ISIS Loses Its Caliphate, Saudi Arabia’s Princes Are Arrested, Trump Recognises Jerusalem and Puerto Rico Struggles in the Dark

Jamaica Homes Global Conflict & Caribbean Impact Review | Published 3 January 2018 | Reporting Period: 3 October – 2 January 2018

Quarterly Briefing

• ISIS loses its self-declared capital: Raqqa falls to US-backed Syrian Democratic Forces on October 17; Iraq declares final victory over the Islamic State’s territorial caliphate in December.
• Saudi Arabia’s Crown Prince Mohammed bin Salman orchestrates a sweeping anti-corruption purge on November 4–5, detaining hundreds of princes, ministers and businessmen at the Ritz-Carlton in Riyadh.
• President Trump recognises Jerusalem as Israel’s capital on December 6, triggering protests across the Arab world and a near-unanimous UN General Assembly resolution condemning the move.
• Puerto Rico remains without power for most of its 3.3 million people in October and November, three months after Hurricane Maria, in what experts call the largest blackout in US history.
• Myanmar’s military conducts a campaign against the Rohingya Muslim minority that the UN describes as bearing the hallmarks of genocide; over 600,000 have fled to Bangladesh by December.
• Oil prices rise to a two-year high above $65 per barrel by year-end as OPEC and Russia extend their production cuts, adding to Caribbean fuel import costs.

Prologue: The Caliphate’s End and a New Middle East

The final quarter of 2017 marked one of the most significant geopolitical transitions of the decade: the collapse of the Islamic State’s territorial caliphate, which had controlled large areas of Iraq and Syria and declared itself a state with a capital city, courts, a currency and an army. The territory was gone, but the ideology and its adherents remained, and the post-caliphate Middle East was already reshaping itself around new competitions and alignments. Saudi Arabia’s Crown Prince was consolidating power with spectacular theatricality and then flying to Washington to present himself as a force for reform. The United States was upending decades of international consensus on Jerusalem. And in the Caribbean’s own neighbourhood, Puerto Rico’s months-long electricity crisis demonstrated the catastrophic gap between American self-image and actual capacity to respond to disaster in its own territories. For Jamaica, the quarter brought rising oil prices, continuing PETROCARIBE deterioration and the sobering precedent of Puerto Rico’s experience for any island government contemplating what a major hurricane could do to critical infrastructure.

The End of the ISIS Caliphate

The US-backed Syrian Democratic Forces completed the liberation of Raqqa — the city ISIS had declared its capital in 2014 — on 17 October 2017 after a months-long siege that reduced much of the city to rubble. In Iraq, the final ISIS strongholds fell through October and November; Prime Minister Haider al-Abadi declared victory over ISIS’s territorial caliphate in December. The caliphate at its peak had controlled territory the size of the United Kingdom, administered a population of eight million, generated substantial revenue from oil sales and taxation, and inspired attacks in dozens of countries worldwide. Its destruction removed a territorial base but not the ideological movement: ISIS continued to claim responsibility for attacks in Europe, Asia and Africa, and had established affiliated groups in Libya, the Sinai, West Africa and Southeast Asia.

For the Caribbean, the caliphate’s collapse was significant primarily as a development that reduced one category of global terrorist threat. The region had been concerned about radicalisation among Caribbean nationals who had travelled to ISIS-held territory; several Caribbean governments had taken measures to address the issue. With the territorial base gone, the return of fighters to their home countries — including some Caribbean nationals — was a new security concern that regional governments were beginning to address.

The Saudi Anti-Corruption Purge

On the night of 4–5 November 2017, Saudi authorities arrested over 200 princes, ministers, military officers and billionaire businessmen, placing them in the Ritz-Carlton hotel in Riyadh. The detentions were framed as an anti-corruption operation, with the Anti-Corruption Committee headed by Crown Prince Mohammed bin Salman. Among those detained were Prince Al-Waleed bin Talal, one of the world’s wealthiest individuals, and former intelligence chief Prince Bandar bin Sultan. Most detainees were released within months after reaching financial settlements with the government; the total amount recovered was reported at over $100 billion. Outside observers generally characterised the operation less as an anti-corruption drive than as a consolidation of power by MBS, eliminating potential rivals and extracting wealth from powerful families that might have constrained his authority.

Oil markets reacted to the purge by adding a political risk premium: the Saudi political compact that had underpinned the kingdom’s stability was visibly changing, and any disruption to Saudi oil production would affect global prices with immediate Caribbean consequences. Simultaneously, OPEC and Russia extended their production cut agreement through 2018, removing supply that continued to support prices above $60 per barrel.

Jerusalem: Trump Breaks with International Consensus

President Trump’s announcement on 6 December that the United States recognised Jerusalem as Israel’s capital and would relocate its embassy there from Tel Aviv was among the most consequential Middle East policy decisions in decades. The final status of Jerusalem — home to holy sites central to Judaism, Islam and Christianity, and claimed as a capital by both Israel and the Palestinians — had been explicitly reserved by the international community as a matter to be resolved through negotiation. Trump’s recognition removed the United States as a credible neutral mediator and drew international condemnation including from closest allies. The UN General Assembly voted 128 to 9, with 35 abstentions, to condemn the decision; the US threatened to cut aid to countries that voted against it. Several Caribbean nations were among those that voted in favour of the resolution condemning the US position, reflecting CARICOM’s longstanding support for a two-state solution.

Puerto Rico: The Long Dark

Three months after Hurricane Maria struck Puerto Rico on 20 September 2017 as a Category 4 storm, large parts of the island remained without electricity as this edition was being written. PREPA, Puerto Rico’s electricity authority, had been in financial crisis before the storm; its infrastructure was old and poorly maintained. The hurricane destroyed much of the island’s transmission network. By November, the death toll — initially officially reported at 64 — was being revised dramatically upward by academic and journalistic investigations; estimates of excess mortality ranged into the thousands. President Trump’s visit and his comments throwing paper towels to survivors drew sharp criticism. The federal disaster response was widely characterised as slower and less comprehensive than had been applied to mainland US disasters of comparable scale.

For Jamaica and the Caribbean, Puerto Rico’s experience was a cautionary tale with direct relevance. The island had been better resourced, more closely tied to the world’s largest economy, and served by US federal agencies — and had still faced a months-long electricity crisis. For smaller, less resourced Caribbean islands, the message was stark: in a major hurricane, infrastructure recovery could take not weeks but months or years, and external assistance, however generous, could not substitute for domestic preparedness and resilience.

Looking Ahead

The post-caliphate Middle East is being contested by new alignments: Iran and its proxies emboldened by their role in defeating ISIS; Saudi Arabia’s assertive new leadership pursuing a confrontational regional policy; and the United States having taken a unilateral position on Jerusalem that has isolated it from most of its traditional partners. Oil prices entering 2018 at two-year highs add financial pressure to Caribbean import budgets. Puerto Rico’s ongoing crisis is a reminder that the 2017 hurricane season’s damage has not been fully addressed. And Venezuela’s collapse continues to progress in ways that will further reduce PETROCARIBE’s remaining utility. Jamaica enters 2018 with its own economy performing solidly, but the external environment presents multiple sources of risk that demand continued vigilance.

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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