The Lasting Significance Of 1979

Commentary on the death of former British prime minister Margaret Thatcher has rightly pointed out that she was a transformational figure, not just for the UK economy, but, indirectly, for dozens of other countries that moved away from socialism or quasi-socialism to a neoliberal economic model following Britain’s experiment.

But, the election of Margaret Thatcher as Britain’s prime minister in May 1979 was one of a series of transformational events that year that have a lasting significance to this very day.

China: One of the biggest questions the world faces today is whether China will reform itself, economically and politically, to become an advanced nation. The year 1979 was pivotal for China for several reasons: 1) it was the first year in which China embarked on free market reforms under ‘Paramount Leader’ Deng Xiaoping; 2) it was the year that China established diplomatic relations with the US; and 3) it was the year that China adopted its one-child policy. These three developments shaped the Chinese economy for the next 30-plus years. How the new administration of Xi Jinping handles these three issues – economic policy, relations with the US, and demographics – will determine whether China succeeds or fails.

Iran: The Iranian Revolution of 1979 was a pivotal event for the Middle East, turning a once reliable ally of the West into a fiercely anti-Western state. The American embassy hostage crisis that began in November that year contributed heavily to the defeat of Jimmy Carter in the 1980 US presidential election. International concerns about Iran’s nuclear programme largely stem from the revolutionary zeal with which Iranian leaders condemn Tehran’s enemies. The Islamist regime has repeatedly defied its critics’ expectations of its imminent demise. Nevertheless, we find it hard to believe that the regime will continue in its present form for another decade. Eventually, Iran will change, and when this happens, it will transform the Middle East.

Iraq: In July 1979, Saddam Hussein formally assumed the presidency of Iraq (previously he was vice-president, but de facto president). His ascension would set the scene for three major wars, the third of which resulted in his overthrow. Iraq today is still recovering from Saddam’s legacy.

Egypt-Israel: 1979 was also the year that Egypt signed a peace treaty with Israel, thereby reducing the threat of more Arab-Israeli wars. Israel would still face significant security threats, but the treaty with Egypt effectively broke the back of the radical Arab nationalist camp led by Cairo. The durability of the peace treaty is one of Israel’s biggest concerns today, along with the prospects of a nuclear Iran.

Afghanistan: In July 1979, US President Jimmy Carter initiated a campaign to support forces opposed to the Communist regime that had seized power in Afghanistan the previous year. Carter’s action prompted the Soviet Union to invade in December 1979. This led to a decade of war (1979-1989), a decade of chaos (1989-2001), and a further decade of war (2001-present). Although the Afghan war has faded somewhat from the newspaper headlines, the country’s future after the US withdrawal in 2015 will have a significant impact on the development of Pakistan and Central Asia.

Although many individual years seem ‘pivotal’ in retrospect, we are hard pressed to think of years in the late 20th century that have had such a big impact as 1979 (the obvious other one being 1989).

This blog is tagged to:
Sector: Country Risk, Defence & Security
Geography: China, Iraq

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