November 9, 2011 / 4:58 AM / 9 years ago

FACTBOX - Key political risks to watch in Saudi Arabia

DUBAI (Reuters) - The world’s leading oil exporter Saudi Arabia faces rising tensions with regional rival Iran and turmoil in two neighbouring countries hit by the wave of Arab unrest this spring as it tackles changes at the top of its ruling family.

The death of Crown Prince Sultan in October led to conservative Interior Minister Prince Nayef’s promotion to King Abdullah’s heir only a week after the octogenarian monarch had his third back operation within a year.

The stability of Saudi Arabia is of global importance since the kingdom sits on more than a fifth of the world’s oil reserves, is a significant owner of dollar assets and acts as Middle East lynchpin of U.S. security policy.

It is also home to the biggest Arab stock market.

Changes in the royal line raise questions about the direction and pace of gradual economic and social reforms aimed at the critical long-term challenge of reconciling the Islamic kingdom’s conservative traditions with the needs of a youthful, increasingly outward looking population.

Abdullah has aimed to create jobs for young Saudis by liberalising the economy and introducing regulations restricting foreign workers, and has attempted to diminish the spectre of Islamic militancy by reducing clerical control over education.

Some 60 percent of Saudis are under the age of 30, Internet penetration is 44 percent according to internetworldstats.com and unemployment last year reached 10 percent.

DIFFICULT NEIGHBOURS

Youth unemployment was seen as one of the causes of protests in other Arab countries this spring, but a ban on protests backed by leading clerics, a show of support by tribal leaders and spending of $130 billion on housing and other social benefits helped Abdullah ward off any serious unrest.

Demonstrations were limited to the Shi’ite minority in the Eastern Province, where anger at perceived discrimination and activist arrests fuelled minor protests throughout the summer.

Last month the interior ministry blamed an unnamed foreign country, widely seen as code for Iran, for instigating an assault with guns and fire bombs on a police station in the province that injured 14, including 11 security officers.

Later in the month the United States accused two Iranians of plotting to assassinate the Saudi ambassador in Riyadh with support from Tehran, raising fears of escalating tensions between the Gulf’s largest powers.

Riyadh suspects Iran of fomenting unrest among the Shi’ite majority in neighbouring Bahrain and attempting to expand its influence throughout the Arab world.

Iran denied any part in the alleged plot.

Although the kingdom suppressed an al Qaeda campaign last decade, many of the organisation’s members slipped into neighbouring Yemen.

Riyadh fears their ability to operate freely in the turbulent tribal country may be enhanced by the nine-month revolt against President Ali Abdullah Saleh, which has caused much of the country to slip out of government control.

SUCCESSION

The appointment of Nayef, who is about 78, involved the Allegiance Council, a group of princes set up by Abdullah in 2006 to regulate the kingdom’s opaque succession process.

Analysts said Abdullah’s decision to involve the council, the first time it has deliberated a succession, improved the chances of orderly, smooth power transitions in the future.

Sultan’s death also opened up the post of defence and aviation minister, which he had held for nearly five decades, meaning there will be more significant changes at the top of the ruling family, perhaps entailing the biggest cabinet reshuffle in a generation.

Riyadh Governor Prince Salman, who is 76, has long been seen as the next most senior royal after Nayef and is widely tipped for promotion.

So far, Saudi Arabia’s kings have only been drawn from the sons of its founder, King Abdulaziz Ibn Saud, who died in 1953.

Around 20 of his sons are still alive and a handful of these occupy senior government posts and may want to press a claim one day to rule the country.

Analysts say the question of succession is likely to become more complicated when the kingship eventually moves down a generation to one of Ibn Saud’s grandsons, a development that might not happen for a decade or more.

WHAT TO WATCH:

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

- A reshuffle of top government positions between leading members of the ruling family

- Any sign of abrupt cancellation of scheduled programmes such as foreign visits by Saudi dignitaries; sudden trips by Saudi princes to visit an ailing fellow prince abroad

- 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 analysts say his reform drive has run out of steam.

He has barely altered the political system of the Gulf monarchy despite petitions by democracy activists, liberals and Islamists calling on the king to allow elections and more freedom.

Saudi Arabia’s only elections are for half the seats on municipal councils that hold little real power.

In September Abdullah announced that women would be allowed to participate in future municipal elections and be included in the appointed Shura council which advises the government on making new laws.

However, a campaign by some women to win the right to drive was suppressed by the government and some of the participants were arrested.

One was sentenced to 10 lashes but a senior princess said Abdullah had reversed the sentence, which has not been carried out.

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

WHAT TO WATCH:

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

- 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.

The Saudis sent more than a 1,000 soldiers into Bahrain to protect government facilities after an uprising backed by the island nation’s Shi’ite majority. The kingdom announced a drawdown of troops in June, after Bahrain lifted its state of emergency.

Shi’ites in the kingdom’s Eastern Province, which lies next to Bahrain, have held a number of protests calling for prisoner releases.

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. suspicions that Iran aims to develop nuclear weapons. The United States and Israel have not ruled out pre-emptive 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.

Abdullah was said to have “frequently exhorted the U.S. to attack Iran to put an end to its nuclear programme”, one cable said.

WHAT TO WATCH:

- Any signs of further protests and a deterioration in the Eastern Province

- 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 into 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 Islamist militants gain more ground in Yemen, where they have taken advantage of the chaos as Saleh faces off with opponents, and vow to turn their attentions to Saudi Arabia

- Signs of more concrete action from Riyadh to build a fence it has long talked of to seal the mountainous 1,500-km (930-mile) Yemen border to stop drugs and militants from crossing

(Writing by Angus McDowall; Editing by Louise Ireland)

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