With war seemingly inevitable and imminent, the Kuwaiti economy has a bad case of the jitters. Investors in the local stock market were reassured on March 5 by the headline: 'Stocks rise despite war fears', but had their own worst fears confirmed just four days later by another: 'KSE index plunges 31.9 points'.

Brokers attribute sharp drops to profit taking by investors eager to hoard cash in times of uncertainty and talk of war. When the index shoots up, war rumors are also cited as the main factor, because several listed companies are signing big contracts with the US and British armed forces. Investors' nerves will be tested if a war is launched; one stock market official said trading would cease the moment the first missiles streak toward their targets in Iraq.

When opponents of war in Iraq cite its projected multi-billion-dollar cost as a reason conflict should be avoided, they talk as if this money will disappear into thin air. But war chest dollars are already trickling down the supply lines to places like Kuwait where British and American troops are gathering.

Last week, a Kuwaiti supplier inked a deal to supply the British armed forces with a fleet of buses, trailers and heavy machinery for $990,000 monthly. Other, smaller traders report similar windfalls. The arrival of thousands of foreign troops in the country has boosted the demand for portable air conditioners, computers and a traditional Kuwaiti product, the desert tent.

Many Kuwaiti families keep tents to pitch in the desert for weekend getaways, especially during the spring. This supports a steady trade for tentmakers and in recent weeks demand has been running at an all-time high.

One tentmaker said he has already rung up more sales in the first two months of 2003 than for the whole of last year. Tentmakers say foreign troops are interested in large units capable of housing dozens of people.

Truck salesmen report a 30 percent hike in sales compared to the same period last year. Najm Saleh, who works at a Kuwait City dealership, says he is poised to sell 300 four-wheel drive vehicles to local customers, who are "interested in security matters".

In some cases demand is outstripping supply. One Kuwaiti merchant has failed to meet his contractual obligations to deliver one million cases of bottled water to the US forces who had to turn to suppliers in the UAE instead.

To protect consumers from price gouging as the economy moves to a war footing, Deputy Prime Minister and Minister of Interior Sheikh Muhammad Khaled Al Sabah has formed a committee to monitor prices of foodstuffs and other essentials.

But this rising tide of military spending is not lifting all ships. Shuwaikh is a no-nonsense industrial and trading zone close to Kuwait's main port where you can find discount supermarkets and budget furniture showrooms mixed in with building supplies and luxury car dealers. But despite the apparent consumer-friendliness of the area, few people are buying. A branch of hardware giant Ace was empty. The Wholesale City Center was livelier but not busy enough to warrant staffing more than a couple of checkout lines.

"It's all this talk of war, nobody wants to spend their money," said Rafiq, a partner in a nearby diesel spares business. Rafiq and his brothers had seen just one customer all morning.

Kuwait's wealth is founded upon oil, and in this sector talk of war is also talking up the price of crude. Several weeks of upheaval in Venezuela, another key OPEC member, have also helped benchmark Brent crude prices up above the $34 barrel mark.

Still, Kuwait's oil executives are confident security concerns will not hamper production. Abdel Khaleq Mustafa, spokesman for the Kuwait Oil Company, says oil fields and loading jetties are running at full capacity despite the closure of wells near the Iraqi border, a move described as a safety measure.

"So far we are at normal production, nothing changed," Mustafa Said.

Kuwait pumps 2.4 million barrels of oil a day and government officials say this can be ramped up to 3 million barrels daily if necessary.