5 CONFIDENTIAL applies somewhat the same defensive procedure with regard to the disposal of his finances. On that subject he is glad to be able to refuse all applications from Arab countries for official financial assistance on the grounds that he has entrusted the investment of the State reserves to the Investment Board and that is the end of the matter). There is of course an element of blackmail in the Ruler's attitude. It is convenient for him to be able to blame us if Kuwait cannot get all that it wants in its international relations and at the same time he can avoid the necessity of saying unpleasant things to his neighbours which he would find personally and politically distasteful. However, it is something that the Ruler has welcomed the idea of an Iraqi Representative coming to Kuwait, if we can persuade the Iraqis to do this, and I hope he might make a similar suggestion to the Saudis even if he is unwilling to state his own case about the islands. My main conclusion is that we must take this business of looking after Kuwait's foreign relations extremely seriously as a factor in the maintenance of our position in Kuwait and in the Gulf generally. I fully realise that firm support by us for Kuwait's position about the Iraq frontier may make things awkward for us in Iraq, but failure to do so may equally well make things awkward for us in Kuwait and in view of the importance which we so often say we attach to the Gulf I suggest that the balance between the two is fairly close. 4. Another conclusion is that a move towards more direct relations between Kuwait and its neighbours, as advocated in my despatch No. 116 will not come about without a fairly definite initiative on our part. I do not despair of making the Ruler see the difference between dealing with a territorial question between neighbours and getting involved in general Middle East politics via the Arab League, but he will clearly need persuasion. 5. I am sending copies of this letter to Kuwait, Baghdad and P.O.M.E.F. (B.A.B. Burrows) CONFIDENTIAL
