The world’s No. 1 oil exporter faces the twin challenges of creating jobs for a young population at a time of unrest in the Arab world, and pursuing economic reforms with a royal succession looming.

The stability of Saudi Arabia is of global importance since the kingdom sits on more than a fifth of oil reserves, is home to the biggest Arab stock market, is a major owner of dollar assets and acts as a regional linchpin of U.S. security policy.

King Abdullah, who is around 87, unveiled $93 billion in social handouts in March, on top of another $37 billion announced less than a month earlier.

But this apparent effort to insulate the kingdom from Arab popular protests sweeping the region has not stopped activists, including liberals, Shi’ites and Islamists, calling in petitions for more political freedom. Saudi Arabia is an absolute monarchy with no elected parliament.

Riyadh has not seen the kind of mass uprisings that have shaken the Arab world this year, but Shi’ites in the kingdom’s oil-producing east have staged a number of protests.

Almost no Saudis in Riyadh answered a Facebook call for protests on March 11 in the face of a massive security presence.

Saudi Arabia has been ruled by the Al Saud family for 79 years, with influence from clerics following the austere Wahhabi school of Islam, and many oppose the very reforms the king has started.

However, slowing down reforms to modernise education might affect government plans to create jobs — unemployment last year reached 10 percent.

And with around 70 percent of Saudi Arabia’s almost 19 million people under the age of 30, the pressure to find them gainful employment is huge.

SUCCESSION

King Abdullah returned home in February after spending three months abroad for medical treatment, during which he underwent two surgeries after a blood clot complicated a slipped disc.

With the slightly younger Crown Prince Sultan also in poor health, the throne could eventually go to Interior Minister Prince Nayef, a conservative who could put the brakes on some reforms started by Abdullah, analysts say. Nayef, around 77 years old, was promoted to second deputy prime minister in 2009.

He has supported the religious police who roam the streets to make sure unrelated men and women do not mix in public and that shops close during prayer times.

To regulate succession, Abdullah has set up an “allegiance council” of sons and grandsons of the kingdom’s founder but it is not clear when, or how, it will work in practice.

So far only sons of the kingdom’s founder Abdul-Aziz Ibn Saud have ascended the throne, and the remaining 20 or so are mostly in their 70s and 80s. Leaders have been reluctant to hand senior jobs over to the next generation.

If a younger generation were unexpectedly to come into play, prominent potential candidates include Nayef’s son Mohammed, who as the anti-terror chief was the target of an al Qaeda suicide attack in 2009. Another leading face among the grandsons of Ibn Saud is Sultan’s son Khaled, the assistant defence minister.

WHAT TO WATCH:

- The health of senior royal family members and their involvement in day-to-day affairs of running the kingdom

- Any sign of abrupt cancellation of scheduled programmes such as foreign visits by senior leaders

- Any signs that the elder generation is passing on more responsibility to the grandsons of Ibn Saud, and to which ones

REFORMS

Officials who back Abdullah say they fear that young Saudis frustrated over their failure to find work could provide potential recruits to violent Islamists who want to overthrow the House of Saud.

Abdullah started some narrow reforms to overhaul education and the judiciary after taking office in 2005 but diplomats say his reform drive has run out of steam.

He has not altered the political system of an absolute monarchy that analysts say has fuelled dissent, with democracy activists, liberals and Islamists calling on the king in petitions to allow elections and more freedom.

Abdullah’s handouts focused on social largesse and a boost to security and religious police, but included no political change.

The kingdom in March also announced it would hold long-delayed municipal elections but said women will not be allowed to vote. With no elected assembly, Saudi Arabia has no political parties.

Saudi analysts say the king could reshuffle the cabinet, where some ministers have been on board for decades, or call fresh municipal elections, a plan that was shelved in 2009 due to the opposition of conservative princes.

WHAT TO WATCH:

- Any signs of protests or petitions by activists demanding political reforms

- Any signs of a cabinet reshuffle or plan to hold fresh municipal elections

- Any approval of a much-delayed mortgage law, which aims to ease pressure on the housing market

SHI’ITE MUSLIMS

Saudi Arabia, a Sunni-led regional diplomatic heavyweight, has sought to contain Iran’s influence since the 2003 U.S.-led invasion of Iraq produced a Shi’ite-led government in Baghdad.

With majority Shi’ites in neighbouring Bahrain having protested against the Sunni government there, analysts say there is a risk that unrest could spread to Saudi Arabia’s own Shi’ite minority, which lives in the oil-producing Eastern Province just across from Bahrain.

Shi’ites in the east have held a number of protests calling for prisoner releases and a withdrawal of Saudi forces sent to Bahrain to help put down the unrest.

Saudi Shi’ites have long complained about marginalisation and have started small protests to demand the release of prisoners they say have been detained without trial. Riyadh denies any charges of discrimination.

Riyadh also shares U.S. concerns that Iran wants to develop nuclear weapons in secret. The United States and Israel have not ruled out military action against Iran, which says it is developing nuclear energy only to generate electricity.

Saudi Arabia has publicly tried to stay out of the dispute over Tehran’s nuclear programme but a series of U.S. diplomatic cables released by whistle-blowing website WikiLeaks portrayed Riyadh as pressing for a U.S. attack.

King Abdullah was said to have “frequently exhorted the U.S. to attack Iran to put an end to its nuclear programme,” a cable printed in Britain’s Guardian newspaper said.

WHAT TO WATCH:

- Any signs of further protests and a deterioration in the eastern province

- Any possible military action against Iran and its impact on the Gulf region

- Any Saudi diplomatic moves to tighten sanctions on Iran and any signs of Saudi facilities offered for military action

AL QAEDA THREAT

Saudi Arabia, with the help of foreign experts, managed to quash an al Qaeda campaign from 2003 to 2006 that targeted expatriate housing compounds, embassies and oil facilities.

Riyadh destroyed the main cells within its borders. But many militants slipped into neighbouring Yemen where al Qaeda regrouped to form a Yemen-based regional wing that seeks, among other things, the fall of the U.S.-allied Saudi royal family.

The Yemen-based al Qaeda arm shot to the global spotlight after it claimed responsibility for a failed attempt to bomb a U.S.-bound passenger plane in December 2009.

Despite the U.S. killing of al Qaeda founder Osama bin Laden on May 1, the Yemeni wing of the militant Islamist group is expected to remain active, and exploit political instability in Yemen as well.

WHAT TO WATCH:

- Whether al Qaeda’s resurgent Yemen-based branch mounts more operations in Saudi territory, as it has within Yemen

- Riyadh wants to build a fence to seal the mountainous 1,500-km (930-mile) Yemen border, which could help stop militants from crossing.

Saudi Arabia tightened its control of the media on Friday, threatening fines and closure of publications that jeopardised its stability or offended clerics, state media reported.

The desert kingdom and major U.S. ally has managed to stave off the unrest which has rocked the Arab world, toppling leaders in Tunisia and Egypt.

“All those responsible for publication are banned from publishing … anything contradicting Islamic Sharia Law; anything inciting disruption of state security or public order or anything serving foreign interests that contradict national interests,” the state news agency SPA said.

Saudi Arabia follows an austere version of Sunni Islam and does not tolerate any form of dissent. It has no elected parliament and no political parties.

The tighter media controls were set out in amendments to the media law issued as a royal order late on Friday. They also banned stirring up sectarianism and “anything that causes harm to the general interest of the country.”

Almost no Saudis in major cities answered a Facebook call for protests on March 11, in the face of a massive security presence around the country.

Minority Shi’ites have staged a number of street marches in the Eastern Province, where most of Saudi Arabia’s oil fields are located.

Shi’ites are said to represent between 10 and 15 percent of the country’s 18 million people and have long complained of discrimination, a charge the government denies.

Saudi authorities arrested two Shi’ite bloggers from Eastern Province this week, adding to a total of 160 Saudis detained since February, according to a Human Rights Watch report in April.

Clerics played a major role in banning protests by issuing a religious edict which said that demonstrations are against Islamic law.

In turn, the royal order banned the “infringement of the reputation or dignity, the slander or the personal offence of the Grand Mufti or any of the country’s senior clerics or statesmen.”

King Abdullah has strengthened the security and religious police forces, which played a major role in banning protests in the kingdom.

The amendment published on Friday detailed punishments for breaking the media laws, including a fine of half a million riyals ($133,000) and the shutting down of the publication that published the violation, as well as banning the writer from contributing to any media.

 

Dozens of unemployed university graduates and teachers staged rare protests in two Saudi cities on Sunday to demand jobs and better wages in the biggest Arab economy, which is struggling to reduce joblessness.

Saudi Arabia, the world’s No. 1 oil exporter and a U.S. ally, is an absolute monarchy that does not tolerate public dissent. There is no elected parliament or political parties, and newspapers tend to carry the official line.

Over 20 protesters gathered outside the education ministry office in Jeddah while around 20 collected outside the ministry in the capital Riyadh, witnesses and participants said.

“God willing, I’ll be here until Friday if I have to. We don’t care anymore after seven years of unemployment. We have no other choice,” said Omar Alharbi, a 34-year-old Arabic language teacher who took part in the Jeddah protest.

“I plan to stay here until we find a solution,” he said.

The father of six now works as a teacher in a private school making only 1,800 riyals ($480) a month, below the country’s unemployment handout of 2,000 riyals.

Despite its oil wealth, Saudi Arabia, which is rolling out its third straight record budget this year, is struggling to reduce unemployment which reached 10 percent in 2010.

In a move to stave off public dissent gripping much of the Arab world, King Abdullah ordered handouts exceeding $100 billion to be spent on housing, infrastructure, health care and security. It also included a 2,000 riyal unemployment benefit.

Saudis in private firms compete with foreigners who agree to work for lower wages. Teachers are offered 1,800 riyals a month in a private school for a job that pays around 9,000 riyals a month in government schools, protesters said.

Some of the protesters said they had been unemployed since 2003. They estimated the number of unemployed Saudi Arabic language teachers to exceed 10,000.

Saudi Arabia has not seen the kind of mass uprisings that have rocked the Arab world this year, but a number of protests have taken place in the Eastern Province, where most of the kingdom’s oil fields are.

Almost no Saudis in major cities answered a Facebook call for protest on March 11, in the face of a massive security presence around the country.

Earlier this year, some 250 unemployed graduates gathered at the education ministry in Riyadh to demand employment and vowed to continue demonstrating until the government produces jobs.

The group later dispersed after hearing promises from ministry officials saying they will deal with their issue.

“We expect to hear promises to calm us down and disperse us but we will be back. We will be back until they find a solution,” Alharbi said.

 

Saudi Arabian authorities released 25 Shiites arrested during protests in the Eastern Province earlier this month, according an activist.

The detainees were released yesterday, Ibrahim Al- Mugaiteeb, president of the Human Rights First Society, based in al-Khobar, Saudi Arabia, said today in a phone interview.

Shiites in al-Qatif held a demonstration on March 3, attended by about 100 people and heavily policed, to demand the release of prisoners. Another rally of a similar size took place in the eastern village of Awwamiya the same day, while on March 4, protesters in al-Hofuf demanded the release of Shiite cleric Tawfiq al-Amir. Activists said he was freed two days later.

Activists have called for a nationwide “Day of Rage” on March 11, and a Facebook Inc. page advocating the plan has more than 30,000 followers. The kingdom’s Council of Senior Islamic Scholars this week condemned protests as forbidden, and the Interior Ministry warned that demonstrations, marches and sit- ins are “strictly” prohibited.

In Riyadh the mood is tense; everyone is on edge wondering what will happen on Friday – the date the Saudi people have chosen for their revolution. The days building up to Friday so far have not been as reassuring as one would like.

On 4 March, there were protests in the eastern region and a smaller protest here in Riyadh. The protests in the eastern region were mainly to call for the release of Sheikh Tawfiq al-Amer, who had been detained after giving a sermon calling for a constitutional monarchy.

The protest in Riyadh was started by a young Sunni man, Mohammed al-Wadani, who had uploaded a YouTube video a few days before, explaining why the monarchy has to fall. After the protests, 26 people were detained in the eastern region and al-Wadani was taken in soon after he held up his sign near a major mosque in Riyadh.

It’s not just the people who are on edge; apparently the government is also taking this upcoming Friday seriously. Surprisingly, Sheikh Amer was released on Sunday, while usually political detentions take much longer.

All this week, government agencies have been issuing statements banning protests. First it was the interior ministry that promised to take all measures necessary to prevent protests. Then the highest religious establishment, the Council of Senior Clerics, deemed protests and petitions as un-Islamic. The Shura Council, our government-appointed pretend-parliament, also threw its weight behind the interior ministry’s ban and the religious decree of prohibition. But you can’t blame the clerics or the Shura for making these statements – the status quo is what’s keeping them in power and comfortable.

Saudis are now faced with a ban on any form of demonstration, and the blocking and censorship of petitions. Moreover, four newspaper writers who had signed one of the petitions are now suspended.

Saudis feel cornered, with little means of self-expression and at the same time exposed to news and opinions that only add salt to the wound. For example, Prince Talal Bin Abdul Aziz, the king’s half-brother, went on BBC Arabic TV to state his support for a constitutional monarchy and warn that anything less will lead to “evils” (his word).

Meanwhile, a newspaper reported that an expatriate was sentenced to 14 months in prison and 80 lashes for stealing part of a chicken from a restaurant. In response to the news, Abdulrahman Allahim, an award-winning Saudi human rights lawyer, tweeted that in his experience he had never come across a case in Saudi courts where a defendant was given a verdict of not guilty.

In Jeddah, a committee that has spent more than a year investigating the disappearance of millions of public funds assigned to the municipality to build a sewerage system has yet to make one formal accusation against anyone.

Another article revealed that the unemployment benefits recently decreed by the king have been whittled down from 3,000 riyals (£490) a month to 1,000 riyals (£165) and will probably only be given to unemployed men but not women.

The official unemployment rate of men is 10%, although many estimate it to be higher. The unemployment rate for women is yet to be officially announced but a study in 2010 estimated it at more than 26%.

It’s also estimated that about 60% of the population is under 30. These young, unemployed people live with many constrictions on their freedom. In addition to extreme gender segregation, single men are banned from entering shopping malls, and women cannot process their own papers, get a job or even access transport without male accompaniment and approval.

There’s no denying that the country is fertile ground for a revolution. However, I am concerned that the revolution might be hijacked by Islamists. Sa’ad al-Faqih, a London-based anti-monarchy activist, is claiming the revolution for himself. His TV programme, which is accessible via satellite in Saudi, is organising protest locations and revving up viewers to participate. Another contender is the new Islamic Umma party, whose founding members are imprisoned until they renounce their political aspirations (they have so far refused). Although the founding members are not free, the party’s online activity grows day by day. Both groups make use of a rhetoric that is dear to many average Saudis – attacking US foreign policy and the royal family’s misuse of the nation’s wealth while threading both issues within an Islamic theme.

On the other hand, the king is popular. All the petitions call for a constitutional monarchy, rather than the fall of the monarchy. Those who signed the petitions are mostly loyal to the king, but want access to decision-making and an end to corruption.

Also, many of the signatories are thinkers, writers and academics – generally an elite group of Saudis. From what I’ve read, nothing indicates they will go out to protest. However, one political activist who has been imprisoned several times for writing petitions was noticeably absent from recent lists of signatories. When a close friend of mine asked him why, he said, “now is not the time to sign petitions, now is the time to act”.

It’s very difficult to predict what will happen on Friday. My guess is that there will be protests. The larger protests will be in the eastern region and mostly by Shia Muslims. I also expect smaller protests in Riyadh and Jeddah. What tactics the security forces use will greatly influence not only the demonstrators but also the people watching from their homes. If undue violence is used against the demonstrators, it could possibly ignite the same fuse that led to full-blown revolutions in Tunisia, Egypt and Libya.

Whether or not it comes to that, we as a people have changed for ever. No longer do I see the frightened hushing of political discussion – everyone is saying what they believe and aspire for out in the open without fear. As Fouad Alfarhan, a prominent Saudi activist, tweeted:

“Probably not much will happen, however the biggest gain is the awareness raised in a large faction of our young people of their human and political rights in this post-Bouazizi world.”

Sons of Libyan leader Muammar Gaddafi have failed to persuade prominent Saudi clerics to issue religious rulings against a revolt that is threatening to bring down the veteran leader, Al Arabiya television said on Monday.

The Saudi-owned channel said on its website that Gaddafi’s son Saif al-Islam had contacted one cleric, Salman al-Awda, and Saadi Gaddafi had reached out to a second, Ayedh al-Garni, but both rejected their calls.

“You are killing the Libyan people. Turn to God because you are wronging them. Protect Libyan blood, you are killing old people and children. Fear God,” Garni said he told Saadi.

Garni made the remarks on air on Sunday, the website said, adding Awda gave the same message to Saif al-Islam.

Awda has a weekly television show on Saudi-owned pan-Arab channel MBC1 and has been praised by al Qaeda leader Osama bin Laden before as a religious scholar he felt did not toe the government line. Garni gave lectures in Libya last year.

Gaddafi’s forces have been trying for days to push back a revolt that has won over large parts of the military and ended his control over eastern Libya. Gaddafi has accused followers of al Qaeda of staging the protests in the east, where Islamists have clashed with government forces in the past.

Saudi Arabia is the birthplace of Islam and the ruling al-Saud family see the clerical establishment, who have wide powers in society, as the leading authority in mainstream Sunni Islam.

The world’s top oil exporter is nervous that protests sweeping the region, which have included its neighbours Bahrain, Oman and Yemen, could ignite dissent on its own territory.

Activists have set up Facebook pages calling for protests on March 11 and 20 in Saudi Arabia. These have attracted over 17,000 supporters combined. Last week King Abdullah, a close U.S. ally, ordered wage rises for Saudi citizens along with other benefits in an apparent bid to insulate the kingdom from the wave of protests.

Gaddafi has long been an unpopular figure in Saudi Arabia, which once accused him of plotting to assassinate the king.

Clerics close to the government have said it is not the place of religious scholars to back protests or otherwise. But others have said Gaddafi is an illegitimate ruler and denounced him as an apostate.