Gulf political, economic reform crucial - Kuwait PM to paper

DUBAI, July 4 (Reuters) - Gulf Arab rulers should enact economic and political reforms or risk raising the ire of their citizens, Kuwait's prime minister was quoted as saying in the pan-Arab newspaper Al-Hayat on Monday.

Sheikh Nasser al-Mohammad al-Sabah remarks came two weeks after the country's emir warned there would be "zero tolerance" for anyone threatening Kuwait's security.

The world's fourth largest oil exporter has seen limited demonstrations but, thanks to a generous welfare system, avoided the mass protests that toppled rulers in Egypt and Tunisia.

"We believe that the reform process in all the (Gulf) countries are an important and crucial matter," Sheikh Nasser told the daily during a tour of the Gulf Arab states.

"It is not possible to realise growth and stability in any country without economic and political reforms and to realise welfare of the peoples."

In January, the government announced plans to spend nearly ${esc.dollar}5 billion, or around 4 percent of its GDP, on cash grants and free food rations.

Kuwait, which sits on 10 percent of global crude reserves, grants more political freedom than Gulf neighbours such as Saudi Arabia where few dare criticise the government or members of the ruling family.

Sheikh Nasser, who is currently heading his seventh government since his appointment by Emir Sheikh Sabah al-Ahmad al-Sabah in 2006, has undergone fierce criticism from Kuwaiti opposition for what they say is his failure to fulfil the demands of the people.

He survived a non-cooperation motion against him in parliament last month after being questioned about favouring relations with Iran over other Gulf neighbours.

On Monday, Sheikh Nasser called for improved relations with Iran. Relations between the two states have deteriorated over the past year with Kuwait accusing Iran of running a spy cell in the Gulf state.

"We always strive to strengthen our relations and collaboration in various areas with the Islamic Republic of Iran as it is a Muslim neighbour and we have historic ties with it," Sheikh Nasser was quoted as saying.

(Reporting by Martina Fuchs; Editing by Sonya Hepinstall)