Gaza’s Darkening Quarter, the Red Sea Blockade Begins and Avdiivka Falls: How a New Era of Conflict Reached the Caribbean

Jamaica Homes Global Conflict & Caribbean Impact Review — Edition 10 | Published 3 April 2024 | Reporting Period: 3 January – 2 April 2024

Quarterly Briefing

• US and UK launch Operation Poseidon Archer strikes on Houthi targets in Yemen on January 12; Houthis vow to continue.
• ICJ orders Israel to prevent genocide in Gaza on January 26; stops short of ordering ceasefire.
• Ukraine withdraws from Avdiivka on February 17 as ammunition shortages bite amid blocked US aid.
• UNSC Resolution 2728 passes in March calling for immediate Gaza ceasefire; Israel and Hamas reject terms.
• Haiti’s Prime Minister Henry forced to resign March 11; Transitional Presidential Council being established.
• Israel strikes Iranian consulate in Damascus on April 1; Iran vows retaliation; Middle East on the edge.

Prologue: The First Quarter of a New Conflict Architecture

This edition is published two days after Israel’s airstrike on the Iranian consular building in Damascus, which killed two senior generals of the Islamic Revolutionary Guard Corps. Iran has vowed retaliation. The entire Middle East is on alert. The Gaza war, now six months old, has expanded from a bilateral Israeli-Hamas conflict into a regional system of simultaneous engagements involving Hezbollah in Lebanon, the Houthis in Yemen, Iranian proxies in Iraq and Syria, and now potentially Iran itself. The Caribbean observes all of this through an economic lens that has grown more direct with every passing week: since January, the Red Sea crisis has been adding measurable costs to every shipment that Jamaica and its neighbours import from Asia or the Mediterranean.

The first quarter of 2024 was the period in which what had seemed, in October 2023, like a catastrophic but potentially bounded crisis in Gaza began to reveal its architecture as something more enduring and more systemic. The US and UK launched military strikes on Yemen in January to protect shipping, and the Houthis continued attacking regardless. The ICJ’s January 26 provisional measures ruling created diplomatic pressure on Israel but no operational constraint. Ukraine lost a strategically significant city in February as ammunition shortages driven by blocked US Congressional aid left its defenders unable to hold. Haiti’s state effectively dissolved in March. The quarter ended, on April 1, with Israel escalating its campaign against Iran’s regional assets in a strike that will, as this edition goes to press, draw a response whose timing and scale are unknown.

The Red Sea Crisis Begins to Bite: Operation Poseidon Archer

The Houthi Red Sea campaign entered its most militarily contested phase on January 12, when the United States and United Kingdom, with participation from Australia, Bahrain, Canada and the Netherlands, launched Operation Poseidon Archer — the first direct military strikes against Houthi infrastructure in Yemen since the campaign began. More than 60 targets were struck on the first day, including Houthi missile launchers, drone storage facilities, radar systems and command structures. Five Houthis were reported killed. The operation was formally underpinned by UN Security Council Resolution 2722, adopted earlier in January, which condemned the Houthi attacks and affirmed freedom of navigation.

The Houthis’ response was to announce that the strikes would not alter their campaign and that they would, if anything, escalate in response. Within days of the January 12 strikes, Houthi forces conducted additional attacks on commercial shipping in the Red Sea and Gulf of Aden, including the first use of anti-ship ballistic missiles in history — a capability demonstration that underlined the movement’s technical sophistication and Iranian supply chain. Through February and March, despite continued American and British military pressure, the Houthis maintained their campaign. By the end of the quarter, the Red Sea shipping crisis was well into its fifth month with no reduction in intensity.

For Jamaica and the Caribbean, the quarter was the first in which Red Sea disruption costs began to appear in consumer prices and business budgets. Container freight rates between Asia and the Caribbean, which had been broadly stable for most of 2023, had risen sharply since November as the majority of shipping operators rerouted their fleets via the Cape of Good Hope. The additional transit time of 10–14 days per voyage was adding costs that importers were beginning to pass through to retail prices. Building materials, electronics, processed foods and other goods imported from China, Southeast Asia and the Mediterranean all arrived on elevated terms. The Caribbean’s import-dependent economies had entered a period of structurally higher shipping costs with no visible end date.

Gaza at Six Months: the ICJ, the UNSC and an Unanswered Question

The Gaza war entered its fourth, fifth and sixth months during this quarter without military resolution, without a humanitarian breakthrough and without a ceasefire. Israeli ground operations moved from the north of the strip, which had been the primary battleground in November and December, to Khan Younis — Gaza’s second-largest city — through January and February. The World Health Organisation described the civilian death toll in Khan Younis as “horrendous”; blasts killed civilians sheltering in UN facilities. By early January, the cumulative death toll reported by the Gaza Health Ministry had reached approximately 23,000; by April 2, it approached 33,000, with tens of thousands more wounded and the majority of the territory’s 2.3 million people displaced.

The International Court of Justice delivered its provisional measures ruling on January 26, in the genocide case brought by South Africa. The court found that South Africa’s claims were “plausible” and ordered Israel to take all measures within its power to prevent acts of genocide, to ensure its military did not commit genocidal acts, and to preserve evidence. Critically, the court stopped short of ordering an immediate ceasefire — the measure that South Africa had explicitly sought. The ruling was interpreted by opposing camps as either a near-vindication of the genocide claim or evidence that the court had not found genocide proven. Israel stated it would comply with its obligations. The trajectory of the war did not immediately change.

In March, the UN Security Council passed Resolution 2728 calling for an immediate ceasefire and the unconditional release of all hostages. The United States, which had vetoed earlier ceasefire resolutions, abstained from this vote, allowing it to pass. Israel and Hamas both declared the resolution non-binding and continued their respective military and resistance operations. Ceasefire negotiations through Qatar, Egypt and the United States continued in parallel; a possible deal involving a six-week halt, significant hostage releases and expanded humanitarian aid was under active discussion as this edition goes to press, but no agreement has been reached. As of April 2, 2024, the Gaza war has been running for approximately 178 days.

The April 1 Israeli airstrike on the Iranian consular building in Damascus, which killed IRGC Generals Mohammad Reza Zahedi and Mohammad Hadi Haji Rahimi, represents a significant new escalation at the very end of this reporting period. Iran’s Supreme Leader Khamenei has publicly stated that Iran will respond. The nature, timing and targets of that response are, as of April 3, unknown. If Iran’s retaliation expands to include Strait of Hormuz operations or direct strikes on Israeli territory, the Caribbean’s oil import costs will spike in ways that would dwarf the current Red Sea surcharge.

Ukraine: Avdiivka Falls, Aid Remains Blocked

Ukraine’s war entered its third year in February 2024, and the quarter produced the most significant Russian territorial gain since the Kherson region in late 2022. On February 17, Ukrainian forces announced their withdrawal from Avdiivka, a city in the Donetsk region that Ukraine had held since 2014 and that had been under intensive Russian siege for months. Ukrainian commanders and Foreign Minister Dmytro Kuleba were explicit about the cause: Avdiivka was lost because Ukraine did not receive sufficient artillery ammunition. The United States Congress had blocked President Biden’s $60 billion Ukraine security assistance request since October 2023, as House Republicans, led by Speaker Mike Johnson, tied the package to immigration and border demands that Democratic senators rejected.

The implications of Avdiivka’s fall were both military and political. Militarily, Russia gained a significant logistics node that could be used as a springboard for further operations in the Donetsk region. Politically, it provided the clearest possible evidence that US Congressional inaction had operational consequences for the front line — a dynamic that was amplifying calls within the US defence establishment, the Biden administration and among European allies for the House to act before more ground was lost. As of April 3, the aid package remains blocked. It will not pass until April 24 — a date this edition’s readers do not yet know.

Russia’s winter campaign also featured intensive attacks on Ukrainian energy infrastructure: power stations, heat generation facilities and distribution networks were struck in waves of missiles and drones through January, February and March, targeting Ukraine’s civilian heating and electricity supply during the coldest months of the year. For Caribbean economies, the war continued its second full year of distorting global wheat and fertiliser markets, keeping food commodity prices elevated and agricultural input costs high.

Haiti: Gangs, a Resigned Prime Minister and a Mission Delayed

Haiti’s security situation deteriorated toward catastrophe during the quarter. Gang violence in Port-au-Prince intensified through January and February as the Viv Ansanm coalition expanded its territorial control and began planning the coordinated assault that would ultimately force Prime Minister Ariel Henry’s resignation. Henry, who had faced domestic delegitimisation challenges throughout 2023 and 2024, flew to Nairobi on March 1 to sign the agreement for the Kenya-led Multinational Security Support mission — only to find, on arrival, that gangs had seized the Port-au-Prince airport and he could not return. On March 11, Henry announced his resignation from Puerto Rico, where he had diverted. A Transitional Presidential Council was being constituted in the days following this edition’s publication to provide some framework for eventual elections.

The MSS mission, which had been discussed, negotiated and authorised for more than a year, had still not deployed as of April 3. The Kenyan courts had at various points blocked the deployment; the Nairobi agreement of March 1 cleared the most recent legal hurdle, but the practical deployment of forces was still months away. In the interim, Haiti’s gangs were consolidating control over the metropolitan area, the national prison system had been breached with thousands of prisoners released, and the humanitarian situation was approaching a scale that aid organisations described as among the worst in any Caribbean country since the 2010 earthquake. For Jamaica and CARICOM, the Haiti crisis was an immediate neighbourhood emergency with no adequate international response in sight.

Venezuela-Guyana: The Referendum’s Aftermath

The consequences of Venezuela’s December 2023 referendum — in which voters endorsed the incorporation of Guyana’s Essequibo region into Venezuela, albeit in a non-binding domestic procedure — continued to shape the bilateral dynamic through this quarter. The International Court of Justice had issued emergency provisional measures in December ordering Venezuela not to take actions that would change Guyana’s administration of the disputed territory while the case was pending. Venezuela disputed the ICJ’s jurisdiction and did not publicly commit to compliance. CARICOM reaffirmed its support for the ICJ process and Guyana’s territorial integrity. The US military maintained an enhanced cooperation posture with Guyana’s defence forces.

The practical risk for the region remained the possibility that Venezuela would take some action — a naval incursion, interference with Stabroek Block oil operations, or territorial administrative moves — that escalated beyond diplomatic provocation. The Stabroek Block, operated by ExxonMobil, was producing oil that was transforming Guyana into the hemisphere’s fastest-growing economy and contributing to CARICOM’s energy diversification ambitions. Any disruption to that production would have region-wide consequences. As of April 2, the situation remained tense but had not escalated to a direct confrontation.

The Panama Canal: Drought and the Double Chokepoint

The Panama Canal’s water level crisis, driven by the severe 2023–24 El Niño drought that had reduced Gatun Lake to historically low levels, continued through this quarter. The Panama Canal Authority had been restricting daily vessel transits and imposing draft limitations since late 2023, reducing the canal’s throughput capacity and creating a second major shipping bottleneck alongside the Red Sea crisis. For Caribbean importers, 2024 was the first year in modern history in which both the Red Sea–Suez route and the Panama Canal were simultaneously constrained — a double chokepoint with no precedent in the global shipping system’s modern configuration.

Water levels were slowly recovering as the 2024 rainy season approached, with the Canal Authority cautiously increasing daily transits through late March. Full restoration of pre-drought transit capacity was expected by the middle of 2024. But the compounding effect of Panama Canal restrictions on top of Red Sea rerouting had already disrupted Caribbean supply chains in ways that would take months to fully unwind, even after both constraints eased.

Jamaica’s Economy: A Solid Start Before the Storm

Against these external headwinds, Jamaica’s economy posted a respectable 1.4 per cent GDP growth in the first quarter of 2024 — driven by a 7.4 per cent expansion in agriculture, forestry and fishing, and an 18.7 per cent surge in mining and quarrying. Services industries grew by 1.3 per cent. Tourism continued its post-pandemic momentum, with stopover visitor arrivals tracking above the previous year’s strong performance. The housing and construction sector remained active, underpinned by NHT mortgage demand and ongoing hotel and commercial development in the resort parishes.

The Bank of Jamaica maintained its policy rate at 7 per cent per annum, reflecting its assessment that inflation remained elevated relative to the 4–6 per cent target range under the influence of imported cost pressures. The Red Sea crisis’s contribution to import costs was beginning to appear in CPI data, particularly in imported goods categories and construction material prices. Fuel costs — a primary determinant of Jamaica’s general price level, given the island’s near-total dependence on imported petroleum — were sensitive to any expansion of the Gaza conflict toward Iran-related oil supply disruption.

The real estate market maintained its momentum. Demand for residential and commercial property in Kingston, Montego Bay and Ocho Rios remained strong. Mortgage approvals were high. The construction industry was active. The Jamaican economy was, as the quarter closed, on a fundamentally sound trajectory — but entering a period in which external shocks were accumulating: Red Sea shipping costs, a possible Iran-Israel escalation, an ongoing Ukraine war, Haiti’s security collapse, and a hurricane season beginning in five weeks that would prove, as few anticipated, to be historically violent.

Looking Ahead

As this edition is published on 3 April 2024, the Caribbean stands at the beginning of what will prove a difficult year. The Gaza war is six months old with no ceasefire in sight. The Red Sea crisis has embedded itself as a structural cost in Caribbean import economics. Iran’s response to yesterday’s Damascus strike has not yet arrived. Ukraine’s battlefield position is deteriorating under an aid blockage that the US Congress has not resolved. Haiti’s state is in effective suspension. And the Atlantic hurricane season begins in two months. Jamaica’s first quarter growth is a cause for cautious confidence. The external environment that will test whether that confidence is warranted has rarely been more complex.

---

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. This is Edition 10, the first in the series, establishing a baseline view of global conflict and its Caribbean economic implications at the beginning of 2024.

Follow Jamaica Homes on Youtube @jamaicahomes and Instagram @jamaica_homes and on Facebook @jamaicahomes Send us a message or email us at onlinefeedback@jamaica-homes.com or editor@jamaica-homes.com