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This study examines the relationship between the state in Kuwait and the use of large numbers of migrant workers in the Kuwaiti economy. Migrant labour has become essential not only in every aspect of economic life but also as a means of reproducing state power based on traditional social relations. An understanding of the migrant labour system is thus necessary for any understanding of the nature of political relations and political power. Although imports of foreign labour arose in response to economic, rather than political, changes (specifically the development of the oil industry) the state has regulated its presence in such a way as to strengthen its own position by increasin g the loyalty of Kuwaiti citizens. While migrants staff virtually all key sectors of economic and administrative life, oil revenues have been used to guarantee government employment and numerous state welfare benefits to all indigenous workers. The effect of this is an "embourgeoisement" of Kuwaiti labour with a consequence that a significant indigenous working class in the industrial sense does not exist. This situation has, in turn, served to legitimate the political system (and with it the traditional stratum of power holders) in the eyes of Kuwaitis. Migrant labour has also come to serve indigenous capitalists interests. Class fractions such as landlords and import merchants have constructed their prosperity around migrant labour, a factor which has served to lessen tensions between the merchant class and the ruling family and thus further stabilised and legitimised the state. Both Kuwaiti workers and merchants derive numerous state benefits from a legal structure which curtails the civil status of migrants, denying them political rights of expression and association, most social benefits and the right to own property, while simultaneously placing them in relationships of dependence on Kuwaits. The presence of migrants, therefore, makes possible the development of Kuwait's oil wealth, ensure the profits and privileges of its citizens, and allows the state to use economic development and oil wealth to strengthen its own position and avoid the political challenges which modernisation might otherwise bring through the process of class formation.