Changes

Increases in the price of oil starting in 2003 have increased state revenue enormously and permitted a much larger degree of spending on social programs than previously anticipated. However, this has not eased economic hardships such as high unemployment and inflation. The proportion of the economy devoted to the development of weapons of mass destruction and military spending overall remains a contentious issue with leading Western nations.  

Increases in the price of oil starting in 2003 have increased state revenue enormously and permitted a much larger degree of spending on social programs than previously anticipated. However, this has not eased economic hardships such as high unemployment and inflation. The proportion of the economy devoted to the development of weapons of mass destruction and military spending overall remains a contentious issue with leading Western nations.  

Earnings from Iranian oil exports, projected at $57-$87 billion for 2007-2008, are placed into the Oil Stabilization Fund (OSF), originally designed as a Treasury safety net if oil prices dropped below $20/barrel. In practice, the government has drawn upon the OSF to cover overexpenditures. Iran relies on oil for 80% of its export revenue, and 40% of total revenues. (Note: Iran's refining capacity is limited, and Tehran is a net gasoline importer, spending $2.6 billion for foreign gas in 2005.)  

Earnings from Iranian oil exports, projected at $57-$87 billion for 2007-2008, are placed into the Oil Stabilization Fund (OSF), originally designed as a Treasury safety net if oil prices dropped below $20/barrel. In practice, the government has drawn upon the OSF to cover over expenditures. Iran relies on oil for 80% of its export revenue, and 40% of total revenues. (Note: Iran's refining capacity is limited, and Tehran is a net gasoline importer, spending $2.6 billion for foreign gas in 2005.)  

*GDP (purchasing power parity, 2006 est.): $599.2 billion.

*GDP (purchasing power parity, 2006 est.): $599.2 billion.

*GDP (official exchange rate, 2006 est.): $193.5 billion.  

*GDP (official exchange rate, 2006 est.): $193.5 billion.  

On July 19 Mossadegh disolved the Majlis and called for a plebiscite on August 2.  The Tudeh party, which was staging violent demonstrations in the streets, by the end of July openly supported Mossadegh while the [[Soviet Union]] offered desperately needed economic assistance.  Mossadegh received 99.4 per cent of the vote and on August 8 Soviet Premier [[Georgy Malenkov]] told the [[Supreme Soviet]] that the Soviet Union had been conducting negotiations with Iran since June and concluded a series of agreements on border, aid, and trade issues.  The Shah, who still held the position of [[Head of State]], asked for the resignation of the government and appointed a successor.

On July 19 Mossadegh disolved the Majlis and called for a plebiscite on August 2.  The Tudeh party, which was staging violent demonstrations in the streets, by the end of July openly supported Mossadegh while the [[Soviet Union]] offered desperately needed economic assistance.  Mossadegh received 99.4 per cent of the vote and on August 8 Soviet Premier [[Georgy Malenkov]] told the [[Supreme Soviet]] that the Soviet Union had been conducting negotiations with Iran since June and concluded a series of agreements on border, aid, and trade issues.  The Shah, who still held the position of [[Head of State]], asked for the resignation of the government and appointed a successor.

When Mossadegh received word, he began mass arrests. Two days of chaos ensued. Rioters smashed statues of the Shah and his father and screamed, "Death to the Shah!"  With assurances from the CIA, the Iranian Army turned against the officers Mossadegh installed, and drove rioters off the streets.  On August 19, Mossadegh turned himself over to the Shah's forces and was jailed along with Tudeh leaders.  In December he was sentenced to three years in solitary confinement.  The Iranian economy and living standards of the people gradually recoverd as oil exports regained a market share which had been decimated during the previous two years.  The Shah, who could not be seen as too close to the West because of Iran's domestic situation, nevertheless expressed his understating of the importance of Iran's position in the region, and the world, as a bulwark against [[Containment|Soviet expansionism]].

When Mossadegh received word, he began mass arrests. Two days of chaos ensued. Rioters smashed statues of the Shah and his father and screamed, "Death to the Shah!"  With assurances from the CIA, the Iranian Army turned against the officers Mossadegh installed, and drove rioters off the streets.  On August 19, Mossadegh turned himself over to the Shah's forces and was jailed along with Tudeh leaders.  In December he was sentenced to three years in solitary confinement.  The Iranian economy and living standards of the people gradually recovered as oil exports regained a market share which had been decimated during the previous two years.  The Shah, who could not be seen as too close to the West because of Iran's domestic situation, nevertheless expressed his understating of the importance of Iran's position in the region, and the world, as a bulwark against [[Containment|Soviet expansionism]].

The Shah recognized and secured formal diplomatic relations with [[Israel]] and did he participate in the Arab oil embargoes during the [[Six Day War]] of 1967 and [[Yom Kippur War ]] of 1973. The US and British Mediterranean Fleets were provided with oil by the Shah.  During the Yom Kippur War the Shah deterred [[Sadam Hussein]] from playing any role by moving Iranian troops to the border, and with covert aid to the [[Kurds]] of Iraq which kept the Iraqi Army diverted.

The Shah recognized and secured formal diplomatic relations with [[Israel]] and did he participate in the Arab oil embargoes during the [[Six Day War]] of 1967 and [[Yom Kippur War ]] of 1973. The US and British Mediterranean Fleets were provided with oil by the Shah.  During the Yom Kippur War the Shah deterred [[Sadam Hussein]] from playing any role by moving Iranian troops to the border, and with covert aid to the [[Kurds]] of Iraq which kept the Iraqi Army diverted.