Iran A country whose history in the twentieth century was subject to three distinct factors. The first was its geopolitical position, as it bordered on the Russian Empire, with its continual quest for an ice-free port, to the north, and British India to the east. Its geographical situation became even more precarious after World War I, when Mesopotamia (now
Iraq) became a British
League of Nations Mandate. Matters were complicated by its substantial reserves in oil and gas. A third factor was the firm adherence of the vast majority of its population to
Shi'ite Islam, a matter of overwhelming importance in uniting its ethnically heterogeneous population.
The first two (geopolitical and economic) factors dominated events in the first two decades of the century. Oil concessions were granted to British firms in 1901, which later became the Anglo-Persian Oil Company (later still BP). Growing informal control, especially by Britain, was formalized in the 1907 Russian convention. It divided the country into a northern section under Russian influence, a neutral part in the middle, and a southern area under British influence. This brought about violent protests from a traditionalist, Islamic society resentful of Western influence. A constitutional movement had developed in 1905 and managed to wrest a Constitution from the ailing Mozaffar al-Din Shah in 1906, which diverted some powers, including the handout of concessions to foreign companies, from the Shah. Despite the establishment of a parliament, however, there was little effective change in foreign influence. Foreign military presence was increased in 1911, and during World War I it was occupied by Russia and Britain in order to guard its oil reserves.
In 1921 a group of young officers led by Reza Khan assumed power, and in 1925 he deposed the last ruler of the Qajar Dynasty, Ahmad Shah, and proclaimed himself Shah as Reza Shah
Pahlavi. He changed the name of the country from Persia to Iran (a derivative of Aryan, ‘regal, noble’) in 1925. This symbolized his general attempt to reform the country's traditionalist society, mainly in an effort to strengthen Iran's resistance against foreign intrusion. However, while this did create a more centralized, efficient state with a (marginally) more educated society, he achieved the worst of both worlds. He was distrusted by the foreign powers, and resisted at home by traditional communities whose values he attacked. His land reforms created even more landless peasants, while leading to the manipulated acquisition of land by large landowners, of whom he became the wealthiest. During World War II he insisted on remaining neutral, and was increasingly sympathetic to
Nazi Germany. This triggered another Allied occupation. He was forced to abdicate in favour of his son, Muhammad Reza
Pahlavi.
After the war, the well-organized armed forces suppressed separatist forces stationed in
Azerbaijan and Kazakhstan. Nevertheless, the Shah, who firmly supported the USA in the
Cold War, found it difficult to assert control, given the hostile anti-British sentiments among the population. In 1951 he was forced into exile by the popular revolutionary movement led by Mussadeq. The latter nationalized the oil companies, but was unable to carry out further reforms, as he was overthrown in a royalist coup organized by the
CIA in 1953. Reza Pahlavi returned, and concluded the oil agreement of 1954, whereby the oil companies remained in state hands, but were managed, controlled, and exploited by a foreign consortium.
Continuous discontent and sporadic strikes (1956–61) led to the ‘White Revolution’ from 1960, a series of economic and social reforms. These included a land reform, carried out in three stages until 1971—though, if anything, these strengthened the landowners as an important pillar of the regime, by giving them generous compensation (to be paid by the peasants) and thus concentrating investment capital in their hands. Hence, despite fundamental reforms, the first large-scale demonstrations erupted in 1963. To maintain his power regardless of this growing unrest, the Shah's regime became increasingly brutal. He also tried to remain in power through an astute foreign policy, gaining ever more help from the USA, while undercutting his opposition through a friendship treaty with the USSR. A reckless modernization campaign tried to destroy the social base of traditional
Islam, though instead it created a host of inefficient small industries built overwhelmingly by foreign firms. In the mid-1970s, as over 50,000 tortured and maltreated political opponents of the regime languished in state prisons, the Shah's oppressive regime collapsed. In 1978–9 popular protest and general strikes reached such dimensions that they forced the Shah into exile.
A transitional government under S. Bakhtiar oversaw the triumphant return of the Islamic leader,
Ayatollah Khomeini, from exile in Paris in February 1979. A new Constitution transformed the country into an Islamic republic and, despite the efforts of
Bani Sadr, created effectively a theocracy in which the spiritual leadership had the final say. The oil industry was nationalized, and the Shah's institutions dissolved. Islamic law was reintroduced. In a popular act of defiance against the country that had enabled the Shah's dictatorship to endure for so long, crowds occupied the US embassy in Tehran, and thus precipitated the
Iran hostage crisis (1979–80). Consequent international isolation and internal turmoil were followed by the
Iran–Iraq War (1980–8), when Saddam
Hussein's forces tried to exploit Iran's weakness to gain some disputed territories. The war was fought with tremendous losses on both sides, but ultimately led to a stalemate, and in 1988 a ceasefire was agreed which maintained the status quo. While the war caused tremendous damage to the economy, it nonetheless enabled the regime to strengthen its hold on Iranian society, under the conditions of a national emergency. For instance, the introduction of strict Islamic law led to thousands of executions per year, for crimes such as criticism of the government as well as ostensible ‘Satanic’ tendencies.
While economic, educational, and legal reforms towards Islam were comprehensive and relatively systematic, economic reforms embracing Islam were more apparent than real. For instance, banks were forbidden (by the Qur'a¯n) to charge any interest rates, but took high commissions instead. Instead of undergoing any comprehensive reform, the economy deteriorated into chaos. In 1988 the pragmatist leadership faction under
Rafsanjani succeeded Khomeini, since when the country has undergone a careful moderation and opening up in its foreign and domestic policies. Nevertheless, the conservative religious leadership has remained extremely influential. Thus, it continued to support
Hamas and
Hezbollah as well as other
Islamic fundamentalist organizations. In 1997 Sayed Mohammad
Khatami was elected Prime Minster. He tried to liberalize the economy and to promote free speech, but was largely unsuccessful against the continued power of the religious leadership under Ayatollah Sayed Ali
Kahmenei.
