Saudi Arabia’s King Abdullah made sure that his return to the kingdom was a high-profile event with the announcement of measures to spend an estimated SR135bn ($36bn) on a mixture of higher salaries, student handouts, debt write-offs, and housing benefits.

After being away from the kingdom for three months for medical treatment, much has changed. The wave of protests across the region has already unseated two rulers, and more are threatened. It has also unleashed the ugly side of regional autocracy as peaceful protesters have been attacked and killed by police, the military, and in Libya, even the air force.

Yet this aggressive response has failed to get protesters off the streets. Neither have state handouts. The youth movement at the heart of Arab discontent are rallying around calls for reform, not for the government to try to buy them off.

Not every government has the deep pockets of Saudi Arabia. High oil prices have given the kingdom the financial firepower to afford King Abdullah’s massive handouts and still avoid a deficit in 2011.

The hope is that he will placate Saudi youth while longer-term economic diversification efforts take effect, creating jobs and empowering the private sector.

Will it be enough to avoid protests breaking out in Saudi Arabia on a planned ‘Day of Rage’ on 11 March? Support for the protest seems muted, perhaps hoping that reforms will be announced before demonstrations take place.

So far though, Saudi Arabia’s response to the crisis in the region threatens to illustrate just how out of touch it is with the demands of young people by concentrating on economic rather than political reform.