Terrorism, economy to test Saudi Arabia's new king

– Saudi Arabia's new monarch inherits the throne at a moment when the oil-rich kingdom is being buffeted by a plunge in the value of its most valuable commodity, growing challenges by activists at home and deepening turmoil on its borders.

Those who know King Salman bin Abdul-Aziz Al Saud note the 79-year-old's diplomatic skills, honed over nearly five decades as governor of the capital, Riyadh. Those abilities will be put to the test as he positions his country to confront a collapsing Yemen on its southern frontier and threats from the extremist Islamic State in Iraq and the Levant (ISIL) to the north in Iraq.

Saudi kings derive their legitimacy through the support of the clerical establishment, limiting the potential for radical change. Salman already has had plenty of opportunity to put his stamp on Saudi policies, both in his role as defense minister since 2011 and as he increasingly took over duties for his half brother, King Abdullah, who died Friday.

Salman's biggest immediate crisis is how to deal with deeply impoverished Yemen, which is home to what the U.S. sees as Al-Qaida's most dangerous branch. Its militants have infiltrated the porous border to launch attacks against the oil-rich kingdom.

Yemen's U.S.- and Saudi-backed president, Abed Rabbo Hadi, quit just hours before Salman ascended to the throne, driven out by pressure from Shiite rebels known as Houthis. The rebels are accused of being backed by overwhelmingly Shiite Iran.

"Their greatest worry is what's going on in Yemen, which is very much their back yard," said Simon Henderson, director of the Gulf and Energy Policy Program at The Washington Institute.

Salman Shaikh, director of the Brookings Doha Center in Qatar, said that from a Saudi perspective, the advances by the Houthis in Yemen add to a "sense of encirclement by Iran," which is deepening its ties with Shiite-led Iraq and is the main regional patron for embattled Syrian President Bashar Assad.

Iraq and a U.S.-led coalition that includes Saudi air power are struggling to beat back ISIL across Saudi Arabia's northern frontier.

Saudi Arabia took a dim view of former Iraqi Prime Minister Nouri al-Maliki, and Riyadh had been taking steps to mend ties with Iraq's new leadership even before Salman's ascension. It announced this month that it was considering reopening an embassy in Baghdad for the first time in more than two decades.

Aziz Jaber, a political-science professor at Baghdad's Mustansiriyah University, said Salman must try to defuse political and sectarian tensions "because the chaos in the region has reached its peak, and danger is knocking on everybody's door."

A nearly 60 percent drop in oil prices since summer could limit Salman's ability to maneuver.

The kingdom relies on oil revenues to fund most of its budget. While the country has hundreds of billions of dollars in cash reserves, lower oil prices give it less flexibility to maintain spending levels at home and to influence its policies abroad. Current oil prices are well short of what the kingdom needs to balance its budget.

At home, a ballooning youth population is putting pressure on the ruling family to do more to create well-paying jobs. Doing so will likely involve enticing more private-sector companies to a country where more than two-thirds of employed citizens work for the government.

The rapid rise of social media is also upending old assumptions, giving greater voice to everyone from young jihadists to Saudi women. The Arab Spring, while limited in the kingdom, exposed younger generations to the possibility of challenging long-entrenched Arab regimes. Salman will need to decide how harshly his government will deal with activists who test the limits of freedom.

"People you talk to, they are much more willing to raise their voice now," said Ali al-Ahmed, director of the Washington-based Institute of Gulf Affairs. "When Abdullah came, people had high hopes [for change]. I don't think that is there now."