1979 – When the Long 21st Century Began

One of my all-time favourite songs is, “We didn’t start the fire” by Billy Joel from 1989. In its haunting melody are listed 120 important events between the years 1948 and 1989, starting with Harry Truman and Red China and ending with the Cola Wars. Those forty years were also the cold war era and many events listed there had global consequences. In the Twentieth century we can probably associate every year with some event that had a significant impact on global affairs. But rarely can you find a year, where so many seminal and critical events occurred and came together at the same time, each one of them important enough, but in combination have had a profound influence on the future and continue to reverberate today. When we look back from the vantage point of 2023, 1979 was one such year. Connect the dots on a broader canvas, the roots, and origins of many defining events of our time lead us to 1979, defining a new epoch, which we are living through in the twenty-first century.

• What 1979 did was to bring, Capitalism and Religion to the center stage of the world affairs.

Let us look at the important events of the first two decades of Twentieth century:

·       China joins WTO and the exponential growth of Chinese economy and its quest for global role.

·       Rampant financialization of world economy and the Global Financial Crisis.

·       9/11 terror attacks, Taliban, ISIS, Islamic Terrorism, and the ill effects felt globally.

·       US-Iran tensions and Iran at the heart of Middle East cold war with Saudi Arabia and the continuing effects of Shia-Sunni schism.

·       US invasion of Afghanistan and Iraq to overthrow Taliban and Saddam Hussein.

·       Israels multiple wars with Hamas in Gaza and Hezbollah in Lebanon.

All of the above have antecedents in what happened in 1979 and their complex interplay:

·       Margaret Thatcher becomes the Prime Minister of UK and kick starts “Thatcherism”. .

·       Islamic revolution in Iran, the rise of Ayatollah Ruhollah Khomeini and Iran hostage crisis.

·       Deng Xiaoping visits US and kickstarts China’s economic opening-up.

·       Saddam Hussein becomes President of Iraq and purges the Baath party leadership.  

·       Juhayman Utaybi pretending to be the Mehdi lays siege at the grand mosque of Mecca.

·       USSR Invades Afghanistan leading to resistance from Aghan Mujahideen.

·       Israel-Egypt peace treaty is signed in 1979.

1970s – A Decade of Crisis and Malaise

Clockwise from top left: US President Richard Nixon after his resignation, Vietnam War in the early 70s, The 1973 oil crisis, Cam David accords between Egypt and Israel, 1971 Bangladesh genocide, 1970 Bhola cyclone that killed an estimated 500,000 people, Iranian Revolution of 1979, popularity of disco music.

When historians look back, the 1970s are often described as an age of global crisis, a period of uncertainty, upheaval, depression, and malaise. The crisis was broad based, economic, social, political, and cultural. As the post WWII economic growth and prosperity came to an end, the 1970s were perhaps the worst decade of economic performance since the Great Depression for most industrialized countries.

Between 1948 and 1973, the world economy expanded faster than in any similar period, before or after.  The average income per person globally grew at an annual rate of 2.92 percent from 1950 to 1973, enough to double the average person’s living standard in about twenty-five years. Never before in recorded history had so many people become so much better off so quickly. It was even more dramatic in the industrialized countries of the West.  Employment, wages, factory production, business investment, total output and almost every other measure of prosperity increased year after year, reaching its apogee in 1973, when average income per person around the world leaped 4.5 percent. And then it stopped, and the good times came to an end, never again approaching the growth rates of 1973. Volatility came to be the norm and stability an exception.

Across Europe, North America, Latin America, and Japan, average incomes would grow less than half as fast for the rest of the century and into the next and there was no steady improvement of living standards. A universal feeling of prosperity that was common in the decades before faded quickly. As economic growth stalled and inflation raged, people across the world got disillusioned with the ability of governments to make things better. In the US, the average annual inflation rate from 1900 to 1970 was approximately 2.5%. From 1970 to 1979, however, the average rate was 7.06%, and topped out at 13.29% in December 1979. This period came to be known for "stagflation", a phenomenon in which inflation and unemployment steadily increased.

The 1970s also marked a period of energy crisis globally. The Arab oil embargo of 1973, in response to western support for Israel during the Yom-Kippur war triggered substantial petroleum shortages and elevated prices particularly in the United States, Canada, Western Europe, Australia, and New Zealand. The 1979 energy crisis was triggered following the interruptions to global oil supply after the Iranian revolution.

It was also a period of extreme political volatility on a global scale, characterized by frequent coups, civil wars, and armed conflicts. Many regions of the world: Southeast Asia, Middle East, Latin America, and Africa, saw extended periods of prolonged intense conflict. It was a decade of peak cold war confrontation, with US and USSR facing off in a proxy war across the globe:

·       Vietnam War which ended in 1975 and Cambodian Civil War of 1967–1975, which worsened after the US bombing early in the decade and brought Pol Pot to power.

·       Soviet–Afghan War that started in 1979.

·       The brutal Portuguese Colonial War that ended in 1974 and the Angolan Civil War that started in 1975.

·       Bangladesh Liberation War of 1971 in South Asia, followed by India-Pakistan War of 1971.

·       Yom Kippur War of 1973.

·       Turkish invasion of Cyprus in 1974

·       Indonesian invasion of East Timor in 1975.

·       Lebanese Civil War that started in 1975.

·       Western Sahara War that started in 1975.

·       Ugandan–Tanzanian War of 1978–1979, resulting in the overthrow of Idi Amin's regime.

·       Ethiopian Civil War that started in 1974 and the Ogaden War of 1977–1978 between Somalia and Ethiopia.

It was also decade of Coup d’état worldwide: Syria, Uganda, Chile, Ethiopia, Portugal, Bangladesh, Argentina, Pakistan, and El-Salvador. Many of these had serious repercussions and led to genocide, effects of which still linger on.

The decade also saw the rise of terrorism by militant organizations across the world. Europe saw the emergence of Red Brigades and the Baader-Meinhof Gang who were responsible for a spate of bombings, kidnappings, and murders and violence escalated in Northern Ireland. The most prominent of the terrorist incidents was the killing of Israeli athletes at the 1972 Munich Olympics and the hijacking of four planes in 1970 by Palestinian terrorists, leading to the incidents that came to be known as Black September.

Coming at the end of a volatile and crisis ridden decade, the events of 1979 were a denouement and culmination for many forces at play.

Events of 1979 – Putting them in perspective

Iranian Revolution

No one saw what was coming. For the outside world, Iran, a part of US twin pillar strategy in the region, a strong military power, with a growing economy and rapidly modernizing infrastructure had in little more than a generation, changed from a traditional, conservative, and rural society to one that was industrial, modern, and urban. It was hailed as a miracle of modernization.

Bu the white revolution which was started by the Shah in 1963 was too aggressive for a traditional agrarian society. Social stresses built-up and caused resentment among the traders. When millions started marching into the streets against the Shah, chief among the leading group were the traditional Shiite clerics, who were sidelined due to reforms and whose power was undermined. When the Shah left the country in January and Khomeini returned in February to proclaim an Islamic republic, many observers assumed it to be a revolution led by the leftists, camouflaged in religion. They were struggling to comprehend the developments and failed to grasp the power of religion as a political force and Islamism as an alien concept was difficult to warp their head around. But Khomeini had spent years shaping his vision of a future Iran, one in which Shia clerics would run the government and exercise supervision over virtually every aspect of society.

The Islamic revolution in Iran had an explosive effect on rest of the region. It made the Sunni Monarchies of the Gulf, with significant Shia minorities in their population weary of Iranian influence. During the course of the year, it also inspired the Afghan mujahideen to take up arms against the invading Soviet forces.  When Saddam finally became the president of Iraq a few months after the revolution, as a Sunni ruler of Shia majority country, he started a catastrophic war that lasted eight years. The Saudi paranoia against Iranian theocracy was also the beginning of the Arab cold war between Iran and Saudi Arabia with devastating consequences for the region. When Iranian students took hostage, members of the US Embassy in November, it kickstarted a US-Iran antagonism that has defined the foreign policies of both countries to date.

Margaret Thatcher and the rise of Neo-Liberal financial order

When Margaret Thatcher was elected as the British prime minister in May 1979, apart from being the first woman to hold the office, it also signalled a new shift with equally profound global implications.

The British economy grew steadily through the 1950s and 1960s, widely spreading the benefits to the population. The post-war economic consensus that led to growth was based on Keynesianism, the welfare state, nationalised and a highly regulated industry. But by the 1970s, the bloom was gone. Rising global competition had revealed the structural rigidities of the British system and the 1973 oil shock exacerbated the painful decline of British manufacturing. In the 1970s, the British economy tottered from one crisis to another and in 1974 it was forced to introduce electricity rationing and a three-day workweek. Labour unrest and strikes became a regular part of the national news and to add insult to injury, Britain was forced to go begging to IMF for funds in 1976. Unemployment surged and productivity sagged and in general British businesses seemed lost.

Thatcher systematically and decisively rejected the post-war economic consensus. She was a missionary of markets, determined to dismantle socialism and promote the values of entrepreneurship. She advocated economic liberalization, privatization, deregulation, monetarism, austerity, and reductions in government spending. Her views on economic policy were so unconventional that they made her part of the minority within her own cabinet. In 1979 no one had an inclination about the effects of what Thacher was unleashing. No one used the word privatization yet, but that would be the defining aspect of global market revolution in the coming decades.

One of Thacher’s devoted admirers was Ronal Reagan, He shared many of her philosophies and like Thatcher, Reagan took office at a time of financial crisis in the US. A deep recession gripped the United States in 1981, with double-digit unemployment, poverty rates, and inflation, alongside already sky-high interest rates, falling incomes, and a crumbling stock market. Reagan campaigned and won outlining his philosophy, termed as Reaganomics. It involved, reducing the growth of government to increase the growth of the economy, cut taxes, reduce spending in all areas except defence, curb inflation, and deregulate business.

Both Thacher and Reagan parted ways with Keynesian economics that was in vogue for over three decades and adopted teachings from the works of Friedrich Hayek and Milton Friedman. Together Thatcherism combined with Reaganomics, set the world towards capitalistic order and financialization that gained momentum in the coming decades and well into the 21st century.

Chinese Economic Reforms

On January 29, 1979, Deng Xiaoping began his nine-day visit to the United States of America. Coming less than a month after both US and China had normalized relations, on January 1st, 1979, the trip was a milestone, a spark that lit the fire. It opened doors for mutual exchange and cooperation between China and the US and was the first time that a national Chinese leader visited America since the founding of the PRC in 1949.

Before the trip, Deng is quoted to have said that one of the aims of visit would be to boost China’s modernization by learning from the US, whose industrial and technological development was the most advanced in the world and China wanted to emulate it, after the ravages of the cultural revolution. To stay true to his words, during the visit, Fang Yi, director of the State Science and Technology Commission, signed multiple agreements with the US to speed up scientific exchanges. Later in the year, the first 50 Chinese students arrived in the United States. In the year after Deng’s visit, some 1,025 Chinese were in the US and by 1984, fourteen thousand, two-thirds of whom were studying the sciences, and engineering.

Back home, beginning in 1979, Deng launched several economic reforms. He initiated a set of radical agricultural reforms by enabling farmers to sell a portion of their crops on the free market. This effectively ended the commune system and increased the size of allowed private plots and legalized the informal markets for farm products in rural areas. China also established four special economic zones (SEZ) along the coast for attracting FDI. Additional coastal regions and cities were designated as open cities and development zones, were given incentives to experiment with free-market ideas and provided with tax and trade incentives. Private investments and entrepreneur ship were encouraged to bring more innovation into the economy. This was followed up by decentralizing the economy, by delegating economic control of various enterprises to provincial and local governments. To make the policies more impactful, Deng also gradually eliminated price controls on a wide range of products.

At the time, no one really grasped the full magnitude of what Deng had in mind and the policies he initiated. If anyone tried to make sense of it, it was with scepticism. Afterall, no Communist regime had ever succeeded in reforming itself. As the reforms began, the comparisons that most observers drew were with Yugoslavia, Hungary, or East Germany. This incomprehension was further amplified because Deng still cloaked his support for reforms and restructuring in Maoist language and slogans. Rest as they say is History! The grand political and economic experiment that Deng kickstarted has left a profound mark on both China and the world.

Siege of Mecca

In the early hours of 20 November 1979, as many believers from all over the world gathered for their prayers in the central courtyard of the Grand Mosque in Mecca, 200 men led by a charismatic preacher called Juhayman al-Utaybi, who managed to smuggle arms into the compound in coffins with the pretext of seeking blessings for the dead, laid siege to the holiest place in Islam.

The men who took over the Grand Mosque belonged to an association called al-Jamaa al-Salafiya al-Muhtasiba (JSM) which condemned what it perceived as the degeneration of social and religious values in Saudi Arabia. This was the decade when post the oil embargo of 1973 and the quadrupling of oil prices, Saudi Arabia was flush with money and was gradually transforming into a consumer society. Cars and electrical goods were becoming commonplace, the country was urbanising, and in some regions men and women began to mix in public. This was sacrilege for the members of JSM, who still lived an austere life and adhered to the tenets of Islam as defined by the Koran. Juhayman announced himself as the Mahdi, who would begin a reign of justice and fairness on Earth after it has been filled with injustice and oppression.

What followed shook the Muslim world at its roots and changed the Saudi rulers and the society forever. It was the beginning of a two-week drawn-out battle that would spill blood in Mecca, prompt a global diplomatic crisis, involve American pilots and French commandoes, marking a watershed moment for the Islamic world and the West. The consequences of this crisis, much underplayed in history and forgotten by many, last to this day.

The initial reaction to the siege by the Saudi rulers was one of ignorance, arrogance, incompetence and absolute disregard for the truth and public opinion. Saudi Monarchy never recovered from this, and its image was sullied forever. Many Muslims in Saudi Arabia and beyond, including the young Osama Bin Laden, were so repulsed by the carnage in Mecca, that they drifted toward open opposition to the House of Saud and its American backers. The fiery ideology that inspired Juhayman and his men to commit murder in Islam’s holiest place mutated with time into increasingly more vicious strains globally, resulting in the rise of Al-Qaeda, ISIS and Taliban.

The significance of the siege of Mecca was missed at the time even by the most sharp-eyed observers and was shrugged off as a local incident specific to Saudi Arabia. It was the first large scale Jihadi movement, but with the benefit of hindsight, it can be seen as a precursor to what became all too familiar violent Islamic terrorism of Al-Qaeda and ISIS and the wars in Iraq and Afghanistan in the 21st century. In one of history’s greatest ironies, it was this brand of Jihadi ideology, which after the Siege ended was seen as something of great value, co-opted, and promoted by the Saudi’s and Americans in their cold war battlefronts in Afghanistan against the Soviets and against Iran. Instead of being suppressed and eradicated, the brutal brand of Islam espoused by Juhayman was encouraged, funded, and nurtured as it metastasized across the world since 1979.

Soviet Invasion of Afghanistan

On Dec 24, 1979, the Soviet Union invaded Afghanistan following the overthrow and assassination of Nur Muhammad Taraki, the man installed by Moscow the year before as leader of its puppet regime in Kabul. Why did USSR invade Afghanistan? What was their main purpose? Was it their attempt to reach the warm water ports of Persian Gulf really? Or was it their attempt to prop-up a tottering communist regime in the country, to counter Islamism in Iran and growing American influence in Pakistan? Historians have debated this for over four decades, nevertheless whatever the reason, what the invasion unleashed were forces beyond anyone’s control.

In the wider Middle East, the Soviet invasion caused uncertainty for the US and its traditional Arab allies, as they tried to figure out Moscow’s next move. Coming on the heels of Iranian Shiite revolution, for the Sunni Arab monarchies this had ominous portents. This was the first time the Soviet Union had invaded a country outside the European bloc and signalled a new aggressive trend of Soviet expansionism. There were worries that the presence of Soviet forces in Afghanistan could embolden communist and radical elements in the region. Given the uncertainties and presumed catastrophic outcomes, Americans and Saudi’s decided to support the rebels against the invading army.

It was the beginning of a nine-year, pointless bloody conflict between the Mujahideen, funded and armed by Americans, Saudis and other conservative Arab monarchies, and the Soviet army that claimed the lives of 15,000 Soviet troops and more than a million Afghans, and ending in Moscow’s humiliating withdrawal from the country in 1989. What began as a traditional tribal uprising in a conservative country, against the invading forces, soon morphed into a new phenomenon known as “Islamism.” Within the space of just a few years, this religious insurgency would supplant Marxism and secular nationalism as the dominant opposition ideology of the Middle East. The conflict, which became a proxy war between the Soviets and US, had dramatic geopolitical consequences. It hastened the breakup of the Soviet Union and also created a breeding ground for terrorism, leading to the rise of Osama bin Laden, who fought alongside the mujahideen. After the withdrawal of the Soviet forces, in a country devastated by a decade of war, the mujahideen’s infighting for power and their failure to restore peace and stability created a fertile ground for the rise of Taliban and a chance to seize power.

At a time when the world was still coming to understand what happened in Iran, neither the Americans nor the Soviets and Arab monarchies grasped and failed to predict the forces that the invasion would unleash. Over the next few years, the insurgent power of revivalist Islam took everyone by surprise. What everyone failed to foresee was the combustible mix of geopolitics, religion and revolutionary politics that would redefine many aspects of the global order.

Final words

To keep the narrative manageable, I have highlighted what I felt were five of the most important events from that transformative year of 1979, that still cast a long shadow on our current world. There were other events that were significant in their own right: Saddam’s grab of power and purging the Baath party in Iraq, The Israel and Egyptian peace treaty, Execution of Zulfikar Ali Bhutto in Pakistan, and General Zia-Ul-Haq’s consolidation of power etc, which in many ways have also contributed in their own myriad ways to the current state of affairs. But these were events that became prominent in combination with the above five, but not in their own right. It was really the events described above that in various permutations and combinations created the world we live in.

In the past couple of years, I have read a few opinions that compare the current decade to the 1970’s and in a case or two to the events of 1979. Our minds are hardwired to see patterns and extrapolate events into the future. But to highlight what Christian Caryl, in his book “Strange Rebels” puts it across nicely:

·       “History has a way of playing tricks. As events unfold around us, we interpret what we see through the prism of precedent, and then are amazed when it turns out that our actions never play out the same way twice. We speak confidently about “the lessons of the past” as if the messy cosmos of human affairs could be reduced to the order of a classroom. Rarely has the past proven a more deceptive guide to the future than at the end of the eighth decade of the twentieth century. If you take a certain pleasure in seeing the experts confounded and the pundits dismayed, then 1979 is sure to hold your interest.”

Yes, things look very uncertain today in a post pandemic world. Rising geopolitical tensions, US and China rivalry, wars in Ukraine, Caucasus and Middle East, fragile economic conditions etc, might prompt us to draw lessons from the 1970’s. But predicting or trying to visualize the future would be foolhardy. It will only with the power of hindsight, after a few decades will we be able to tell if any of these events or a combination of, have a had profound world changing consequences.