Whither the Kingdom?
The attacks in Saudi Arabia over the weekend have the markets jittery, though perhaps not for the right reason. Traders fear that stepped up attacks on oil infrastructure, both human and physical, will impede the ability of Saudi Arabia to deliver the oil that the market is counting on. The Economist has an excellent article covering this prospect and its potential impact in some detail. As bad as this may seem, it is a short-run concern, compared to what these incidents may be signaling for the longer term.

More worrisome than the number of attacks against foreigners this year is that the perpetrators seem able to penetrate targets that have at least some level of security and then escape from the scene, despite a rapid response from police and other security forces. If this is an indication that the security apparatus of the Kingdom has been infiltrated or compromised through sympathy for Al Qaida within its ranks, then we could be in for a much rougher time ahead.

The longevity of the Saudi monarchy has been questioned for decades, but the House of Saud has clung to power through an astute balance of religious legitimacy, social benevolence and technocratic orientation, all backed by the use of force, when necessary. The post-9/11 world is putting pressure on the monarchy's ties to Wah'habi Islam, and the country's demographic bubble is eroding the welfare state. If the military and police were to prove unreliable, then the outcome could be precisely the kind of upheaval that some analysts have predicted for years.

The evidence so far doesn't support such a conclusion, but the Kingdom isn't exactly the most open society on the planet, either. This situation bears careful scrutiny in the months ahead.