Saudi king announces $10.7 billion in spending on social benefits

Saudi Arabia's King Abdullah has announced a series of benefits for citizens amounting to $10.7 billion, mainly for pay raises, job creation and a loan forgiveness scheme.

The steps, which include funding to offset high inflation and to aid young unemployed people and Saudi citizens studying abroad, come as the region scrambles to deal with pro-democracy uprisings sparked by youth unemployment and political repression.

No political reforms were announced as part of the package, though the 86-year-old monarch did pardon some prisoners indicted in financial crimes, according to reports.

As part of the Saudi scheme, state employees will see their incomes increase by 15 percent, and additional cash has also been made available for housing loans, according to state TV.

The move almost doubles an existing development fund that helps people buy homes, get married and start businesses.

The king announced the measures after returning to the country from three months abroad for health treatment.

Abdullah was recovering in Morocco for four weeks, after undergoing surgery in the United States for a herniated disk which had caused blood accumulation around his spine.

He also received Bahrain's King Hamad bin Isa Al Khalifa, visiting his ally Saudi Arabia for talks on the unrest in his tiny kingdom, where tens of thousands of protesters have called for the fall of the Sunni dynasty that rules majority Shiite Bahrain.

Like the tiny Bahrain, OPEC heavyweight Saudi Arabia also has a significant Shiite population that has long complained of oppression by the Sunni rulers.

There are concerns that Bahrain's uprising, now in its second week, could spread to the Saudi kingdom, whose absolute rulers permit few political freedoms.

The kingdom also declared Saturday a public holiday to celebrate the king's safe return. Hundreds of men in white robes performed a traditional Bedouin sword dance on special carpets laid out at Riyadh airport for his arrival.