Since the fall of the old regime in Iraq in 2003, Kuwait's foreign policy has shifted from a look-south attitude to a helicopter view of the Gulf region.

A look at the maps reveals that the northern Gulf state Kuwait, as a neighbor to Iraq and Iran (by sea), has a much bigger need for a balanced diplomacy and foreign policy than the other Arab Gulf states.

With regard to Iran's disputed nuclear program, Sheikh Sabah al-Ahmed al-Sabah, Emir of Kuwait, has repeatedly called for a peaceful resolution. The Emir urged "dialogue, peaceful means and adherence to the principles of international legitimacy." Kuwait could not afford a closure of the Straits of Hormuz. Iran has threatened to block the isthmus should the US and Israel opt for war against Tehran. Kuwaiti tankers need the long sea-route to the south for exporting the country's main source of income, which is oil.

In 2011, despite four rounds of UN sanctions and ongoing Western pressure on Iran, Kuwait and Tehran agreed to expand economic and trade relations. Both states share the Arash/Durra oil field in the Arabian Gulf.

Along with its southern neighbors, Kuwait is sitting economically and partly politically in one boat. Since 1981, the six oil-rich countries Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates and Oman constitute the Gulf Co-operation Council (GCC). The GCC is not quite the same thing as the European Union, as although the Arab Gulf states have implemented a common customs union, free movement of capital and people and have placed their defense policy under a common umbrella, they have not (yet) introduced a common currency or expanded.

"The GCC is not just a security pact, but also a cultural and economic pact because we share the same culture, and we have the same economic concerns as resource-based economies," said Sheikh Dr. Mohammad Sabah Al-Sabah, Kuwait's former Deputy Prime Minister and Minister of Foreign Affairs, to IFC News.

The six member states also have some freedom to design their own foreign policy as long as they do not contradict common GCC agreements. In May 2007, Kuwait ended its currency peg to the US dollar and moved to a basket of "major currencies" after the dollar dropped dramatically in value. While this issue seems at first glance to be a purely economic one, it showed that Kuwait was ready to pursue its own interests if necessary.

A year later, Kuwait re-opened its embassy in Baghdad after almost two decades of absence, a milestone in Kuwaiti foreign policy. Iraq followed suit and re-installed its diplomatic mission in Kuwait City in 2010.

However, despite increased trade between the two countries, relations remained delicate. On July 13, 2011, the Kuwaiti embassy in Baghdad was attacked with rockets by a group of unknown insurgents. "Is there a Cold War brewing?", the Dubai-based Gulf News asked, citing border issues between the two, as well as Kuwait's port ambitions on the Boubyan Island, which Baghdad claims reduce its access to Gulf waters. The heavily fortified border, where the Kuwaiti army has built man-high fences, trenches and barriers in reminiscence of the German-German line of demarcation during Soviet times, proofs that both countries have still a long way to go to reach mututal trust and reconciliation.

Progress was seen in March 2012, when the former enemies of war reached a debt deal worth 500 million US dollars. Under the agreed terms of the deal, Iraq will pay Kuwait 300 million US dollars as part of billions of reparations for war damages resulting from the 1990 invasion and subsequent seven-month long occupation by Saddam Hussein. Iraq also agreed to invest another 200 million US dollars in a joint Iraqi-Kuwaiti carrier. In exchange, Kuwait committed itself to lifting sanctions against Iraqi Airways.

Détente culminated on April 6 2012, when Baghdad approved a request by Kuwait's budget carrier Jazeera Airways, which demanded landing rights in Iraq's capital and in Najaf, home to Imam Ali's shrine, which is a holy site for the Shi'a fraction in Islam.

On a regional level, the Kuwaiti government was always among the first to help those most in need when disasters occurred. On April 24, 2012, the national news agency KUNA reported that the Kuwait Al-Rahma Society for Relief and Development would provide funds to 55 Syrian families who fled to neighboring Lebanon to escape fighting in their country. Kuwait's ruling family AL-Sabah has provided millions of dollars to the relief campaign for Syrians in need of help.

In 2006, Kuwait pledged 70 million US dollars to help Lebanon to recover after Israel fought a reckless war which saw wide-scale bombardment of civilian buildings in the south of the country and in Beirut.

On an international level, the Kuwait Fund for Arab Economic Development has been at the forefront of improving Kuwait's image through supporting projects and humanitarian initiatives. In an exclusive interview with Marcopolis, Abdulwahab Al Bader, the General Manager of the Fund, said "a great deal happens over the span of 50 years, but if we go over all of the events, it will never end, as there are always things to say," adding that "there are a number of projects in Sudan, Morocco, Egypt… Lately in Sudan we have a dam project, the Marwai Dam, which has been in the works for a long time and has doubled the electricity production in Sudan."

According to Al Bader, the fund's mission is a cornerstone of the Gulf state's foreign policy. "I have always thought of Kuwait's foreign policy as open-minded, and that we played a great part in it. We are open to everybody. This is what we are trying to do at Kuwait Fund: to be a constructive part of Kuwait's foreign policy."

In recent years Kuwait has jumped onto the Go East-bandwagon. Kuwait has increased its relations with China, Malaysia and Indonesia, and the private sector supports these ambitions. Earlier this year in May, Kuwait China Investment, one of the top regional investment firms bridging businesses between the Middle and the Far East, rebranded to Asiya Investments and launched its advisory investment unit Asiya Investments Dubai Limited in the sheikhdom's onshore financial free zone, DIFC.

Nevertheless, Washington remains Kuwait's closest ally. A destroyed Iraqi tank has been positioned in front of the US embassy in Kuwait as a memorial of the 1991 Gulf war. As a sign of thanks for the United States' swift move to liberate Kuwait, the sign below the tank says: "We will never forget you."