Crisis, Realignment, and the Dawn of the
Post–Cold War World, 1975–1991
I0. Postcolonial Crises and Asian Economic Expansion, 1975–1990
A0. Revolutions, Depressions, and Democratic Reform in Latin America
10. The success of the Cuban Revolution both energized the revolutionary left throughout
Latin America and led the United States to organize its political and military allies in
Latin America in a struggle to defeat communism.
20. In Brazil a coup in 1964 brought in a military government whose combination of
dictatorship, use of death squads to eliminate opposition, and use of tax and tariff
policies to encourage industrialization through import substitution came to be known as
the “Brazilian Solution.” Elements of the “Brazilian Solution” were applied in Chile by
the government of Augusto Pinochet, whose CIA-assisted coup overthrew the socialist
Allende government in 1973 and in Argentina by a military regime that seized power in
30. Despite reverses in Brazil, Chile, and Argentina, revolutionary movements persisted
elsewhere. In Nicaragua the Cuban-backed Sandinista movement overthrew the
government of Anastasio Somoza and ruled until it was defeated in free elections in
1990. In El Salvador the Farabundo Marti National Liberation Front (FMLN) fought a
guerilla war against the military regime until declining popular support in the 1990s led
the rebels to negotiate an end to the armed conflict and transform themselves into a
40. The military dictatorships established in Brazil, Chile, and Argentina all came to an end
between 1983 and 1990. All three regimes were undermined by reports of kidnapping,
torture, and corruption; the Argentine regime also suffered from its invasion of the
Falkland Islands and consequent military defeat by Britain.
50. By the end of the 1980s oil-importing nations like Brazil were in economic trouble
because they had borrowed heavily to pay the high oil prices engineered by OPEC. The
oil-exporting nations such as Mexico faced crises because they had borrowed heavily
when oil prices were high and rising in the 1970s, but found themselves unable to keep
up with their debt payments when the price of oil fell in the 1980s.
60. In 1991 Latin America was more dominated by the United States than it had been in
1975. This may be seen in the United States’ use of military force to intervene in
Grenada in 1983 and in Panama in 1989.
B0. Islamic Revolutions in Iran and Afghanistan
10. Crises in Iran and Afghanistan threatened to involve the superpowers; the United States
reacted to these crises with restraint, but the Soviet Union took a bolder and ultimately
20. In Iran, American backing and the corruption and inefficiency of Shah Muhammad Reza
Pahlavi’s regime stimulated popular resentment. In 1979 street demonstrations and
strikes toppled the Shah and brought a Shi’ite cleric, Ayatollah Ruhollah Khomeini, to
power. The overthrow of an ally and the establishment of an anti-western conservative Islamic republic in Iran were blows to American prestige, but the United States was
unable to do anything about it.
30. In the fall of 1980 Iraqi leader Saddam Hussein invaded Iran to topple the Islamic
Republic. The United States supported Iran at first, but then in 1986 tilted toward Iraq.
40. The Soviet Union faced a more serious problem when it sent its army into Afghanistan in
1978 in order to support a newly established communist regime against a hodgepodge of
local, religiously inspired guerilla bands that controlled much of the countryside. The
Soviet Union’s struggle against the American-backed guerillas was so costly and caused
so much domestic discontent that the Soviet leaders withdrew their troops in 1989 and
left the rebel groups to fight with each other for control of Afghanistan.
C0. Asian Transformation
10. The Japanese economy grew at a faster rate than that of any other major developed
country in the 1970s and 1980s, and Japanese average income outstripped that of the
United States in the 1990s. This economic growth was associated with an industrial
economy in which keiretsu (alliances of firms) received government assistance in the
form of tariffs and import regulations that inhibited foreign competition.
20. The Japanese model of close cooperation between government and industry was imitated
by a small number of Asian states, most notably by South Korea, in which four giant
corporations led the way in developing heavy industries and consumer industries. Hong
Kong and Singapore also developed modern industrial and commercial economies. All of
these newly industrialized economies shared certain characteristics: discipline and hard-
working labor forces, investment in education, high rates of personal savings, export
strategies, government sponsorship and protection, and the ability to begin their
industrialization with the latest technology.
30. In China after 1978 the regime of Deng Xiaoping carried out successful economic
reforms that allowed private enterprise and foreign investment to exist alongside the
inefficient state-owned enterprises and which allowed individuals and families to
contract agricultural land and farm it as they liked. At the same time, the command
economy remained in place and China resisted political reform, notably when the
Communist Party crushed the protests in Tiananmen Square in 1989.
II0. The End of the Bipolar World, 1989–1991
A0. Crisis in the Soviet Union
10. During the presidency of Ronald Reagan the Soviet Union’s economy was strained by
the attempt to match massive U.S. spending on armaments, such as a space-based missile
protection system. The Soviet Union’s obsolete industrial plants, its inefficient planned
economy, its declining standard of living, and its unpopular war with Afghanistan fueled
an underground current of protest.
20. When Mikhail Gorbachev took over the leadership in 1985 he tried to address the
problems of the Soviet Union by introducing a policy of political openness (glasnost)
and economic reform (perestroika).
B0. The Collapse of the Socialist Bloc
10. Events in eastern Europe were very important in forcing change on the Soviet Union.
The activities of the Solidarity labor union in Poland, the emerging alliances between
nationalist and religious opponents of the communist regimes, and the economic
weakness of the communist states themselves led to the fall of communist governments
across eastern Europe in 1989 and to the reunification of Germany in 1990.
20. The weakness of the central government and the rise of nationalism led to the dissolution
of the Soviet Union in September 1991. Ethnic and religious divisions also led to the
dismemberment of Yugoslavia in 1991 and the division of the Czech Republic in 1992.
C0. The Persian Gulf War, 1990–1991 10. Iraq invaded Kuwait in August 1990 in an attempt to gain control of Kuwait’s oil fields.
Saudi Arabia felt threatened by Iraq’s action and helped to draw the United States into a
war in which American forces led a coalition that drove Iraq out of Kuwait but left
Saddam Hussein in power.
20. The Persian Gulf War restored the United States’ confidence in its military capability
while demonstrating that Russia—Iraq’s former ally—was impotent.
III0. The Challenge of Population Growt