Benazir Bhutto is Assassinated as She Returns to Pakistan, Kenya’s Election Descends into Violence, Musharraf Declares Emergency Rule and the Global Credit Crunch Deepens

Jamaica Homes Global Conflict & Caribbean Impact Review | Published 3 January 2008 | Reporting Period: 3 October – 2 January 2008

Quarterly Briefing

• Benazir Bhutto, the former Pakistani prime minister who returned from exile in October to contest elections, is assassinated on December 27 at a campaign rally in Rawalpindi; a suicide bomber detonates after gunshots strike her; the killing destabilises Pakistan at a moment of acute political crisis and removes from the scene the opposition leader best placed to challenge both Musharraf and the jihadist movement.
• Pakistan’s President Pervez Musharraf declares a state of emergency on November 3, suspending the constitution, dismissing the supreme court and placing opposition politicians under house arrest; the emergency is described as necessary to counter the Taliban insurgency but is widely condemned internationally and domestically as a measure to prevent judicial review of his contested re-election.
• Kenya holds presidential elections on December 27; incumbent Mwai Kibaki is declared the winner over opposition candidate Raila Odinga in disputed results; Odinga’s Luo supporters begin attacks on Kibaki’s Kikuyu community; by the time this edition is published, hundreds have been killed and hundreds of thousands are displaced; a full-scale ethnic conflict is developing.
• The global credit crunch, precipitated by the collapse of the US subprime mortgage market, deepens through the quarter; the UK’s Northern Rock bank experienced the first run on a British bank in 150 years in September; further bank writedowns across Wall Street and in European financial institutions signal that the losses from mortgage-backed securities are far larger than initially acknowledged.
• The Annapolis Conference on Middle East peace, convened by the Bush administration on November 27 with Israeli Prime Minister Olmert and Palestinian Authority President Abbas, commits the parties to negotiations toward a two-state solution to be concluded before the end of 2008; expectations are guarded; Hamas, which controls Gaza, is excluded and denounces the process.
• Venezuela’s President Hugo Chávez suffers his first major political defeat on December 2 when voters reject by a margin of 51 to 49 per cent a constitutional referendum that would have extended his presidential term indefinitely and increased state control of the economy; Chávez accepts the result, the first electoral loss of his career.

Prologue: Pakistan and Kenya on the Brink

The last quarter of 2007 ended with two major democratic crises developing simultaneously. Pakistan’s Emergency Order of November 3 represented Musharraf’s explicit acknowledgement that he could not survive a genuinely independent supreme court ruling on the legality of his re-election as president while still serving as army chief. The supreme court, led by Chief Justice Iftikhar Chaudhry — himself reinstated after Musharraf’s earlier attempt to dismiss him had triggered mass protests — was likely to rule against him; the Emergency Order was the chosen instrument of prevention. Bhutto’s return from exile in October, under a negotiated amnesty, had been widely seen as the United States’ attempt to manage a controlled democratic transition that would give Musharraf’s successor government a civilian partner; her assassination on December 27 left that strategy in ruins.

Pakistan: Bhutto’s Killing and Its Consequences

Benazir Bhutto’s decision to return to Pakistan, despite explicit threats to her life from jihadist groups, was an act of political courage and, as events proved, of recklessness. She had survived a suicide attack on her motorcade in Karachi on October 18, days after her arrival, that killed more than 130 people. She was warned repeatedly that the intelligence services were not protecting her adequately. The Rawalpindi rally on December 27 proceeded without the security measures her own team had requested. Whether the assassination was the work of Pakistani Taliban elements alone, or whether elements of the ISI were involved, remained unresolved as this edition is published; the Pakistani government’s initial claim that she died by hitting her head on her vehicle’s sunroof hatch was widely disbelieved.

The political consequences for Pakistan were immediate and severe. Riots destroyed property across the country’s Sindh province. The Pakistan People’s Party announced it would contest the scheduled January elections under the leadership of Bhutto’s widower Asif Ali Zardari and her son Bilawal. Musharraf’s already damaged authority suffered further. The United States, which had invested heavily in the Bhutto strategy, was left searching for a new approach to a nuclear-armed country of 160 million people with an active jihadist insurgency and an unreliable government.

Venezuela’s Referendum and Caribbean Politics

Chávez’s referendum defeat on December 2 was the most significant political development in the Caribbean’s neighbourhood since his near-ouster in the 2002 coup attempt. The “No” vote of 51 per cent — against 49 per cent for the constitutional changes — demonstrated that Venezuelan voters were willing to support Chávez personally while rejecting his more radical political programme. The proposed amendments included the elimination of presidential term limits, direct state control of the Central Bank, and explicit socialist provisions for the economy; the breadth of the package gave moderate Chávez voters who had consistently re-elected him cover to vote against specific provisions. Chávez accepted the result with the statement that the opposition had won “for now” — a phrase that his critics noted contained an implicit threat.

For Caribbean countries receiving Venezuelan assistance through Petrocaribe and other programmes, the question was whether a politically weakened Chávez would maintain the generosity of his regional engagements. The subsidised oil supplies, Cuban medical cooperation through Misión Barrio Adentro, and Caribbean Basin Investment Fund contributions were all ultimately dependent on Venezuelan oil revenues and on Chávez’s political will to direct them regionally. A Chávez preoccupied with domestic political survival was a less reliable regional partner.

Looking Ahead

Pakistan’s scheduled elections have been postponed from January 8 to February 18 following Bhutto’s assassination; their conduct in a country now consumed by political violence and grief will be a critical test of whether a civilian transition is possible. Kenya’s ethnic violence, just beginning as this edition is published, will require urgent mediation; the African Union and former UN Secretary-General Kofi Annan have been approached to mediate. The credit crunch will continue to develop: the full scale of losses in mortgage-backed securities remains unclear, and several major financial institutions are likely to require emergency capital injections in the coming months. And the Caribbean’s tourism season begins in the shadow of global economic uncertainty and rising energy costs that will test the resilience of island economies already under fiscal pressure.

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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.

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