Saudi King Returns Home Amid Regional Unrest

After months of absence, Abdullah of Saudi Arabia returns home at a time of turmoil in the Arab world.

King Abdullah of Saudi Arabia returned to his home country on Wednesday after undergoing medical treatment in the United States and recuperating in Morocco for the past three months. In his absence, popular revolts have swept the Arab world, including neighboring and oil rich Bahrain, a fellow American ally where the monarchy is under pressure from a Shiite majority.

The Saudi kingdom has so far escaped the sort of unrest that topped Hosni Mubarak’s thirty year reign in Egypt and may remove Libya’s Colonel Gaddafi from power.

There have been signs of growing discontent in Saudi Arabia however. As in other parts of the Middle East, high unemployment, especially among the youth, coupled with a yearning for greater political freedoms may inspire demonstrations in the kingdom as well.

Saudi Arabia is home to a sizable Shiite minority moreover which lives mostly in the oil rich eastern part of the country. The Saudi royal family, which dominates national politics, is Sunni.

On Sunday Prince Nayef, the deputy prime minister and believed to be third in line to the throne, said Saudi Arabia “stands united with Bahrain against any threat jeopardizing its security, stability and unity.” The tiny island kingdom is linked to the Saudi mainland by a sixteen mile causeway and both nations share the proceeds of the offshore Abu Safa oilfield. They are also both members of the Gulf Cooperation Council.

King Abdullah has already expressed support for embattled Arab rulers and is expected to play a more active role now that he has returned to Saudi Arabia.

Since the revolution in Tunisia last month, the Saudis have witnessed small demonstrations in the city of Jeddah and their capital of Riyadh. Last year, minor sectarian clashes broke out between Sunni and Shiite Muslims.

Saudi Arabia is estimated to control a quarter of the world’s oil reservers and is the world’s leading oil exporter. The oil industry accounts for nearly half of Saudi GDP compared to just 40 percent for the private sector.

The government has streamlined regulations and maintained low tax rates in order to attract foreign investment and promote diversification of the economy. It is also building six “economic cities” to be completed by 2020 where high investments in renewable energies and telecommunications are made.

Five years of high oil prices between 2004 and 2008 helped Saudi Arabia grow but the global turndown two years ago severely reduced economic expansion.

Corruption is perceived as significant. In February 2009, King Abdullah reshuffled his cabinet, appointing several moderates to important posts but members of the Saudi royal family, which is huge, seem to regard the country more as a family business than a nation they shepherd.

Bribes, often disguised as “commissions,” are commonplace. Saudi royals, who occupy virtually all public offices and control many corporations, including the state oil industry, receive astronomical monthly allowances but the rest of the population, more than 25 million, enjoy a relatively high standard of living as well. Compared to the rest of the region, Saudi GDP per capita is high while people have free access to education and health care.

On his return, King Abdullah, believed to be 87 years of age, immediately announced increased college, housing and social security benefits along with a raise in government salaries. According to Saudi television, he was scheduled to meet with his Bahraini colleague Wednesday afternoon.