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OFFICERS AND MEN of the Saudi armed forces are to receive pay increments of between 40% and 80% effective from 5 May. This is the first pay rise since 1977, and represents a major step in the government's aim to attract more personnel to the security services. Officers will be given rises of between 40% and 60% and enlisted men rises of between 60% and 80%. The director-general of planning and budgets in the the Defence Ministry, Lieutenant General Yusuf al-Salloum, said that the increments will cover personnel in the armed forces, the National Guard, the Interior Ministry and the Intelligence Directorate. (The scale of the increases is reflected in the growth of the defence and security allocation under the new budget - see Economy and Trade).

CONSIDERABLE ANGER is growing in Saudi Arabia about the US administration's quite extraordinary mishandling of the proposal to sell advanced aerial surveillance aircraft to the kingdom. The White House - which had given everybody, including most importantly the Saudis - the impression that the sale was firm, has now agreed not to submit its plan to Congress until the latter has had time "to give advice on the final shape and form" of the total arms package under discussion. That effectively means no final decision will be taken until September. Not only is the controversial AWACS decision now deferred, but also the . administration's proposal to provide Saudi Arabia's US-built F-15s with advanced range and firepower.

US SECRETARY of State Alexander Haig this month visited Saudi Arabia on a Gulf and Middle East tour, but signally failed to allay fears that the United States was far more interested in deterring the apparent threat from the Soviet Union than solving the Arab-Israeli question. During his stay in Riyadh Haig was silent on the prospects for any revival of the Camp David process (perhaps tactfully) or any proposals concerning the "Palestinian issue" (less tactfully). With good reason, the Saudis are worried that Washington is prepared to allow the impasse in Arab-Israeli negotiations to continue so that greater attention can be devoted to Gulf security.

SAUDI INDUSTRY and Electricity Minister Ghazi al-Qusaibi, has hastened to reassure bidding companies that the Bahrain causeway contract will be let soon. His pledge is important because several of the competing firms are becoming, not unjustifiably, impatient with the costly delay to the project. Unfortunately, such delays are all too common on large-scale projects in Saudi Arabia. Some firms involved with the Bahrain causeway scheme are already believed to have withdrawn from the bidding. Although the more confident of the remaining companies hope that the contract will be awarded by this summer, past experience hardly justifies optimism and firms may have to wait even longer.

THIS MONTH, the Arab Gulf states got down to serious planning for the Council for Gulf Cooperation. On the face of it, this new grouping (which includes Saudi Arabia, Kuwait, Bahrain, Qatar, the UAE and Oman) will devote itself to coordinating economic and social development in the Gulf. A start has already been made with the establishment of the Gulf Organisation for Industrial Consulting in 1977. Joint industrial ventures are being established, including an aluminium rolling mill (agreement signed in February), an oil refinery to be sited at Yanbu, a methanol plant in Bahrain and an iron and steel plant also in Bahrain.

GREAT STATES either create empires or have empires thrust upon them. America is no exception. A breakaway colony, deeply suspicious of colonialism up until the end of the last war, it found that Western Europe's retreat from the Middle East, Africa and the Far East had created power vacuums which were inevitably going to be filled, probably by the communist world. Inexperienced in the area of international politics, America blundered into ill-fated ventures such as Vietnam and, perhaps more importantly, into backing the wrong horse in the Middle East war race.

A NEW FACTORY for the manufacture of Irish dairy products was officially opened in Riyadh on 15 February. The new milk plant is owned by the Saudi Irish dairy company (Sidco), a business partnership first launched two years ago. It has been in production for three months and is now turning out a complete range of products.

THIRTY-EIGHT LEADERS OF ISLAMIC COUNTRIES declared that Jihad, or holy war, will be the prime objective of this generation until Jerusalem and the occupied Palestinian and Arab territories are restored. The Mecca declaration, which was the main outcome of the Summit, unites the Islamic world firmly behind the Arab cause including support for the Palestinians and a boycott of Israel.

"WE PLEDGE TO STRUGGLE by all means at our disposal to liberate Jerusalem and for the return of occupied Palestine and Arab territories to their rightful owners". This statement, dubbed the 'Mecca Declaration', was the gist of the seven-point document drawn up at the meeting of ministers preparatory to the 25 January Third Islamic Conference to be held at Taif.

POLITICAL AND ECONOMIC TIES between Saudi Arabia and Pakistan were strengthened recently following the visits to Asia of two Saudi Arabian Princes. The Saudi Minister of the Interior, Prince Naif spent over half of-his five-day visit in the north west frontier province which borders Afghanistan. Over one million Afghan refugees have sought shelter in this area and accompanied by Pakistani government officials the Prince visited a refugee camp there. He had earlier spoken of his country's appreciation for Pakistan's efforts to mitigate the suffering of the Afghan refugees. Saudi Arabia indicated that it would provide maximum support to the refugees because they had suffered the consequences of a socialist invasion. During his visit Prince Naif also had talks with his Pakistani counterpart Mahmoud Haroon, they discussed problems relating to Pakistani nationals living and working in the kingdom.

THE MOST VOLATILE MILITARY situation to threaten the Middle East and involve the Gulf states since the Iraqi-Iranian war started only three months ago was defused at the eleventh hour by consorted efforts from both Arab and Western countries. Jordan and Syria were set to do battle along their 360 kilometre border and Syria's President Assad was determined to invade Jordanian territory after his statements that Jordan was harbouring elements dangerous to his regime. Jordan moved up its heavy troops and the two sides were within striking distance before a successful attempt at bringing the warrior nations to heel materialised.

FOR A WHOLE DAY confusion reigned throughout the world's airlines as the Saudi Arabian government issued a ban on alien entry to the Kingdom. On 19 November every Saudi Embassy's visa department was instructed not to issue visitor visas until further notification from the government. Rumours abounded and the consensus was that there were internal problems within the Kingdom. Officials suggested that, firstly the suspension would last until after the Islamic conference; second that the restrictions could continue until well into January of next year; third that the ban was only meant to include those passengers with pilgrim visas to visit the holy city of Mecca, where the Islamic summit was to be held; and last that there had been an administrative error by the government and that no such ban had been issued at all.

Apart from the United States Government employees in Saudi Arabia, the many thousands of Americans who have either permanent or temporary interests in the kingdom are apprehensive over the new administration's policy in the Middle East. To quote the 'FET' (Foreign Economic Trends) 1980 issue, published by the US Foreign Service, US Department of State; released by the US Department of Commerce, American Embassy, Jeddah:- "Doing business in Saudi Arabia is not easy". This remark may have much more significance for the Americans in '81 than when it was iterated early this year.

Although anxious glances have been cast by the Saudis at recent Shiite demonstrations across the border in Kuwait and further north at the Iraqi-Iranian confrontations, the most sensitive area of insecurity appears to be within the kingdom itself. Ever since the Mecca siege last year, when more 500 people died and the following unrest in university campuses in the Eastern Province and the later demonstration of anti-monarchy groups in London, internal security has been stepped up dramatically.

It seems fairly clear that the idea of sending four American radar surveillance aircraft (AWACS) to Saudi Arabia came from the Saudis themselves last month. That alone is evidence enough of the extent of concern among the smaller Gull states about the escalating Iraqi-Iranian war. Last time Washington sent a couple of AWACS to Saudi Arabia (during the Yemeni fighting in spring 1979), the kingdom could permit itself the luxury of huffing and puffing in newspaper editorials about American over-reaction. The Gulf states do not like an overt American presence because it offends their pride and because it provokes the radicals of whom they must perpetually be afraid. But they know that if the war spreads down the Gull, they need the protection which they cannot provide for themselves.