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.