The gap between the developed world and the underdeveloped world grows daily. The vast majority of the underdeveloped nations fall farther and farther behind the quick pace of the developed nations. There are constant efforts being made to rectify this deplorable situation. The countries borrow vast amounts of money; they adhere to the tried and not so true methods of the IMF. They attempt to pull themselves out of the Third World hole, but cannot. They are plagued with failing economies and declining terms of trade. However, there is one commodity, one natural resource that this does not apply to, oil. Oil is independent of these restraints. A country rich in oil is a country rich in profit. So, why then are the countries in the Middle East still a part of the Third World? That question is precisely what this paper is intended to find out. However, a study of the entire Middle East is far too broad for the scope of this study. So, this paper will focus on the Country of Iran. The British Ambassador to Iran in the 1970's, Anthony Parsons, once said, "I had a keen intellectual interest in observing at first hand the prospects of one of the few Third World countries which was generally believed to be close to breaking through the barrier of underdevelopment." So, why did Iran fail to live up to the expectations of Parsons and others? This study hopes to illuminate that question and others.
"Opportunities are not gained easily, but they can be lost easily," says President Khatami of Iran recently. Iran today is a country trying to gain control of itself. The President's new policies call for an increase in non-oil exports, activation of the private sector, more foreign investment, higher taxes on the more economically active, a reformation of the monetary structure of the public sector (obeying monetary discipline), establishment of a suitable social security system and channeling subsidies, and an increase in national savings and private investments.'
Why does a country with a Gross Domestic Product of $74,757,600,000 in 1994 need such drastic change? Why does a nation with a running deficit of 0.1% also in 1994 have an inflation rate of3l.5% in the same year? Iran is made up of 636,296 square miles in which 71,538,000 people live. It is ranked 15tb in the World in population and has a population growth rate of 2.1% per year. The average life expectancy is 69.6 years. It has an infant mortality rate of 30 per 1,000 live births. There are 3 doctors for every 10,000 people and 14 hospital beds for every 10,000 people. ii It is suffering from plummeting oil prices, horrible unemployment, high inflation, high prices, an inefficient public sector, and little economic growth.iii Yet in 1995 it produced 179,400,000 metric tons of crude oil, or 1,315,002,000 barrels of crude oil.iv There are great contradictions in this nation. How is it that a country so rich in resources is so riddled with economic problems?
This question is not a simple one. It begs not only the current facts and the makeup of the country, but also the history of what happened to this developing nation. In order to understand a country one must delve into it's past. In order to understand the present state of Iran, one must carefully examine the early intervention of foreign powers into Iran, post - World War II Iranian political control, the overthrow of the government of Musaddiq in 1953, the oil boom of the 1970's, the Islamic Revolution of 1979, and the Iran-Iraq War.
Iran has existed for centuries. It is a collage of people, broken into groups by four major mountain ranges and a vast central desert. Religiously, the nation is 93% Shi'ite, 5% Sunni, and 2% Armenian and Assyrian Christians, Bahais, Jews, and Zoroastrians. These religious distinctions only reinforce ethnic and linguistic divisions, as the considerable Sunni minority is mostly confined to northern Kurdistan, Arabs to Kiluzistan, Baluchis to Baluchistan, and Turkmans to the Caspion ~ At the end of the 19th century, where we begin our history for this is when things truly began to change, even tribal groups such as the Kurds lacked solidarity. They were divided into a number of mutually hostile clans, the Sunnis being in the north and the Shi'ites in the south. On top of all this, the Sunni and Shi'ite sects, throughout Iran, were and are divided into numerous subsets, which were known to be actively hostile as wellvi. To make things even more confusing, for the reader and Iran, the nation is divided linguistically. 60% of the people speak Persian. 25% speak Turk, 7% Kurd, 3% Arabic, 2% Baluchi, 2% Armenian, and 1% communicate in other ~ There are even subgroups of dialects to these various languages. There was no sense of national unity. Iranians were not loyal to Iran, or to any economic grouping. They were loyal to their family, their clan, or even religious 5ectViii. The nation known as Iran was hardly united in late 19th century and still suffers from the divisions set forth here. The setting was perfect for rising imperialist nations to sink their hungry teeth into this resource rich land.
However, in order to lay a proper framework for Iranian political events, it must be stated that foreign interests in Iran were closely connected to the internal stability that these foreign governments believed existed in the power of the Shah. The discussion of Iranian history that is to follow will certainly prove the perceptions of these foreign influences to be completely incorrect. In fact, the power of the Shah was not at all stable. Furthermore, the Shah's obvious ties to the governments of the United States and Great Britain only weakened his power within the nation of Iran.
The Shah of Iran took a stance of positive equilibrium, or political balance, towards the two foreign powers, Great Britain and Russia, that came desiring oil in the middle of the 19th ~ Since he did not have the technology or the knowledge of how to use it even if he did have it, he allowed the foreign company's to drill the oil for him. But for every concession he made to entrepreneurs of one country, he would also make a concession to the other. After several series of alternating commissions to drill, a cumulative trade deficit developed. Slowly, both imperialist nations gained more influence in the country. By the late 1870's, Britain had acquired enough authority to impede Germany from becoming a third power in Iran's political and economic relations, even though the Shah himself asked German firms to develop a railroad and shipping in the southx. But this influence is minute compared to the authority the European Power claims in the twentieth century
In 1901, the largest concession of oil thus far was granted; a concession that would never be equalized and one that put Great Britain in the forefront of Iranian political life. This concession was granted by the Shah of Qajar to the British engineer William Knox D'Arcy. The concession of 1901 had long lasting effects that plagued Iranian relations with the West throughout the twentieth century. The terms of the oil concession granted Britain almost complete control over Iran's most precious and valued commodity. This caused a widespread feeling among Iranians that the unquestioned power of the Shah needed to be reexamined. The Iranian historian Fakhreddin Azimi comments on this trend by saying, "The challenge of the West had, above all, helped the emergence of a modern civic spirit.~~xi This "civic spirit" meant that an organized challenge to the Shah's power was on the horizon. In 1906, this challenge was realized when Muzaffar ud-Din Shah submitted to pressure and issued a decree which heralded the constitutional era in Iranian ~ This important decree created the National Consultative Assembly, known as the Majils and created an Iranian constitution that limited the power of the Shah.
The Majlis was viewed as a hostile organization by the British government from the outset. The reasons for this negative view are not hard to understand when the interests of Great Britain in Iran are remembered. The British government was concerned with Iran because of the oil that the country held. The importance of oil is obvious and needs no further discussion, but oils relation to internal Iranian politics might not be as intuitive. Britain wanted and needed an Iranian government that had supreme authority and well-defined interests. This would allow them to deal with only one man, which made the process of securing their interests much more simple. In the words of Terry Lynn Karl, the British wanted a government "which could enforce control over the entire country and thus provide them with one reliable bargaining partner instead of many. The power of the Shah fit this description perfectly, but the creation of the Majlis in 1906 altered the cozy relationship between Great Britain and the Shah.
The creation of the Majlis meant that all of Iran's affairs, including foreign, were going to be under the scrutiny of more individuals. Thus, many of the particulars of the 1901 oil concession were reexamined and found to be unacceptable to the Iranians. These new grievances against British control of Iranian oil and the oil concession were well founded. First, the oil concession was not ratified by the parliament of the post-constitutional period. Some sort of move by the parliament was highly likely, especially when one considers that the concession had left the country's most important resource under the control of a foreign concessionaire.xiv This point only proves the supreme power that the Qajar Shah held before 1906. Second, to make matters worse, APOC (the Anglo-Persian Oil Company that was established by the concession) did not consistently follow the terms of the 1901 agreement. The British government often granted rebates to the Royal Navy that considerably cut into Iranian profits.xv This concern over the specific Iranian share in the oil industry was also a new aspect of the constitutional Majlis. At this point nationalism became a new worry to the British interest because the Majlis "had become an effective forum for debating and defining the national interests of Iran and thus a means of nourishing the growing Iranian national consciousness.~xvi It seemed that Great Britain could no longer exploit the Iranian oil industry through manipulation of the Shah without consequences.
However, the setback that British relations suffered in 1906 was short lived. The outbreak of World War I allowed them to resume aggressive policies that were meant to influence the domestic politics of Iran. The Germans and the Ottomans extended the conflict into Iran during the early stages of the Great War, thus the British and the Russians also had to be present to counter any of their enemies' actions. However, in 1917, the October Revolution broke out in Russia and the Germans and Ottomans withdrew from the country shortly thereafter leaving the British virtually unchallenged in Iran. This unchallenged position left the door open for the British to commence aggressive policies that the Majlis could not withstand. The Majlis was unable to unite against the British because it was large and many of its deputies were divided on important issues. Also the in-built inefficiency of the Majlis and the inevitable fragility of the constitutional governments lead to the realization of British wishes in Iran.xvII These wishes were embodied by the bloodless coup of 1921 during which the Qaj ar dynasty was abolished. The authoritarian rule of the British-backed Reza Shah Pahlavi was established in 1925.
However, constitutionalism in Iran was not completely dead. The memory of the constitutional government was able to survive because of the harsh, authoritarian rule of the Reza Shah. The Reza Shah, with approval of and encouragement by the British government, began an attempt to modernize Iran. Roads, railways, and other means of communication were created during his rule, but not before he completely modernized the army and the police force in order to make obvious and secure his power. In the Reza Shah's mind, "modernization was perceived to be attainable only through autocratic measures and the suppression of representative institutions. ~ Thus, a government that was adequate enough to efficiently run the newly modernized Iran never emerged under the Reza Shah. The nationalism and desire for a more constitutional government that had been suppressed during this time was fully ready to emerge when the Reza Shah's rule was ended by the Anglo-Soviet occupation of Iran in 1941. Again, the participation of foreign nations shaped and made possible the events that drastically affected the course of Iranian political history.
The period of Iranian history from 1941 until 1953 is widely known as that nations best chance at establishing democracy. In his book The Crisis ofDemocracy, Azimi notes that "the political arrangements which replaced Reza Shah's regime were legitimized through the 'depersonalization' of the exercise of political power and constraints on its use arising largely from the re-establishment of parliamentary
~
A new political elite had now emerged that was more conscious and aware of democratic methods of governing. The legacy of the Reza Shah was not completely destroyed, but the new Shah would have little of the autocratic power that his father enjoyed. The spirit of Iranian nationalism was rekindled, and the influence of the Majlis was restored. However, many of the inherent weaknesses of the Iranian constitution still existed. One of the major problems was the two-year term of the deputies of the Majlis. This caused inefficiency because of two reasons. First, the Majlis was never together long enough to form a cohesive working relationship among its deputies. Second, the deputies had to spend most of their term campaigning for the next election instead of working for real change and taking risks. Sayyid Taqizadih, a leading constitutionalist of the time, recognized this weakness when he said "no other factor indicating the chaotic condition of the country is as salient as the fact that in the course of ten years... thirty-eight consecutive Cabinets have assnmed office in Iran. Regardless, the nationalism of the constitutional government was preserved until 1953 when the government of Musaddiq was toppled by a British-American sponsored coup.The coup of 1953 is probably the most important event in Iranian history during the twentieth century. This event is probably more important than the Islamic Revolution of 1979 because it laid the groundwork and provided justification for that momentous event. Thus, a detailed examination of the events leading up to the coup of 1953 is in order.
Dr. Muhammad Musaddiq was one of the most vocal proponents of Iranian nationalism. He looked to the past and was angered at the British control of Iranian oil. His anger was furthered by the small percentage of profits that Iran received from the AIOC after World War ~ Soon after his election to Priine Minister in April of 1951, he nationalized the Iranian oil industry by seizing British control over it. This sparked his battle with Great Britain and eventually the United States. Unfortunately for Musaddiq, it was a battle that his country was not able to win.
Musaddiq' 5 decision to nationalize the oil industry was certainly a risky maneuver, but he had reasons that lead him to believe that it could work. His justification had two parts. First, he believed that the United States would support him against the British. Musaddiq viewed the Untied States as a great anti-colonial power. He felt that he shared something in common with the American Revolutionaries because of their battle against the British Crown. Furthermore, there was an ongoing dispute between the British and American oil companies at the time. In 1949, the British decided to ban imports of oil from dollar areas until all oil from sterling areas was used up. This ended up costing American oil companies 100,000 barrels of oil sales per day.xxii Musaddiq also gained hope from the fair oil relationship that the United States had with Saudi Arabia. Thus, he had good reason to believe that the United States would be an ally against Britain.
Musaddiq also believed that Iran possessed the technical capabilities that were required to run its own oil industry. He expelled British management and technicians with this belief in mind. Musaddiq knew how vital Iranian oil was to the rest of the world as well. Thus, when Britain issued an international boycott of Iranian oil he was not alarmed because he thought that it would be short lived. He was also not alarmed because he believed that Iran could create an effective non-oil economy. Musaddiq's effectiveness as a leader was demonstrated by his ability to orchestrate this new Iranian economy. The Iranian economy survived the boycott from 1951 until 1953 even when losses of oil revenues cost them 200 billion rials, or 40% of their budget. The historian Homa Katouzian notes that, "the key to this success was the steady increase of in non-oil exports [tobacco, tea, sugar, and opium], and the dramatic fall in imports as a consequence of the imposition of import quotas, and - especially - the depreciation of the rial."xxiii Musaddiq was successful for a time on his own, but he would soon need loans from the United States in order to sustain his economy. The refusal of these loans shocked him and was the first step in his downfall.
One reason that the United States turned against Musaddiq was the importance of Iranian oil to the world as a whole. The United States was unavoidably linked to the British through the coalition of U.S. - British oil companies known as the "seven sisters."xxiv All of these companies gained much of their oil from the Middle East, thus they had a common interest in keeping the oil industries there stable. It is not hard to believe that many Americans believed that what happened to Britain in Iran could happen to the United States in Saudi Arabia. These countries felt that they needed to ally with one another against rogue leaders like Musaddiq in order to protect their oil companies' common interests. The United States proved Musaddiq's theory incorrect and cooperated with Great Britain. In 1953, President Eisenhower responded to Musaddiq's request for aid by saying, "It would not be fair to the American taxpayers for the U.S. government to extend any economic aid to Iran so long as Iran would have access to funds derived from the sale of its oil if a reasonable agreement were reached with regard to compensation whereby the large-scale marketing of Iranian oil would be resumed.xxv The United States would not support Musaddiq's new economic policy until a settlement was reached with the British.
However, this economic theory is only a fraction of the total concern that the United States had in Iran. The U.S. received very little of its oil from Iran and thus had other, more important concerns. To be precise, this other, non-oil concern was the containment of the Soviet Union. President Truman exercised a fairly even-handed approach to Iran during the 1940's. His main concern was the government of Iran's willingness to remain pro-Western. It was quite obvious that Musaddiq was not a communist, so the United States only employed the CIA against the Iranian communist party, the Tudeh Party. Things changed in 1953 with the inauguration of Eisenhower. Many historians have noted that the Eisenhower administration was characterized by "paranoid anti-communism. ,XXVI Their paranoia was heightened by the events of 1953. First, the oil dispute between Iran and Britain reached an impasse. Then the economic situation in Iran turned drastic which lead Americans to believe that communism could take over. Finally, these suspicions were confirmed when the Tudeh Party became more and more vocal throughout 1953. All of these events added up to a point in which the United States felt it best to support a coup against Musaddiq.
The importance of the American government in the coup of 1953 is unquestionable. In fact, Mark Gasiorowski has commented that, "it seems quite clear that the U.S. role in the events of August 1953 was vital; it [the coup] could not have happened without the United States.xxvii The coup against Musaddiq had five parts, all of which the United States had a major role in. First, there would have to be some sort of anti-Musaddiq propaganda in Iran. This part of the plan was carried out by the CIA who simply included Musaddiq in their anti-Tudeh efforts. Second, there needed to be visible anti-Musaddiq demonstrations. The CIA also carried out this by actually paying Iranian citizens to demonstrate. Third, political figures had to be bribed. Fourth, military leaders had to buy off in order to ensure a bloodless coup. Finally, and most importantly, the
Shah had to be persuaded to constitutionally denounce Musaddiq. This would lend some credibility to the coup and ensure that a pro-Western government would take power. All of this was successfully accomplished in 1953, and the Shah was reestablished as the supreme power in Iran.
The consequences of the 1953 coup are still being felt today. It was obvious that the West had orchestrated the entire event. The people of Iran knew well that the Shah had the support of the United States and Great Britain. Thus, from 1953 until the Islamic Revolution of 1979, the United States was linked to the hated Shah and his brutal police force, the SAVAK. The United States failed to foresee this consequence because it was blinded by anti-communism. The American government gave little thought to the popularity of Musaddiq. His movement was a popular one that preached Iranian nationalism and self-determination. Musaddiq was made a hero by standing up against the powerful Western nations. The Shah was vilified as a pawn that was powerless against American and British wishes. Furthermore, the coup undermined Musaddiq's attempt at establishing democracy in Iran. Again, the United States was seemingly more concerned with Iran's anti-communism than it was with Iranian democracy. All of these mistakes by the American government and subsequent anti-American sentiment in Iran would come back to haunt the United States in 1979.
In 1953, Mohammed Reza Pahlavi Shah became the central leader in Iran. The constitution was once again put to the side. This Shah was put into place by Western powers and would exercise autocratic control over Iran; both are similarities with his father in 1925, Reza Shah. The Shah of 1953 was probably more infatuated with the West and its ideals than his father. British Ambassador to Iran, Anthony Parsons, described this aspect of the Shah's personality when he wrote, "In the Shah's mind, Iran was part of Western civilization, separated by an accident of geography from its natural partners and equals. The Iranians in his view were Aryan, not Semitic, and their innate talents and abilities had been suffocated by the blanket of the Arab invasion and its spiritual concomitant, Islam."xxviii The Shah was willing to do everything in his power to cure Iran of its historic backwardness and push it in the direction of the advanced Western nations.
The Shah called the pursuit of this goal his plan for a "Great Civilization." The oil boom in 1973 provided the Shah with the necessary means to make his vision a reality. The Shah began pouring oil revenues into heavy industry and his spending spree began to show positive results. Ambassador Parsons remarked, "I would visit a modern factory and come away feeling that I had seen something on par with its equivalent in Western Europe."xxxix The early seventies were certainly prosperous for Iran and the Shah made great strides towards his "Great Civilization," but this prosperity came with a cost. Karl comments on the double-sided effect of the Shah's actions in 1973 when she writes, "the Shah never even considered the possibility of sterilizing petroleum wealth. ,, instead, he sought to modernize through investments in heavy industry, encouraged a consumer boom to keep the commercial and educated classes quiet, actively destroyed politically uncontrollable traditional forms of nomadic agriculture and religious life, built up the military, formed his own political parties, and created a police state to quash opposition to his rule."xxx The Shah made decisions to foster Iran's international prestige rather than for economic independence or cost-effectiveness. Automobile and tractor factories were established, but the essential parts (i.e., engines) were imported. Even assembling them in Iran was more costly than just importing the finished product. Oil-derived subsidies permitted many areas of the economy to remain unproductive, inefficient, and dependent on the West.xxxi Also during this time, the Shah decided to use his new influx of revenue to make Iran a regional and possibly global power. He started to buy arms and his consumption rose with the boom. From 1972 to 1976, The Shah bought $10 billion worth in U.S. arms.xxxii Through his use of brutality to maintain power, his denunciation of religion, and through his horrid economic plans and wasting of resources. The citizens of Iran continued to notice these unpopular views and actions of the Shah, and an anti-Shah sentiment began to emerge.
The people who were unhappy with the Shah were also unhappy with the United States. It must be remembered that the Americans played a vital role in the Shah's return to power and his formation of a brutal police squad, the SAVAK. The United States also kept a healthy relationship with the Shah throughout his rule. Starting with the Nixon administration and continuing to a lesser extent until the Carter administration, the United States sold almost half of its entire foreign military sales to Iran.xxxiii' The United States was quite happy with the rule of the Shah because he represented a strong, pro-Western leader that would not submit to communism. The British were also pleased with the leadership of the Shah because he was so dependent on the oil revenues that he would never attempt to disrupt the oil concession like Musaddiq did in 1953.
However, the Shah's rule was suffered a severe blow when oil prices fell in 1975. At this point, Iran began to suffer from what economists call the "Dutch Disease." The Dutch Disease is "a process whereby new discoveries of favorable price changes in one sector of the economy - for example, petroleum - cause distress in other sectors - for example agriculture."xxxiv This seems to fit the situation that the Shah found himself in during the oil crisis of 1975. He based his authority and the success of his Great Civilization on the revenues from oil. When these revenues began to show decline, the fragility of the Shah's power was exposed. This gave the many Iranians who felt oppressed under the Shah and opportunity to voice their opinions. Many of these grievances were against the SAVAK, the police organization that had been brutally suppressing any anti-Shah sentiments. However most of the complaints against the Shah were inspired by religion. Ambassador Parsons recalls this time in Iran when he writes, "there had been a cycle of nightly violence with congregations, distempered by fasting and inflamed by the sermons of the mullahs, sallying from the mosques on the rampage against the symbols of modernity, Pahlavi-ism and non-Islamic culture."xxxv The Shah's Great Civilization and repression of Iranian history and culture was finally coming back to haunt him.
The Shah was now in retreat. The political tide in Iran had irreversibly turned against him. The workers in the oil fields went on strike in early 1979 and virtually destroyed the Shah's economy. The religious leaders of Iran were now ready to overthrow the Shah, but all of the Ayatollahs were not in agreement. The Ayatollahs of Qom and Mashnad only wanted a return to the constitutional period that was established in 1906, but the Ayatollah Khomeini, the most vocal dissident, wanted a complete Islamic revolution and the final departure of the Shah. The Shah conceded and said that there would be free elections at the end of 1979, but things had gone too far. His power was ended and a military government was established to weather the storm.
Until this point, nothing has been said about the American and British roles in the events of 1979. These are crucial roles to the understanding of 1979 and the consequences that followed. American and British intentions during the events of 1979 are still debated to this day. The Shah, in a book published almost a decade latter, blamed these governments for his overthrow. He believed that the Carter administration was against him because of the many attacks he received over the issue of human rights. The Shah was unhappy with the Americans refusal to sell him tear gas canisters and rubber-tipped bullets xxxvi, but this should be seen as an American concern for human rights, not a condemnation of the Shah's regime. The Shah also blamed the United States for backing down to the Soviet Union when Brezhnev warned the U.S. not to prop up the Shah. He also accused the British government for failing to come to his aid. He sited the anti-Shah views that were expressed in the BBC Persian-language broadcasts. Ambassador Parsons recognizes this situation as well in his account of the times when he writes, "the mullahs themselves believed that they had British support which we were expressing through Radio London."xxxvii This particular belief of the Shah was misinformed. The positions of the press in a democratic society with free speech should never be considered to be the same as that nation's government.
Therefore the question of why the Revolution took place turns on the actions of the Shah himself, thought one must not forget who placed him there. Ambassador Parsons blames the revolution on the culmination of the 1975-oil crisis, the Shah's repressive measures, and the liberalization that the Shah allowed after pressure from Washington. Parsons believes that if the Shah had kept a tight lid on the opposition during the oil crisis that he could have survived. This belief that the Shah brought the Revolution on himself seems to be supported by the American situation. The United States had much to lose if the Shah lost power. American arms sales were cut in half after the Revolution. Furthermore, it is not plausible that the United States would want an unforgiving antiAmeric an, Khomeini, in control of a nation that was considered their first line of defense against the Soviet Union. In fact, after the Revolution, the United States lost crucial listening posts in Iran. From these facts, it seems highly unlikely that the U.S. and British governments were against the Shah.
Iranian-American relations suffered after the Revolution. After an American-backed provisional government failed, Khomeini had full control of Iran. He immediately ousted American officials and caused a worldwide hike in oil prices by limiting production. The American government was now powerless to do anything about it. However, the reasons for Khomeini's aggressive anti-American policies must now be analyzed. For the answers to these questions one must return to 1953, when the United States took a leading role in the coup that toppled Musaddiq's popular government. On many occasions, Khomeini was even likened to Musaddiq. It was said that both leaders were "champions of the disinherited against the imperialist aggressors."xxxviii Khomeini and the rest of Iran knew full well that the United States was largely responsible for the fall of Musaddiq and the installation of the Shah. Therefore, they blamed the United States as much as the Shah for the repression of Iranian nationalism, culture, and religion that took place between 1953 and 1979.
The relationship between the United States and the Shah was solidified when the Americans refused to return the Shah to Iran for trial. The Iranians had suspicions all along that the Shah was merely a puppet of the West, but now they had proof of these suspicions because he ran to the West for protection after the Revolution. The refusal to release the Shah prompted the capture of more than sixty American diplomats. The ensuing hostage crisis lead to the total breakdown of U.S. Iranian relations.
Now, to say that the United States was completely powerless to stop Iran in it's new policies is not totally accurate. Some historians believe that the War between Iran and Iraq, which ensued in the following year, was orchestrated by the U.S. Either way, the War added to the instability already apparent in Iran. Though Iran now had a new political system, it's economy was suffering from decades of misuse.
The Iran-Iraq War began with Iraq's invasion of Iran on September 22, 1980 over a territory dispute. However, it is generally agreed that this is not the true reason for Iraq's aggression. Stephen Pelletiere claims that the War was a direct result of the power vacuum that arose in the Persian Gulf in the 1960's when British forces withdrew from the area. On the heels of Britain, the Shah of Iran assumed control of the policeman role in the Gulf. Iraq, envious of Iran's regional power, invaded in 1980. As Shahram Chubin words it, "this dispute is unusual in the Third World not just because it was not an internal or civil war, it was purely an inter-state war. Also, it was not about, simply or principally, a dispute over territory, but rather a conquest over power and ideas."xxxix Another theory on Iraq's aggression was that Saddam Hussein, the President and Authoritative power in Iraq, feared the revolutionary fervor in Iran. He was concerned that the desire for a religious state would spur the Muslims in his nation to revolt. He needed to stop the wave of revolution and after the takeover of the American Embassy, he knew the West would tolerate his actions.xl
In the beginning of the War, it looked like Iraq would secure a victory in the near future. Out of the 19 states in the Middle East, 15 were in support of Iraq as well as Western Powers, though not as directly. Iraq was receiving monetary support from most of the Middle Eastern nations as well as troops and the Western Powers were selling them arms. However, Iraq is not the focus of this paper. In this War, Iran was virtually alone. Syria and Libya sided with Iran, though they were not as supportive as Iraq's allies. They supported Iran, but did not assist them. Also, in the beginning of the War, the Soviet Union was the sole arms supplier to Iran, all other country's boycotting the war torn nation. However, as the war progressed and the USSR saw no opportunity for political control in Iran, they decided to support Iraq, in hopes of political power in that country. xli This left Iran in desperate need for arms and the only place they could find any, though not nearly enough, was on the black market.
So, Iran was without assistance, had Iraqi troops deep into their borders, was isolated in the Global Community (mostly because of their own decision to break ties with other nations after the Islamic Revolution), faced friction within its political elite, and fought an enemy with countless new weapons and billions of donated dollars to burn (In February 1982, the Gulf's Arab states granted Iraq $24 billionxlii). In spite of all this, by November and December of 1981, Iranian troops began to recapture much of their lost land. In fact, on May 24, 1982, Iranian troops recaptured the port city of Khoramshar, the final Iraqi stronghold on Iranian soil.
Now, Iran had a decision to make. The country had successfully drove Iraq from its land, but is this the end of the war? At this point Saddam Hussein realized his blunder and offered an unconditional cease-fire. In answer to Saddam's proposal, in July of 1982, Iran launched a major aggressive into Iraqi territory. "Rather than take advantage of its 1982 position, Iran passed over the opportunity at the price of the destruction of its military force as well as much of its national potential."xliii
The rest of the details of the War are not important. What is important is the effect of the War on Iran. After the War, the country faced high inflation rates, high prices for primary commodities, subsidization, an unprecedented loss of national revenue, a decline in the public's purchasing power, an outrageous unemployment rate, and the expansion of artificial and unproductive jobs.xliv The Iran-Iraq War caused $440 billion in direct losses to the Iranian economy and another $490 billion in indirect losses. Reconstruction of the war damaged economy cost another $644.4 billion. The total cost of the War exceeds the oil revenues of Iran for the entire 20th century. On top of these losses, one must also add the loss of human life. Iran lost 367,000 soldiers with hundreds of thousands more injured.xlv The losses not only represent the superficial costs of the War, but also the lost opportunities of the Iranian nation and its economy. The small gains that the Shah was able to make towards his "Great Society" in the early 1970's were gained through investment of oil revenues. After the Iran-Iraq War, the nation of Iran is in too much debt to even think of such expenditures. The country had an opportunity to put the momentum of the Islamic Revolution to work, making changes to pull their economy out of the horrible slump that the Shah left it in at the end of the 1970's, but all was stopped by the War. "It was a war that resolved nothing, and changed very little. Although pursued along the full length of the five-hundred mile frontier between the two states, it remained in large measure a border war, with no major incursions into the territory of either state, and extensions confined to a 'war of the cities,' that is, missile and air attacks, and a 'tanker war' on the waters of the Persian Gulf. Neither regime was toppled by the war, and none of the issues underlying it were settled."xlvi
The most recent event to effect Iran was the Persian Gulf War, known as Operation Desert Storm to many Americans. Iran managed to keep a solid neutrality in this war and was directly affected by this war. The biggest outcome of this war, to Iran, was the taking on of over one million refugees from Iraq, those who were being persecuted by Saddam Hussein. Beyond this, the War succeeded in making the already unstable region of the Middle East even more unstable.
So, the end of the history has been reached and Iran's story has had some illumination dance across its pages. The problems that face Iran and those that faced Iran throughout its recent history are all a direct result of the country's most valuable asset, their oil. It was the oil that brought the imperialist nations to Iran in the middle of the 19th century. Granted, these nations manipulated and undermined Iran's power. They used the developing nation to the best of their abilities. However, they would not have had reason to be there if it wasn't for Iran's enormous store of oil. Had Iran been oil free, it probably would have ended up much like Costa Rica. Having nothing to offer the conquerors, Iran would have been looked over. It's true that the selfishness and greed of the Shahs threw the country into both political and economic instability, however the shahs were artificially placed on their thrones. Powerful western governments who wanted an easy way to control Iran placed them there with the desire of getting at the nation's oil. Ironic that the nations best blessing and best hope to get itself out of its present mess is the precise thing that led Iran there. Iran is a victim of its own glory.
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