As might be expected, Isfahan changed rapidly as the Americans withdrew and skilled workers migrated to other sections of the country. The many Iranians who had been employed as support staff — drivers, gardeners, housekeepers, guards — saw their economic prospects diminish. In addition, many Isfahanis also left Iran.

Brain Drain and Redistribution

The loss of specialized manpower was so severe that the government mounted an early appeal for those living abroad to return home. The affirmative response was minimal and the number of emigrants continued to grow throughout the 1980s.

At the same time, the Provisional Government began to implement redistributive policies to effect immediate (but relative) changes in the distribution of wealth.

The Khomeini regime expected that redistribution would occur in two ways.

First, policies were designed to ensure that resources would be more equally divided among the various provinces in Iran. Since Isfahan was one of the most developed metropolitan areas at the beginning of 1979, it was to be expected that some of its resources would be diverted to less advantaged provinces with less large industry and employment, lower literacy rates, inadequate health services, and less housing.

Next, disparities among socoeconomic groups within the province were expected to be addressed through the equalization of income.

The Reform Process

The new government worked quickly to begin the reform process and, in the first year following the revolution, many assets were expropriated by nationalization decrees of the Provisional Revolutionary Government. Firms affected included banks, auto industries, and basic metal (steel, copper, and aluminum) concerns.

The assets of the largest industrialists and their immediate families were confiscated.

Additional properties were seized by Islamic Revolutionary Courts and placed under the ownership of the Foundation of the Oppressed (FFO), a religious trust. This organization was given a mandate to build housing for the most deprived sections of the population.

Because initially the urban poor were thought to be the most reliable base of power for the new Republic, this action was important to establishing the credibility of the regime with its constituency. As in Havana in 1959, there was strong momentum to invade and occupy the vacant buildings left behind when wealthy and middle-class property holders fled the country.

Encouraged by the FFO, the poor seized empty houses, luxury hotels, and unoccupied private buildings.

The euphoria created by the housing takeovers was short-lived. It was soon discovered that these activities led to uncertainty in the private housing market and in the construction sector. The Revolutionary Council was forced to take action limiting the perceived excesses of the foundation, and the housing seizures were halted. Some of the new tenants were actually evicted.

Iraq Invades Iran

Hopes that Iran would be able to concentrate on domestic issues by switching its emphasis from guns to butter dissipated when on September 22, 1980, the Iraqi army invaded Iran, penetrating as deep as 80 kilometers into Iranian territory in some places. Within several weeks over 14,000 square kilometers of Iran were occupied. Once again the nation was caught up in a frenzy of militarism.

This time, though, there was no strong patron to call on. Just as Iran’s foreign policy had changed in the wake of revolution, so had its military.

For more on “guns and butter” click here.

Photo by David Stanley.

Former American Embassy in Tehran

Throughout the 1970s, Iran was concerned with dangers that emanated from both the region and the Soviet Union.

Engaged in a strategic, economic, and political alliance with the West, Iran was trapped in its image as a US surrogate. This impression served to thwart Iran’s championship of Third World goals and objectives. At the same time, there was growing criticism in the United States of the shah’s military build-up and human rights abuses. Overall:

by the time of the revolution, Iran’s foreign policy orientation and its over-activism were resented at home and created serious tensions in its relationship with both its allies and its enemies.

The Islamic revolution changed this situation. The spread of revolutionary Islam became the stated goal of Iran’s foreign policy. This entailed focusing on the interests of the Islamic community rather than nationalistic concerns. From the outset this led to disagreement.

Two groups emerged.

• One group, influenced by a Third World variant of socialist ideas was intensely anti-Western, especially anti-American. it wanted better ties with the Soviet Union, the Eastern bloc, and Third World countries and favored the export of revolution.
• A second group was more concerned about the Soviet/communist threat. This faction wanted to maintain some relationship with the West to preclude Soviet aggression. It favored the export of revolution by example rather than force.

Both factions believed that the export of revolution would ensure Iran’s security through a process of surrounding the territory by a cohort of like minded states.

These themes were played out in the transitional government of Prime Minister Bazargan when the competition was among three principal forces: Islamic nationalists, secular nationalists, and a variety of leftist groups.

After the consolidation of Islamic rule, these conflicts occurred within the Islamic leadership itself. While Bazargan, himself, pursued a nonaligned policy based on avoiding dependence on any one great power and maintaining good relations with neighboring states, after the occupation of the US embassy and the hostage taking, it became impossible to maintain reasonable relations with the United States.

From the November 4, 1979, hostage taking until the September 1980 outbreak of the war with Iraq, Iran’s foreign policy was dominated by three issues:

• the hostage taking
• the internal power struggle
• and the Soviet occupation of Afghanistan.

The hostage crisis dictated that

foreign policy consisted of extreme anti-Americanism and an all-out call for Islamic revolution on the Iranian model throughout the Muslim world.

While mainly driven by rhetoric and rarely by action, it was clear that Iran’s geopolitical position could no longer be useful to the United States.

The period of cliency had ended.

Photo by Orlygur Hnefill

Iran and the US Split: Americans and Iranians Leave Isfahan and Other Iranian Cities

As strikes, protests, and demonstrations became more frenzied, Isfahan began to change. Most Americans left the city by November 1978, and an estimated $2 billion in scheduled military servicing and production contracts left with them. The Western corporate presence and the American consumer — groups which had increasingly fed the local economy — vanished.

Many Iranian professionals — physicians, lawyers, engineers, and university professors — fled the country also, taking their financial capital with them.

Within a year, after the capture of American hostages in Tehran on November 4, 1979, rapprochement between the American government and the new Iranian regime became impossible. The former opportunity structure was radically altered. No longer was it possible for the Iranian government to purchase weapons or receive monetary assistance — loans or guarantees — from the US government.

The break with the United States makes it possible to evaluate alternative approaches to urban development in Iran. Although America’s liberal grand strategy did not become explicit worldwide until shortly after the Iranian revolution, its ideals were certainly implicit in the US presence in Iran from the 1940s through the 1970s. As Thomas Ricks noted:

. . . many of the Shah’s critics found every aspect of the aid mission to have political consequences, such as land reform, police training, agricultural research, and the rural medical service implying “a commitment to free market economy and frequently a linkage to Western institutions . . .”

The institutional change which occurred throughout 1979 was a clear break with this past policy, facilitating new choices and restricting opportunities. Domestically, different approaches to Iran’s foreign and domestic policies, along with the imposition of external sanctions, dictated that modified factors would influence the country’s urban environment as well.

Institutional Change

Consolidation of the revolution under the leadership of Ayatollah Khomeini resulted in almost immediate institutional change.

On February 5, 1979, a Provisional Government was appointed, to be headed by Mehdi Bazargan, a politician from the Mossadegh era. While a Cabinet was put in place, composed chiefly of technocrats and western educated religious liberals, Khomeini retained real political power. A Revolutionary Council and Islamic Komitehs emerged, dominated by the fundamentalist faction of the clerical establishment. Meanwhile, Khomeini requested a plebiscite to legitimate power and establish an Islamic Republic.

The opposition — secular forces and moderate religious elements — countered that a choice must be offered between an Islamic Republic and an Islamic Democratic Republic. However, since Khomeini believed that democracy was a non-Islamic and western concept, this idea was rejected. Consequently, most secular groups boycotted the election, and the plebiscite was approved by approximately 98.2 percent of the voters.

On April 1, 1979 — just two months after his return to Iran — Khomeini proclaimed the formal establishment of the republic.

A Republic is Born

The next task, involving the adoption of a new constitution, followed. The objective of the principal institutions — the office of chief spiritual-political guide (faqih), the presidency, and the assembly (majles) — was to assure continued control of the government by the Shi’a Muslim clergy. This structure was consistent with Khomeini’s instruction that “the constitution and other laws in this Republic, must be based one hundred percent on Islam.”  The new document was approved in the middle of November and ratified by a referendum on December 2-3, 1979. Thus, in a remarkably short period of time, the institutional structure of  Iran had been altered and reoriented. As Shireen Hunter describes in her book Iran After Khomeini:

The preamble to Iran’s Islamic constitution states that ‘the basic character of the [Islamic] Revolution, which distinguishes it from other movements that have taken place in Iran during the past hundred years, is its ideological and Islamic nature.’  The preamble also states that the constitution is the culmination of a century-old Iranian “anti-despotic” and “anti-imperialist” struggle and that the Iranians recognized the failure of previous movements such as the constitutional revolution and Dr. Mohammad Mossadegh’s movement to be the lack of a proper ideological and Islamic foundation. Moreover, the preamble states that the “mission of the constitution is to give objective existence to the credal bases of the [Islamic] movement and to create conditions under which may be nurtured the noble and universal values of Islam.”

Hunter goes on to list several important consequences for the nature of Iran’s leadership, its political institutions, and the cultural foundation of the society.

• First, in contrast with the 1906 constitution in which the “will of the nation” was the source of legitimacy and authority, the basis of political legitimacy and authority in the new constitution is “God” and the divine law as given in the Holy Qur’an. Hunter notes, however, that if the 1906 constitution’s provisions had been applied faithfully, no legislation contrary to Islamic law could have passed even if the overwhelming majority of Iranians had approved of it.”
• Second, since “Islam is to be the sole point of reference for all aspects of life, people running the country must be well versed in Islamic law and be morally unreproachable.” Based on this concept, the new constitution established what many perceive to be a theocracy whereby “the function of ultimate spiritual and political leadership will be discharged by the supreme religious leader on the basis of the concept of the Velayat-e-Faqih or the guardianship of the supreme religious leader.” Hunter goes on to note that “the Ayatollah Khomeini himself was not against the monarchy as a political system, rather, he opposed what he believed to be the Pahlavis’ anti-Islamic policies. He began to develop his concept of an Islamic theocracy after he became convinced that the Pahlavis were beyond redemption and that their rule mortally endangered Islam and the Shi’a establishment in Iran.”
• Third, the Islamic regime dropped any reference to Iran as a nation, choosing instead to focus on the Umat-al-Islam (the community of Muslims). Thus, it is Islamic notions of nation, state, race, and ethnicity that are predominant. In this context, the new government also targeted nationalist tendencies and attempted to ban all vestiges of Iran’s pre-Islamic culture.

In sum, the new constitution had implications for all facets of political, social, and economic life. Purposeful changes in the direction of the country’s foreign policy became particularly important.

Photograph by Matt Werner

There was a general recognition in the US that the shah’s perception of threat was real and diverse. The monarch’s interpretation of Iran’s security issues coincided with those concerns which the United States understood  to be critical in the Cold War environment. As the staff report concluded :

It is . . . not difficult for the Shah to make a rational case for high levels of investment in US equipment, and the Executive branch to respond positively, if the threat analysis is regarded as the primary determinant of procurement policy. In short, it is difficult to criticize Iran’s perception that it needs a modern military force. What is more debatable . . . is the suitability of and problems with the particular defense programs in which Iran has chosen to invest its resources . . . .

Shahram Cubin, on the other hand, justifies the shah’s weapons purchases, arguing:

It should be emphasized that Iran’s search for security, its arms procurement programs, and its diplomacy cannot be separated from its perception of international politics. Iran was invaded in two world wars; was the object of a de facto partition between two great powers in 1907; was subjected to constant intervention and dictation throughout this century; was the target of externally abetted separatist movements in the 1940s; was threatened and penetrated in the 1950s; was vulnerable to Arab nationalist shoestring imperialism in the 1960s; and is vulnerable to proxy-wars today. Its armaments buildup in the 1970s, therefore, can scarcely be considered anomalous or anachronistic except when viewed from a comfortable distance.

Like Kemp, Chubin predicates the defense buildup on several assumptions: the sensitive and strategic nature of the Persian Gulf region; a power vacuum in the Indian Ocean; the tenuous nature of bilateral alliances; the “lightening quick” nature of modern wars which requires a “high level of preparedness and substantial indigenous resources;” the need for deterrence forces vis-a-vis the Soviet Union.

All in all, Chubin contends that — given Iran’s perception of threat — its pattern of weapons acquisition is understandable. He then goes on to discuss the suitability of the weapons selected for Iran’s defense needs, addressing particulary the shah’s demand “to adopt tomorrow’s system, not today’s.” In this regard he concludes:

In short, Iran’s procurement policy has been to buy advanced weapons for the airforce chiefly from a single source, and to diversify its weapons for other services, while not ignoring the advantages of new technologies. The acquisition of advanced technologies is undoubtedly advantageous: it postpones obsolescence, enhances prestige, and probably has deterrent value. The increased expense of buying early (when higher unit costs often include R&D expenses) has to be balanced against the mounting expense of the system (given inflation) if bought later.

Regarding the shah’s purchase of the F-14, Chubin agrees that the decision was the correct one, especially in light of the Soviet overflights of Iran’s territory discussed earlier.

Assuming that the above evaluation is accurate, why were the shah’s procurement decisions so controversial? Did the monarch maximize the opportunity structure available to him? If so, did he consider the internal consequences of his decisions? Or did unforeseen spillover lead to unpredicted outcomes? In order to answer these questions, it is first necessary to look at whether the shah did indeed maximize the opportunities available to him

Opportunity Structure

Any assessment of whether or not the shah maximized his opportunities must, at most, be mixed. It is clear that, in the Cold War environment (and given Iran’s history), an alliance with the United States was preferable to one with the Soviet Union. It is also obvious that the shah believed that he could have both guns and butter. In fact, he believed that militarization was a precondition for social and economic development. Moreover, because of Iran’s oil reserves and its strategic geographic locale, he initially expected that American loans and grants would finance his project. That was not to be the case.

Overview: The Military

Support for all of Iran’s security forces increased dramatically during the Cold War period, especially after the rapid escalation in oil profits facilitated spending. According to Thomas M. Ricks, regarding the military:

He [the shah] increased its size from 200,000 men in 1963 to 410,000 in 1977; the army went from 180,000 to 200,000; the gendarmerie from 2,000 to 25,000; the air force from 7,500 to 100,000; the navy from 2,000 to 25,000; the elite commando unit from 2,000 to 17,000; and the Imperial Guard, which served as a praetorian force, from 2,000 to 8,000. He also increased the annual military budget from $293 million in 1963 to $1.8 billion in 1973., and, after the quadrupling of oil prices, to $7.3 billion in 1977 (at 1973 prices and exchange rates. )

Superficially, it seems unlikely that all of the increases were related to Cold War necessity. For example, the gendarmerie provided internal protection while the Imperial Guard served as guarantor of the shah’s personal safety. However, when viewed in the context of the shah’s opinions regarding Iran’s defense needs, the connection becomes quite clear. A staff report to the US Subcommittee on Foreign Assistance noted the following five areas of concern surrounding Iran’s security: threats to oil; the Soviet threat; the Arab threat; the threat from the East and the Southeast; and the internal threat. Each worry will be treated briefly below. The discussion is drawn from U.S. Military Sales to Iran: a staff report to the Subcommittee on Foreign Assistance of the Committee on Foreign Relations, United States Senate, 1976. The report was prepared by Robert Mantel and Geoffrey Kemp. Those desiring more detail should consult the document in its entirety.

Oil

The impact to Iran’s economy of any interruption in the flow of oil to the Western world could be expected to have considerable political, economic, and military impact. Thus, the shah spent a great deal of money to ensure the security of supplies. The threat was quite complex since Iran’s oil is exposed at different points in the oil flow cycle: the oil fields, the collecting system, the local terminal facilities, and the oil sea lanes which transport supertankers from Iran to the West.

Although each of the vulnerabilities required a different type of military preparedness, there were some common elements. These included:

• the need for air defense and anti sabotage measures
• contingencies to protect the sea lanes through maritime capability and a basing structure
• a need for counterinsurgency forces to protect the entrance to the Straits of Hormuz
• the use of land forces with logistics support and reconnaissance provided by air and naval elements.

The Soviet Threat

Iran’s 1,250 mile border with the Soviet Union led most Iranians to regard “that country as its most serious potential adversary because of the history of Soviet-Iranian relations and Iran’s generally pro-western stance. However, given the military capabilities of the Soviet Union, the Iranians believe that in the event of direct military confrontation between the two countries, they, standing alone, would not stand a chance.” Their coping strategy in this regard was designed to delay a direct Soviet attack, then accept defeat or wait for the United States to intervene. Iran was also fearful of indirect Soviet support for Iraq, Afghanistan, and India as well as for potentially dissident internal forces.

The Arab Threat

Iran perceived a threat from its West, especially from Iraq and Saudi Arabia. The regime deduced the possibility of conflict with Iraq over the Shatt-al-Arab waterway, and/or a revolution in Saudi Arabia that would put a more extremist anti Western regime in power. Later events proved Iran’s understanding of threat from Iraq to be accurate.

The Threat from the East and the Southeast

Iran was concerned about conflict involving Afghanistan, Pakistan, and India. The regime was especially concerned about problems within the Baluchestan regions of southeast Iran and Pakistan. In order to deal with these concerns, new basing programs were initiated by the Iranian armed forces in the central and southeastern sectors of the country.

The Internal Threat

Internal threats to Iran were thought to come from three primary sources: left wing Communist guerilla groups; right wing Moslem guerilla groups; and separatist movements, especially in Baluchistan.

Photograph: kamshots