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

Problems with the armed forces emerged in the fall of 1978 with the first act of sabotage in the army, the explosion of a helicopter in Isfahan on October 10. Afterwards, insubordination and desertions became more common. Parsa states:

A clandestine army report indicated that by December 7 — exactly one month after the military government had been installed — a total of 5,434 army personnel, mainly low-ranking enlisted men, had defected from thirty-nine garrisons . . . . Soldiers from the Isfahan artillery unit publicly declared on December 5 that when they accepted their commissions they had sworn to defend the nation and its people, not kill civilians. They announced their refusal to support a regime engaged in massacring its own citizens and pledged instead to support Ayatollah Khomeini. To those still deceived by the Shah, they issued a warning that soon the regime’s associates would be put on trial.

Demonstrating air force cadets were arrested in Isfahan on January 27. They were joined by the homafars who had worked closely with the American community at Khatami Air Base. The culmination of this dissent occurred at the outset of “three glorious days” of the revolution — February 9, 1978 — when air force cadets and the homafars provoked a

punitive attack by 50 to 200 of the Imperial Guards* stationed at Dawshan Tappeh Base in eastern Tehran. Fighting continued around the air force barracks until early Saturday afternoon when the Homafars seized 2000 rifles and distributed them to the people. By then arms were being distributed in the mosques of  Tehran, and special phone numbers for calling to receive arms were posted on placards. Meanwhile, Isfahan had fallen into the hands of Khomeini supporters.

* The Imperial Guards were the shah’s elite fighting force and his personal protectors.*

Certainly, the actions of the homafars were unfathomable to the American engineers and technicians who had worked with them in Isfahan. Just as conflicted was the extent to which US policy was blamed for the shah’s downfall. In the context of the military environment to which most of them were accustomed, their personal efforts in Iran were best critiqued in the context of the Cold War conflict.

Arms sales to Iran were clearly related to the grand strategy of the United States. Moreover, Iran’s defense needs coincided with America’s Cold War expediency. In contrast, most Iranians sensed the threats to Iran’s security but took exception to the fact that

When American weapons are placed on a host nation’s soil, but are still operationally controlled by (private or public) American advisors, there is obviously a limitation imposed upon the host nation’s sovereignty.

Given this resentment and the subsequent downfall of the monarchy, it is worth examining the shah’s perception of Iran’s defense needs. Was his perception of threat rational? And, if so, was his military buildup, particularly his procurement program, justified? We’ll look at those questions in our next post about Iran.

The Global Meets the Local in Iran’s Bazaars

Contestation between the global and the local has been a persistent theme in Iran’s bazaar community since at least the beginning of the 1900s when the influx of foreign-made textiles undermined traditional handicrafts. Abrahamian notes that the tax collector of Isfahan, reporting on the weavers’ guild, stated:

In the past, high-quality textiles were manufactured in Isfahan since everyone — from the highest to the lowest — wore local products. But in the last few years, the people of Iran have given up their body and soul to buy the colorful and cheap products of Europe. In doing so, they incurred greater losses than they imagined: local weavers, in trying to imitate imported fabrics, have lowered their quality. Russians have stopped buying Iranian textiles, and many occupations have suffered great losses. At least one-tenth of the guilds in this city were weavers, not even one-fifth have survived. About one-twentieth of the needy widows of Isfahan raised their children on the income they derived from spinning for the weavers; they have now lost their source of livelihood. Likewise, other important guilds, such as dyers, carders, and bleachers, have suffered. Other occupations have also been affected: for example, farmers can no longer sell their cotton for high prices.

The Bazaaris Embrace Politics

As a consequence of their discontent, bazaaris, members of the traditional middle class, played an active role in the nationalist and democratic Constitutional Revolution of 1906-1911. However, they did not support the Democrats, a party which urged that progressive forces lead the country in combating foreign capitalism. Rather, they supported the Moderate party which called for granting financial assistance to the middle class, especially the small capitalists of the bazaar. The party’s position also included the following: strengthening the constitutional monarchy; safeguarding religion; protecting family life, private property, and fundamental rights; and enforcing the shari’a.

Post World War II: Bazaaris Oppose the Monarchy

After World War II, the bazaaris consistently opposed the monarchy, playing a significant role in the Mossadegh crisis of the 1950s where they sided with the nationalists rather than the royalists. Later, even though the group benefited from the prosperity which existed from the mid 1960s onward, no governmental policies were designed to further its concerns. Most of the time, in fact, the government’s development policies were against its interests. A good example can be found in Isfahan’s carpet sector. Just as domestic demand was dropping due to the import of machine made rugs, and high priced imported wool was required to replace declining domestic supplies, government policy restricted the use of child labor, adding to the cost of production.

Isfahan’s Bazaar in the 1970s

In the 1970s, the bazaar remained an integral part of Isfahan’s commercial vitality. The city was still the center of Iran’s handicraft industry and the bazaar regulated as much as half this production. Though weakened throughout the Pahlavi period, guild elders — as leaders of independent trade and craft guilds — continued to assert authority over shop assistants, handicraftsmen, workshop employees, and small peddlers. In addition, bazaar moneymakers controlled approximately 15% of private sector credit. (This factor would become important as revolutionary forces took hold since independent economic resources allowed some associated with the bazaar to engage in strikes and other protest activities without losing their immediate livelihood.) Also, many merchants sold goods to outside shopkeepers on a credit basis, creating a dependent relationship that allowed them to exert influence on the city’s entire commercial sector.

The Resurgence (Rastakhiz) Party and the Bazaar

The longstanding relationships mentioned above were threatened when the Resurgence (Rastakhiz) party opened branches in the bazaar in an attempt to undermine traditional influences. The party organized students into vigilante gangs called “inspectorate teams” and sent them into the bazaars “to wage a ‘merciless campaign against profiteers, cheaters, hoarders, and unscrupulous capitalists.'”

The Guild Courts

Similarly, the so-called Guild Courts set up hastily by SAVAK gave out fines, banned traders from their hometowns, handed out prison sentences to shopkeepers, and brought charges against small businessmen. According to Abrahamian:

By early 1976, every bazaar family had at least one member who had directly suffered from the ‘anti-profiteering campaign’ . . . . The formation of the Resurgence party had been an affront to the bazaars; the anti-profiteering campaign was a blatant invasion of the bazaars. Nor for the first time, the bazaar community increasingly turned to its traditional ally, the ‘ulama’ for help and protection.

Party representatives forced donations from small businessmen, drafted a law to reform the guilds, and “supplanted the easy-going High Councils of Guilds with tightly controlled Chambers of Guilds: which were placed under the direct authority of the governor-general of the province. At the same time, the government directly threatened the economic base of the bazaar by setting up state corporations to import and distribute basic foods, especially wheat, sugar, and meat.

Furthermore, the government-controlled press began to talk of the need to uproot the bazaars, build highways through the old city centers, eradicate “worm-ridden shops,” replace inefficient butchers, grocers, and bakers with efficient supermarkets, and establish a state-run market . . . .

Relative Deprivation and Discontent

These activities were exacerbated by a “sense of relative deprivation caused by the tremendous gains made by industrialists connected with the Pahlavi court and considerable moral indignation caused by the disregard of Islam and traditional values under foreign influence.” Consequently the need to raise revenue in the face of declining oil revenues encouraged the government to levy higher taxes and cut bank loans to shopkeepers. Meanwhile, the cost of living continued to escalate.

Despite growing disaffection, it is important to recognize that a wide diversity of opinion existed within the bazaar community regarding government policy. Some shopkeepers supported the regime, while others responded more negatively to state policies that adversely affected their livelihood. Nevertheless, eventually discontent became pervasive, linked in large part to economic interests and many generations of foreign penetration. Parsa reports that, in Isfahan, bazaaris made the following statement:

The people of Isfahan have been subjected to the severest class inequality and repression. They have seen with their own eyes how their mineral resources and material and spiritual wealth have been plundered by a minority of dirty foreigners with the cooperation of internal servants; they have also seen how corruption and decadence have spread in the country . . . . Their actions have been responsible for poverty and moral decay.

These comments had little impact, however, since the regime had succeeded in severing the autonomy of bazaar organizations, leaving the mosque as the only channel through which mobilization for collective action could occur. Bazaari strikes and protests organized there provided a mechanism through which others could challenge the shah’s regime. Symbolically, bazaar closings signaled to other groups in society that conflict was underway, creating “opportunities for other adversely affected classes and groups to act collectively as well.” One such clique was comprised of the military and the homafars, both of whom had worked closely and cooperatively with F-14 engineers and technicians. I’ll talk about this group in my next post on Iran.

Photograph by Paul Keller

Contributory Factors

The Iranian Revolution had multiple contributory factors and has been examined in great detail elsewhere. However, it is worth noting that many believe that the physical presence of the US community was an irritant, leading to urban unrest. Clearly, there were untoward incidents in Isfahan involving Iranians and culturally insensitive Americans. At the same time, there were many positive relationships crossing all socioeconomic levels. Some scholars have stated that Americans interacted only with more elite Iranians. This was not the case in Isfahan. If anything, the American community had more solid relationships with those in lower socioeconomic groups. Misinformation and misperception regarding the American community in Isfahan are present in numerous academic accounts which tend to be largely anecdotal and from self-selecting sources.

The American Factor

Certainly, though, a major concern of those who participated in demonstrations and strikes was entrenched opposition to foreign domination and external exploitation. In the city itself, however, Americans were rarely threatened. While soldiers and tanks were stationed on every street corner in Khaneh Isfahan and Shahin Shahr, there were few reports of overt insult to the US community throughout the fall of 1978. Americans continued to travel freely around the city, sometimes finding themselves inadvertently in the midst of mob action only to report that Iranian demonstrators cleared pathways for them to move safely by.

On other occasions, in the course of massive demonstrations, protestors and military alike smiled and threw flowers at foreign buses which happened to be in the wrong place at the wrong time. It seemed clear to Americans present that anger might be directed at the US government, but almost never at specific individuals.

Even in the last days, many expatriate workers and their families did not sense that revolutionary activities were directed at them. This assessment was bolstered by the many incidents occurring at the Russian steel mill. (For our timeline click here.)

Domestic Factors Meet Foreign Penetration

In place of rampant anti-Americanism, the complaints of Isfahan’s residents centered on economic problems, concern over changing morality, and a loss of control over their own lifestyles. Many of the problems associated with the foreign community as a whole were actually linked to Pahlavi policy decisions implemented over the course of the 20th century. Additional issues were rooted in Iran’s historical struggles against external forces.

Still, it is reasonable to question why bazaaris and the military — two groups particularly impacted by the American presence — were extremely active in Isfahan’s unrest. It is widely agreed that their participation was a demand for an end to what they understood to be foreign penetration and manipulation. But was it a demand for a return to Iran’s 1906 constitution which embraced a more pluralistic — if not democratic — system of government?

Cold War Iran: A One Party State

The shah had voiced his opposition to democracy in 1975 when he decided to establish a one-party state, dissolving the two-party system which had been in place since 1963 and labeling those who were reluctant to join his new party “Tudeh (Communist) sympathizers.” These traitors, he said, could either go to prison or “leave the country tomorrow.”

The shah’s main goal was to create a Leninist style organization that could mobilize the masses, break down traditional barriers, and convert Iran to a fully modern society. The party declared that “it would observe the principles of ‘democratic centralism,’ synthesize the best aspects of socialism and capitalism, establish a dialectical relationship between the government and the people, and help the Great Leader (Farmadar) complete his White Revolution and lead his Iran toward a new Great Civilization.”

The party was designed by two groups of advisers. One group was made up of young political scientists from American universities who accepted Samuel Huntington’s premise that the only way to achieve political stability in developing countries was to establish a disciplined government party that would become an organic link between the state and society. (For our previous post on Samuel Huntington click here.) This, in turn, would facilitate the mobilization of society and would eliminate distruptive social elements. (The above two paragraphs rely heavily on Ervand Abrahamian’s Between Two Revolutions , 440-441.)

When foreign journalists questioned the shah about his policies, the stated: “Freedom of thought! Freedom of thought! Democracy, democracy! With five-year-olds going on strike and parading in the streets! . . . Democracy? Freedom? What do those words mean? I don’t want any part of them.” (Abrahamian 440-441)

A belated response to his outburst was printed in the January 1979 edition of the Guilds newsletter where an article made clear that a democratic outcome was indeed demanded, explicitly stating that bazaaris, hand in hand with other Iranians, “will move toward the establishment of a just and genuine democracy, building a proud Iran on the ruins of corruption.” Over time, it will be possible to assess the extent to which their demands were satisfied.

 

 

What’s Happening to the ‘Hood?

While American and Iranian neighborhoods were somewhat segregated in Cold War Isfahan, there was much intermingling. Buses carrying Westerners traveled back and forth through various  areas of Isfahan every half hour. Since many Americans took great pride in living off the local economy, the buses traversed the oldest areas of the city, stopping frequently, and making visible the differences which existed between the two communities.

Some areas of Isfahan were virtually taken over by expatriates. These included the bazaar, the major shopping corridor along Chahar Bagh Bala, Abbasabad Avenue near the Anglican Church and the English Bookstore, and the neighborhoods surrounding the Kourush Hotel.

Along Chahar Bagh Bala, a favorite of the Western community (as well as busloads of Soviet workers and their families), recently constructed multi-level European-style shopping centers dotted an avenue lined by plane trees and garden pavilions. Nearby, the Shah Abbas Hotel, situated in an old caravanserai, had become associated with Western decadence. It was one of several places in Isfahan that routinely served as a watering hole for expatriates. Other encroachment was also visible, particularly in new buildings like the Kourush and Park Pol Hotels where employees of Grumman and Bell Helicopter International (BHI) were housed for months on end waiting for permanent quarters to become available.

Many of the urban modifications, though, were unrelated to the American intusion. Instead, they were a continuation of the international planning trends which had taken hold in the 1930s. Nevertheless the Americans were a convenient scapegoat and many locals attributed unwanted change to the physical presence of the foreign community.

Can Isfahan Survive?

As a result of the many changes, on the eve of the 1979 revolution, serious observers were asking the question “Can Isfahan Survive?” Concerns regarding the built environment were voiced most prominently in a May 1976 special issue of Architectural Digest titled simply Isfahan. The editors noted:

If by Isfahan is meant the [traditional] character of the city as portrayed in the preceding pages of this issue, the chances of survival are slim indeed. For Isfahan is designated in the Fifth Development Plan 1973-1978 (together with other historic cities like Tabriz, Mashad, and Shiraz) as a ‘pole’ city for further industrial expansion in the hope that with increased opportunities for employment, it will become a strong magnet attracting immigrants from rural areas who would otherwise go to Tehran. In the last 10 years the population of Isfahan has increased by nearly 50 percent and, if that rate is maintained, it will double to 1 1/2 million over the next 20 years. It would not be unreasonable to infer that official policy is prepared to sacrifice one of the finest cities in the world for the sake of a modern capital which has become, in the words of an Iranian architect, ‘an ever-expanding hub of ugliness.’

Agriculture is Threatened

Most importantly, Isfahan’s agricultural base was threatened by residential development and new industry related to the mushrooming military industrial complex.

The most damaging type of new development involved the destruction of large old courtyard homes so that owners could make a quick profit by selling subdivided plots or building multi-story blocks of modern apartment buildings. A person who pulled down his old house and built a new one was exempted from taxation for three years. Intended as an incentive for slum clearance, this law became a serious threat to heritage.

Development was especially visible along the southern stretch of Chahar Bagh with modern new structures — surrounded by construction sites — serving as homes for recently arrived Americans. Although Grumman employees were required to move to more peripheral areas, representatives of other corporations as well as subcontractors were still situated in the center of town.

New construction was also evident in Julfa, the old Armenian quarter of the city. Here water channels which once irrigated gardens were no longer needed and residents didn’t object when authorities diverted the water elsewhere. As Cantacuzino stated:

Today all the channels are dry and the gardens which survive barren and ready for the concrete mixer.

The pollution in the traditional channels — know as jubes — provided symbolic evidence of the impact of secularization on the city. According to one planner:

Water has always been an essential element in Iranian towns. Its rarity in an arid country made people respect and treasure it. Indeed Islam holds that water is holy. With the influence of religion in decline, water today is commonly defiled with garbage, while the empty pools in the caravanserais are used as dumps.

in addition to pressures on the urban core, new developments were spreading into the agricultural land surrounding the city. To the east, private haphazard development stretched into the countryside where land was cheap. By late 1977, problems associated with the housing shortage and the building boom were exacerbated by an overall economic downturn.

Economic Downturn and Price Controls

Scarcities of necessary items occurred in early 1978, just as an increasing array of European luxury goods and appliances became more common. Krups coffee makers and blenders, televisions, and refrigerators were now readily available. At the same time, groceries on the local market became more expensive and hard to find. One couldn’t buy chicken if eggs were available and vice versa; even seasonal vegetables were in short supply.

At first wealthy businessmen, but then the smaller merchants, were hurt by the implementation of price controls on basic commodities. Concurrently, large quantities of imported goods — rice from North Carolina, lamb from New Zealand, and chicken from Rumania — were brought in to undercut local dealers.

To some extent the foreign community was protected against rising inflation by cost of living clauses in their formal contracts. Still, most felt the pinch, with the cot of living index almost doubling in a six year period.

Isfahanis blamed the foreign community since it was linked to the regime’s ‘crash’ industrialization program and to the continued growth in the military establishment. On the other hand, the regime blamed the local business community.

Guns or Butter

As discussed above, the shah declared war first on “big business” profiteers, then on shopkeepers and small businessmen, finally imposing price controls on basic commodities. When Iranians suggested a “guns and butter” connection, the shah argued that their thinking was shortsighted. He posed the problem differently, asking:

What is the use in having an advanced industry in a country which could be brought to its knees when faced with any small, asinine event?”

The US agreed, observing that:

. . . the percentage of the total Iranian budget allocated to defense has decreased from 32% in 1974 to 22% in 1975 and 24% in 1976, as total Government expenditures increased from $11 billion in 1974 to $36.9 billion in 1976. The revenue increase, almost entirely from oil, was of sufficient magnitude to fund virtually all programs, civil and military; choices between guns and butter were not necessary.

Photograph by Cordelia Persen.

At the beginning of the 1970s when the earliest groups of Americans began to arrive, Isfahan was a dual city having undergone change throughout the post World War II period.

In the north end of the municipality proper, traditional elements remained dominant — twisting streets, bazaar routes, courtyard houses, mosques, madrasehs, caravanserais, and hammans. In contrast, the more modern south was highly structured, based on a gridiron design imposed on neighborhoods which had once housed gardens, pavilions, and palaces.

Both areas were threatened.

The north was endangered by indiscriminate development and by a desire to create east-west links. The construction of  Ibn-e-Sina Avenue in the early 1970s, for example, had devastated a dense housing district north of the Friday Mosque.

Although the project and others like it were probably inevitable, they were the subject of great controversy because they were officially endorsed by a master plan drawn up by Western planners. Subsequently, the Ministry of Culture headed by Bagher Shirazi (with the assistance of a coordinating committee set up by the Empress) stopped all new road building in the central areas. These groups also determined to stop both migrants and industry from coming to Isfahan, policies in direct contravention of the Fifth Development Plan.

The south was also subject to overdevelopment. The demands of the burgeoning military-industrial complex and its support staff placed additional stress on agricultural areas with little attention given to agricultural impact. A majority of the 1,800 Bell Helicopter International (BHI) employees and their dependents moved to Hezar Jarib on the south side of town.

So far as the expanding F-14 community was concerned, at first some of the newcomers moved into luxury housing in the middle of town with local landlords gaining windfall profits from their presence. By late 1977, however, as housing costs soared out of control — and as sweetheart deals were made with local developers — Grumman required its employees to move to Khaneh Isfahan or Shahin Shahr, US style subdivisions on the northern fringes of town. In opposition to the integrated and cosmopolitian situation that had marked the American presence in the early years, distinctively separate communities were now the norm, divided by wide differentials in income and living conditions.

Khaneh Isfahan was an example of the type of planned community that was gaining worldwide recognition during this timeframe. ( The development of Columbia, MD, one of the world’s first planned communities began in the early 1960s.)

Built by private developers for local residents but, instead, housing the American community, Khaneh represented a substantial expansion of the city in a direction sanctioned by the Master Plan of 1968.

As previously mentioned, Shahin Shahr, farther north, was also co-opted by the American community.

Built on rich agricultural land and on a much larger scale, the “new city” of Shahin Shahr was billed in the press as “the world’s largest-ever private real estate development.” Moreover, whether serving the needs of the Americans or Iranians, the town was a break with tradition. Designed to house 300,000 residents, it was to include no major industry, thus destroying the traditional Iranian integration of work and home. Importantly, in stark contrast to the major (Russian) industrial town of Aryashahr, also in metropolitan Isfahan, the housing of American workers in both developments focused a great deal of attention on the foreign community.

Since Khaneh Isfahan and Shahin Shahr had been profiled as “developments of the future” for Iranian residents, the Americans were perceived to be usurpers “living in the lap of luxury.” Despite the perception, this was not the case. While American homes were palatial by most Iranian standards, basic services were lacking. The building boom placed untenable pressure on Isfahan’s fragile existing infrastructure. During the summer months when water was desperately needed for agriculture, toliets could be flushed only once a day, showers and baths were limited, and washers and dryers were useless because of water shortages and power blackouts. Because the new homes had been built on a western model, air conditioning was essential, but –since rooftop coolers required water to operate — they were usually non-functional.

Existing problems couldn’t be resolved because militarization necessitated additional infrastructure expansion for bases, airfields, and industrial facilities. There was a shortage of essential materials and an inadequate construction industry for such large-scale projects.

The housing needs of the proliferating American community meant that their neighborhoods were complemented by large tent cities sheltering low-wage construction workers from Afghanistan and Pakistan who were rapidly building the additional residences necessary to accommodate anticipated demand.

Housing pressures also arose from the arrival of large numbers of Iranian technicians and military personnel from other areas of the country.

The Shah’s purchases from Bell Helicopter and Grumman produced two bottlenecks in the Isfahan area.  The first related to an already stretched infrastructure. Neither communications nor transportation capabilities were sufficient to deal with the volume of imports or with the business and consumer demand generated by the arrival of the American community. More important, however, was the shortage of trained manpower at virtually every skill level. This issue impacted not only Isfahan but all of Iran as workers left their permanent place of residence and flowed into the city to satisfy the necessary labor requirements.

Competition for trained manpower emerged between the military and the civilian sectors, among the three services themselves, and even within a particular service. An associated problem involved the issue of wages and incentives for military personnel. Since the weapons purchases created a rapid expansion in the civilian as well as the defense sectors of the economy, the military had difficulty matching salary offers, an action needed to attract sufficient numbers of trained personnel. This, of course, managed to further drive up the costs of the projects.

(Interestingly, the US was concerned with similar issues. In 1975, the American Comptroller General stated in a report to Congress that the defense capability of the US had been endangered by the massive short-term assignment of military specialists to the planning and construction of the Iranian military apparatus.)

The Imperial Iranian Air Force (IIAF) was particularly affected. The shah’s pride and joy, it had received the bulk of funds available for modernization. In fact, its inventory was among the most sophisticated in the world. Nevertheless, its effectiveness was increasingly jeopardized since the F-14 program skimmed off the best pilots and technicians from other projects. Moreover, technical manpower levels were expected to double, with a 1976 shortfall of 7,000 increasing to at least 10,000 in 1981, largely due to F-14 requirements.

It was estimated that by 1981, 6,500 personnel would be required to support the Tomcat alone. Of this number. about 2,650 would be technically trained.  The Air Force, which had 76,000 personnel in 1976, was projected to increase its staff by over 50 % by 1981 in order to operate effectively.

The original F-14 implementation plan called for base construction, training, and aircraft delivery to coincide. Consequently, the 9 to 12  month delays in the construction of base support facilities at Isfahan’s Khatami Air Base were seen as symptomatic of other back-end problems. For example, the holdups in construction of on-site training facilities resulted in a backlog of 200 maintenance personnel awaiting training. In addition, the development of a functional logistics system was expected to require technical training for an additional 14,000 Iranians.

Even though the American Congress was fast becoming concerned about back-end problems, the regime was encouraged at evidence of population redistribution and industrial growth. Isfahan had been targeted as a growth pole in an attempt to correct the regional imbalance resulting from Tehran’s exploding population, and Iran’s Fourth Plan (1968-1972) explicitly describes goverment support for a policy of

military-led industrialization . . . [that] also desired to reduce Tehran’s dominance as an industrial center. This was seen as important from the standpoint of military objectives and of balanced development. Approximately sixty percent of Iran’s entire industrial production occurred in Tehran or the Central Province. Tehran attracted industries because it was the center of the government and infrastructure was there . . . . new military plants were [to be] located in several centers, of which Esfahan was to be the most important.

As the 1975 staff report validated:

Iran’s military programs are having a  profound effect upon the socio-economic development of the country. Thousands of young Iranians are learning skills that have application in the economy as a whole. The creation of new bases . . . and the expansion of existing ones . . . are resulting in the development of basic infrastructure and the creation of new communities in sparsely populated regions of the country.

Regarding language competency, the Iranian government decided to use English rather than Farsi as the basic language for most skilled military operations.

As concerns infrastructure, basic needs (roads, water supply, electricity, ports, communications) along with demands created by new communities were expected to have socioeconomic effects far beyond the military requirements of the bases. In fact, it was hoped that the physical growth of the bases would act as a catalyst for further population redistribution and industrial growth.

Iran was optimistic that arms purchases and the establishment of an associated domestic arms industry geared towards ‘the supply of many of the highly complex weapons systems with locally manufactured spare parts’ would impel development through its modernizing, educative, training, and nation-building functions. Meanwhile, the back-end problems identified above meant that increasing numbers of American personnel and their dependents were arriving in Iran. Problems in obtaining skilled personnel also meant that contractor personnel would remain in-country longer.

According to Shahram Chubin:

Despite rapid training programs — 2,674 Iranian students were trained by the United States in FY 1975, the majority in communications, electronics, and maintenance — Iran’s reliance on foreign advisers and technicians will continue to grow if new weapons are to be absorbed as they are delivered.

Chubin also cites:

. . . parallels in the civilian sector, where an urgent need for improved health service has forced Iran to recruit doctors and nurses from abroad in large numbers and to use foreign contractors to construct hospitals, some on a turnkey basis.

For this (and other reasons) there was a large scale importation of foreign workers — Indians, Pakistanis, Filipinos, and South Koreans — whose numbers were expected to reach 700,000 by 1980.

As Bell and Grumman engineers and skilled workers arrived in large numbers to meet the labor requirements that their projects demanded, they immediately became a distinctive presence in the Isfahan community. At once, the presence of large numbers of young single male civilians without adequate recreational outlets was linked to sociopolitical problems. Pressures were so severe that BHI set strict quotas ( about 10 %) for the number of single US males permitted to participate in their Iran program.

Also, in contrast to some accounts, American workers with their families did not live their lives in isolation.  Most Americans in Isfahan did not have PX privileges, nor did they have Khomeini’s favorite — concessions. Instead, many Americans shopped on the local economy, and some lived in established neighborhoods. At least early on, American children played in vacant lots with Iranian children their age.

American workers did have housing provided for them and did send their children to separate schools. However,  the cost of these services was included as income on W-2 forms.  This led to some resentment in the American community, for while American workers were required to pay high prices for some of their “privileges,” they had no freedom of choice. They did what they were told to do or they went home.

Unlike the Russians involved in the steel mill operation, the Bell and Grumman communities weren’t low profile. Their presence visually transformed Isfahan demographics. So did that of the Iranian homofars (uniformed civil servants) who worked closely with the American specialists. This group would later play a key role in the final days of the revolution.

Photograph by Lisa Reynolds Wolfe.

The American multinational corporation played a much different role in Iran in the 1970s than it had in Taiwan in the 1960s. In the case of Taiwan, the prosperous MNC was widening horizons, searching for both cheap labor and new markets. In the case of Iran, the American defense contractor was concerned with salvaging the US defense industry which, in the late 1960s, had fallen upon hard times.

Based on declining orders from the Pentagon, a US foreign trade deficit, and increasingly energetic competition from foreign defense firms, there was a pressing need to augment exports. Accordingly, Nixon and Kissinger both

tended to regard arms selling as an extension of diplomacy, in the nineteenth century tradition, and neither had serious inhibitions about their means. The humiliation of Vietnam, and America’s weakened economy, had engendered more skeptical and short-term diplomatic attitudes, treating arms as counters in the world’s game with which to bargain for settlement or placate client-states.

Nevertheless, as a consequence of increasing weapons sales, by 1972 the arms industry was beginning to enter a period of recovery.  The following year the Pentagon more than doubled foreign sales — from $3.9 billion in 1973 to $8.3 billion in 1974. The liberal sales policy had particular bearing in Iran where, by 1976, forty US companies had personnel stationed to work on military contracts. The largest operations were those of Bell Helicopter International (Army Aviation) and the Grumman Aircraft Corporation (F-14).

By the mid-1970s, Bell had 1,700 employees working on a forty-five acre Isfahan base. The large support staff was necessary because Bell helicopters required eight to ten hours of maintenance for every hour of flight. Iran was unable to provide the skilled labor required. Grumman was to have a similar number of employees and dependents based in the city.

The Grumman Corporation (Another Kind of Multinational)

In his May 1972 meeting with President Nixon, the shah presented evidence that high-flying (80,000 feet) Russian Foxbats — MIG25s — had been operating Over Iranian soil. The monarch expressed concern over this occurrence as well as over his perception of growing Soviet influence in the Indian Ocean-Horn of Africa region. Convinced of the need for deterrence, the US offered the purchase of either the F-14 or F-15 advanced fighter aircraft.

The shah selected the F-14 primarily because it carried the Phoenix weapons system which was the only system capable of reaching the high-flying Soviet planes. The F-14, manufactured by the Grumman Corporation based in Bethpage, New York, was the first entirely new American fighter to be designed for a decade. It first flew in December 1970. The most expensive fighter ever built, the plane’s manufacture had almost bankrupted Grumman. In 1971, the project lost $18 million and the following year $79 million. While the navy had at first paid more and then loaned Grumman money, the company had decided to conduct a search for foreign buyers.

Desperate to make a sale, Grumman hired an Iranian-American lobbyist (Houshang Lavi) with close ties to the regime, promising to pay him $28 million if Iran’s purchase of the Tomcat was formalized. By August 1973, the shah had decided to order the plane. In August 1974, however, the sale was jeopardized when Congress unexpectedly voted to cut off the navy loan which was subsidizing the plane’s production, forcing Grumman to come up with $200 million in six weeks or go under.

Fortunately, for the Long Island based firm, the shah intervened. Iran’s government-owned bank, Bank Melli Iran, agreed to loan $75 million to help ensure the delivery of the planes, an action which encouraged American banks and consortia to put together the credits necessary to bail the defense contractor out. In essence, the shah was sharing the cost of the planes with the US Navy.

In January 1976, ahead of schedule, the first Tomcat was delivered to Iran, accompanied by 800 workers and their dependents. Soon the company was sending not only planes but engineers, administrators, and instructors to support the aircraft.

As a consequence of the Shah’s patronage, both Iran and Grumman were locked into an alliance which was subsequently to become extremely contentious.

Tensions emerged when the Iranian deputy minister for war, General Toufanian, discovered that Grumman had paid $28 million to agents, an amount that had then been fed back into the contract for Iranian government reimbursement.

The general announced at a press conference:

This shows that the foreign companies want to loot us. We will not allow this and we will pull the extra money out of their throats.

While perhaps the most public, this would not be the only strain in the relationship. Both the US and Iran had underestimated the management problems inherent in the new programs. Moreover, US service personnel had not informed the Iranians of the complexities involved in achieving fighter readiness.

Unlike the American multinational in Taiwan or the Soviets at Isfahan’s steel mill, Grumman could not employ large numbers of local managers and technical experts. As a report to members of Congress stated:

The government of Iran is attempting to create an extremely modern military establishment in a country that lacks the technical educational and industrial base to provide the necessary trained personnel and management capabilities to operate such an establishment effectively. Iran also lacks experience in logistics and support operations and does not have the maintenance capabilities, the infrastructure (port facilities, roads, rail nets, etc.) and the construction capacity to implement its new programs independent of  outside support.

Thus, the back-end process — issues of procurement, finance, logistics, maintenance and training — had important implications.

Eventually urban pressures arising from the impact of the aircraft’s acquisition on Isfahan’s social, economic, and built environments would be linked to revolutionary circumstances.