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Initial Contacts with the British
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Kuwait's initial contacts with the British were primarily through contact with the English East India Company. This company was somewhat of an Eighteenth century Multinational corporation with interests stretching from the British Isles to the Orient. Kuwait happened to lie between the East India Company's primary centre of production (India) and her main market (Britain and Europe). There were three main routes that the company used to communicate and transport goods between these two destinations: The Cape of Good Hope provided the longest route, but had the advantage of being an all-sea route. This meant that ships could do the journey in one go and was ideal for moving heavy and bulky cargoes and goods. The Red Sea and the Persian Gulf offered the other two rival routes. They both had the advantage of being more direct, but the disadvantage of having no continuous stretch of water. Ships would have to unload their cargo or passengers and they would have to proceed overland to the Mediterrenean sea and reembark on a ship lying in wait. This procedure made it difficult to transport goods, but was still faster for passengers and, more importantly, for messengers to carry vital communications and information between India and Britain.
Kuwait, was in the fortuitious position of having one of the only decent deep water ports in the Northern Gulf and so could accomodate any British ships wishing to dock and alight its passsengers. It's primary competition in the eighteenth and nineteenth century was the Ottoman run port of Basra. There was a great deal of commercial and political rivarly between these two ports to supplant one another and gain control over the overland caravan routes.
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Establishment of Formal Relations
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Kuwait became a protectorate of the British Empire in 1899. It entered into this association in order to help itself withstand any resurgent aggression from the Ottoman empire to its north. It had already avoided direct subjagation by aiding an 1871 Ottoman expedition down to Al Hasa. However, the Ottomans were seeking, and receiving, diplomatic and economic help from the Germans. The most visible manifestation of this fact was the planned Berlin - Baghdad railway. In fact, the Germans even pencilled in Kuwait as being the terminus for this project. So, Kuwait feared Ottoman expansion, whilst Britain feared being displaced by the Germans. It was therefore in both their interests to come to a formal, protective agreement. This was also a period of heightened European tensions with Britain being forced into a much more isolationist position and having to shore up its position throughout the Persian Gulf and into the wider world.
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Administration
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With the signing of a formal agreement between the two countries, it didn't take the British long to make the most out of their dominant position. Within a few years the first British political agent took up a permanent post in Kuwait, with a view to influencing the Sheikh into advancing British interests in the area. The Royal Navy were quick to turn Shuwaikh port into a British coaling station. A telegraphic line was passed through Kuwait in 1913. And, in a move that was not fully appreciated by any of the participants at the time, Britain was given a monopoly over the exploration and production of oil reserves in Kuwait.
As the 1920's approached it was clear that the Arabian peninsular was increasingly descending into very unpleasant power struggles. In addition, Kuwait was not only the primary British backed power in the gulf region. It had also been given a League of Nations mandate to rule over Transjordan and Iraq. This meant that any local rivalries would often pit one British backed government against another and could mean that Britain was not always acting in the best interests of the individual Sheikhs and rulers.
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Role within the Empire
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Kuwait was always a rather minor player within the British Empire. The ambivalence towards any greater idea of imperial well being could easily be detected amongst Kuwaiti leaders: They made it very clear that they were a protectorate of Britain only as a way to forestall inclusion into any Ottoman expansion in the area. Indeed, this was most clearly demonstrated by Sheikh Jaber II almost hostile neutrality towards Britain during the Great War. Even at the ceremonial level, Kuwaiti leaders had minimal contact with any British officials outside of Kuwait itself. Kuwait's leaders always made it clear that inclusion in the Empire was nothing other than a act of real-politik.
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Economics of Empire
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Unfortunately for Britain, Kuwait's oil was never fully exploited during the years of the Empire. Oil had been discovered, and British oil companies had even been granted a monopoly over its exploration and extraction. Yet, it was only in the final decade before handover that oil began to return any kind of profit to these companies and to Kuwait itself.
Before oil, the major revenue source for the Kuwaiti emirs was through Shuwaikh port and the fact that Kuwait was one of the terminals for the Caravan routes travelling between the Persian Gulf and the Mediterrenean Sea. Taxes and levies would be applied to raise money from these two economic activities. Kuwait was more of a strategic partner for Britain rather than an economic one.
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Withdrawal from Empire
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Britain's withdrawal from Kuwait was a swift, unannounced one. Although with hindsight, it was a fairly inevitable consequence of Britain's humiliation over the Suez crisis. The late 1950's and early 1960's was the period that Britain's withdrawal from empire was in full flight. Defence retrenchment and cost cutting were the final excuses given as Britain handed over the responsibility for Kuwait's defence to Saudi Arabia and the newly formed Gulf Council. The ending of formal ties was a fairly amicable affair, and economic and strategic links have been maintained right up until the present day.
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