The Silk Roads: A New History of the World

by Frankopan, Peter

  Washington’s anxiety that the USSR’s tentacles were spreading ever further was reinforced by events elsewhere in Asia. In 1971, Moscow signed a twenty-five-year treaty of peace, friendship and co-operation with India, and agreed to provide economic, technological and military support. Things looked ominous in Afghanistan where a coup propelled Muammad Dāwud to power in 1973 alongside a cadre of left-wing supporters. A number of high-profile Islamist leaders were either pushed out by or fled from the new regime. They found a welcome home in Pakistan, especially in the so-called tribal regions around Quetta, where they were actively supported by the government of Zulfiqar Ali Bhutto, who saw them as a tool to help destabilise the new government in Afghanistan – and as an easy way to burnish his own religious credentials at home.

  The sense of turbulence and of an emerging new world order was palpable as the peoples of the belt between the Mediterranean and the Himalayas strove to take their futures into their own hands. The real moment when Iraq became independent, Saddam Hussein used to say later, was when it nationalised its oil industry – and took control of its own destiny in 1972. Gone were the days when westerners would turn up and lord it over the local population. The time of ‘foreign domination and alien exploitation’, he declared, ‘was at an end’.17

  Oil was the fuel behind much of this movement to escape from the overbearing influence of outside powers, setting off a chain reaction that had profound long-term implications. The catalyst for a new round of change was a coup led by an ambitious young Libyan army officer who had been described as ‘cheerful, hard-working and conscientious’ by the British army course instructor who supervised his training in the UK.18 Muammar Gaddafi was certainly resourceful. At the start of 1970, shortly after seizing power, he demanded a dramatic rise in the revenues of Libyan oil – which at that time was responsible for 30 per cent of Europe’s total supply. ‘Brothers,’ he had proclaimed to his countrymen, ‘the revolution cannot let the Libyan people be poor while they own colossal oil wealth. There are people living in huts and tents while the foreigner lives in palaces.’ Other countries put men on the moon, Gaddafi went on; the Libyans are exploited to the extent that they have no electricity or water.19

  The oil companies screamed with outrage at the new regime’s insistence on being paid a fair price for the oil; but they soon complied after it had been made clear that nationalisation was not an option – but that it might be. The fact that the Libyan leader could force a renegotiation was not lost on others: within weeks, OPEC was pushing to raise the contribution made to its members by western oil companies, threatening to reduce production to force agreement. It was, in the words of one Shell executive, the moment when the ‘avalanche’ began.20

  The results were spectacular. The price of oil quadrupled over the course of three years, putting immense strain on the economies of Europe and the US, where demand and consumption levels galloped ever onwards. In the meantime, the oil-producing countries were flooded by unprecedented inflows of cash. The countries in the centre of Asia and the Persian Gulf had seen their returns steadily improve almost as soon as the Knox D’Arcy concession struck oil as agreements were slowly but surely renegotiated in the decades that followed with better and better terms. But what happened in the 1970s was a shift of seismic proportions. In 1972–3 alone, Iran’s oil revenues rose eight-fold. In the space of a decade, government revenues rose thirty-fold.21 In neighbouring Iraq, the rise was no less spectacular, going up fifty times between 1972 and 1980 from $575 million to $26 billion.22

  It was all very well complaining about the ‘extent of dependence by western industrial countries upon oil as a source of energy’, as one senior American official did in a report prepared for the State Department in 1973.23 But there was an inevitability about the transfer of power – and money – to the countries straddling the spine of Asia; and there was an inevitability too about the strengthening sinews of the Islamic world that followed as ambitions were magnified.

  The most dramatic expression of these came with a renewed effort to dislodge the totemic symbol of outside influence in the Middle East as a whole: Israel. In October 1973, Syrian and Egyptian forces launched Operation Badr, named after the battle that had opened the way to securing control of the holy city of Mecca in the time of the Prophet Muammad.24 The assault caught not only Israeli defences by surprise, but the superpowers as well. Hours before the attack began, a CIA report confidently stated that ‘we relate low probability to the possibility of the initiation of a military operation against Israel by the two armies’ – despite the knowledge that Egyptian and Syrian troops were gathering near the border; they were doing so either as part of a training exercise, the report concluded, or ‘in fear [of] offensive steps [that might be taken] by Israel’.25 Although some have argued that the KGB appeared to have been better informed of the plans, the expulsion of Soviet observers en masse from Egypt a year earlier shows how the strong the desire was to settle scores locally – rather than as part of the wider struggle for Cold War supremacy.26 In fact, the USSR had been actively trying to calm tensions in the Middle East and seeking ‘military relaxation’ in the region.27

  The impact of the conflict shook the globe. In the US, the military-alert level was raised to DEFCON 3, indicating that the risk of a nuclear launch was considered to be imminent – and higher than at any point since the Cuban missile crisis of 1962. In the Soviet Union, the focus was on containing the situation. Pressure was put on Egypt’s President Sadat behind the scenes to agree a ceasefire, while the Soviet Foreign Minister, Andrei Gromyko – a consummate political survivor – personally pressed President Nixon and his newly appointed Secretary of State, Henry Kissinger, to act jointly to prevent a ‘real conflagration’ that might easily lead to war spreading.28

  The real significance of the Yom Kippur War, so named because the attack began on the Jewish holy day, lay not in the attempts by Washington and Moscow to work together, nor even in the spectacular results which saw one of the great military reversals in history as Israel went from being within hours of extinction to shattering the invading forces and advancing on Damascus and Cairo. In fact, what was remarkable was the way the Arabic-speaking world acted together – as a caliphate in all but name. The ringleaders were the Saudis, the masters of Mecca, who not only talked openly about using oil as a weapon but actually did so. Production was cut back, which, combined with political uncertainty, led to price rises: costs per barrel tripled almost overnight.

  As queues formed round petrol stations in the US, Secretary of State Henry Kissinger complained about ‘political blackmail’ that threatened the stability of the developed world. The shock was enough to prompt talk of developing new strategies that would reduce or even remove altogether dependence on Middle Eastern oil. On 7 November 1973 President Nixon gave a nationwide prime-time address on TV to announce a series of measures to address the uncomfortable fact that ‘in recent years, our energy demands have begun to exceed available supplies’. As a result, the President opined solemnly, power plants were to be converted from the use of oil to the use of coal, ‘our most abundant resource’. Fuel for aircraft was to be restricted with immediate effect; all vehicles owned by the federal government were to be prevented from travelling faster than 50mph, ‘except in emergencies’. ‘To be sure that there is enough oil to go around for the entire winter,’ Nixon went on, ‘it will be essential for all of us to live and work in lower temperatures. We must ask everyone to lower the thermostat in your home by at least 6 degrees so that we can achieve a national daytime average of 68 degrees.’ If it is any consolation, the President added, ‘my doctor tells me . . . that you really are more healthy’ living at this temperature.29

  ‘Now, some of you may wonder’, he went on, ‘whether we are turning back the clock to another age. Gas rationing, oil shortages, reduced speed limits – they all sound like a way of life we left behind with Glenn Miller and the war of the forties. Well, in fact, part of our current problem also stems from war
– the war in the Middle East.’ What was needed in addition, Nixon announced, was ‘a national goal’, an ambitious plan to enable the US to meet its ‘own energy needs without depending on any foreign energy source’. Christened ‘Project Independence’, the proposal was to be inspired by ‘the spirit of Apollo’ (a reference to the space programme) and the Manhattan Project that had given the west nuclear weapons – and the ability to destroy the world. The US was a superpower; but it was also intensely aware of its weaknesses. It was time to find alternatives and thereby decrease dependence on – and the importance of – Middle Eastern oil.30

  The volte face produced some unexpected side-effects. The general reduction of highway speed limits to 55mph, a step intended to slow consumption, led not only to a fall in consumption of over 150,000 oil barrels per day, but also to a major reduction in the number of traffic accidents nationwide. In December 1973 alone, statistics from the National Highway Traffic Safety Administration suggested a fall in fatality levels of more than 15 per cent as a direct result of lower speed limits.31 Studies conducted in Utah, Illinois, Kentucky, California and elsewhere demonstrated clearly the positive effect that lowering speed limits had on saving lives.32

  The importance of reducing energy usage prompted American architects to start designing buildings that placed greater emphasis on renewable energy sources.33 It marked a watershed moment too in the development of the electrically powered car, encouraging extensive research into the stability and efficiency of a series of competing systems, including aqueous electrolyte, solid-state and molten-salt batteries which laid the basis for the hybrid cars that reached the mass market decades later.34 Energy became a high-profile political issue, with the governor of Georgia – and soon to be presidential candidate – Jimmy Carter vocal in his calls for a ‘comprehensive long-range national energy policy’.35 Congress agreed to invest heavily in solar power, while increasingly sympathetic attitudes emerged towards the nuclear industry, which was perceived as technologically reliable and as an obvious solution to energy problems.36

  Rising prices now justified prospecting for oil in areas where oil production had previously been commercially unviable or prohibitively expensive – such as the North Sea and the Gulf of Mexico. Offshore platforms led to rapid technological advances in drilling in deep-water locations, and to investment in infrastructure, pipelines, rigs and manpower.

  But none of these were immediate solutions. They all required research and investment and above all time. Turning down the air-conditioning in federal buildings, allowing ‘appropriate relaxation of [government] employee dress standards’ and greater use of car-sharing, as President Nixon ordered in a memorandum in June 1973, were all very well, but such measures were unlikely to resolve the problem.37 In the meantime, the oil producers in the Middle East made hay. With uncertainty about supply spooking the market and the Muslim nations of OPEC using oil as what the King of Saudi Arabia called a ‘weapon in a battle’, prices raced almost out of control. In the last six months of 1973, the posted price rose from $2.90 per barrel to $11.65.38

  Even when the Yom Kippur War came to an end after three weeks of bitter fighting, things never went back to normal. Indeed, the redistribution of capital from the west simply accelerated: the collective revenues of the oil-producing countries rose from $23 billion in 1972 to $140 billion just five years later.39 Cities boomed, transformed by cash that funded the building of roads, schools, hospitals and, in the case of Baghdad, a new airport, monumental architecture and even a stadium designed by Le Corbusier. So great was the change that one Japanese architectural journal likened the transformation of the Iraqi capital to that of Paris in the late nineteenth century under the direction of Baron Haussmann.40 Naturally, this provided those in power with valuable political capital: regimes across the Persian Gulf could make grandiose statements that linked the new affluence with their personal power.

  It was no coincidence, therefore, that as the streams of cash flowing into the heart of the world turned into a torrent, the ruling classes became increasingly demagogic in their outlook. The funds at their disposal were so great that, although they could be used to provide bread and circuses in the traditional method of autocratic control, there was simply too much to lose by giving others a share of the power. There was a marked slowdown in the development of pluralistic democracy and instead a tightening of control by small groups of individuals – whether related by blood to the ruler and the ruling family as in the Arabian peninsula and in Iran, or espousing common political causes as in Iraq and Syria. Dynastic rule became the norm at a time when the industrialised world was actively breaking down barriers to improve social mobility and loudly trumpeting the merits of liberal democracy.

  The redistribution of capital to the oil-rich countries – most of which were located in or around the Persian Gulf – came at the expense of a chronic slump in the economies of the developed world that buckled under the weight of depression and stagnation as the coffers of OPEC states swelled. The Middle East was awash with money, just as Britain had been in its heyday in the eighteenth century when nabobs spent cash with abandon. The 1970s were a decade of opulence, when Iran Air placed orders for Concordes, and when the imports of luxury goods like stereos and televisions soared with the number of viewers rising from just over 2 million in 1970 to 15 million just four years later.41 Lavish spending knew no boundaries.

  As had been the case when early medieval Europe had been hungry for fine fabrics, spices and luxuries from the east, the question was whether there were other ways to pay for the highly prized necessities. A millennium earlier, slaves had been shipped to the Muslim countries to help fund the purchases heading in the other direction. Now too there was a darker side to being able to afford the black gold: the sale of arms and the sale of nuclear technology.

  National governments lobbied aggressively to sell weapons through state-owned businesses, or by supporting corporations that were major employers and taxpayers. The Middle East as a whole accounted for more than 50 per cent of global arms imports in the mid-1970s. In Iran alone, defence expenditure multiplied nearly ten-fold in six years to 1978, with US businesses taking orders worth almost $20 billion in the same period; total military expenditure in this period has been estimated at more than $54 billion – eventually rising to nearly 16 per cent of GNP.42

  The Shah needed little convincing when it came to buying weapons. He was a man obsessed by planes, missiles and artillery, who on one occasion turned to the British ambassador to Iran to ask, ‘What is the sprocket horsepower of the Chieftain tank?’ – a question the diplomat struggled to answer.43 All-comers were keen to get a piece of the action, from the Soviet Union to the French, from the East Germans to the British. Armed with seemingly limitless resources, it was a question of which surface-to-air missile systems would be bought, which anti-tank devices would sell, which fighter planes would be acquired – and which middleman to trust to get deals done in a world that seemed difficult for the outsider to navigate successfully.

  In Iraq, spending on military hardware reached nearly 40 per cent of the national budget, rising by more than six times between 1975 and 1980. Few worried about the consequences of what quickly developed into a regional arms race between Iran and Iraq, or whether the ever increasing resources spent on the weapons would dangerously raise the profile of the military in both countries. On the contrary, as long as there was demand – and the ability to pay – no hurdles were put in the way of countries across the Middle East and Persian Gulf acquiring large stockpiles of weapons. The more Chieftain tanks ordered by Iran, Mirage jets by Israel, MiG-21 and MiG-23 fighters by Syria, Soviet T-72 tanks by Iraq and US F-5 jets by Saudi Arabia, the better for the economies of Britain, France, the USSR and the USA.44

  The same approach was taken with the issue of nuclear power. In the early twenty-first century, the very notion of states like Iran developing any form of nuclear capability became the subject of international condemnation and disbelief. The ques
tion of nuclear power has become inextricably linked with the proliferation of weapons of mass destruction. Iraq’s nuclear potential – and the inability of inspectors from the International Atomic Energy Agency to examine facilities, laboratories and centrifuges thought, reported or known to be in the country – were a fundamental part of the justification for the invasion in 2003 that toppled Saddam Hussein.

  Analogous question marks over Iran’s apparent determination to develop nuclear capability and its ability to process radioactive materials have provoked similar impulses. ‘We can’t let politics and mythology cloud reality,’ Secretary of State John Kerry said in the winter of 2013. ‘[President Obama] has been willing and made it clear that he is prepared to use force with respect to Iran’s weapons, and he has deployed the forces and the weapons necessary to achieve that goal if it has to be achieved.’45 The very idea of wanting to develop nuclear energy has been seen as a danger to regional and global security. The Iranians, said Vice-President Dick Cheney in 2005, ‘are already sitting on an awful lot of oil and gas. Nobody can figure [out] why they need nuclear [power] as well to generate energy.’ ‘For a major oil producer such as Iran,’ agreed Henry Kissinger, ‘nuclear energy is a wasteful use of resources.’46

  Decades earlier, both men saw things very differently – as did successive White House administrations in the post-war period. In fact, the acquisition of nuclear resources had been actively encouraged by the United States in a programme whose name and aims today seem almost comical: Atoms for Peace. Conceived by the Eisenhower administration, this was a plan designed to allow the US to participate in ‘an international atomic pool’, and ultimately involved friendly governments being given access to 40,000 kilograms of Uranium-235 for non-military research.47