* Thousand of Kuwaitis have protested ahead of election
* Opposition groups call for elected government
* Complaints of bureaucracy, graft, lack of development
* Other Gulf dynasties keeping nervous eye on Kuwait
By Sylvia Westall
KUWAIT, Nov 14 (Reuters) - What started as a dispute over voting rules in Kuwait has mushroomed into a debate about the balance of power between the emir and parliament, with implications for other Gulf dynasties facing reform pressure since the Arab Spring.
Thousands of Kuwaitis have regularly taken to the streets since late October to protest at Sheikh Sabah al-Ahmad al-Sabah’s decision to amend the electoral law before a parliamentary election on Dec. 1.
While public demonstrations about local issues are common in a state that allows the most dissent in the Gulf, Kuwait - a major oil producer and U.S. ally in a precarious region facing U.S. arch-foe Iran - has avoided Arab Spring-style mass unrest that toppled three veteran Arab dictators last year.
But in a conscious echo of slogans used in other parts of the Arab world, some demonstrators at an opposition-led rally on Nov. 11 chanted “The people want to bring down the decree!” and a slogan addressed to the emir: “We won’t allow you!”
The 83-year-old emir, described as “immune and inviolable” in the constitution, has said his emergency decree to reduce the number of votes per citizen to one from four will streamline the electoral system and help preserve national unity.
Opposition groups say the changes will skew the vote in favour of candidates close to the government, which is run by a prime minister appointed by Sheikh Sabah and whose top posts are filled by members of the ruling family.
“We are seeing the emergence of a very vibrant, assertive and dynamic civil society that is seeking a transformation in the power relations and structure of the state,” said Shafeeq Ghabra, professor of political science at Kuwait University.
“It is going as far as (demanding) a constitutional, parliamentary monarchy. It is not a revolutionary movement, it is a grassroots civil reform movement.”
General public dissatisfaction over corruption and lagging, uneven development has been coupled with a more assertive opposition bloc, made up of Islamist, tribal and liberal politicians, keen to protect their own interests, said Mohammed al-Mokatea, a constitutional expert at Kuwait University.
“They are perhaps getting the feeling that they are going to be isolated from political life,” he said, referring to the period after the elections, which the opposition is boycotting.
Kuwait, with a population of 3.7 million, boasts the most open political system in the Gulf. Parliament has legislative powers and the right to summon ministers for questioning.
However, the emir has the final say in state affairs, can veto laws and dissolve parliament.
While protests have swelled to tens of thousands of people, with some broken up by police using tear gas, they are generally smaller than some of the largest demonstrations over corruption late in 2011 which led to the resignation of the cabinet.
Last year the opposition and protest groups were able to unify around the corruption theme, putting real pressure on the government and ousting the prime minister, a nephew of the emir.
This time around, an increasingly organised youth wing has reemerged in the opposition movement, voicing frustration at the focus on the electoral law and saying there are broader problems to tackle.
“You have a problem with the distribution of wealth,” Ahmed, 26, said. “There are people with certain interests, you need to know the right person and use ‘wasta’,” he said, using an Arabic word for nepotism or influence. “It is not just the government, the MPs use their power to their advantage here too.”
The emir’s recent meetings with opposition figures suggest he may be looking at ways to offer a compromise after the elections, analysts said. Protesters restricted their last rally to a square near parliament, reducing tension with the police.
Some demands include allowing a proportion of cabinet posts to be held by the opposition, or the chance to question ministers without the threat of dissolution of parliament.
The authorities need to make changes to address the root causes of the unrest but also to be seen doing this on their own terms, said Sam Wilkins, an analyst at Control Risks in Dubai.
“They can’t be seen to have their hands forced by street protesters because that would set a very dangerous precedent, not just for Kuwait but for the Gulf more broadly.”
Other conservative, U.S.-aligned Gulf monarchies such as the United Arab Emirates are watching developments in Kuwait closely, according to Abdulkhaleq Abdulla, a professor of political science at Emirates University.
“The general concern is not necessarily about democracy and freedom and protest, the general concern is Kuwait heading down a road that might be similar to what happened in Bahrain where there is violence, confrontation,” he said. “They don’t want one of them, a ruling family, going through all that trouble.”
Some say the street clashes in Kuwait could have damaged moderate calls for democratic reform, Abdulla said.
The violence could also be seized on as an example by those in the UAE who resist such change, by citing Kuwait’s democratic model - however limited - as a recipe for instability.
The United States has pressed Bahrain to engage opposition demands for reform to restore calm in a country where U.S. naval forces are based as a bulwark against Iranian power.
There has also been some unrest in Saudi Arabia, involving minority Shi‘ite Muslims complaining of discrimination, and in Oman where the ruling sultan has struggled to defuse discontent by creating tens of thousands of public sector jobs.