Page 297 - Arabia the Gulf and the West

294 Arabia, the Gulf and the West

second stages of the land reform, they did not invest this capital, as the shah
had intended they should, in industrial development. Instead, they employed
it in the purchase of urban land and property, and in speculative construction
of an unproductive kind (office buildings, apartment blocks, shops, housing,
etc.) with the aim of continuing to live, as they had in the past, off their rents. It
was much the same with the merchants and local manufacturers who accumu­
lated fortunes during the consumer boom of the early 1970s. They, like the
landowners and other beneficiaries of the flood of oil money among the

professional and bureaucratic classes, preferred to sink their gains in real estate
or to transfer them out of the country, usually for investment in the West.
From the latter part of 1975 onwards some $100 million of private capital on
average left Persia every month, sometimes even more, as in the autumn of
1975 when $2,000 million at least was-estimated to have been remitted abroad,
and again in the autumn of 1978 when a similar sum was said to have left the
country.
Another cause of the stultification of the shah’s grand design was the sheer
shortage of skilled labour already alluded to, a shortage made all the more
severe by the competition from, and priority given to, military construction
projects. Throughout the 1960s and increasingly in the 1970s the shah had
encouraged the migration of workers from the countryside to the towns so as to
create the pool of labour necessary for Persia’s industrial revolution. On the eve
of the Second World War three-quarters of Persia’s population of some four­
teen and a half million souls lived either on rural estates or in villages and towns
of fewer than 5,000 inhabitants. Forty years later some 46 per cent of the
population, which by this time had grown to about forty million, lived in the

cities and larger towns, and this urban population was expanding at three times
the rate of growth of the rural population. The economic boom of the 1970s was
virtually confined to the main cities - Tehran, Tabriz, Ispahan, Mashhad,
Shiraz, Kirmanshah, Ahwaz and Abadan - and to Tehran above all, the
population of the capital growing from something over half a million in 1939 to
more than four million by the mid-1970s. Most of the peasants who poured into
the cities, however, were mechanically unskilled (the great majority of them
unlettered as well), so that they were fit for no more than basic physical labour
or the simplest kinds of factory work.
Their expectations, however, had been raised by the excitement of the oil
boom and by the shah’s exhortations to them to build the ‘Great Civilization .

Aware that such a fast-growing urban proletariat, newly uprooted from its
traditional way of life, could prove politically dangerous, especially in Tehran,
the shah sought to buy off its potential enmity, as he had bought off that of the
upper and middle classes, by economic douceurs. By royal decree the wages of
factory workers were constantly increased, and employers were required to pay
bonuses to their employees at regular intervals. A further populist measure
devised by the shah was that of workers’ shares - the urban equivalent 0