Oil Money: Middle East Petrodollars and the Transformation of US Empire, 1967–1988 by David M. Wight

Author:David M. Wight [Wight, David M.]
Language: eng
Format: epub
Tags: Political Science, International Relations, General, History, Middle East, Modern, 20th Century
ISBN: 9781501715747
Google: KCz9DwAAQBAJ
Publisher: Cornell
Published: 2021-07-15T13:22:57+00:00

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With Iran demonstrating a new moderation on oil prices and a continued commitment to providing security for US interests in the Gulf, it is little wonder that when Carter visited Tehran on New Year’s Eve in 1977, he effusively praised the shah for his “great leadership” in establishing Iran as “an island of stability in one of the more troubled areas of the world.”45 In truth, however, the shah’s regime faced mounting crises. Iran’s oil revenues had stagnated since 1976 owing to the OPEC price battles, but existing petrodollar expenditures caused inflation to persist. In August 1977 the shah appointed the economist Jamshid Amuzegar as prime minister to address mounting financial concerns. Amuzegar pursued a deflationary campaign, but the shah largely prevented him from reducing government spending on the military and long-term industrial projects. Amuzegar therefore made cuts to other economic sectors, particularly urban construction, which rapidly increased the number of unemployed. Workers strikes increased in frequency despite being confronted by the threat of violence from security forces. Government price controls and antiprofiteering arrests of Iranian businesspeople meant to stifle inflation outraged the bazaar merchants and small industrialists. The marked economic disparity between well-connected Iranian elites, who continued their binge of hyperconsumerism, and average Iranians, who increasingly feared for their livelihoods, magnified popular discontent. Amuzegar also imposed severe cuts in government subsidies to the ulama, further alienating the Shia leadership and their followers. Despite these measures, the continuation of government purchases of arms and capital-intensive industrial projects ensured that high rates of inflation persisted even as unemployment swiftly rose. Largely due to its choices in where to allocate its petrodollars, Iran was now experiencing its own painful version of stagflation.46

By 1977 the shah had managed to alienate every major segment of Iranian society: rural peasants, urban laborers, bazaar and small-factory owners, the ulama, middle-class professionals, and college students. Only military officers, senior civil servants, and royal courtiers remained widely loyal to the Pahlavi dynasty. Peaceful protests and the dissemination of open letters condemning the shah’s rule increased in frequency, circulated from across the Iranian ideological spectrum. Increasingly, however, Khomeini became the symbol of opposition to the shah, and his network of religious students increasingly led the Iranian resistance.

Then, on January 7, 1978, in an effort to undermine Khomeini’s growing popularity, the Iranian state-backed newspaper Ettelaat ran an article claiming Khomeini was a paid British agent of Indian descent working to recolonize Iran and a faithless man who had lived a licentious life of writing love poetry and drinking wine. The clumsy effort to discredit Khomeini backfired spectacularly. Over the next two days, Shia seminary students in the holy city of Qom organized protests and shutdowns in the larger community. Iranian security forces responded with force, killing some of the protesters. The massacre in Qom marked the start of the Iranian Revolution, triggering a yearlong cycle of popular Iranian protests and securing the position of Khomeini and his followers as the leaders of the revolution.47

From Najaf, Khomeini guided the revolutionaries through speeches that were smuggled into Iran in pamphlets and cassette tapes.

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