The Political-Social Consequences of Foreign Capital and Externalization of the Gilan’s Economy in the Qajar Era

During the industrial revolution in Europe, foreign investors and businessmen were drawn to the numerous business opportunities of Gilan, which subsequently became one of the first regions in Iran to begin the process of integration into the global economy. Indeed, this northern territory bordering the Caspian Sea attracted foreign investment in the economic sectors of fisheries, industry, agriculture and oil, particularly in the second half of the Qajar era. The trade routes of Gilan had been among the main highways for the importation of new consumer goods, and accordingly the customs authorities in Astara and Anzali played a unique role in the country’s international trade. However, due to the weakness of the Iranian government that ultimately led to the fall of the Qajar Dynasty, this accumulation of capital in Gilan led to the expansion of the power and influence of this province in relation to the central government; and to some extent, it gained more autonomy from the national economy. The two research questions to be answered are:  a) What was the nature of the process of economic externalization in Gilan in the late Qajar period? and b) What were the implications of this economic externalization for the social and political conditions of Gilan in the late Qajar period? In the research hypothesis, it is argued that the foreign capital injection into the economy   of  Gilan gradually led to its dependency on the global economy and concurrently helped it to gain relative economic independence from the national economy which in turn weakened the political influence of the central government over the local economic players. Data is collected by the use of the method of qualitative thematic analysis of historical records and documents in addition to exploring the findings of previous research on the subject. As the last decades of Qajar rule approached, Gilan was well on the threshold of becoming an industrialized province with more economic independence from the government in Tehran, due to the direct ties established between foreign investors and a score of Gilan’s merchants and upper-class businessmen who no longer needed to be supported by the central government.The authors’ theoretical framework is based on Eric Wolf's study of the peasant revolts in the 20th century. His main argument is that the peasant revolts had occurred in the situations where the local economy-global economy linkage had resulted in the relative strengthening of the villagers and the creation of a large middle-class and wealthy peasants. At the same time, this linkage has led to the foreign powers’ support for the ‘rebel’ region and consequently to the weakening of the central government’s hold on that region. In the conclusion, it is stated that the foreign investors, notably Russia, created the economic dependency of merchants, peasants and artisans of Gilan by importing capital goods, establishing several factories and commercial offices, purchasing fertile land from the local. Russia also provided extensive military support for its loyal local allies in Gilan, and thus the central government’s power in this province was severely weakened politically and militarily. As a result, the groundwork was put in place for the activities of opposition forces in Gilan in the period of 1905-1925.