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200. Telegram From the Department of State to the Embassy in Iran/1/ Washington, May 18, 1967, 9:55 a.m. /1/Source: Department of State, Central Files, POL 7 IRAN. Confidential; Limdis. Drafted by Eliot on May 17, cleared by Macomber, and approved by Battle. 196786. Embtel 4488./2/ For Ambassador from Battle and Macomber. Subject: Shah and Fulbright. /2/Document 195. 1. While we have not approached Sen. Fulbright directly, we consider it most unlikely that he would be prepared make amends to Shah of kind Shah would want. It doubtful in any case that Fulbright intended directly insult Shah; his remarks are directed more against Executive Branch. Only Senatorial alternative to Fulbright as host for coffee June 13 might be Symington as Chairman NEA subcommittee. 2. Shah's reneging on his acceptance Fulbright invitation/3/ would redound strongly to Shah's disadvantage as it would indicate sensitivity not becoming sovereign of a proud, strong and independent nation and would damage his reputation here as it undoubtedly would become known. At present Fulbright's remarks have received no publicity here. Moreover, as you have pointed out to Shah, Iran's story merits telling to key Senators and the Senators want to hear it as is evidenced by Fulbright's invitation. /3/Telegram 4520 from Tehran, May 15, reported that the Shah had told Alam that he could not go through with the scheduled tea with Fulbright. Meyer noted that, in the Embassy's view, the clearly best alternative answer would be for the Vice President to host the Senatorial tea. (Department of State, Central Files, POL 7 IRAN) 3. We therefore believe it desirable for you once again to urge Shah go ahead with coffee with Fulbright as his host. You might wish stress to Shah that this recommendation comes from Shah's friends, who have considered carefully the pros and cons and believe this course is in best interest of US-Iranian friendship and understanding. Rusk
201. Telegram From the Department of State to the Embassy in Iran/1/ Washington, May 19, 1967, 9:26 p.m. /1/Source: Department of State, Central Files, DEF 19-8 US-IRAN. Secret; Priority. Drafted by Eliot on May 15; cleared in draft by ISA Regional Director for Near East and South Asia Colonel Amos A. Jordan, Jr., Funari, Wolf, and Saunders; and approved by Battle. Repeated to CINCSTRIKE/CINCMEAFSA. 198765. 1. President has approved second $50 million increment of military sales credit for Iran under the $200 million planning figure he approved for FY 67-70 in May 1966. You should so inform Shah in your audience May 22. 2. In informing Shah of this approval, you should also: a. Inform him that major item being financed in this increment is second squadron of 16 F-4's. Details on the cost, configuration, etc. of this squadron will be contained in the letter of offer which will be prepared for submission to GOI through ARMISH/MAAG. b. Invite him to suggest time and place for credit negotiation which we hope can be completed prior his arrival Washington June 12. DOD prepared receive Iranian negotiator in Washington or send negotiating team to Tehran. c. State we consider annual review once again to have been useful process. FYI. Among other advantages, it provides bulwark against telescoping of annual tranches. End FYI. State that in our review of Iran's economic situation, we have been greatly impressed at progress Iran has been making. Her economic growth and programs of social reform are impressive evidence of Shah's determination to have his nation modernized. We do, however, remain concerned about number of trends and this concern should be conveyed to Shah: (1) steadily increasing demands of military on Iran's resources, both domestic and foreign, as evidenced by projected 12.9 percent annual rate of increase in military expenditures over next five years and by 6 percent in 1966 to 9 percent in 1972 proportion of GNP to be devoted to military expenditures; and (2) while we are confident GOI capable of handling, we note from projections that inflationary trends with possible effects on balance of payments are likely increase in years ahead. We believe economic improvement and social betterment are best assurance of security in long run against threats to Iran and hope Iran's economic progress will not be adversely affected by her military expenditures. d. Believe it useful to remind Shah of our continuing concern over Iran's arms deal with USSR on grounds stated in President's letter of July 20, 1966./2/ /2/Document 158. 3. Our negotiators will be authorized initially propose 5-1/2 percent interest, 8-year repayment credit terms but to go to 5 percent. These terms should not be revealed to Shah but should be reserved for disclosure to Iranians during credit negotiations. Rusk
202. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, May 22, 1967, 1025Z. /1/Source: Department of State, Central Files, POL 7 IRAN. Confidential; Priority; Limdis. 4629. For Battle and Macomber. Subj: Shah and Fulbright. Ref: State 196786./2/ /2/Document 200. 1. Talked with Alam again 21st re Senator Fulbright's tea for Shah, reiterating arguments reftel as well as welcome news contained State 198767/3/ about Vice President's willingness to participate in tea with Senate leadership. /3/Dated May 19. (Department of State, Central Files, POL 7 IRAN) 2. As clincher, Alam suggests that if Ambassador Ansary could call on Fulbright and obtain some comments on how much Senator looks forward to seeing Shah, and if Ansary were able to report also some favorable remarks by Fulbright about Iran's accomplishments under the Shah's leadership, way would be clear for Shah's being the Senator's guest. Alam notes this course should make things easy for all concerned. 3. Suggest Department facilitate such interview between Ansary and Fulbright at early date. Ansary may already be aware (if not initiator) of this suggestion. We believe that with Department's coaching he can be counted on to handle this project discreetly and successfully. 4. If prospects are for smooth sailing between Shah and Fulbright, Department may wish consider returning to original schedule of 3:00 to 4:00 p.m. for visit with Vice President. This, too, can be worked out with Ambassador Ansary. Meyer
203. Telegram From the Embassy in Iran to the Department of State/1/ Tehran, May 23, 1967, 0955Z. /1/Source: Department of State, Central Files, DEF 19-8 US-IRAN. Secret; Priority. Repeated to Moscow and CINCSTRIKE/USCINCMEAFSA. 4655. Annual Review. Ref: State 198765./2/ /2/Document 201. 1. Noting conversations we have had with PriMin, as well as GOI financial officials, General Jablonsky and I in discussion with Shah 22nd expressed conviction Annual Review indeed a useful process for all concerned. Projections which been developed, I noted, unusually realistic and valuable in providing statistical indicators of Iran's present and future economic progress. 2. Shah said Central Bank projections were very much on conservative side. They did not take adequately into account revenues which bound to accrue from budding projects, e.g. in petrochemical and agricultural fields. Basic problem, Shah said, is not so much Iran's economic wherewithal as it is trained human resources. I concurred that Iran's absorptive capacity is limiting factor to both economic development and military modernization. 3. After commending Iran's current and projected growth rate, I noted that perhaps Iran's greatest problem is its success. Burgeoning economic development, accompanied by budgetary and foreign exchange deficits, can cause inflationary pressures. Shah noted prices been relatively stable and GOI intends to keep them that way, e.g. by foreign borrowing. We both agreed it is important to keep watchful eye on this problem. 4. Noting that plan organization expenditures this year due to increase by record 34 percent, I emphasized importance of economic development to Iran's stability and security. At same time, noted that military budget increased each of past two years by over 20 percent and while rate is due to decline it will still be 12.9 percent at conclusion coming five-year period. Said PriMin and we had gone into this matter thoroughly and had ascertained that increased military expenditures are due to such reasons as fact that Iran now must buy its spares instead of obtaining them via grant aid. Nevertheless, this too is matter which requires constant control. Shah said problem is to keep military budget down but present developments in Mideast underscore need for Iran's maintaining adequate defense capability. He recalled Senator Fulbright some years ago lecturing him to effect that scarcely any countries except USSR and USA need have military establishments. He said he had asked Fulbright whether USG would guarantee existence via US armed forces support of every nation whose independence comes under threat. Shah said same question is even more pertinent today. Shah's view is that it is in Iran's and USG's interest that Iran have capability of deterring or coping with regional threats. 5. Shah said factor which had impressed him in economic projections was that at present Iran's debt servicing is only around half of what its debt servicing capacity can be. It was noted that present figure is 8.5 percent of foreign exchange receipts and that foreign repayments will not rise to 12 percent level before end of next five year plan. 6. While reiterating points of concern, i.e. rising military budget and inflationary pressures, I reported our conclusion that Iran's economic progress is noteworthy and our conviction that GOI officials will keep it healthy. Accordingly, President has approved FY68 $50,000,000 credit tranche for military purchasing in US. Added that virtually all this amount will go for second F-4 squadron. 7. Shah expressed appreciation. At same time, he called attention to serious and rather urgent need for five additional F-5B's. Need arises from fact that because of Vietnam demands USG not providing extent of training previously provided. He said he has 20 pilots training in Pakistan through T-38 level, but additional F-5B's are necessary to train new pilots in gunnery and formation flying. General Jablonsky indicated there may be small amount of money left in FY68 tranche after F-4 squadron financed but it would not finance more than one or two F-5B's. Shah said if USG not prepared to provide additional $3 to $5 million via credit arrangements, need is such that he would be prepared to pay cash for those not fundable under FY67 tranche. 8. Looking to future, Shah said by 1972 Iran would need replacement equipment. He reiterated his determination to preserve his American military orientation, particularly Air Force. He discussed possibility of post-Vietnam rehab F-4 aircraft or F-5 follow-on aircraft which Nor-throp now considering. I noted this was for future. Shah agreed but pointed out that because of three to four year time lags Iran must get in line. Main question was whether USG is willing, as he hopes, to remain Iran's chief supplier. He noted in this connection that he has more trouble assuring answer to this question now when he is paying for equipment than previously when USG supplied it via grant aid. There was brief discussion few other military matters but they minor in nature. They being reported via General Jablonsky's usual channels. 9. Shah said he would appreciate my advice whether he should discuss his military needs extensively while in Washington or whether they could be handled adequately either via ARMISH/MAAG here or via Ambassador Ansary. Acknowledging that Shah undoubtedly would be explaining his general thesis as to Iran's need for adequate defense capability, I urged Shah not to get into discussion of specific requirements. 10. During course of discussion, I recalled President Johnson's letter of last July/3/ and the concern therein expressed re Iran's dealing with Soviets in arms. This subject, I noted, is very much in minds of many key Washington officials. This launched Shah into lengthy rehearsal of rationale for relatively small amount of Soviet military purchasing. He said Soviet Ambassador was in previous day expressing hope that current arms deliveries would be fore-runners of others. Shah gave us clear indication he does not intend to get into any relationship of dependence on Soviets, noting specifically how easily they could undermine him by cutting off supplies. /3/Document 158. 11. Shah outlined his familiar thesis that Soviets have leapfrogged over southern tier and for all intents and purposes have established base in Egypt. That accomplished, Soviets, according to Shah, are now maneuvering vis-a-vis Iran and Turkey. While it would be "odd," Shah said, to rebuff "smiles and friendship" entirely, he made clear he knows Soviet game is to get Persian Gulf, i.e., Russia's "historic dream." This prompted inquiry from me why he is planning to let Soviets explore for oil in Kermanshah and Shiraz areas. Shah reiterated what he had told U.K. Ambassador Wright (Tehran 4574),/4/ i.e., dividing Iran into spheres of influence along lines of the 1907 treaty is unthinkable. I said steel mill project is already in central Iran which should disabuse those who might postulate spheres of influence theory. Shah noted Isfahan in 1907 treaty was considered in Soviet sphere of influence. In any case, he said he does not expect substantial oil deposits to be found in Shiraz area. Shah categorically said he would never let Soviets work in coastal or offshore areas of Gulf where they would serve as "scouts" for Nasser. /4/Dated May 18. (Department of State, Central Files, PET 17 U.S.S.R.-IRAN) 12. Re negotiations for FY68 tranche, Shah agreed arrangements should be worked out with Central Bank Governor Samii for either Washington or Tehran. He expressed hope that negotiations could be concluded expeditiously. 13. Comment: Shah was in entirely different mood from that when I saw him week ago re the Fulbright affair. He was buoyant and seemed be looking forward with eagerness to telling Iran's story to Washington officialdom. Of more direct importance, Shah had obviously done his homework re economic projections which Central Bank had produced. He was conversant with various economic indicators. This in itself is in our view direct evidence that purpose intended by Annual Review has been served. Meyer
204. Memorandum of Conversation/1/ Washington, May 26, 1967. /1/Source: Johnson Library, National Security File, Country File, Iran, Memos & Miscellaneous, Vol. II, 1/66-1/69. Secret. Drafted by Rockwell and approved by the White House on May 31. SUBJECT PARTICIPANTS The following were the substantive comments made during the conversation which took place between the President and Ambassador Ansary after the latter had presented his credentials. The Ambassador said that Iran believed that the present crisis in the Near East proved the correctness of Iran's analysis of the situation in the area. Iran felt that it was necessary to resist aggressive forces. Iran counted on continuing United States support for its efforts to promote stability in the area. The President made no substantive response at this point but in a later reference to the Near East crisis in connection with his appointment later the same day with Foreign Minister Eban remarked that the United States was trying very hard to find a "middle way" to solve the present crisis. "If this could be done", he said, "a catastrophe could be avoided". Ambassador Ansary said he believed a "middle way" would be the best way to solve the crisis. The President, in a separate comment, remarked that he thought the world was in the midst of a period of "testing". Efforts were being made to get away with acquiring additional territory. He felt it important that this be understood. Ambassador Ansary referred to the economic progress being made in Iran with special reference to the rate of growth which he described as being exceeded only by Japan. The President said that he was looking forward to the visit of the Shah and the Empress and that he would very much welcome any views which His Majesty might have on the situation in the Near East.
205. Action Memorandum From the Assistant Secretary of State for Near Eastern and South Asian Affairs (Battle) to the Ambassador at Large (Harriman)/1/ Washington, June 2, 1967. /1/Source: Department of State, Central Files, POL 27 ARAB-ISR. Secret; Exdis. Drafted by UAR Country Director Donald C. Bergus and cleared by Eliot. SUBJECT During your visit to Paris, I recommend that you meet with the Shah to discuss the Middle East crisis and specifically to increase his understanding of and support for our policy. Background The current Arab/Israel crisis has had repercussions in Iran. At the same time Nasser called for the evacuation of UNEF, he also publicly requested Jordan and Saudi Arabia to intervene with the Shah to stop sales of Iranian oil to Israel. (Iranian oil has been supplied to Israel since 1957 and has been carried by tanker around the Arabian Peninsula through the Gulf of Aqaba to Eilat.) In response, the Iranian Government issued an official denial that Iranian oil was being sold to Israel. This is technically true, since the transactions are made through third parties. At the same time, the Iranians became concerned about their isolated position among the Islamic nations of the Middle East and about the effects of Iran's ties with Israel on Iran's efforts to establish closer relations with the moderate Arab states. On May 31, the Iranian Government issued a statement supporting "the legitimate rights of Moslem peoples" and saying that it regards "as necessary the securing of the legitimate rights of the Palestinian people as mentioned in the U.N. resolutions." The statement also expressed the hope for a peaceful solution to the present crisis. The Iranian press has from the first attacked Nasser for instigating the crisis. Iran's concern about its relations with the moderate Arab states has no doubt been increased as a result of King Hussein's flight to Cairo to effect a grand reconciliation and to sign a military agreement with the UAR. At this writing King Faisal is still in Europe, but we do not exclude the possibility that he, too, may in some manner make a gesture toward improving his relations with Nasser in the name of Arab solidarity against the Israel threat. In their talks with us, Iranian officials have been expressing the hope that we would take a firm line to keep the Gulf of Aqaba open. The Shah undoubtedly believes that we bear much of the responsibility for the crisis for not having acted vigorously to oppose Nasser long since. Some Iranian officials have indicated a concern that we might resume aid to Nasser in order to end the crisis. Recommendation Suggested talking points for use with the Shah: 1. The present crisis in the Middle East is grave and highly dangerous. 2. The U.S. is doing its best to urge restraint on all parties to the dispute. 3. We do not believe that Nasser wishes to be the first to shoot in the present situation. Indeed, it would be against his interest to do so. He has again proven his ability as an expert, albeit a malevolent one, in exploiting and building upon the events of each day. He has been able to create circumstances in which the very firmly held anti-Israel sentiments of most Arabs come to the fore. 4. For the past six months to a year, Nasser had been convincing himself that the U.S. was determined to destroy him and to humiliate Egypt. He viewed the cessation of significant U.S. aid to Egypt in the UAR's growing economic crisis, his failure to achieve a victory in the Yemen, resistance to his designs by Kings Faisal and Hussein, and even the good relations between Iran and the United States in this light. 5. Nasser, therefore, is trying to exploit the current crisis to his advantage. He has consistently sought to identify publicly the U.S. with Israel. He now believes he is in a position whereby the U.S. and Israel face the painful choice of either accepting his "victory" (withdrawal of UNEF, closure of the Straits of Tiran) or committing "aggression" against Egypt. He strongly hopes for the former. He believes, however, that if he is destroyed as a result of Israel/U.S. military action, he can destroy with him a good many Western interests in the area. He considers this a deterrent. There is some speculation that among Nasser's objectives is the resumption of U.S. aid to the UAR. We have told the Iranians that there is no possibility that we will resume aid to the UAR in the foreseeable future. 6. There is good reason to believe that the Soviets may have been instrumental in touching off the present crisis by floating in mid-May in Damascus and Cairo a report that a massive Israel attack on Syria was imminent. Since then, they have attempted to reap full propaganda advantage of the theme that Israel is the aggressor and has U.S. support, that the Soviet Union is the protector of the Arabs and that the Soviet Union hopes war can be avoided if only the U.S. will restrain Israel. The Soviets seem to have been taken by surprise by Nasser's proclaimed closure of the Gulf of Aqaba and have thus far confined themselves to general statements in support of the Arab position that the Straits lie in Egyptian territorial waters. 7. We certainly do not approve of Hussein's early public capitulation to Nasser. Hussein as a sovereign independent ruler has to decide where his best interests lie. He has assured us that this gesture was solely for the purpose of insurance and that his attitude toward and intention to cooperate with the United States is unchanged. Whether Hussein will be able to maintain this position under the pressure of events cannot be predicted with certainty. 8. It would be helpful if the Shah were to let the Israelis know that his attitude toward them is unchanged and that his intention is to maintain the present relationship with them in all its aspects as circumstances warrant. The Shah could also usefully counsel the Israelis to exercise military restraint in order to give the fullest opportunity for multilateral diplomacy to work. We would hope that Iran would take no steps to interrupt the commercial relationships whereby Iran obtains oil. 9. We would also hope that the Shah would get word to Faisal and Hussein indicating that the present crisis should not be allowed to impair the close relationship which Iran has with both countries. This relationship is based on a mutuality of interests which continues to endure. 10. The U.S. position in this crisis has been made clear by the President in his statement of May 23. The United States is firmly committed to the support of the political independence and territorial integrity of all the nations of the area. The United States strongly opposes aggression by anyone in the area, in any form, overt or clandestine. The United States considers the Gulf of Aqaba to be an international waterway and feels that a blockade of Israeli shipping is illegal and potentially disastrous to the cause of peace. The United States is making vigorous efforts to obtain effective United Nations action to resolve this crisis. Concurrently, we are consulting urgently with the maritime nations of the world with a view to multilateral action asserting our right to use this international waterway.
206. Intelligence Memorandum/1/ No. 1117/67 Washington, June 5, 1967. /1/Source: Johnson Library, National Security File, Country File, Iran, Vol. II, Memos & Miscellaneous, 1/66-1/69. Secret; No Foreign Dissem. Prepared in the CIA's Directorate of Intelligence. A note on the source text indicates that this memorandum was prepared by the Office of Current Intelligence and coordinated with the Office of Research and Reports, the Office of National Estimates, and the Clandestine Services, all in the CIA. THE SHAH OF IRAN AND HIS POLICIES
Summary The Shah of Iran and Queen Farah will arrive in Washington on 12 June for a three-day official visit. Since his last visit to the US in 1964, the Shah has been evolving a new foreign policy which entails less reliance on the US and closer relations with the USSR and Eastern Europe. The Shah remains basically pro-US in outlook, but believes that it is advantageous for Iran to broaden its sources of military equipment, economic credits, and trade. He can be expected to press for a firm US policy against his bete noire, Egyptian President Nasir, and to request more favorable treatment for Iran in the extension of US military and economic credits. A proud and sensitive man, the Shah will also be expecting recognition for his role as leader of a country which is stable, achieving rapid economic growth, and undertaking widespread social and economic reforms. Background 1. The Shah's new independence stems from many factors, but probably the most significant is his growing conviction that the immediate threat to Iranian security is posed not by the USSR but by the ambitions of Egyptian President Nasir. He believes that Nasir has designs on the Persian Gulf and on the oil-rich Iranian province of Khuzestan, which has a large population of ethnic Arabs (see map)./2/ Iranian security officials claim to have evidence that the exiled Khuzestan (Arabistan) Liberation Front receives encouragement and assistance from Egyptian intelligence. The Shah can certainly be expected to point to the current Middle East crisis as evidence of Nasir's insatiable ambitions. /2/Not reproduced. 2. The Shah is also convinced that American officials have underestimated the Egyptian threat to Iran and fears that the US would not support Iran if a Nasirist campaign against him were to lead to hostilities. He was severely shaken by the withholding of US arms from Pakistan during the Indo-Pakistani conflict of 1965 and constantly points to this as evidence that Iran must have other sources of arms and economic assistance. He is determined to bolster his defenses in the Persian Gulf, and is doing so with arms from a variety of sources. 3. In economic terms the Shah is, of course, attracted by the low interest rates charged by the Soviets and Eastern Europeans and by the opportunity to repay Eastern military and economic credits with goods rather than with foreign exchange. Last year's US-Iranian military credit negotiations were marked by bitter Iranian complaints that US terms were strictly commercial and took no note of Iran's position as a good friend of the West. Rapprochement with the East 4. The real turning point in Iranian-Soviet relations came in late 1965 when the Soviets extended Iran a credit of $289 million for building a steel mill it had long desired. Part of this credit will be used for the construction of a pipeline, through which will pass the Iranian natural gas which the Soviets will accept as payment for the credit. Soviet economic credits to Iran now total at least $346 million. Other projects include construction of the Aras dam on the Iranian-U.S.S.R. border, an electric power plant in Tabriz, improvement of Iranian ports on the Caspian, and Soviet prospecting for oil in the Iranian offshore area of the Caspian Sea. 5. During the first five months of 1967 the pace of Iran's rapprochement with the USSR increased. Early in the year, Iran and the USSR signed a $540 million five-year trade agreement. Although this agreement probably will not be completely fulfilled, it still will result in a significant increase in trade. In April, Soviet Deputy Premier Baybakov visited Teheran and apparently offered the Iranians almost every conceivable type of economic assistance. The communique issued at the close of Baybakov's visit mentioned industry, communications, electric power, dam construction, irrigation, mining, oil explorations, and metallurgy. It also mentioned increased shipments of natural gas to the U.S.S.R. and the sale of Iranian oil. The communiqué was only a "declaration of intent," however, and in negotiations on specific projects the Soviets tend not to be as generous as their initial offers would indicate. 6. The most significant development of 1967 was the announcement in January of a Soviet-Iranian arms deal, involving the extension of a $110-million Soviet credit toward the purchase of armored personnel carriers, antiaircraft weapons, and trucks. Arrangements were also made for Soviet technicians and advisers to train Iranians in the use of the equipment. This agreement, together with the purchase of UK naval equipment and Tiger Cat missiles, has broken the virtual monopoly which the US held over the supply and training of the Iranian armed forces. 7. The Shah also informed Western officials in May that he intended to allow the Soviets to prospect for oil in areas in southern and western Iran. The Soviets, however, may be reluctant to undertake expensive prospecting in areas which the Western consortium was willing to give up. Nevertheless, the Shah's willingness to permit a Soviet presence in the southern oil region is indicative of the extent to which his attitude toward the USSR has changed. It is also indicative of his determination to increase Iranian oil production and of his disappointment with the record of the Western oil consortium. 8. Eastern European countries have extended over $158 million in economic credits to Iran--over $100 million of the credits is from Rumania and the rest is from Bulgaria, Czechoslovakia, Hungary, and Poland. Several new trade agreements have been signed, and Iran has already agreed to sell oil to Rumania and Bulgaria. The Shah was in Czechoslovakia in May; the Czechs had previously indicated an interest in expanding Iran's munitions production capability, and this possibility was undoubtedly discussed. Domestic Developments 9. Iran is stable and continues to sustain a high level of economic growth. This strong domestic base has contributed to the Shah's increasing self-confidence and has further nurtured his ambitions for even more rapid development. It has also provided the backdrop against which he could for the first time decrease his dependence on the U.S. 10. Parliamentary elections have been scheduled for August, and there are indications that the government may loosen political restrictions somewhat. The opposition Mardom Party may be permitted to win more seats, the parties may have more leeway in the selection of candidates, and two government-approved candidates may be permitted to run in some constituencies. Nevertheless, the Shah is certainly not prepared to allow outspoken opposition, and there is still no legitimate outlet for the expression of antiregime sentiment. 11. The Shah's "White Revolution"--his term for his reform program--is proceeding apace. The distribution phase of land reform is virtually complete, and the program is now concentrating on farm mechanization and the development of cooperatives. The health and literacy corps are considered successful, although there is little information on the impact of the programs on the average Iranian. All of these programs are hampered to some degree by the lack of trained personnel. 12. The Shah's reform program has taken the steam out of the left-wing opposition National Front Party. The already suppressed Tudeh (Communist) Party has been still further weakened by the reform and by the Iranian-U.S.S.R. rapprochement. Conservative religious leaders continue to oppose aspects of the reform program--such as increased rights for women--but apparently with little impact on the public. 13. The Iranian economy is healthy, and all indications point to a rapid growth rate at least for the next year. Last year's growth rate was about nine percent, prices remained remarkably stable, public and private investment increased, and oil revenues continued to rise. The government has already taken steps to ease pressures on the balance of payments. Iranian officials continue to believe that oil production is not rising fast enough, and this could lead to further confrontations with the Western oil consortium. A serious Iranian-consortium crisis was narrowly averted last fall when the consortium agreed to step up production, to relinquish 25 percent of its concession area to the Iranian Government, and to make oil available for sale by Iran to Eastern Europe. 14. For the first time, the Shah has been willing to face the succession problem and to make contingency plans for the possibility of his early demise. At the request of the Shah, elections will be held in August for a constituent assembly to examine and amend the articles of the constitution pertaining to succession. The assembly is expected to authorize the Shah to appoint a regent to rule if he should die before the Crown Prince is of age. All indications are that the Shah will appoint Queen Farah. He has absolute faith in her loyalty, and she has proved to be competent, popular, and actively interested in the reform program. Outlook 15. Despite his new independence, the Shah remains a good friend of the U.S.--he is one of the few third-world leaders who publicly supports the U.S. policy in Vietnam. Iran is still heavily dependent on the West for investment, trade, and military equipment. The Shah constantly insists that his closer relations with the East will strengthen Iran, and will thus make his country a better ally of the U.S. He claims to have no illusions about the ultimate aims of the U.S.S.R., and his internal security forces have been bolstered to maintain surveillance of the growing number of Communist technicians and advisers in Iran. Recently, the Iranian press undertook a campaign--obviously with government approval--to put the rapprochement in "perspective." The newspapers have taken note of continued antigovernment broadcasts from Communist clandestine radios, past Soviet perfidy, and the dangers of accepting the Soviet embrace too enthusiastically. 16. Nevertheless, the danger remains that the Shah will overestimate his capability to control the increased Soviet presence in Iran. He has said several times recently, with some overconfidence, that Soviet "dependence" on Iranian natural gas will give Iran significant leverage over Soviet policy in the Middle East, a doubtful analysis at best. The possibility also exists that, in the event of the Shah's demise, the U.S.S.R. would be in a better position to influence the course of events.
207. Telegram From the Embassy in France to the Department of State/1/ Paris, June 5, 1967, 1615Z. /1/Source: Department of State, Central Files, POL 27 ARAB-ISR. Secret; Exdis. Although the Embassy requested that the Department pass the telegram to Tehran eyes only for Meyer, a note on the source text indicates the Department did not do so. There is no indication on the source text that the telegram was passed to the White House. 19869. Dept pass AmEmbassy Tehran immediate. For the President and the Secretary of State from Harriman. I had a long talk alone with Shah at noon today, interrupted only by news despatches of Arab-Israel fighting. I gave him AFP despatch from Moscow to the effect that Russian position would depend on that taken by the US, which he said was most important. The Shah listened to my explanation of our attempts to restrain Israel and Arabs, possible Soviet encouragement of Damascus and Cairo belligerence, but our belief Soviets did not now want military action and their surprise over Nasser's closing of Gulf of Aqaba. Furthermore, the President believed Shah's interest was to remain as aloof as possible without interruption oil shipments and that he hoped Shah would use his influence, particularly with Faisal. I said the President would be most interested in getting the Shah's opinions and judgment. He replied that perhaps we should not talk about the past, but only the future. On the other hand, we must learn from past mistakes. He went over the familiar ground of our assisting Nasser, not accepting the inevitability of his aggressive policies. We had missed opportunity to stop Nasser over other issues in the past, over Yemen, and such outrageous actions as use of gas. Now things were difficult since on the issue of conflict with Israel all Arabs would be united. His Ambassador had seen Faisal who, although concerned over Nasser and other issues, stated he would give full support to Nasser against Israel. He reported that Soviet Ambassador had called on him this morning. Ambassador stated that hostilities should be stopped, and in this the French might be useful. Security Council action should be sought. The Shah emphasized several times that the long range problem was how to stop Nasser in future. Some other issue than Israel must be found. Although he continued to consider Nasser a dangerous and aggressive dictator, interested only in his aggrandizement, the Shah could not oppose a Moslem cause. He would, therefore, have to give "lip service" support, specifically referring to earlier UN resolutions. The Shah suggested we should give the impression we wanted to stop the fighting, but implied that he hoped Nasser's forces would be humiliated. He considered our long range major objective was "how Nasser could be destroyed". Although he looked forward keenly to seeing the President in Washington, he feels he probably must return home as his people would not understand his traveling in Paris and visiting the fair in Canada. He rehearsed again, as he had done when I saw him last November, his belief that Iran must be militarily strong enough to deal with Nasser and Iraq without US intervention. He again expressed regret that we had not done more to strengthen Iran militarily, referring particularly to our extensive aid to Turkey. I of course went over the familiar ground of Turkey's NATO membership, etc. He seemed relieved when I offered to call on him tomorrow if there were any further developments of importance, and when I told him that I felt sure we would continue to consult him closely, he repeated necessity that he must give lip service to Moslem solidarity, but his primary concern was how Nasser's influence could be reduced and eventually destroyed. Otherwise, there could be no peace in the Middle East. He indicated that currently oil shipments would continue without interruption as normal commercial transactions, and that he would in other ways attempt to calm situation. Please instruct if any reason for me to see Shah again tomorrow morning./2/ /2/Harriman's "Further Notes on Conversation with the Shah," June 5, are in the Library of Congress, Manuscript Division, Harriman Papers, Special Files of W. Averell Harriman, Public Service, Kennedy-Johnson Administrations, Shah of Iran. Bohlen
208. Telegram From the Embassy in France to the Department of State/1/ Paris, June 6, 1967, 1220Z. /1/Source: Department of State, Central Files, POL 27 ARAB-ISR. Secret; Exdis. Passed to the White House. Although the Embassy requested that the Department pass the telegram to Tehran eyes only for Meyer, a note on the source text indicates the Department did not do so. 19914. For the President and the Secretary of State from Harriman. Ref State 208388./2/ Called on Shah this morning and conveyed message in reftel. He is remaining in Paris today for talk and luncheon with De Gaulle, then returning to Tehran tomorrow, Wednesday June 7. He regrets not having opportunity for talks with the President and hopes to come to Washington at a later date. He agreed to inform our Ambassador Meyer fully on his talks with De Gaulle and his analysis of where De Gaulle is heading in Middle East. /2/Telegram 208388 to Paris, June 5, informed Harriman that the Department believed that it was desirable for him to speak to the Shah Tuesday (June 6) morning and state that the President of course deferred to the Shah's judgment as to whether he should return home, but would be most disappointed not to have an opportunity for personal discussions on many subjects, including especially the Middle Eastern crisis. (Ibid.) Shah expressed earnest desire to continue close exchange of views on developments. He believes Nasser's claim of intervention by US and British planes is to have future basis that his forces were not defeated by Israel alone. The Shah hopes the Soviets will not intervene militarily on pretext to offset U.S. action. I told him that our contacts with Soviet Government led us to believe Soviets would not intervene and had indicated that all should work for cease-fire and return to old positions. I also said we understand Israel had no territorial ambitions, only assurance of free passage to Gulf of Aqaba. Shah urged that we should now consider long range problem of Nasser. We could not tolerate flare-ups every few years. He said Nasser's aggressive plans must be stopped. Shah raised question of his initiative regarding Vietnam which I will report in septel. Bohlen
209. Message From the Shah of Iran to President Johnson/1/ Paris, June 6, 1967. /1/Source: Johnson Library, National Security File, Special Head of State Correspondence File, Iran, 10/1/66-8/31/67. No classification marking. The letter is on letterhead from the Iranian Embassy in Washington. It is a matter of deep regret that owing to the grave and uncertain situation in the Middle East, the Empress and I are obliged to cancel our visit to the United States and return home immediately. However, Mr. President, I look forward to the opportunity of seeing you again in not too distant a future when we can discuss matters of mutual interest. The Empress and I take this opportunity to express our heartfelt greetings and best wishes to you, Mr. President, to Mrs. Johnson and to your great people. Mohammad Reza Pahlavi/2/ /2/Printed from a copy that bears this typed signature. [Continue with the next documents] |
