The Qum Protests and the Coming of the Iranian Revolution
297
negative growth figure for 1971). All three sources show faltering growth
rates in the years after the oil price hikes of 1973, with the exception of the
unanimously strong figures for 1976. At first glance, then, there is statisti-
cal support for an economic explanation of the Iranian Revolution: a grow-
ing disjuncture between the oil boom’s heightened expectations and Iran’s
subsequent macro-economic performance.
Yet there was a recession in 1975 too, and no revolution occurred. All
three sources show a significant drop in growth from 1974 to 1975, and the
recession was no secret at the time. Only a year after announcing his dreams
for a ‘‘Great Civilization in Iran,’’ to be funded by dramatically increased oil
revenues, the shah began to speak of belt-tightening in May 1975. Ministries
were instructed to cut spending and then to prioritize projects in anticipation
of additional cuts (New York Times, 28 May 1975, 18, and 15 August 1975, 52).
In July, a moratorium on new international contracts went into effect, and for
the first time since the oil boom, Iran started to borrow on the world money
market, as much as $500 million by mid-August (Business Week [New York],
17 November 1975, 63; New York Times, 13 August 1975, 47, and 15 August
1975, 47, 52; Graham 1980: 93). Private investors began to ship their money
abroad, $2 billion in 1975 (Halliday 1979: 165). To combat inflation, the
government scapegoated retailers, especially in the traditional bazaar sector,
imposing strict price controls and accusing certain well-known merchants of
profiteering. In July 1975, during the first weeks of price controls, 10,000 mer-
chants were fined, more than 7,000 arrested, and 600 shut down (Graham
1980: 94; The Times [London], 4 August 1975, 5; New York Times, 21 August
1975, 51; Parsa 1989: 103).
40
Already in the spring of 1975, U.S. officials had
noted economic ‘‘strains’’ in Iran, predicted lower growth rates, and were
worried that a ‘‘significant economic, and potentially political, problem cen-
ters on the rising expectations that for many cannot be fulfilled.’’
41
Was the recession of 1977 worse than that of 1975? The statistical evi-
dence is contradictory and inconclusive.
42
The Central Bank figures show
positive growth rates for both years, with rates higher in 1977 than in 1975;
the IMF reports a low positive rate for 1975 and a low negative rate for 1977;
the Penn World Table gives negative rates for both years, with 1977 more
negative than 1975. Even if we accept a majority vote and conclude that Iran’s
macro-economic condition was worse in 1977 than in 1975, by what mecha-
nism might a faltering GDP have influenced reactions to the January 1978
Qum protests?
298
Social Science History
One potential mechanism might involve government spending; as the
global recession following the 1973 oil price hikes reduced the government’s
oil revenues, less money would be available for the government to buy popu-
lar support. In keeping with this explanation, government spending as a per-
cent of GDP grew 15% in 1975 and only 5% in 1977 (the annual data run from
21 March to 20 March) ( Jazayeri 1988: 169, reporting statistics from the Cen-
tral Bank of Iran). Yet government consumption continued to increase faster
than the rate of population growth. Plus, the fall-off from 1974 to 1975 was
steeper than from 1976 to 1977, suggesting that perceptions of relative depri-
vation might also have been expected in 1975. The opposite pattern appears
with private consumption, a second possible mechanism (ibid.). Here the
absolute rate of growth was higher in 1977 than in 1975, but the drop-off from
the previous year’s growth rate was steeper. Thus in terms of consumption,
no clear pattern emerges to establish 1977 as economically worse than 1975.
Inflation is another potential mechanism of economic distress. Let us
keep in mind that Iranian government statistics on inflation were widely
considered to be seriously underestimated (Ikani 1987: 126; Quarterly Eco-
nomic Review: Iran [London], 2d quarter 1975, 10). Quarterly data from
the IMF consumer-price scale and the Quarterly Economic Review’s cost-of-
living scale both show large inflationary bursts in the first two quarters of
1975, leading up to the June Qum protests. The last two quarters of 1977,
by contrast, witnessed relatively low inflation (though extremely high bursts
had been registered in early 1977).
43
Responses to the Qum protests do not
appear to correlate with quarterly shifts in inflation.
Annualized inflation figures present a somewhat different pattern. As
shown in Table 2, Iran began running double-digit inflation in 1973, and the
consumer price index leapt by 25.1% in 1977, according to the Central Bank
of Iran. As indicated in the following columns of Table 2, which report West-
ern calendar years, dramatic wage increases more than kept pace with infla-
tion, but the differential eroded after 1975: in the manufacturing and con-
struction sectors, workers’ wages rose by 30% more than consumer prices
in 1975, by 20% more in 1976, and only by 3 to 9% more in 1977. Daily
calorie intake, as reported by the Food and Agriculture Organisation (1980),
continued to rise during this period, but it did not match the 8% increase of
1975. The deprivation suffered in 1977 was not absolute but was relative to
the growing prosperity of previous years.
If the manufacturing or construction sectors felt deprivation, however,