Kuwait City: With a youthful, well-educated population, strong relationships with both neighbours and world powers, and a strategic location on the Gulf, major oil producer Kuwait should be as dynamic a hub for the region as Dubai or Doha. But while others in the Gulf have powered ahead, attracting foreign investment and developing infrastructure, Kuwait has stagnated, frustrating the people of a country once seen as a Middle East trailblazer.

This frustration is especially evident among young Kuwaitis, cosmopolitan and often educated abroad, who complain of bureaucratic red tape and dysfunctional politics, but also acknowledge complacency among their fellow citizens. Although thousands took to Kuwait’s streets in 2011 and 2012, seeking moderate political reforms, the demonstrations eventually fizzled, at least partly due to Kuwaitis’ alarm over the chaos and rise of Islamists in the Arab Spring countries.

Kuwait’s system of government handouts and well-paid, comfortable state jobs also blunted calls for change, whether in politics or in the state-reliant economy, observers say. “We are very lucky that we are financially very comfortable,” said Maha Al Baghli, president of the association of business and professional women in Kuwait and an advocate for female entrepreneurs.

“On the other hand, it is not encouraging entrepreneurs and hard work,” Baghli told Reuters.

Sandwiched between Iraq and Saudi Arabia, the country is one of the world’s richest per capita, and more than half of its 1.2 million citizens are under 25. Kuwait’s leaders point to political deadlock in parliament that makes it difficult to get things done. But many observers say the government’s frequent personnel changes, layers of bureaucracy and general ennui are also to blame.

“We don’t take the government seriously. They talk, but they do not do,” said one Kuwaiti newspaper editor, who asked not to be named because of the sensitivity of the topic. The trauma of Saddam Hussain’s invasion in 1990 deepened an innate cautiousness in Kuwaiti society, some believe. When asked in 2010 why Kuwait appeared to have lost position to other Gulf states, its emir, Shaikh Sabah Al Ahmad Al Sabah, told Germany’s Frankfurter Allgemeine Zeitung: “Every country follows its own path, according to the demands of its society.”

Kuwait’s parliament is the oldest and most influential in the six-nation Gulf Cooperation Council. The assembly can block legislation and interrogate ministers, who are selected by a prime minister chosen by the emir. Relations between the elected assembly and government have often been fraught, however, with six parliamentary elections since 2006 and more than ten different governments, resulting more in political stasis than dynamism. In addition, members of the ruling family tend to hold the top government posts, while 84-year-old Shaikh Sabah has the final say on state affairs.

The political stand-offs are seen to be a main factor holding up economic reforms and a 30-billion-dinar ($106.5 billion, Dh391 billion) development plan for major infrastructure projects, announced in 2010, aimed at turning Kuwait into a regional centre. The plan includes projects such as a new airport, refinery and housing. One major residential city project, planned for years in the southern desert near the Saudi border, appeared on a recent visit to have made little progress.

Shafeeq Ghabra, professor of political science at Kuwait University, said there is a growing sense that the current system is not working. “There needs to be a political system which is more representative, more equal and more grassroots, with new blood at the highest level — that is able to deal with the issues that have been mounting over the past two decades,” Ghabra said. “You cannot freeze yourself in a moment in history.”

Kuwaitis compare their financial centre to Dubai. “It’s leadership,” said the editor, when asked about what makes the UAE, also home to Abu Dhabi, work.

Kuwait’s government has not implemented a strategic vision, he said. “(Shaikh Mohammad) has a vision, he has a plan. From arriving at the airport until you leave. You respect this.”

“The failure of Kuwait to keep pace with its neighbours does have an unfortunate side effect of dampening support for even partial political participation,” said Kristian Ulrichsen, Gulf expert at the US-based Baker Institute.

“Rulers elsewhere look at the political deadlock and take the lesson that this is what happens when too many unpredictable elements are brought into the decision-making process.”