Fluctuations in the balance of Payments and its impact on The Iranian economy for The years 1973 – 1979 (a study in economic history)

Abstract

Balance of payments data is one of the most important data that countries use to draw their economic policy, and on the basis of economic policy, policies are drawn up in other fields, and based on this principle, Iran's financial conditions changed in late 1973, following the decisions of the Organization of Petroleum Exporting Countries (OPEC) at the end of the aforementioned year, during which oil prices increased significantly, Iran has witnessed large financial returns, for the first time in its history, and for this reason the conditions of the Iranian balance of payments have changed, and the state of chronic deficit, which it was suffering from, has vanished, and therefore the Iranian government has taken A series of unsuccessful measures.

of unsuccessful measures, as it increased its imports of goods, reduced its protective restrictions, abolished import duties, and increased armament costs. Iran began importing types of weapons, equipment, planes, tanks and warships, and the number of Iranian army personnel tripled, in order to realize the dreams of Shah Muhammad. Pahlavi's satisfaction with restoring the glories of the ancient Persian civilizations, and the government began an unthoughtful policy of openness, so foreign companies and banks entered to practice their business without restrictions to protect the national economy As a result, Iran witnessed unprecedented financial inflation, and the value of salaries and wages decreased as a result, and the number of the unemployed increased, and the number of immigrants from the countryside to the centers of major cities increased, and the Iranian government did not pay the necessary attention to the balance of payments data, which was indicating dangers. As a result of that economic confusion, the state of discontent increased among the various classes of the people, and popular protests and demonstrations began to increase little by little, and the attempts of successive Iranian governments to restore calm and stability to the country did not work, so the Shah was forced to leave the country, the revolution triumphed, and the Islamic Republic of Iran was established in February 1979.