The Camp David Summit Fails to Produce a Palestinian Peace, the Second Intifada Erupts on the Temple Mount and Sydney Hosts the Olympics

Jamaica Homes Global Conflict & Caribbean Impact Review | Published 3 October 2000 | Reporting Period: 3 July – 2 October 2000

Quarterly Briefing

• President Clinton convenes a summit at Camp David from July 11-25 bringing together Israeli Prime Minister Ehud Barak and Palestinian Authority President Yasser Arafat in an attempt to conclude a final status agreement before his presidency ends; the talks collapse on July 25 without agreement, primarily over the status of Jerusalem; Clinton blames Arafat for the failure; Palestinian negotiators dispute this characterisation; the collapse removes the primary diplomatic framework for a two-state solution and sets the stage for the explosion of violence that follows.
• Israeli opposition leader Ariel Sharon visits the Temple Mount — the site of the Al-Aqsa Mosque and the holiest site in Judaism — with a large security escort on September 28; Palestinians regard the visit as a deliberate provocation; riots begin the same day; Israeli security forces respond with live fire; the Second Intifada erupts; as this edition is published, clashes continue across the West Bank and Gaza; the immediate death toll since September 28 is over 60; the peace process that has defined Middle East diplomacy since Oslo is, in practical terms, over.
• The Sydney Olympic Games proceed from September 15 to October 1, generally judged the most successful Games in decades; the host nation Australia performs strongly; Caribbean athletes compete creditably; the Games provide a brief moment of international goodwill in a quarter otherwise dominated by the collapse of the peace process; Jamaican athletes contribute to the Caribbean’s medal tally in sprinting; the Games generate significant tourism revenue for Australia and demonstrate the economic potential of major sporting events.
• Mexico’s presidential election on July 2 produces a historic result: Vicente Fox of the National Action Party defeats the candidate of the Institutional Revolutionary Party (PRI), ending 71 years of continuous PRI rule; the democratic transition is the most significant political change in Mexico since the Revolution; Fox’s victory is celebrated across the hemisphere as a signal that Latin America’s democratic consolidation continues; the transition has potential implications for Mexico’s relationship with the Caribbean through the CARICOM-Mexico framework.
• Sierra Leone’s civil war enters a critical phase; the Revolutionary United Front, which had signed the Lomé Peace Agreement in July 1999, resumed hostilities in May 2000; RUF forces seized over 500 UN peacekeepers; a British military intervention in May stabilised the situation around Freetown; the UN peacekeeping mission UNAMSIL is being reinforced; the conflict’s impact on West African stability and the diamond trade is significant; the Caribbean’s connections to West African diaspora communities maintain regional interest in the conflict’s resolution.
• Oil prices reach their highest levels since 1990 during the quarter; Brent crude touches $35 per barrel in September as OPEC production discipline, strong global demand and the Middle East political risk premium combine; the OPEC decision to increase production quotas in September provides some relief; Caribbean governments, whose energy import bills are entirely denominated in dollars, face fiscal pressure that compounds existing debt service obligations; Jamaica’s energy costs are a persistent constraint on economic growth.

Prologue: Oslo’s Failure and What It Means

The Oslo Accords of 1993 had been the defining diplomatic achievement of the post-Cold War decade: the recognition by Israel and the PLO of each other’s existence and the establishment of a framework for a negotiated two-state solution. Seven years later, the Camp David failure and the subsequent eruption of the Second Intifada represent its effective end. The reasons were structural: the gap between Israeli and Palestinian positions on Jerusalem, the right of return for Palestinian refugees and the status of settlements in the West Bank had not narrowed in seven years of negotiations; Camp David exposed rather than bridged it. The quarter ends with Palestinian and Israeli civilians dying in the streets of the West Bank and Gaza, and with no diplomatic architecture in place to stop them.

The Intifada and the Caribbean’s Middle East Exposure

The Second Intifada’s immediate relevance to the Caribbean was economic, expressed primarily through oil. The Middle East risk premium that sustained violence in Israel and the Palestinian territories maintained crude prices at elevated levels; each barrel above $25 represented an additional cost for Caribbean oil-importing economies. The longer-term relevance was diplomatic: the Caribbean’s small states depended on multilateral frameworks — the UN system, negotiated agreements, international law — as substitutes for the military and economic power they did not possess. The collapse of the Oslo framework, the most significant state-to-state negotiated agreement of the 1990s, was a cautionary tale about the fragility of such frameworks and the speed with which they could unravel.

Looking Ahead

The Second Intifada is in its first week as this edition is published; its trajectory is entirely unclear; attempts at de-escalation are being made by Egypt, Jordan and the US; they face a violence dynamic that neither side yet controls. The US presidential election on November 7 will determine the foreign policy approach to Middle East diplomacy for the next four years; both candidates have expressed strong support for Israel while acknowledging the necessity of a Palestinian state. Mexico’s Fox government, inaugurated in December, will offer new opportunities for hemispheric integration. For the Caribbean, the oil price level going into the fourth quarter is a budget management challenge; the central banking question is whether OPEC’s production increase will moderate prices before Caribbean governments must present their next annual budgets.

Jamaica Homes Global Conflict & Caribbean Impact Review is published quarterly, examining how wars, geopolitical tensions and major international crises have shaped Jamaica, the Caribbean and their economies.