Domestic Policies - The Economy

"This is very interesting: The Americans occupy the country, kill people, sell the oil and when they have lost, they blame others." - Ahmadinejad

    The economy of Iran depends entirely on its oil industries. This makes the country dependent on the oil world prices. Any changes in these will affect the country's economy. Every time there is a fluctuation in price, the economy suffers drastic changes. For instance, in 1976 the world oil price started decreasing. This led to an increasing inflation of over 20%. Given the rise in the cost of living, the civil servants were badly affected, and opposition groups started to grow.

    On top of the inflation, in order to uphold the Shah's objective of modernization, Iran started to import huge amounts of goods. It soon became trendy to wear fashionable products. This, of course, devalued local production and affected small merchants significantly. As a result, these minor producers resented the Shah and his political decisions. 

    After the White Revolution of 1963, the Shah decided to start land reforms. This policy led to a significant increase in the population, especially the one in Tehran, that "went from 2.9 million in 1966 to 4.4 million in 1976." Soon, the infrastructure was not enough for the population, and the government showed little to no action in the building of roads or the supply of electricity and water. This caused a huge discontent among the rural class.
     You can now see how the economic structure has led to much of the discontent towards the government. This resentment, when greater, can be witnessed in the form of political opposition or dissent, which I will be discussing soon.

Europe recently imposed sanctions on and banned Iranian oil, significantly affecting its export numbers.

Sources:

Habibi, Mariam. History of Europe and the Middle East: Course Companion. Oxford: Oxford UP, 2010. Print.