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accomplished by the spending of money, which in turn would be furnished by
the industrial West in the form of bounteous oil payments.
Unfortunately, Persia lacked nearly every prerequisite necessary for the
transition to an industrial economy in so short a space of time as the shah had
decreed. Her people were in the main illiterate (perhaps as many as three-
quarters of them), devoid of the technical skills and experience needed for an
industrial labour force. The country had no economic infrastructure in the
form of adequate roads, railways, ports, communications or power and water
supplies to support the rapid development of industry. There was only one
steel mill in existence, the Aryamehr complex at Ispahan, which the Russians
had undertaken to build in 1966-7. It was completed in 1973 but three years
later it had still not achieved its planned output of 600,000 tons per annum.

Although in the decade from the late 1960s to the late 1970s Persia’s gross
national product grew at a remarkable rate, averaging some 13-14 per cent per
annum, most of the industrial growth was in activities deriving from the oil
industry. Only the barest start was made with the manufacture of intermediate
and heavy (i.e. capital) goods, which demands greater technical skills and
managerial talents than light manufacturing. Instead, the bulk of the national
output was either in construction or in what might be termed ‘Coca Cola’
manufacturing, i.e. the production of light consumer goods intended as substi­
tutes for imports.
What the economic activity of the 1970s lacked in achievement it more

than made up for in extravagance. At least 40 per cent of the money invested in
any project, it has been estimated, was wasted. Much of the waste was caused
by the inability of Persia’s ports and transport system to handle the vast
quantities of imports which had been ordered with senseless abandon. At
Khurramshahr in the middle of 1975 there were some 200 ships waiting to
unload their cargoes, and the average waiting time was five months. In one year
alone (1974-5), demurrage charges cost Persia over $1,000 million, or 5 per
cent of her oil revenues. Although half the imports were government pur­
chases, they, like every class of import, were held up by the lethargic and

elephantine workings of the Persian bureaucracy and by the systematic pecula­
tions of customs officers. There were not enough vehicles to transport the
goods from the docks to their destinations; so the government purchased
several thousand lorries, only to find that there were not enough Persians
capable of driving or maintaining them.
There were reasons other than the inadequacy of the country’s economic
infrastructure to account for the frustration of the shah’s efforts to industrialize
his country overnight. Among Persia’s landowning and mercantile classes

there was no tradition of long-term investment in industrial undertakings, or
any disposition to take the risks that such investment involved. Even when
money was made available to the landowners in the form of over-generous
compensation for the estates they had been made to surrender in the first and