Item


 

King Abdullah of Saudi Arabia returned to the kingdom after months of medical treatment overseas. He immediately announced an aid package of US $36 billion in financial support from King Abdullah amounts to $1,800 per capita. 

 Under the package, significant funds will be injected into housing and education.

 

King Abdullah also announced a raft of financial support measures, intended to help some of the poorest in the kingdom. For the first time, jobless Saudis were granted unemployment benefits for a year. The government also said it would not phase out an inflation allowance that had raised public worker pay by 15 percent over the past three years. The plan also included expanding social insurance schemes to enable families to claim benefits for up to 15 members, higher than a previous cap of eight. The Royal Court also announced it was creating 300 jobs to “find out the needs of the citizens”.

 

Meanwhile, protests continued in mainly Shiite parts of the kingdom calling for greater rights.

 

February 26, 2011

 

 

Analysis and Forecast: Decreasing Risk


 

The return by King Abdullah appears to have taken place to address growing fear of the emulation of the Arab riots in the kingdom. The massive aid package also appears to come at a time to mitigate the risks of mass protests.

 

The Saudi government has been studying improving welfare, housing and education for Saudi citizens for a number of months. However, previous plans that were not officially announced, were thought to be much smaller than the current package. The size of the package appears to be a direct result of increasing anxiety in Saudi Arabia. However, on a per-capita basis, the package is smaller than what other governments in the Gulf have offered. It also comes at a time when the kingdom faces major challenges including massive youth unemployment (estimated at over 20 percent for under 30’s), housing shortages as well as rising unrest across the country. An example were the Jeddah protests in January 2011, after floods killed a number of people when demonstrators accused government officials of corruption, leading to the construction of inadequate flood defenses.

 

Although the size of the package is large, it is unlikely to be sufficient to addressing longer-term issues with the education system and unemployment. It will, however, provide a short-term reprieve in most of the country.

 

However, it is unlikely to affect plans for Shiites in the Eastern Province and Najran for continuing their anti-government protests. The protestors demand there are more political and the government does not appear to be addressing those head-on. Saudi Arabia has the GCC’s largest Shiite population (though not in percentage terms).

 

The figure below shows the make-up of the Saudi population: