The Pasdaran Gain Control Over Iran’s Military Operations
During the first half of the Cold War, the shah of Iran was determined to employ military-led industrialization as his country’s development strategy. All changed, though, after the revolution when the Pasdaran — the Army of the Guardians of the Islamic Revolution — gained control over Iran’s military operations, rejecting any sort of relationship with the United States.
With the onset of the Iran-Iraq War, Iran’s regular armed forces became even more powerless to oppose the Pasdaran who, along with poorly trained volunteers called basij
enhanced their image in Iran through human-wave assaults on Iraqi positions and other suicidal exploits. Their heroic self-sacrifice and battle experience probably led some of the leaders of the Pasdaran to envisage slowly absorbing the regular Iranian armed forces into their own ranks and command structure.
As opposed to militarization under the shah, the willingness of the general public to sacrifice young lives for an ideological position touched every family in every locale in Iran.
Iran’s War Casualties
Out of a 1986 population of 50.6 million, there were approximately 300,000 casualties, including 61.000 missing in action. At least another 500,000 were disabled or maimed. Over 2.5 million lost their homes and jobs or were “displaced, in various refugee camps, makeshift shacks, and temporary shelters in major urban centers.”
Civilian industry was impacted since “millions of energetic and productive working people . . . served in the war in varying capacities as military personnel, paramilitary and irregular forces, technical experts, and volunteers.”
The impact of the war on Iran’s human settlements was also disruptive. While 52 cities in five ‘war provinces’ were damaged, major cities in other parts of the country, including Isfahan, were hit by missiles and bombs on numerous occasions, sustaining substantial damage. Direct economic costs included:
damage to major buildings and public establishments, machinery and equipment (belonging to the three main economic sectors of agriculture, industry, and services, and those sent to the war front, except military equipment), material goods, infrastructures, war-related wages (excluding those paid to military personnel), and welfare payments to the war inflicted population. Indirect economic costs, on the other hand, include opportunity costs including lost potential GNP and lost potential earnings from oil, reduction in capacities, and delay in operations.
At the same time, Iraq’s invasion of Iran had provided a temporary solution to the regime’s early crisis. Eric Hoogland asserts that the government was able to “capitalize upon the image of Iran as a victim of aggression” and, in the process, broaden support for the theocracy.
High Unemployment
Hoogland argues that the high levels of unemployment experienced by urban workers in the 1979-1981 time period were alleviated, in part, by manpower requirements surrounding the war effort. One hundred eighty-five thousand men served in the professional military; about 250,000 more were in the Revolutionary Guards; and at least 100,000 rotating volunteers were “kept at combat readiness in the Basij-e Mostazafin (Mobilization of the Oppressed).” He goes on to estimate that 900,000 youths were removed from the labor force temporarily or permanently due to the war. In this context, it’s appropriate to examine the new regime’s economic and oil policy.
In early 1979. there was talk of eliminating Iran’s dependency on oil and establishing a more balanced development of the economy. According to Cyrus Bina, oil workers, themselves, made the following demands:
- redistribution of oil income
- an end to foreign domination of the oil industry
- workers’ control including veto privileges over management appointees
- an increase in oil prices over the OPEC determined level.
The workers also proposed:
- conservation of oil resources
- diversification of exports
- elimination of enhanced recovery systems
- elimination of transnational oil companies.
Almost immediately, 18,000 foreign technicians left the country.
Continuing Importance of Oil
While the workers were nominally supported by the new regime, with the outbreak of war, both international and domestic considerations emerged. The Islamic government began selling oil below OPEC prices in order to maximize its income. The additional revenue was absolutely required to support the war economy, and the government had no choice but to capitalize on Iran’s rentier capacities. In fact, throughout the 1980s, the value of oil exports remained well above 90 percent of total export values.
When the price of oil dropped in 1986, the regime was forced to export more oil to cope with a drain on foreign exchange reserves, mounting budget deficits, and immense expenditures associated with the war effort.
While the regime was not able to compensate for the 40 percent decline in capacity which followed the removal of the shah, Bina states that
the Shah’s oil policies and those of the Islamic government are hardly distinct from one another. In the former case the oil revenues were spent on military build-up in the anticipation of war, whereas in the later they were spent on conducting the war, without anticipation of its aftermath.
In the postwar (post-Khomeini) era, the Islamic Republic has been faced with the task of reconstruction of its war-damaged economy. Again, the government must rely on oil revenues. Thus, the Iranian economy remains subject to the vagaries of the international oil market. In fact Bina says:
. . . the economy is more intwined with global economy today than during the Shah’s regime. The oil policy rests on the idea of mortgaging the country’s future in order to prolong the life of the regime. This policy is one shared by both regimes, old as well as new. The post-war political reconstruction of the Islamic Republic is also intwined with the crisis of legitimacy and the crisis of governance, both of which are root causes of the antagonism between the government and the opposition and a source of internal factional conflict within the government itself.
Reliance on oil and the resolution of the war with Iraq did not end Iran’s economic problems. Nor did the regime’s emphasis on the
. . . preservation of private property and capitalism without the old social and economic ties to the USA. The new policy was in fact a demand for a change in Iran’s economic partners in the world economy. However, apart from a series of minor reforms, the Islamic Republic was not able to alter the socio-economic structure and alleviate the crisis that it had inherited. Economically, the Islamic Republic was only able to change the geographic distribution of Iran’s foreign trade . . . . The structural relation between Iran and the West, and Iran’s long-term position in the international division of labor remained unchanged under the Islamic Republic in the 1980s.
A slowdown and decline in output, high unemployment, chronic inflation, severe shortages of basic necessities, and underutilization of industrial capacity continued.
The agricultural sector also showed steady decline throughout the 1980s.
The Iran-Iraq War provided a convenient mechanism for the regime to evade responsibility for the worsening economy and facilitated a postponement of political crisis related to economic issues. It also meant that the revolution’s call for social justice was largely ignored.
Photo by Cordelia Persen
