuwait’s special circumstances. This country is a major importer of foreign labor and does not face the problem of structural unemployment. The graduates you met are people who want government jobs, or people who do not wish to work in the private sector and shun manual work. We cannot bloat our civil service beyond its present size that accounts for almost 30 percent of the labor force.

Our government has taken a series of measures to encourage private firms to employ Kuwaitis, especially graduates. The new investment legislation that we have sent to the parliament specifically addresses the issue of jobs for Kuwaitis. Every new enterprise must create new jobs of which at least 25 percent must be reserved for Kuwaitis. At the end of the day, however, we cannot invent jobs that are needed. Those who claim to be unemployed should take the jobs that are available at any given time. They shouldn’t expect the government to employ everyone.

Q: Your government’s privatization program seems to be in trouble. One recent privatization is criticized because some say it favored a company owned by the speaker of the parliament. Some experts say you have chosen the Russian style of privatization which is designed to favor individuals and groups close to the establishment as against the Polish style that gives ordinary investors, including foreigners, a chance to invest in the newly privatized industries.

Sheikh Sabah: Some say, some say. I cannot comment on what some unnamed people say. You know that we have a parliament which is as outspoken as any and a press that makes no concessions to the government. Thus anyone who has anything valid to say can do so in the open. As for what you term as Russian and Polish styles of privatization, I am not familiar with them. We are trying to have privatization Kuwaiti style. The issue is being debated at the parliament and in the media. What I can say is that we are firmly committed to privatization as an important aspect of our long-term economic strategy.

Q: Let’s move to politics. My first question concerns reports and rumors about personal and political divisions within the ruling family. Is there any truth in these rumors? Or do you have a united strategy within the ruling family?

Sheikh Sabah: Once again we are back with “they say, they say” (yaqulun, yaqulun). These rumors have been going on ever since the invasion and occupation of our country by the Iraqis. I can assure you that our family is united in the service of Kuwait and its people on the basis of strategies that ensure our national safety and prosperity as well as our basic freedoms and way of life. Everyone in the family respects the emir as the head of the family and of the state. Everyone in the family respects the crown prince in his position and as an elder brother.

Q: Can we come to the question of Iraq? I was puzzled by the way you treated the outcome of the Arab summit in Amman as especially significant....

Sheikh Sabah: It was especially significant. This was the first time in more than a decade that all Arab states were present at a summit. In our opinion this was of great importance. Also, the Amman summit persuaded all Arab leaders that Kuwait was not an obstacle to the removal of sanctions against Iraq. Some Arab leaders had believed that it was Kuwait’s policy to oppose the easing or the lifting of sanctions. The Amman summit convinced them that that was not the case. They realized that it was Iraq that did not want the sanctions to end.

The Iraqi leadership wants to continue the present situation that enables it to maintain control over society through rationing coupons and other measures. There is a pattern in the Iraqi behavior. At a meeting in Cairo, five Arab foreign ministers were charged with the task of contacting the United Nations’ Security Council and ask for a program to end the sanctions. Who refused ? Iraq. At the same time it became clear that the removal of sanctions is not in my hands or in the hands of any Arab leader.

Q: Maybe Iraq does not want the sanctions to be lifted because it wants them to collapse. In other words, Iraq is looking for a diplomatic victory rather than a handout by the coalition that defeated it...

Sheikh Sabah: I am not privy to the calculations of the Iraqi leaders. What I can say is that I am deeply and sincerely sorry about the sufferings of the Iraqi people. We do not want the sanctions to continue a minute longer than necessary. This is why, in Amman, we did all that was asked by the Arab summit to come up with a common position to work for the ending of sanctions.

Q: The question is not about the sanctions as such. Iraq can import virtually everything it needs under the present arrangements. What Saddam Hussein wants is to regain control of Iraq’s oil income. He wants to spend Iraq’s money as he pleases. I think you took big risks in Amman. The summit gave Iraq an opportunity to claim that the Arab world is united in demanding an end to the sanctions. And that could have had an impact on public opinion, especially in the US. I could imagine editorials in the New York Times asking why should the US insist on sanctions against Iraq when Kuwait wants them lifted? The Iraqi team in Amman demonstrated a surprising degree of naiveté, which got you off the hook. The ultimate question is: would Kuwait or any of the GCC countries feel happy and safe to see Saddam Hussein freed of sanctions and allowed to spend $30 billion of Iraq’s annual oil income as he pleases?

Sheikh Sabah: The short answer is that such a prospect does not please me. But I believe we can look after our own safety and security with the help of our allies both in the region and outside. This is why we and other GCC members were prepared to go that extra mile in Amman.

Q: You have spoken warmly of Iran, which is quite a change since the 1980s...

Sheikh Sabah: It certainly is. In the 1980s we were wrong. We were wrong in supporting Iraq in its war against Iran. We have already apologized for that policy. But our Iranian brothers should not forget the full context of the time. They, too, made mistakes. They supported a plot against the life of the emir and launched missile attacks on our ships and oil installations. All that, however, is in the past.

Today, we regard friendship and cooperation with Iran as a cornerstone of our national policy and see the Islamic Republic as an element of peace and stability in the region. Our trade with Iran is increasing fast. We also want to invest in Iran’s economic development. We are close to finalizing our Continental Shelf Accord and have just signed an important agreement for the channeling of water from Iran to Kuwait through an under-sea canal.