MOHAMMED REZA SHAH'S recent good-will visit to the United States has again drawn American attention to his strategically important country. Iran is due to receive a small amount of aid under the Foreign Arms Aid Bill passed in the last session of Congress; and the initiation of a Seven-Year Plan of Iranian self-development and improvement in coöperation with western, especially American, technical aid and advice has recently been announced. These events call for an appraisal of the present situation and future possibilities in Iran, and of American foreign policy there.

The first skirmish in the struggle between Russia and the west in the Security Council of the United Nations took place over Iran. The Soviet Union failed to withdraw Soviet troops from Iran by March 2, 1946, as she was pledged to do under the Tripartite Treaty of 1942, and when Iran, with a notable display of nerve and coolness carried the matter to the Council, the pressure of western diplomacy and of world opinion focused in the United Nations forced the Soviets to climb down. It was not until the close of 1946, however, that the Azerbaijan rebellion was liquidated and the integrity of Iranian territory reëstablished. Iranian independence of choice and action was proved in practice in the fall of 1947 when the Iranian Parliament rejected the Soviet-backed oil agreement between the two countries. This was possible because Iran received the diplomatic support of the Western Powers, under vigorous American leadership, and felt confident that the United Nations would support her if the U.S.S.R. resorted to aggression.

Iran is accustomed to the policy of adroitly balancing opposing Powers against each other, but during the last two years she has been increasingly forced into open alliance with the west by the Kremlin's machinations. The Soviets have continued to create tension and friction within the country, have perpetrated annoying border incidents and persisted in radio and press attacks upon the government. Most serious of all is the constant attempt by the Soviets to build up a case for armed intervention on the basis of the variously interpreted Soviet-Iranian Treaty of Friendship of 1921. To this end they accuse Iran of connivance with the United States in building airfields and military bases as a threat to the U.S.S.R., whose oil fields are vulnerably close to the Iranian border. The response of the Iranian Government to all this pressure has been resistance, if not indeed defiance: a bold procedure for a country so weak and so close to the Russian colossus.

Though still sincerely protesting her desire to live at peace and in friendship with her great northern neighbor, she has turned to Western Powers for help. The rôle of Soviet satellite she resolutely rejects. What are her chances to remain independent and free?

II

The answer will depend upon Iran's ability to carry forward her modern social revolution and to apply the program of political and economic reform which she has drawn up; and her ability to succeed in this will in turn depend to a considerable extent upon the accuracy with which the United States appraises the realities of the Iranian internal situation. Since the abdication of Reza Shah in 1941, his son and successor, Mohammed Reza Pahlevi, has tried to rule as a constitutional sovereign. Those who know him find him sincere, intelligent and devoted to the best interests of his country; but his task is very difficult. The young ruler is under the necessity of prodding a reluctant government into constructive action, and is constantly blocked by its lethargy and shortsightedness.

The majority of the people favor the monarchy and trust the present ruler. But they deeply distrust the ruling class of Iran, which dominates the Majlis, or National Assembly, and the Government, that is, the Cabinet and ministries. This landed and mercantile aristocracy manages to control elections of deputies in most of the provinces, and in general dictates the reshuffling of Cabinet ministers in the successive administrations. The people look to the Shah for leadership in ending this sterile situation and bringing new men into the Government. Thus far the response of the Majlis to the effort to pull the nation together in the face of Russian efforts to disrupt it has been even more futile than that of the executive branch of government, which, although parliamentary in form, resembles the United States system in that the members of the Cabinet do not hold seats in the Assembly. The inherent atomistic individualism of Iranian society has intensified this aristocratic futility. During the dictatorship of Reza Shah there could be no training in constructive parliamentary politics, with its necessary compromises and coalitions. This has contributed to the inability of Iranian politicians to develop the kind of party alignments essential for effective legislative action in a constitutional government. But the fractional and unstable character of the association of deputies in recent parliaments, with personalities rather than policies and programs the determining factors, is caused primarily by the lack of any real connection between the deputies and the electorate.

The franchise is widely held, but a large majority of the people are illiterate and are the easy prey of wealthy and powerful politicians. The Shah and his Government have tried to create a more realistic democratic base by limiting the vote to the literate, while simultaneously pressing a campaign to implement the existing law which specifies that elementary education be universal and compulsory. The members of the Majlis, however, have shown no disposition to favor the limitation of their present power which would be inherent in such a reform. The consequence is that an increasing number of Iranians are convinced that the only hope for concerted and constructive action lies in the leadership of the Shah, who alone can supply the unifying force which will put the nation on the road to stability and progress. This movement is the most significant development of recent years in Iran, and it was immeasurably strengthened by the unsuccessful attempt upon the Shah's life last February. The Government described this as part of a far-flung plot of the leftist Tudeh (Masses) Party, whose record of subservience to Moscow was demonstrated in 1945-47, and most Iranians accepted that explanation. The people reacted by closing ranks behind the Government when it outlawed the Party, and by rallying behind the leadership of the Shah.

Even the Majlis responded to the popular pressure and gave to the Shah some of the increased powers for which he had been asking for more than a year. In May a Constituent Assembly amended the constitution, empowering the Shah to dissolve Parliament when it rejected or refused to act upon major governmental proposals and to carry the issue to the electorate for a new mandate. Mindful of the abrogation of the constitution by the present Shah's father, the delegates hedged this new grant of power with the provision that the Shah could dissolve Parliament once only on the same issue. Another decision calculated to give stability to the Government and to enhance the prestige of the Shah was the implementation, at last, of the constitutional provision which calls for an upper legislative chamber, or Senate, to be composed of 30 members, half of them elected by the people and half appointed by the Shah. These elections have recently been held and the 16th Majlis will be the first bicameral legislature.

No one can tell just how the movement will develop, for in the last analysis it depends upon the character of the young ruler. The relationship between the military and civilian leaders of the country is a point of tension. The generals were more privileged and more powerful under the dictatorship, and there are those among them who would be glad to induce the present Shah to desert his constitutional rôle. The recent decision of the Government to reincorporate in the Army most of the national gendarmerie, heretofore under the command of the Ministry of Interior, was contrary to the desire of the majority in the Majlis and increased the concern of those who fear the ambitions of the military. Suspicion is not directed at the Shah so much as at the generals who would like to use his popularity and prestige to increase their own power. And in any case, public concern was considerably reassured by the Shah's subsequent order forbidding Army officers to interfere in any way with civil affairs and in particular with the impending elections. Theoretically, the Army is responsible to the Cabinet through the Minister of War. But this official is almost invariably an appointee of the Palace; and in any major issue between the Premier and the Palace the allegiance of the Army is given first to its royal commander. But the question is not likely to arise in serious form unless there is basic distrust between the Premier and the Shah, such as existed during the incumbency of Ahmad Qavam, who resigned on December 10, 1947, after a vote of lack of confidence.

The present coöperation between the Shah and the Government is predicated upon mutual trust and a sincere acceptance by the monarch of a constitutional rôle. The enhancement of the Shah's influence is welcomed by the majority of the people and their leaders. There is hostile opposition, but it is that of the extreme Left, especially that part of it under Soviet influence, and an extreme Right led by the conservative clerics. The assassination last November of Hazhir, Minister of Court, by a young fanatic who had been protected by clerics in 1946 after he murdered a brilliant and popular reformer shows how real is the danger from the Right.

III

In the face of such internal tensions, the rôle of a friendly Great Power such as the United States is delicate and difficult. We wish to respect Iran's own independence of action, and to pursue the traditional American policy of noninterference in another nation's domestic affairs. Yet if we did not place our prestige and strength behind those groups and programs that make for democracy and the extension of the welfare of the people we would in fact exercise our power blindly and irresponsibly. Justifiably or not, the United States has acquired the reputation of supporting the status quo everywhere in the Middle East. In Iran there is desperate need of basic reform, and many of the ruling class oppose it. The United States must devise means to develop Iran for the benefit of all its people. We cannot dictate economic methods, and certainly not forms of government, but American aid can and should be plainly contingent upon agreements on goals that promote the welfare of the nation as a whole and not that of some privileged class or group only. Broad humanitarian conditions may properly be attached to help freely asked.

American help to Iran has not been lacking since the war. In addition to advisory missions to the Army and the gendarmerie, there has been a $10,000,000 loan to secure war surplus many times that in value, and special legislation by Congress to provide a loan to cover the cost of transporting these supplies. This material has been used by Iran to reëquip her police and military forces. Some Iranians are inclined to think that American funds are theirs as of right, and to key their demands accordingly. For United States administrators to disillusion those who take this attitude is necessary for the welfare of all concerned.

On the other hand, there does seem to be justification for those Iranian critics who point out that their country has received relatively less than her share of help as compared to Turkey and Greece. Iran is by no means a military investment comparable in importance to Turkey, and though the United States does well not to listen to all the requests of expansive generals in Teheran, we should remember that no chain is stronger than its weakest link and that the need for economic aid is constant if Iran is to have the will and the means to resist Soviet tyranny. Moreover, the United States might well be more alert to the possibility of making some small grants in aid for which no Congressional appropriation is needed and which would be practical and psychologically helpful. For example, it seems inexplicable that our Government should have curtly dismissed Iran's recent request for grain to meet near famine conditions in some areas with the observation that there was plenty of wheat to be bought on the world market. A small gift would have strengthened the Iranian Government's hand, especially with recalcitrant hoarders of grain, and would have brought much good-will to the United States among the hungry people.

The relationship of British and American policy in Iran offers a rather difficult problem of public relations, since many Iranians assume that the United States has simply taken over the rôle that Britain played there in the nineteenth century, and that the British are angrily trying to resist the American attempt to replace them in this sphere. Of course the Soviets do their best to foster this interpretation. Soviet propaganda, aiming to present the British and ourselves as the most brutal of imperialists, talks unceasingly of the bitter rivalry between the British and American Embassies. Quite the opposite would appear to be true. Certainly at the high policy level there is agreement between London and Washington on Iranian policy. But this is not because the United States has taken on the nineteenth century imperialism of Britain, but because the present Labor Government perceives the bankruptcy of that policy in Asia. An almost pathological anti-British feeling exists in Iran, and most Iranians cannot credit Britain with any good intentions toward their country. The fact of British and American friendship can perhaps best be demonstrated by actions rather than words -- and, after all, actions are the only convincing demonstration of American intentions toward Iran, though full and accurate information about those activities of course has a very necessary place.

A negative stand against the Soviets in support of Iranian independence is not sufficient, particularly since (to return to the central problem) such a policy takes the form of buttressing the ruling class. It is imperative that we perceive the danger in this. Some means must be found to support those dynamic forces that are demanding new leadership and a liberal program in behalf of the people as a whole. The recent elections for the 16th Majlis in Teheran -- where at least elections have been comparatively free -- trumpet this warning. Although at this writing all the count is not yet in, it would appear that those candidates who have been bold enough to stand in vigorous opposition to the Government have been supported by large majorities. As this report appears in print, the new Majlis will be initiating its session. We shall see whether it is an improvement on its predecessors. Even if there is new blood, one should not be too sanguine. The fifteenth parliament yielded to the popular pressure which made itself felt during the spring and early summer in support of the Shah; but before it adjourned the old atomistic Iranian individualism seemed to have returned. Basic change comes slowly in such a country.

Yet there is no question that new forces are emerging, especially among the younger educated citizens, and that they will not long be denied a share in shaping the country's destiny. The Tudeh Party is outlawed, and discredited by its prostitution by Moscow; but the patriotism which was perverted in that body is still alive, and is searching for a leader of stature and integrity. The Shah could fill this rôle, and probably would attempt it if he were assured of American support. There seems to be a growing realization in Washington that only a more positive program can build solidly and well in Iran.

IV

The core of the problem, therefore, is economic. What the people ask is bread, and a lightening of the burdens of everyday existence. This is what the Soviets promise them, and the only answer to it is a rising standard of living in Iran. It is significant that the people are revising their estimate of Reza Shah's dictatorship; at least, they say, he provided some bread and some hope, and what good are freedom and democracy, unless they can do likewise? During his régime, Iran was started on the road to economic improvement by the development of motorized communications, light industry and technical education, and by the expansion of trade. Top-heavy centralization, neglect of the basic industry of agriculture, and the repercussions of the world depression slowed this development. Then came the war, Allied "occupation" and a 1,000 percent inflation which brought confusion and eventually dislocated the economy completely. No one has yet struck a balance of the gains and losses which the war brought to Iran, but the unfortunate fact seems to be that the gains, such as they were, accrued to a small percentage -- the ruling aristocracy and the new rich -- while the masses bore the brunt of the inflation and the results of the economic dislocation.

Since the war Iran has been struggling to meet this situation. New labor laws of an advanced and liberal character have at least been put on the books. State industries have been reorganized and more opportunities opened to profitable investment of private capital. Pest and malaria control has been instituted in various test areas of considerable size. The highway system has deteriorated, but the interrupted prewar effort to provide a rail network has been resumed. A new agreement with the Anglo-Iranian Oil Company for the exploitation of their oil concession in the southwest has been worked out, but the last Majlis refused to ratify it on the ground that it is not favorable enough to Iranian interests; unfortunately Soviet political ambitions have to date prevented Iran from capitalizing on her other petroleum resources. Not least has been the flow of students abroad to secure the necessary technical training to take part in this new national development; at present, more than 700 are studying in the United States, the majority of them meeting their expenses on their own resources.

The most important and comprehensive effort of Iran to meet the postwar situation is her projected $650,000,000 Seven Year Plan for development of her human and material resources, due to get under way in 1950. The plan is indeed ambitious, since the most recent annual budget of the Iranian Government is only approximately $250,000,000. Studies were initiated in 1946, and some of the best American engineering advice has been sought. A preliminary survey cost Iran a quarter of a million dollars, and a more detailed and definitive report cost more than twice that. The plan will be administered by a Supreme Planning Board, which, except for its dependence upon the Majlis for appropriations, is autonomous and independent of the Government. The Chairman of this Board is the executive director of the plan. He will be a powerful figure in the country, and, along with his colleagues, the target of considerable pressure in decisions which will greatly affect individuals and groups.

The Shah will of course exert much influence in the formulation of policy and choice of personnel. His American-trained younger brother, Abd al-Reza, has been his usual means of liaison with the Board, though sometimes the Shah's contacts are direct, as when he recently agreed to the replacement of the Chairman of the Board without the knowledge of his brother, a good friend of the ousted official. Considerable expert personnel will be required for the implementation of the plan. All administration will be in the hands of Iranians, and it should be possible to find a sufficient number of qualified administrators among the men trained abroad since 1930. Foreigners will advise only. Some advisers will be supplied by private firms in the United States, and some will be drawn from other countries. After the passage of the "Point Four" legislation, which is expected in the next session of Congress, it will also be possible to assign government experts employed by the United States to advisory positions, as has already been requested by the Iranian Government.

The character of this advisory personnel will be of primary importance. The United States Government can naturally expect to play no part in the choice of non-American advisers. Perhaps it can properly be consulted in the selection of private American advisers, though it cannot make the decision. But it can and must take great care in the selection of its own experts loaned to Iran. After the rather unfortunate experience in regard to some of the personnel of the Millspaugh economic and financial mission during 1943-45, there appears to be a disposition in Washington to screen recommendations very carefully and to retain the check of recall on all advisers loaned by the United States Government. With foreigners employed only as advisers, not as administrators, some of the difficulties which were created for the Millspaugh mission will be eliminated. But Iran has a record of paying high prices for advice and then disregarding it, and it is well to be aware that personnel problems will become acute. It is difficult to retain high caliber advisers and to maintain morale when disinterested advice is constantly disregarded.

The plan is to be financed by Iranian oil royalties and by capital funds (two-thirds) and foreign loans (one-third), the latter probably from the World Bank and Monetary Fund. Although to date Iran has done no more than file notice of application for such a loan, Bank and Fund officials have visited Iran and are reported as well disposed toward such a request. There is considerable difference of opinion in responsible Iranian circles as to the present need for a loan. A. H. Ebtehaj, Governor of the National Bank and a member of the Supreme Planning Board, insists that for the first two years Iran can finance the program herself by oil royalties (a substantial portion of which are, by agreement with the British, available in dollars), by loans from the National Bank, by sale of government property, by private capital and by a 50 percent devaluation of Iranian currency. This devaluation would be achieved by reducing to that extent the present 100 percent backing of the Iranian rial by gold, foreign exchange reserves in both sterling and dollars, and the treasury of the Crown. No other country in the world has such complete coverage for its currency, and Mr. Ebtehaj argues that if it were cut in half Iran's currency would still be better protected than that of most nations. It is not surprising, however, that many Iranians, including the Shah, fear to put this theory to the test. Monetary stability rests on the confidence of the people in their currency, and the maintenance of confidence is of double importance in the Middle East.

The program will in any case require foreign financing eventually; but foreign funds would be much easier to obtain if Iran showed that she could get the plan under way on her own resources. It is generally agreed that the project is sound and will make for increased productivity; and the oil royalties, estimated to carry about 35 percent of the financing of the plan, will continue to bring money into the Treasury. Iran is in an advantageous position to finance such a plan of self-development. There is no doubt that the program would be inflationary, but the rate of expenditure can be controlled and the increase in the production of the country ought to take care of this necessary risk. Some experts believe that Iran cannot efficiently spend the annual sums designated in the early stages of the plan; and, if so, a reduction in initial expenditures would correspondingly reduce the inflationary effect.

V

The program calls for correlated and progressively productive projects -- the expansion of main and subsidiary communications to increase the flow of local goods and tap undeveloped areas and resources; the increase of the size and yield of cultivatable land by dams, irrigation, and such small scale mechanization as is practicable; the expansion of the light industry needed to supply the materials and tools for these projects and to process certain exportable products; the development of the oil resources of the country outside the Anglo-Iranian concession (although this is so expensive that only a beginning can be made with the small amounts of capital available); the extension of public health projects such as control of malaria and tuberculosis and the provision of pure drinking water and modern sanitation that will increase and raise the efficiency of the country's labor supply; and, finally, the spread of educational opportunities, especially at the elementary level and in village and rural areas.

If this plan can be developed as projected, the living standard of the Iranian people should before long begin to rise, and there should be hope for the future. This would inevitably have a quieting and steadying effect upon the political situation; and in such an atmosphere the liberal and progressive elements might find an opportunity to make themselves felt. But for this very reason, we should be aware that the landed and mercantile classes are likely to perceive in the plan a threat to their present supremacy. To be sure, this plan does not call for any radical alteration of the present land-holding system, which must eventually come. But the success of the plan will in practice be a movement in that direction, and it is altogether probable that among these privileged classes there will be many who will strive to sabotage the whole effort.

These supporters of the status quo will be abetted by the conservative clerics who fear this program of industrialization and modernization as a threat to the Islamic religion, way of life and social structure. Too many of them fail not only to perceive the opportunity for utilizing modern technology in the building of a dynamic society dedicated to the best in Islam, but also to realize that the alternative is revolution and Communism. If Iran became a Soviet satellite they would be liquidated without ceremony.

Finally, we must expect the Soviets to use every means to ruin the whole effort. They cannot afford to see it succeed. By every device of unscrupulous propaganda they will brand it a diabolical enslavement of Iran by United States capitalistic imperialism. "Exploitation" in the old sense of the word is, in fact, impossible within the framework of the plan, and American information services have an extremely important task to perform in making the Iranian people understand what is being done, as has been noted above. It is fair to report that officials in Washington are aware of these matters.

The chance of success for the plan is, of course, predicated on the assumption that Iran has a few years of peace in which to get her feet planted on the road to recovery and reform. Whether the Politburo will grant them to her, no man can say. An outbreak of war anywhere would probably quickly involve Iran, with the Red Army striking for the Persian Gulf in order to make Soviet petroleum resources secure and if possible to appropriate those of the Near East. For a country so vulnerable, Iran has shown courage in standing up so stoutly to Soviet intimidation. Her stand is founded on knowledge of American support. The pressure will be intensified if Iran shows success in her effort of self-development. Only the certainty that the violation of her territory would not go unchallenged by the United States and the United Nations can give her people the breathing space they need.

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  • T. CUYLER YOUNG, Associate Professor of Persian Language and History, Princeton University; for seven years in Iran for the Presbyterian Board of Foreign Missions; Public Affairs Officer of the American Embassy at Teheran during the war
  • More By T. Cuyler Young