Iran’s Direct Strike on Israel, Haiti in Freefall and a Hurricane at the Door: Caribbean Geopolitics in Q2 2024

Jamaica Homes Global Conflict & Caribbean Impact Review — Edition 9 | Published 3 July 2024 | Reporting Period: 3 April – 2 July 2024

Quarterly Briefing

• Iran launches over 300 drones and missiles at Israel on April 13; the first direct attack in history between the two countries.
• Israel begins Rafah ground offensive May 6; Gaza ceasefire talks intensify but no deal reached.
• Haiti implodes: gangs force Prime Minister Henry’s resignation; Kenya-led MSS mission arrives in June.
• US Congress passes $61 billion Ukraine aid package in April after six months of blockage in the House.
• Red Sea freight rates surge toward record highs as Houthi attacks continue into their eighth month.
• Hurricane Beryl makes landfall in Jamaica this morning, July 3, as a Category 4 storm; damage unknown.

Prologue: The Quarter Jamaica and the World Will Not Forget

This edition is being published as Hurricane Beryl — which struck Jamaica in the early hours of July 3 as a Category 4 system with sustained winds of 130 miles per hour — crosses the island. The full extent of the damage will not be known for hours or days. What is already clear, from the storm’s track and intensity, is that Jamaica has absorbed a direct hit from one of the earliest and most powerful Atlantic hurricanes ever recorded: Beryl reached Category 5 status in late June, the earliest such intensification in the Atlantic basin’s documented history, before making a series of devastating landfalls across the eastern and central Caribbean.

Beryl’s arrival closes a quarter that was already extraordinary by any measure. For the first time in modern history, Iran fired drones and ballistic missiles directly at Israeli territory in a mass attack on April 13. Gaza’s war expanded into Rafah in May, pushing what remained of two million displaced people toward the Egyptian border with no safe refuge. Haiti’s state dissolved under gang pressure in March, forcing a prime ministerial resignation and the belated activation of the Kenya-led multinational security mission that had been promised for more than a year. The United States Congress finally unlocked $61 billion in Ukraine military aid after six months of House Speaker paralysis. And the Red Sea crisis, now in its eighth month, continued to impose structural import cost surcharges on every Caribbean economy that sources goods from Asia or the Mediterranean. As this edition goes to press, the quarter has just ended with a hurricane making landfall on the island’s own coast.

Iran Attacks Israel: The Regional War Goes Direct

The most historically significant single event of the quarter — and one of the most significant military events in the modern Middle East — occurred on April 13 and 14, when the Islamic Revolutionary Guard Corps launched Operation True Promise against Israeli territory. The attack involved approximately 170 drones, 30 cruise missiles and 120 ballistic missiles, coordinated with Hezbollah from Lebanon, Houthi forces from Yemen, and Iraqi militia proxies. The scale — over 300 separate projectiles directed at a sovereign state in a single coordinated assault — was unprecedented in the history of the region’s modern conflicts.

The trigger was Israel’s April 1 airstrike on the Iranian consular building in Damascus, which killed two senior IRGC generals. Iran described its retaliation as an exercise in legitimate self-defence under Article 51 of the UN Charter and as a message that attacks on Iranian diplomatic and military personnel would carry consequences. The practical military effect was limited: the joint interception system involving Israel, the United States, the United Kingdom, Jordan and other regional partners intercepted approximately 99 per cent of the incoming projectiles before they reached their targets. There were no Israeli deaths from the attack, though several injuries were reported. Israel’s limited retaliatory strike inside Iranian territory on April 19 was understood as a demonstration of capability rather than a major escalation.

For Jamaica and the Caribbean, Operation True Promise was significant at two levels. First, it demonstrated that the Gaza war had acquired a direct Iran-Israel dimension that could escalate into a major regional conflict capable of disrupting global oil supply through the Strait of Hormuz — through which 20 per cent of the world’s crude oil transits. Oil prices spiked in the days following the April 13 attack, adding to the existing fuel cost pressures that Caribbean importers were already absorbing from the Red Sea crisis. Second, it confirmed that the conflict’s architecture had expanded beyond Gaza, involving Iran, Hezbollah, the Houthis, and Iraqi militias in a coordinated regional posture that made any simple “Gaza ceasefire” solution increasingly difficult to achieve without addressing the entire axis’s political demands.

Gaza: Rafah, Famine and Failed Ceasefires

The Gaza war entered its seventh, eighth and ninth months during this quarter without resolution, with the Rafah ground offensive beginning on May 6 as its most contested development. Israel described the Rafah operation as essential to destroying Hamas’s remaining military battalions, which had regrouped in the south of the strip as Israeli operations in the north and centre wound down. Critics — including, unusually, the Biden administration — warned that a ground assault on Rafah, where approximately 1.4 million displaced Palestinians had sought refuge, risked mass civilian casualties and would prevent any remaining humanitarian corridor from functioning. The International Court of Justice, hearing South Africa’s genocide case against Israel, issued provisional measures ordering Israel to take effective measures to prevent genocide and to allow humanitarian access.

Ceasefire talks conducted through Egypt, Qatar and the United States intensified through May and June. In late April and early May, Hamas accepted a ceasefire proposal that the Israeli cabinet subsequently rejected as incompatible with its war aims. Successive framework proposals — involving a multi-phase exchange of hostages for Palestinian prisoners, a temporary halt to fighting and a humanitarian access mechanism — failed to bridge the fundamental gap between Hamas’s insistence on a permanent end to the war and Israel’s refusal to commit to one. The death toll in Gaza, as reported by the Gaza Health Ministry, exceeded 37,000 by the end of June. Famine conditions were developing in northern Gaza, where the combination of Israeli restrictions on aid deliveries and the destruction of food distribution infrastructure had produced acute malnutrition rates among the most severe recorded in a modern conflict.

As of July 2, 2024, the Gaza war is in its ninth month with no ceasefire and no clear path to one. The Houthi movement’s commitment to continue Red Sea attacks for as long as the Gaza war continues means that every additional month of fighting in Gaza adds another month of elevated Caribbean import costs. The Caribbean’s economic stake in a Gaza resolution is no longer abstract: it is denominated in the quarterly freight rate surcharges that importers are paying, the construction project cost overruns, and the consumer goods price premiums that appear in Jamaican stores as an invisible Gaza tax.

Haiti: State Collapse and the Mission That Came Too Late

Haiti’s descent into state failure reached its most acute point in this quarter. The immediate catalyst was the gang alliance Viv Ansanm — Living Together — which in late February and early March 2024 launched coordinated attacks on police stations, government buildings and the Toussaint Louverture International Airport. On March 1, the day that Prime Minister Ariel Henry flew to Nairobi to sign the agreement for the Kenya-led Multinational Security Support mission, gangs seized the airport. Henry was unable to return to Haiti. On March 11, trapped in Puerto Rico and with no prospect of landing, he announced his resignation. In April, a Transitional Presidential Council was established to provide some semblance of governmental continuity.

The gang alliance now controlled an estimated 80 per cent of Port-au-Prince. The first three months of 2024 had been the most violent in Haiti’s recorded history: 1,660 killed and 845 injured between January and March, a 53 per cent increase over the preceding quarter and the worst recorded by UN human rights monitors. By the time Kenyan police forces began arriving in late June as the advance element of the Multinational Security Support mission, they were deploying into a capital city where gang sovereignty was the operational reality they faced.

For Jamaica, Haiti’s collapse was simultaneously a moral, strategic and practical challenge. CARICOM had advocated for international security intervention in Haiti for years. The MSS mission’s belated activation — and the fact that its first deployment came only after the state’s de facto dissolution rather than as a preventive measure — raised questions about the international community’s willingness to engage with the Caribbean’s most severe humanitarian emergency. Jamaica’s own small security deployment to the mission represented a tangible commitment to regional solidarity. But the scale of what Kenya’s initial contingent of several hundred officers was being asked to accomplish — restore order to a city of three million people controlled by armed gangs — was daunting by any measure.

Ukraine: Aid Unlocked, War Unchanged

The United States Congress ended a six-month impasse on Ukraine military assistance when the House of Representatives passed a $61 billion aid package in April 2024 — the same bill that Speaker Mike Johnson had blocked for months as House Republicans held the package hostage to immigration and border policy demands. President Biden signed the legislation on April 24, immediately releasing a weapons package that included Patriot missile system munitions, HIMARS rocket systems, additional artillery ammunition, Bradley Fighting Vehicles and Mine-Resistant Ambush Protected vehicles. The announcement was greeted with relief in Kyiv, where ammunition shortages had forced Ukrainian forces to ration artillery fire during the months of US-aid uncertainty.

Despite the aid restoration, the military situation in Ukraine remained difficult. Russia launched a renewed offensive in the Kharkiv region in May, applying pressure on Ukraine’s second-largest city and requiring a significant redeployment of Ukrainian reserves. Ukrainian forces held, preventing any Russian breakthrough toward Kharkiv city. In June, President Biden authorised Ukraine to use American-supplied weapons for limited strikes against Russian military targets across the border in support of defending Kharkiv — a significant policy shift that had been resisted for months over escalation concerns. The war’s eastern front remained broadly stable through the quarter, with incremental Russian advances in Donetsk continuing but without the decisive breakthroughs that Russia’s broader resource advantage might have enabled.

For Caribbean economies, Ukraine’s war remained a persistent background cost through elevated wheat, flour and fertiliser prices. The $61 billion aid package’s passage extended the war’s military sustainability on the Ukrainian side but did not end the conflict or the commodity distortions it imposed on the global markets through which the Caribbean was connected.

The Red Sea and the Panama Canal: Two Chokepoints Under Pressure

The Houthi Red Sea campaign continued throughout this quarter with no abatement. Attacks were occurring at a pace that had diverted an estimated 90 per cent of container traffic away from the Suez Canal route by mid-2024. Freight rates between Asia and the Caribbean, already elevated since early 2024, were approaching their peak in July. The shipping industry had not seen a disruption of this duration and scale since the COVID-19 pandemic’s port congestion crisis of 2021–22, and unlike that crisis, the Red Sea situation had no visible resolution timeline tied to any particular logistical adjustment: it would end only when the Gaza war ended, or when a new military equilibrium in Yemen changed Houthi calculations.

The Panama Canal presented a separate challenge. Extended drought driven by the 2023–24 El Niño cycle had reduced Gatun Lake water levels to the point where the Panama Canal Authority had implemented significant transit restrictions since late 2023, limiting daily vessel transits and imposing draft restrictions that reduced cargo volumes per crossing. While water levels were slowly recovering as the 2024 rainy season progressed, the restrictions had created their own shipping bottleneck that compounded the Red Sea rerouting pressures. For Caribbean importers, the simultaneous compression of two of the world’s most critical maritime chokepoints — the Suez-Red Sea corridor and the Panama Canal — added a layer of logistical complexity with no historical precedent.

Jamaica’s Economy: Resilient but Exposed

Jamaica’s economy in Q2 2024 performed below expectations, with declines in construction, manufacturing and parts of the services sector offsetting continued tourism growth. The economy had contracted by an average of approximately 2 per cent across the first three quarters of 2024, reflecting both the external headwinds from the Red Sea disruption and domestic supply-side factors. The Bank of Jamaica maintained its policy rate at 7 per cent per annum — its highest in recent years — reflecting its continued focus on bringing inflation sustainably within the 4–6 per cent target range in the face of imported cost pressures.

Tourism remained the most reliable sector, with stopover arrivals continuing to grow and visitor expenditure tracking ahead of projections. Construction activity, while slowing from its 2023 pace, remained active in the housing and hotel development segments. Remittances from the North American diaspora continued to support household consumption and provided meaningful foreign exchange inflows. The NHT reported continued demand for mortgage products despite elevated interest rates, suggesting that Jamaica’s underlying demographic demand for housing remained intact even as broader economic conditions were challenging.

Looking Ahead

This edition is published as Hurricane Beryl makes landfall. Full damage assessment will take days. What this quarter’s events make clear is that Jamaica and the Caribbean are navigating a world in which the distances between global conflicts and domestic economic conditions are shorter than at any previous point. Iran’s direct attack on Israel in April narrowed the margin between the Middle East’s current crisis and a full regional war. Haiti’s state collapse arrived on CARICOM’s doorstep. The Red Sea disruption has been embedded in Caribbean import costs for eight months. And Beryl’s arrival — the most intense early-season hurricane on record — is a reminder that the climate risks which compound these economic vulnerabilities are not abating. The next edition will assess what July 3 actually cost Jamaica, and what the world looks like once the storm passes.

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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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