Gaddafi Is Killed, Kim Jong-il Dies, America Leaves Iraq, Europe’s Debt Crisis Topples Two Governments and the Arab Spring Continues

Jamaica Homes Global Conflict & Caribbean Impact Review | Published 3 January 2012 | Reporting Period: 3 October – 2 January 2012

Quarterly Briefing

• Muammar Gaddafi is captured by rebel forces near Sirte and killed on October 20, ending forty-two years of rule in Libya; the National Transitional Council declares liberation on October 23; NATO ends its military mission on October 31.
• North Korea’s supreme leader Kim Jong-il dies on December 17 of a heart attack; his youngest son Kim Jong-un, in his late twenties and barely known internationally, is confirmed as successor; uncertainty about the young leader’s intentions rattles the Korean peninsula and beyond.
• The United States withdraws its last combat troops from Iraq on December 18, formally ending the nine-year war; the country is left with a functioning but fragile democratic government, deep sectarian divisions and an uncertain security future.
• Europe’s sovereign debt crisis claims two elected governments: Greek Prime Minister George Papandreou resigns on November 9 after a failed referendum gambit; Italian Prime Minister Silvio Berlusconi resigns on November 12 as bond yields approach 7 per cent.
• Syria’s government continues its crackdown despite joining an Arab League ceasefire agreement on November 2; Arab League monitors deployed in December report continuing violence; the death toll has exceeded 5,000 since protests began in March.
• Egypt’s first post-Mubarak parliamentary elections begin in November; early results favour the Muslim Brotherhood’s Freedom and Justice Party; the Supreme Council of the Armed Forces retains ultimate authority pending a presidential election.

Prologue: Year’s End with a Dictator Dead and a Dynasty Reborn

The final quarter of 2011 bookended the Arab Spring’s revolutionary year with two deaths and a withdrawal of historic proportions. Gaddafi’s killing on 20 October closed the chapter that had begun in February when Libyans in Benghazi rose against a regime that had ruled them for longer than most of them had been alive. Kim Jong-il’s death on 17 December opened a new and more uncertain chapter in Northeast Asia, passing power to a young and unproven son about whom the world’s intelligence services knew almost nothing. And the American military’s departure from Iraq on 18 December was the formal conclusion of a war whose origins, conduct and consequences had defined the first decade of the twenty-first century. For the Caribbean, these were events of genuine consequence: the euro crisis that was simultaneously toppling European governments directly threatened the economic recovery in source markets on which the region’s tourism depends; oil prices, while off their 2011 peaks, remained elevated; and the continued instability in the Arab world kept the risk premium in global energy markets at levels that taxed Caribbean import bills.

Gaddafi’s End and Libya’s Open Question

The capture and killing of Muammar Gaddafi near his home town of Sirte on 20 October, at the hands of National Liberation Army fighters, was the moment that definitively ended the Libyan civil war’s first phase. The videos of Gaddafi’s last moments circulated globally; the circumstances of his death — apparently killed while in custody — attracted criticism from human rights organisations but generated little political pushback among the governments that had supported NATO’s intervention. The NTC declared full liberation on 23 October; NATO formally ended Operation Unified Protector on 31 October. Libya’s oil production, disrupted since February, began to recover rapidly, providing some relief to global markets.

But Libya’s political transition was already showing signs of the fragmentation that would define the years ahead. The NTC was a coalition of regional, tribal and ideological factions with divergent interests; the militias that had won the war were not disarming; and the weapons stockpiles from Gaddafi’s enormous arsenals were proliferating across the Sahel, arming groups from Mali to Nigeria. The difficult work of building a Libyan state was just beginning, and the international community’s attention was already moving on.

Europe’s Crisis, Kim Jong-un and the Iraq Withdrawal

The eurozone’s autumn crisis reached its acute phase in November when two of the euro area’s largest economies lost their elected governments in quick succession. George Papandreou’s announcement on 31 October that he would hold a referendum on Greece’s second bailout — a decision made without consulting European partners — produced instant fury in Berlin and Paris, cratered markets and forced him to abandon the idea within 48 hours. He resigned on 9 November; Lucas Papademos, a former ECB vice president, was installed as technocratic prime minister. Two days later, with Italian ten-year bond yields approaching 7 per cent, Silvio Berlusconi announced his resignation; Mario Monti, an EU commissioner and economist, was appointed to lead a government of technocrats.

Both transitions demonstrated the degree to which elected governments in eurozone periphery countries had effectively lost economic sovereignty to the bond markets and to the informal governance of the European Commission, ECB and IMF. The Caribbean’s exposure was real: a eurozone recession would suppress demand for Caribbean exports and tourism from European source markets, and reduce remittances from Caribbean diaspora communities in the UK and elsewhere. Kim Jong-il’s death on 17 December introduced a different kind of uncertainty. His son and designated successor, Kim Jong-un, was estimated to be in his late twenties, had been educated in Switzerland and was essentially unknown to the world’s intelligence services. North Korea had navigated previous leadership transitions without military incident; whether Kim Jong-un could consolidate power and what foreign policy direction he would take were the questions that defined the peninsula’s near-term risk calculus. The US troop withdrawal from Iraq on 18 December was formal, complete and, in the assessment of the Obama administration, honourable. Whether the Iraq that American forces left behind would remain stable was a question whose answer was already being contested.

The Arab Spring’s Unfinished Business

Syria’s crackdown was now in its ninth month and had killed over 5,000 people by December’s end, according to UN estimates. The Assad government’s agreement to an Arab League ceasefire on 2 November was followed by continued military operations; when Arab League monitors deployed to Syria in December they reported ongoing violence rather than a genuine ceasefire. The international community’s options remained limited: Russia and China had indicated they would veto any Security Council resolution authorising coercive measures. Egypt’s parliamentary elections — held in three rounds from November through January — were producing Islamist majorities that would reshape the country’s political dynamics; the Muslim Brotherhood’s party led, with the more conservative Salafist Nour party performing strongly in early rounds. The Supreme Council of the Armed Forces remained in ultimate control and was resisting civilian oversight in ways that Tahrir Square protesters were denouncing as a hijacking of the revolution.

Looking Ahead

2012 begins with the eurozone’s crisis unresolved, its two largest periphery economies under technocratic rather than elected governments, and market pressure requiring a new stability architecture that Europe’s governments have not yet agreed. Syria’s war will intensify; no political solution is visible. North Korea’s new young leader is an unknown quantity; miscalculation on the peninsula remains a live risk. Iran’s nuclear programme is advancing; the prospect of Israeli or American military action has been raised more explicitly than at any previous point. And the Caribbean enters 2012 with oil still above $100 per barrel, tourism dependent on recovering economies that are recovering slowly, and a PETROCARIBE programme that continues to provide critical relief from a Venezuela whose own political stability will be tested by a presidential election this year. The world that the Caribbean must navigate has rarely been more simultaneously uncertain across so many dimensions.

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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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