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King Abdullah attempts to avoid unrest with $35 billion in benefits for citizens

Saudi King Abdullah returned home after three months abroad and announced $35 billion in benefits for Saudi citizens in an attempt to insulate the world's biggest oil exporting country from the popular unrest that is sweeping the Arab world.


REUTERS - Saudi King Abdullah returned home to the world's biggest oil exporter after three months abroad for medical treatment on Wednesday and unveiled a series of benefits for citizens estimated to be worth $35 billion.

 The benefits include funding to offset high inflation, to help young unemployed people and to support families to get affordable housing and were offered as popular protests over poverty, corruption and repression hit many Arab countries.
Hundreds of men in white robes performed a traditional Bedouin sword dance on carpets laid out at Riyadh airport as they prepared to greet the monarch, thought to be 87.
Television presenters wore scarves in the colours of the Saudi flag in coverage termed "the joy of a nation" in celebration of the king, who was standing when he first descended from his plane before taking to a wheelchair.
Before his arrival, state media announced the action plan to help lower- and middle-income Saudis among the 18 million native population. The package included pay rises to offset inflation, unemployment benefits and affordable housing for families.
Political stability in the top OPEC producer is of global concern as Saudi Arabia controls more than a fifth of oil reserves, is a major holder of dollar assets and a vital regional U.S. ally.
The measures did not include political reforms in the absolute monarchy such as elections to municipal councils demanded by liberals and opposition groups. The Gulf Arab state has no elected parliament or political parties and does not tolerate public dissent.
"I think it's good but we need to see more reforms like municipal elections and better regulation. Financial benefits work only if officials can be held responsible," said a Saudi political analyst, who declined to be named.
Saudis were critical of the announcement on Twitter. "We want rights, not gifts," said Fahad Aldhafeeri in one typical tweet.
Abdullah travelled to the United States in November for surgery to a herniated disk which caused blood accumulation around the spine. He has been recuperating in Morocco for the past four weeks.
During his absence, Abdullah's slightly younger half-brother Crown Prince Sultan was in charge, but doubts remain over his health as he was abroad for much of the past two years for illness.
Reforms needed
Analysts do not expect unrest like in Egypt or Tunisia since the Gulf Arab state sits on more than $400 billion in net foreign assets, but they say Riyadh must address social pressures such as high youth unemployment and housing problems.
"Housing and job creation for Saudis are two structural challenges this country is facing," said John Sfakianakis, chief economist at Banque Saudi Fransi, who put the total value of the king's measures at 140 billion riyals ($37.33 billion).
G20-member Saudi Arabia has outlined spending of 580 billion riyals for 2011 in its third consecutive record budget. The king said last month expenditures would rise in the coming years.
EFG-Hermes estimated the package at around 100 billion riyals, saying it could trigger a rally in a stock market that lost 4 percent over the past week on unrest in Bahrain and the rest of the region.
Bahrain's King Hamad bin Isa was among the princes thronging the Tarmac when Abdullah arrived. King Hamad this week promised dialogue and released political prisoners in an effort to mollify protesters, mainly from the majority Shi'ite Muslim community, who are demanding democratic reform.
Saudi Arabia and Western countries see Bahrain's Sunni monarchy as a bulwark against the rising regional influence of non-Arab Shi'ite power Iran. The U.S. Fifth Fleet is stationed in the island state.
Like other Arabs, Saudis watching the fall of Egypt's Hosni Mubarak and Tunisia's Ben Ali Zine al-Abidine have started calling in social media for reforms in the strict Sunni kingdom.
Hundreds of people have backed a Facebook campaign calling for a "day of rage" on March 11 to demand an elected ruler, greater freedom for women and release of political prisoners.
Under the king's measures announced on Saudi TV, the state will pay aid for unemployed young people and tuition fees to study abroad, while waiving loans.
A state programme to help Saudis to get affordable housing will be supported alone with 40 billion riyals but the unnamed Saudi analyst said the plan did not fix problems such as that much of the land in the vast desert country is owned by royals.
"It's good to give aid but there is no land available. The land should be returned to the state or otherwise much money would be spent buying back land to build new housing," he said.
The government has been mulling for years a mortgage bill to address the housing issue but analysts say no consensus has been reached on how to fix the land issue.
Riyadh has been keen to show its Western allies there will be no power vacuum despite its octogenarian rulers' health problems. It is not clear if Abdullah will be succeeded by a reformist like himself or a conservative.


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