Академический Документы
Профессиональный Документы
Культура Документы
the most
Compassionate and Mercifu
The Center for the Publication of
the U.S. Espionage Den's ~Iocuments
Ayatollah Taleghani and Dr. Mofatteh intersection,
P.O. Box: 1 5 8 1 5 - 3 4 7 9 Tel: 824005
TABLE OF CONTENTS
1- A Letter For Khalatbari From Helms ......................... 1
Annex of General Security Procedures ...................... 3
A Letter For Helms From Khalatbari ........................ 4
2- Senator Percy's Visit: Political Issues .................... 9
a- 601 Attitude TowardsArab-Israel Confrotantion ........... 9
b- Palestinian States .................................... 10
c- ~ u t u r e of saudi ~ r a b i a............................... 10
e dexclurrage uJ notrs
-4greenccnt ~ ~ i c t by
Sig~ccdat fikrurr May 28 arid June 6,1971;
Kntrrecl irrto$orrr J~crre6 , IY7C.
E X C E L I (~:E T:~
I linve t11o honor to reft.1. to the growing c.\c.I~~~uge of classified
inforn~alio~~ between our two governments. As is cudtornary in the
c~onductof diplornntic rclatiorls, ~ u c hinformation iu excharlged in
confidence, with dre explicit or tacit understunding that the confidence
will be respoctctl. Tllia priuciple is reflected in domestic l s ~ sant1
rc~ulatiotlsprotecting State and Military secrets and is ulso elnbodiecl
in vurious lnultilatcral uritl biluteral agreements.
The Uiiited States Government believes it t desirublo to record t l ~ c
basic pl.it~ciplcswhich govern tho exchange of such infornmlion in
order to fwilitatu and furtllor pron~oteercliangeu of such information
between our two governments. I have the honor to propose, therefore,
a confirmation of tlio Mutual Understanding tlitlt, with respoct to
the exchange of* colaqsified information commi~rricutetl directly or
indirectly Betwcell our two governlaents, the recipient:
a. will not reluasu the infornlution to a third govcrnnlclrt without
t l ~ eapprov~~l of the rulcnring govenlnlent;
b. %willuntlerttbko to afford tlio information eubtdantiully tho sanic!
d f g e c of protection ufrortled i t I)y tllu rduaving govt?rnment;
c. wlll not use thu infonnution for othex tllan tliu plvpose for which/
i t was givcil; ant1
tl. will rc~spectprivate riglrtu, suclr as puto~tts,copyright*, or trudn
sc.crcis w1Jcl1 are ulvolvcd in tho infolalabion.
For the ~)urlx)ws of tliis ugrec~irent,infor~rlationis uutlerstootl ill iki
broadest sense to include, among other things, any documerrt, writing,
sketcl~,phoiog~.t\pll,plun, ~notlel,specification, tlesipl or prototypo,
whetlier co~~unrrrricatod by orul, viuuul, or written u~eunuor by (runs-
fcr of c q u i p l ~ l e or
~ ~1111ilclia1s.
t 1
Tl~csuplillciples will r~pplgin tlio cRSC of tho Govcrnniont of the
IJlri(ct1 Sttttrs to irifor~~~nt~io~i dczi~w~tetl by the Govcrnmnnt, of tho
U~iibtlSlatrs us "<:onficieliti\iJ", "Sccrct", or "Top Secret", ant1 to
i~rfornlt~tion clcsignnttrcl by ,yy!)ucGover~inirnt c:omhig within tlio
~)urvicwof tlris agree~i~eat. Tliis ugrccmc~itwill ilot, llowcvc~r,apply to
i~~fot~rncllio~i for wliic.11 sl)ociul agrc!ernt!ut:: nrny be requirctl.
,,
1llis ~n~<la~standiiig will apldy to all excliangns of sucli i~ifor~nation
t)c*lwren 1111 ugencies nntl autliorizctl oliic-islsof our two Govc~r~irnofits,
wllctlirr nt the r&;yocti\w t*t~l)italsof our- two co~~ut~rics, a1 inkc-
111itioliu1c.o~~ferenccs or rlsewlic*re. Any otllur arrango111ont.i bclwvcet~
our two Govrrnmt~~~ts or. tllt.ir rc1spoc-tivo ngollc:ios rclat-ing 10 tlio ox-
c-l~angeof +11(4iinfortt~atioliwill, to tlio e\;trnt tlitit t l i ~ yarc llot in(*on'--
hiztolit wit11 tl~ose~)~~i~i(~i~)l~~s~~~ictt~ l ) t ~ ttN(*(-ti*(I1 ) ~ -t11is t11iclc4rst1~11diilg
Ilctnils rr~nrclingc:haniic4s of c:o~nr~~rl~lic.t~liori ttllcl tlic ttpylicttlion of
Lllc foregol~~g princi1,lcs will I)o,t l ~ osul)joc.t,of such ta~cliuicularrrtllbc-
1lic.111~ us illny be ticc.ct,saQ- I)c.lwrc~rliil)l,ropriatr tigcnc-ics of our
r.c*q~ccl i \ (: Ciovcninirnts.
Each Uo~rcrn~nent \trill por~lritsoc~lritycbuprrts of tlic ollirr Govern-
uwnt to ni;iku poriotlic. visits 1,o its tor~itory,whou i t is nlutunlly
c-o~ivcnicnt,lo disciiss with it:, ~ ~ u r i 1 .it~~tllolities y its pr~coduros
tilltl ft~cilitiosfor thc protec~liorlof c111~~iliocI illforniutioll furnished
to i t by tho other Govcl-n~iic~ib, untl will iihsist sr~aliesperts in doter-
rnining wlietlier clwific!tl infonnution p~*ctvicledby their Govenlmel~t
to blie otllcr Govern~~~c~rr L is h i n g atluq~ct~toly protected.
In rucognition of tho Tiict that ~)rotnctionof tile cltwsified informa-
tion exeht~iigrdhercuntlur, particularly in 1110 field of rosomch on
and dovclop~nent id proc11lc:lion of d ~ f o ~ i snu i ~to rial, is esuential
to tlio nnlional snhty of both our co~~iitrius, genornl procecluros for
bafogunrding the infolliit~tionwill be as set forth in Annex hcreto.
If the foregoiug is agrootible to your Gover~~tnont, I propose that this
note w d your reply to that effect, dovigllatiilg the types of information
your Goverliment wisl~cscovered, shall constitute an ngreement on
this mutter effective the (lute of your reply.
Accept, Excellency, the retiewed twurulwlceo of 111y higllesb
consideration.
His Excrllency
AIIBAB-ALI K,HALATBABI,
MiniBtur jor Foreign Affairs,
Tehran
2
Annex of C;cnerul Security Procedures
I . O1Hcit~linformulion givori u security clussilicuiio~~ by citlror of
o l ~ r~ w oG ~ V O ~ I I Ior~ I)y ~ OI LI ~I ~~( .~ ~I ~ I of~ I o11r
C I I ~t ~ v oG o v c r ~ i ~ n i ~ n~id
~its
i'~~~*~iislied by ctitl~rrCiovernriicnt to tho other tllluugli Goverllliirnt
c.l~~~~lnels will I)H ~hsig~i(r(I a (:llik4licati01i by al11)rol)riillls authorilios
of I lie rec~livirigG ~ V C ~ I I I which I I C I Iwill~ US+LIPO 11 (IC~PIW of protcct.io11
1 1 i v 1 e I or r ~ t 1 ri 1 i i t r c q ~ i r i l by tbc Ge)vonil~lcot
I I I lli+liing t IIP i ~ ~ f o i .ion. ~n~~t
2 . 'rho rcbc-il)irnl(;r~vrr~u~~cr~lt I\ ill iiot II>C ~ I I C I Ii ~ i f o r ~ n u tlor i o ~ollicr
~
+ ~ S wlii(.ll it W ~ I - I ~ ~ r ~ i i J IIIIII
I l i . 1 1 1 tllc I ) I I ~ ~ J I ) for ~ e v l\\ 111 111)ldiwlos~
I I I 11 inforl~i~~lion ( I * II t IlirO ( ; ( I \ (br11111~lit \vi~liottt tlic prior (50~~st!i~t
of I l ~ c *Govor~~~~i(!~it ~vlli011 I'III'III~I~I-(I I lie i~~l'or~iiutioll.
.:. Wit11 I (-YIII~(.I, 1 1 ) 4111'11 ~ I I ~ ~ I . I I ioli
I , I ~ I'III ~ i i r I i ~ : (ill
l ce)~i~i~*(-tictli with
4 o111,ruc:lsI I I I I ~ Iby ~ c~it~llc*r C;ovc~~.~r~~~otit, it-, ILRI:III-~I-,, or privlrlo cntiticb+
or ~udividrlnl?witlli~iits k:rriiot~ will) the o~1rc.r Govcr~iniolit, its
it!:c~ucios, 01. privutc1 c!lititics 0 1 i~~tlivi~l~irrls witliiii ila tctrritory, tho
( ; o v c r t l ~ ~ iul t ~ tllo
~ I cb~)\llitry in wliic:ll p c r t ' o ~ . ~ ~untler ~ ~ ~ ~tho
i c econtract
I - Inking j ) I ~ i e ~ bwill assuuw ~ ~ q ) o l ~ + i b i fur l i t yatl~rii~~ihtoriilg security
Illchilrlirosfor I llc protectioll of ~ L I ( . I Irlll.i~ili~(I i~il'vr~ii~tti~ii ill u~cordance
wit11 sbanclurrl; t~rid rcquirt311icnts wlli~liarc ~~d~ilinistered by that
(fc~veniinc~ibiu Llic r:rLsu or c~o11lrucLuu1trrr~~ugu~nniit,s i~lvolving
i~iforli~tlt,ion i l origi~~ntcs of tlic! S I ~ I s~c#urit,y
I ~ cl~~ssific-ution. Prior
to t,lio rclctlsc of u ~ HLICI~ y i~~lornlation wliich is clussiliod CONYl-
I)J<NTIAL or Iiigliur to any aorltructor or prosl)ective contractor,
I hu Gover~lnrotitconsideri~yrelctlse of the infor~natio~i will undertake
to insure that such contruc*tor or prospective contractor and his
fuc:ility huve tlie cnpbility to protect the classified information
~ilequately,will grant an appropriate facility cloarunce to this effect,
und will undertake, ,ip accortlalice with national practice, to grant
uppropriate security clearances for all personnel whose duties require
access to tho classified informalion.
4. The recil~ie~it Govcrnn~entwill uluo:
a. 11isure that all persolis having uocess to such classified in-
fonnutioil I L ~ "inforniecl of tlioir resporisibilitiw to protect the
iriforn~utionin a c c o ~ ~ d s ~with ~ o capplicullo laws.
b. Curry out ~ e c i d t yirlspcctions of facilities within its territory
which arc cngaged ill contracts involvi~igsuch classified
inforl~lutio~l.
c. A ~ u r c !that access to s11r.h clarsifiecl infor~nutionat fuc:ilities
t1cscril)ctl it1 s~ibl~aragrupli b is linitod to t,lioso p e ~ ~ o rwho ls
rc!clairc? it for olficiul purposes. Tn this connuction, a roquorjt for
autliorixntiou to visit k~lclla facility wliot~ access to the
3
c.lr~~ificttlinforrrltitiot~iu i;;&lvctl will I)c s~lbtnit~totlto tlitl
spprol~riatodoparttnt!uL oi agency cjf tllo Ctovornlnellt where
tho fncility is locatetl I)y sn ago~lcytlc~4gnalutlfor this purpose
I)y tho other Goverslnenb, tlnd t.I~t* rt!cluast will incli~tln tr
st~lkrl~unt of tho scal~rityclcurn~~c:o 1r11tlofIiciul stst113of tliu
visitor ant1 of tho 11ccosuit.y for t,lia visit,. Hlallkct nr~tlinrizn-
tious for visits over oste~~ded poriods lut~ybo tirmr~gcd.Tliu
Covcrli~l~cut to wl~ich thc rccltlezl i, s~~b~nittcel will bc
t~t!hpoti~it~lo for atlvi>itig (lie coutmctor of 1 . l ~prol)o.rctl ~ visil
rltlti lor ~r~~thorieirig ll1r v i i t to bo IIIIL~I~..
5. (lo,[, i ~ ~ c ~ ~ lin r r ccontl~ic~~i~lg
d s(~i;~lrit~' i ~ ~ v e * $ t i g ~or ~ t i~ispcc-
io~~s
ticxis ~.t.i~t~it*otl I~t~rc.t~)~dor will [lot l~c~,sul~jcct lo r c ~ i r ~ ~ b ~ ~ r ~ ~ t ~ ~ c r
f;. ( 'ltissificd i~~rormatio~l 11 ~ i ( l111iltc~itil~ v i l lI>(> I ru~isfcrr~tl oldj O I ~11
g o v c r l ~ ~ ~ ~ c ~ ~ i t - l o -t~I),&. i~~~cr~~n~c~i
7. '1'11(. ( i o r c ~ r ~ ~ ~uliic.11
r ~ c n tistI1e1 rrc.ipic.l~t,o f 1111~1t~rit~l ~)ro~ltrcc~l
uilclrr. cQo~~trr~tc.t, i l l t l ~ ctcrlittrry of tlio ot llrl (;ove.r~rrt~e~i!, ulrdcrtaktbs
to 1~roIc~c1 cll~szilit~tl a l i ~ ~ u I I 1 1 w i l 1i l l ~ I I Caltlll(a lilltliliclr
i ~ ~ f o r ~ ~ rcotrlt~ittc~tl
IIH i t 1,rotocts its own clus.;ificvl ~ I ~ ~ O ~ I I I I L L ~ ~ I I .
IUI'ERIAL IIINISTI~Y
OF FOREION A F F A I R S
HI.. Ambassador:
I n accordance w i t h t h e s u g g e s t i o n contnineci
in your Note, i t i o hereby agreed that your Note
No. 370 nf 28 Xn_y 1571 m d t h e -ex t h e r e t o ad
, t h i s reply s h ~ l lconstitute an agrecrnent.bctaecn
our two governqcnts effective inunediat cly:
~ i c h n r dHelms,
Ambassador ~f the Unitedstates ofAmerica,
Tehran, Iran.
H *,
wj
*4s
, 0
'
rmtpwwaw
u e p r t r r r s r of 3'1
,j::: .
AllWllUIlmuw
a11 aitcn
.----.- -- -- --..--
ACTW, llORllll 0210 -t
m
JM 9-75 - 11292
1-
um I
L - 6j
2
nrQ
j
QU -I rPPIU 0210
8,O. lUM8 apr
mu
TMI Nlrr (111<IICI,c&rum)
I l l 8 lb
-8 kntol m S mVWt: kUtM
8 ' h h n u U I O ~
1. I. -0. ~ t-tor -ms ~Urr art ,
-tom am r am .
.d~ u l l h t i n
Uhmmi a f o l l m 4 ma. ? e b mprt i.mlmamd
-.Ilbj.otto~~gkutw.
Wa8BqYilk 3A-L
T-
--
".I
1 , - ' a
- liigninmt Israel and would not j o i n o i l emba.'go. lublmui j
tbo-t tbat I m n ..s rgoiw Arabe, aspeui:~lly a y p t ,
to cmL suppart i n Iran-Iraq d i f f i o u l t i e a and to bolster
1rmi.n position in Oult. Q u h t oooperrtion with Israel
eontimod. ha Imt+d) dampst. p l i t i e a l OllllitiViti.6.
b* 7
8nd t-t a r e a t i o n of Palestinian
a t a t e i d t a b l e .nd v h b h gropasitiun. Botb rero vague
u to bow or .b.rr s t a t e mi*t .rist and botb h o r n
-*
rryoet. Jlnutlmr NY in d w i t , uUl disclvsr
in~thrpqirur,oftta EBoalutLPr. l l l n nuLiul
tim of rtrn - Idn -mmm ttm smmirn ot
r h a l r ~ & ~ e a t d ~ i r b s w ~ c r h i a k ~ , L I t s
ahsr daftladm d a m . m u a n t t lmb. Imn% uowea i n find-
ing to out thi.i ud4U-kwai.1 r f - w @ v i a l
to n e i m a d.HloeSM .lid .taMIlw. 8Ug=.
A. Education and knpamsr
In tho @mci1ol field ot WIfant Bd ~ t i a udovolOFcgnt
l th?
I d a n qovomrnnt scww pmaOntly to be dev- a p n o t w a11ptxr
of i t 8 &tunt-m to the pmblom af -ion md tho emWW
ad u t i l t t a t i p l of -r thm t o any e h m sloa. T3w mvhoJ
~ f t P h L h.cl ~ ~ll~ottd uoM u m a f s (a-4 61.9
billion) for alumtian inelmling 10 blUirn -la (appcooclmate4
$297 n l W d hu tk w r y duretim em.
Though iprsrsivo, ths $1.9 bdllial -ta a Sncmaoo ot I
a 1 l y 2 . o S S i n ~ ~ o t t l m ~ l l * , o f t h . ~ o d u c s - j
timl ayoton t o bb- a g n s t w auamt. OI tk, lS,00d Ixu&~l I
8tuknt. t m e m t p t.dmieior. dn108t 41.000 MVG g~~maent I
other
t~d rn intrbd-t~-...;(.* tle muhg t~*dstiy
in
rho - o f ~ t s a ~ t i a a mmarrd~ar~momeffuctic,ta0
poneam d i u e t or roc, %mm;;nrrrr+.u. tam a:Cdd-of e $60
~ ~ l l i ~ d j a m n m a t r o a , m n ~ b l v v o b o o a ~ u nmcsametiw
.hd.
-alllrdr.id~~vltma%a~a,ald8.maomoro
*Wbd.brwmcnLb.&aa,lrtrr~~....tuUyanodat
UItimofitBt-, Y r l a h l l l l O Y . ~ o 1 d t k ~ o ~
pontwrnthrdr-. 8brr.kn~tt;la.aotlnn-
-lard -tdOp. ul -< OorecnJ
d*,pDtr--)aw-ZZZopDLtFae
q*dn~dby--rnab rd-utamB* w.oa
drCrt.#claO.rldOL--mrlP-s-----a
L .
OOdmY.0111aepl~
. r B . . . d t # . . ' 1 - 3 1 ~ 1 ~ r ( a t . L t t r ~
u ~ m ~ m ~ ~ a , . o . p n r j
~ a t ~ ~ n a ~ ( h y M . r y d i w m n d b l e ¶ n t L u r r r a a n
ntiorr*ddo -Wan. n* hwm not Wawd thir mHcatSm
'DraoOgaNu~oadfaRarporotkarbM.of.rd~~.
gM.r yoLantt.l fm d o m t b t m d i ~ ~ ~ t n m t u r ~
nabrinllinrJVI-% g a u s r r * d M m Uun far
aavimaarirwrovrdf.ndae.Mliarrd-umta% Todata
-
A U r J - ~l l v . z ? o N BILL:
-
b o d e , Tb. malr, of d f m d lud bt. w i l l b. p0mitt.d onno
w i n i f tho doom mot tbw.
w i l l k remted w trudwnd to
mmumiw a d l b m Plrolpliy U. holm* gmjaat.
If tk t r w t .D of mu& l8m f a i l . to ooclplete
-
tlw a v p r w d briq -mot d t b l m tL. mtigrhtod d r a d l i u ,
tbo -at dl1 low a f i r to tro m.n* mt or
dalwt p m ~oont of prroh.lwoaot M II f i w ud -
1
r r f r v i m fmm m
-t or ulr, .
II
-u.L,
t b o d o a u w 8 t m f w ~ ~ a r tbh w
tho 1
-
d lud.
~ i ! t ~ . t o n m t a ~ o i t b m ~
w for U. a m o L l 8 t i m of tbo
p r o a w u t u .ill
eign ar hi. b.L.lf.
L U l IUU4 A A H & ~ l i ,bur" 3.
Page 2 of 2
A- 28
-
pmcems t b e i r a g r i c u l t u n l and l i v u t o c k products.
Bbrroboldera of t h e corporate f a r r i n g
/ mtT1cx.B %
ooapanies dl1 be t b e f o 1 U . Y 8-
1. P-rr rbo b a n aoquired t k i r lands i n t b e process
of Land %form and tbo di8tribrrtion and male of g o w m r n t
estates.
3. 8-11 emtate landlords rho b a n opted t o divido
t h e i r lands (and hwp t b e i r mbua), i n m e of t b e i r d e s i r e
and appmval of t b e Minimtry of Caopsmtives and R u n 1 Affairs..
3 , r a r w r s uui ml1 a s t a t . arrwn r h o w e not subject
t o any of tbe Land Reform l a m and stages and .ere personrrlly
and d i r e c t l y f a m i a l tbolr lands .b.n tbe Bupplematary Und
Reform Law .as approved i n 196s.
llQFP- fb. mbarobolderr & a l l p r u a n t l y t r a n s f e r t b e
h k o l u t e w of t k i r Uadm t o t b e oorgorate farming company
had recein duos i n p~roportiont o the ~ i c u l t u r a l ~ v a l w
and e l e m n t s tbermof.
w-ieo
AUTPCU 7 - T b mllugorm of the aorporate farring
rill a c t rs tnutoom and aay l i d o a d on tb0jr
part o r on tho part of official. oonound i n connection
with the oorgorrtiowe . i f a i m w i l l b~ promptly promocuted
with sonteaaem of a u i m m p.mltiw provided by tbo law,
ARTIW 8 - M8011tea b o t m n mhareholdet. and unago-
m a t w i l l k mottled by a t h m - u o collrittee appointed by
the Uinistry of Coopomtim and -141 Affairs, and tho
~lill(l of tho80 m t t - 8 ~111 bo 1,gaXly e n i o ~ o a b l o ,
mT1- 8 -
8wboldOrcl of tbo 00rpoT.t. f 8 a ~
companies may t n m f e r t h e i r s b u w t o the corporation, t o
othor 8harohold.n of tbo m u corporation o r t o t h e i r
childron with th. a m n l of the aorporationos unagownt
and tho Minimtry of coopmrativem .kl Purr1 Affairm. Wo aha-
boldorom sham cam bo l a s than that equivalent t o 10
h.ct- of irrig8t.d and cultivated laad,
-
ARTICLE 10 In o a n of a shueholderas death, tk
corporation w i l l my. tho 8bams oi tbo decoaeod .ham-
boldor and w i l l divide dividoadm . . D O #the 1-1 kin, of
tbo doconmod i n legal proportion. 8.ia-m can promoat oau
of theoolvo8 t o tk oorgorrtion u tbo docouod 8h-
boldores o f f i o i a l n p . w n t a t i n , or a n apply f o r 881, of
tho .bar08 t o tk oorgorrtion.
-t
-
ARTICW 11 corpar8tm f u m i y oolguie. .ill bo
f o r 10 maxu from the date of tboir ostabliebmnt
f m .nl tax08 and o b u g u kviod on other ~ l p . n i o s ~ I
1
CmFXD~IAL E n ~ ~ o s u r2a
mg. 3 of 6
A- 28
~ I O M obuo.
-
NOTI 8-11 u t a t r landlord. b e c o r i y mbmroholdorm
oxond tko n x i u m bold by any f u m r
f u l l y i n t b e i r r a p r o t i n area w i l l k mbjoat t o t u n -
tion aGMrdiag to tu Inr.
-
ARTICUL 11 Sbu*holdor f u u r * f a i l i y t o p.7 in-
otmllmt. of tkir debt i n t i r w i l l Law t h e i r debt.
mid f o r by tho oorgormbim w i m t tbir f n t w profit.,
-
ARTICLL 13 T k Y i n i ~ t r yof w r r t i r e c l and mural
Atfairm w i l l protido mpport to tb. oo-ato farminu cor-
~ n i e isn tkir o p r a t i o m by &o.diB# loam and gr8tuitwr
toabniaal and f i ~ n o i a m l idm out oi tb. lo+.-at0. aunwit
or developant budgot.. Tbo l a t o r a t r r t a of tbo loam
oxtoadd #ball m t uoood t b o a of 1 - oxtondd t o r u r a l
ampera t i v e ~ .
-
14 Tb0 -rat. f u d - collpni.8'
m i l l bavo priority i m aonlwotion wltb a11 r u r a l dom10p.nt
opontiolu and projoat. ondort.l.8 by m - n t .FM~U
mmd o r g 8 n i r t i o m .
-
ARTICU IS Tbm H i a h t r y of W p . r a t i v u and Purml
A l f a i r ~is autbori..d to r t a b 1 i . L witb tbo Cabinot'm
appmval any m a o n u y o r g a n i n t i o r f o r providing toab-
1 mioal a d coc.rroia1 w r r i a o to tb oor-to
maloll" If luy.d ~ r e * a l l y th. ,
t a r r i n g oa-
o o u t i t u t i o m of
wntar? colritkr.
I
-
ARTICUL 16 S b u r b o W m f a i i i y to d h ~ b 8 r mt k i r
m p o ~ i b i l i t i ui n aaaomlmoo with tb. o&porrtion0s opora-
clonal plasm, m y k d.pri..d of -ip by tbo m-
w n t D odoaimion ud t b Yiai.try9m approval, tboir s b a m
hi- purabuod i m o u h or by imtmllvmt. and o f f o r d i n
t k firmt plaao to o t b u l w r r m b u o h l d o n and i n tho
..sand 91- to tk lo.rlpontlom,
-
ARTICLP 17 A ooumil w i l l b. mot up k a d d by th.
Pinlmter of Qoopomtirn .ad Rural Affairr ud witb wd.r-
d i p of otbor m p o m i b k offiaialm t o draw up mnoral
m~iaiomand p h m of tk oorpmut. f u r i y o o l p . n i u and
-1 produation a o o p m t i m , to prwurr -ary fund.
m . d t o m u m r v i r t b o i r o ~ r a t t o m . Tho doaioione of tbo
-11 w i l l bo our- out tb. YLni.try of c o o p o r a t i m
amd Rural M f a i r r a114 tb. o r g a n i u t l o m eowund.
within tho u r of
-
ABTICLI l8 Tbm w i l l m g m oouwilm oi v11lBg.m f a l l i n g
~ oorp~k furi8g w i l l bo
diruaolved and a 8ingle r u r a l ultit aouncil f o r the e n t i r e
area rill be f o r w d i n accordauao witb v i l l a g e council
e l e c t i o n l a w , t o d i 8 c b u p a l l t k n f f a i r s and r08P0Mi-
b i l i t i e s of t b e r i l l a g o o w n o i l 8 t b a t it replacom.
-
ARTICLE 1s I n r u r a l uuu whom tbo Ministry of
Cooperativo8 and Rural Affairm findm it noceserry t o s e t
up corporate f a n i n g 0 ~ p a n i e 8 o r r u r a l production coopora-
t i v o s t o help r r c t o ~ e l o p n ta f t e r n a t u r a l di8asto1-8 much
am o a r t b q u k m , floods, d m ~ ~ g b t.ton. . it w i l l dotemiw
an appropriate area of oporation a d w i l l p r r c b u e and placcr
a t t b e disposal of t b m oorporation o r o o o p o n t i r o a11 t b e
land, water and otbor mouroom within tbo area. Ilban-
boldere w i l l b. th. fa-- of tho am. aW t b o i r abate8
w i l l be determinod i n accordamo witb tbo extent o? t h e i r
provioua farming. B i r i l a r action r y bo t n b n i n tbe case
of area8 f a l l i l y witbin t b e m r r v o i n of ww dam.
ABTQ
I8. -
PO Lands, i n s t a l l a t i o m , wtanding property,
qanate. wlls and i r r i g a t i o n o q u i p n t s i t u ~ t u Jwishin tina
operation a r e a of tho carporrto fanring cwp.nie8 o r r u r a l
production cooporatiroo -blob uu mot owned o r rooted by
s h u o b o l d e n a t tk ti- of tboir formation w i l l bo t r a m -
forred t o tbo M i n i m t ~of Coopontiroo and Rural Affair8
wbicb w i l l bee- a mbamboldor i n psopbrtion t h e r o t o accord-
ing t o A r t i c l e 3 o? tbim law. Lraluation of sucb lands and
property and paymnt tberefolu to tb. rolovant ownen w i l l
bo mado i n t b e following manner:
a . Lands, wbotbor portaiaing t o r i l l a g o farming l o t o
o r mcbanimd f u r land., w i l l k evallutod bf t h e Miniatry
of C w p o r a t i r w and Rural A f f a i m on tbm baais of tbo
Suppl-nty b a d Refom &w oi 1981 aW it8 p e r t i w n t
ngulat,om, Btandily pmporty ( b u i l d i n p , tree., otc.).
i ~ ~ ~ t a l l a t i o wllm
a s , and i r r i g a t i o n o q u i p m t a s well a s
f a r r i n g u c b i w r y uwld by tbo c-ny rill k evaluated
by t b e c o n i t t o o s p c i f i o d i n Yoto P under A r t i c l o 8 of tho
Ilupplerntary A r t i c l n of lard b f o m t s o c u t i r e b g u l a t i o m
of 1967, I n tk o w of 8taoding property and i n s t a l l a t i o m
the p r i c e det8rrirwd rill k paid i n l&yoar i n s t a l l r s n t s
troll tho dato of tranmfer witb a a m w l i n t o m s t , and tbo
p r i m of wollm, plrpl snd r r l a t o d r o b i o o r y w i l l bo wid i n
cub.
b. R i v a t e e.dorYat8 f a l l i y within tbo operation
u u a of tho oorp.ni.a rill bo p v a b a w d i n tk abow n n n o r
and tbo p%woodmrill b. wmd under th mupervieion of tbo
M o m o a t 8 Org.nimatiom ?or tba paraban ad) e n d o n r a t of
mow property. Rublic mod-nt not yet tnnmforrod t o tbo
1 puavanta faruling tbem under t b e h w of Transfer of Endowed
Enclosure
Page 1 o f 11
Encl.7io. 1
COi1FIOENTIM Tehran A-
/ 70
-
Intrnductlon: The rapld increase I n world 011 prlces and the
p a t m m windfall have wrought such dranatlc changes I n Iran's
econwic prospacts over the past two years, that one tends t o for-
get that I n mid-1973 t h f s already was one of the world's nost
rapfdly developing countrfes. Durfng the Fourth Developnent Plan
period (Ebrch 21. 1968-March 20. 1973). the I n n f a n growth rate I n
r e r l terns averaged 11 percent annually. The fomlgn exchange
surplus generated from of1 exports a t four t o f l v e tlmes the 1972-
73 prfce came a t an e x t r e n l y lucky tlnh? for Iran. The country was
j u s t aabarklng on a hlghly smbltlous F i f t h Developmnt Plan and
already had crested an fnfrastructure f a r superior to that of any
other country bordering the Persian Gulf of1 pool.
The econmfc and p o l l t l c a l policies that Iran has followed over the
past two years. fm the v l w polnt o f the country's arn national
Interests, have been rational and almost ulthout exception hfghly
successful. Ulth the s f g n l f l c m t exception o f the Iranian posltlon
on the price o f 011. the country's pol tcles have not k e n contrary
t o U. S. Interests. A strong and stable and pro-lkstern I r a n I s
more l l k e l y t o r m f n a rellable a l l y borderlng a long stretch of
Russla's southwestern f m n t l e r . f f I t s econany remains strong and
I t s people prosperous. Iran I s f i n n l y c m l t t e d t o the mixed econ-
my and has feu ldeologlcal hangups. h r f c a n and other foreign
Investment I s welcane, on Iranlan tents. We danlnate Iranian
rnllftary Imports and we are supplying a groulng share o f i t s non-
m f l f t a r y purchases a t the expense o f kkstem Europe and Japan. 111th
o r without any push h n the U. S. Government our Interests I n t h i s
country should contlnue to grow drdmatlcally.
Dcnmstlc Ecomn - Boanln but S t f l l Oottleneciu: Tren I s grow- 1
nThe w d current Fr cer ooofl!i5pkent
about $61 b l l l l o n . a growth I n L a 1 t!:
r r astlmated a t
over 1974. 1
Estimated current prlces per capfta GMP o f nearly $1.800 t h i s year
thrusts Iran i n t o the rat& o f the rlchust o f developing countries. 1
It can easlly be argwd thltt the juap I n 011 prlces accounts f o r
h a l f the Iranian growth rate. but even without the of1 prlce i n -
crease. Iran's econanic p e r f o m w e I s fmpressfve. Them I s poverty.
/
but tile dtre poverty o f much o f South and Southeast Asia I s g m l r t g ,
harder and harder to ftnd I n I r a n and does not exfst on a mass
scale either I n rural o r w$an areas. There remalns a serlous In-
come dlstrlbutlon problem. Lltb the gap between r l c h and poor my be
wldenlng. Ilevertheless, though the s t a t f s t l c a l base 1s poor. most
obsewen thlnk the poorer classes I n both c l t y and cwntryslde can
perceive t h e l r l o t to be Improving each year.
CONFIDENTIAL
P a 2 f 11
Pil8;tPo. 1
COllFIDENTIAL Tehran A- 7o,
Wl~en ccniparl t o t l ~ eglociny econmlc prospects f o r most o f the
dcveloplng world, one can almost becane euphorlc about Iran. As
brlght as the long range wtlOok Is. hawvor. It must be remembered
that no one can y e t sqy wlth c t r t a t n t y that t h i s country, especially
after havlnq beccmo accustomed to a wch h l her standard o f l f v l n g
durlng I t s b l l export b m , w l l l have estab!ished the klnd o f tn-
d u s t r l r l bas0 I t w i l l need I n 20 to 30 yews f o r continued econ-
m l c prorperlty when the 011 export surplus has prssed i t s peak
1 and w l l l be nottceably taperfn off. Nevertheless. Iran i s movlng
I n the r i g h t dlrectlon to attaen economtc grahh whlch can be our-
* .
toined wlthout a large 011 surplus. I t s developnent plan (Tehran
*f c' A-51) I s loglcal, but the glgantlc r t e o l and petro-chenlicals In-
-
'f, ( i d - dustry projects whtch are tha plan's backbone are f a r behlnd
c(r ,,. schedule ond f o r the m s t pert s t l l l on ti* drawing b r d . The
,, only Free World country betwoen Europe and Japan wlth awthlng re-
serrbling a self-contained heavy Industry sector I s s t l l l Indla
;,'o.lr where steel production began 50 years before It started i n Iran.
While Iran's Revlsed F l f q , Developimnt Plan l s a reasonable projec-
#/
tlon. I t s relevance to what I s actually happenlng I n the country
I s ltmfted. The power o f the old Plan Organtzatlon (now the Plan
and Budget Otyanfratlon) was effecttvely ended more than two years
ago when I t l o s t the l a s t o f I t s lmpMmentatlon rerponsfbllllles.
UIth the MI'S current pullback i r o n sane o f I t s aore ambftious
short range developnent goals (sea blow) and the publlc adoisslon
that I t s f o n t g n exchange resources are not I n f t n t t e and must not
be sq~undered, the planners my r r g r l n sane of t h e l r l o s t parer,
but fhfs t s not yet apparent.
(
, .
,, For thu past year and a &If, w h has been sald about the two
major b o t t l e m k s t n the IronIan .conmy--the inadequate port ana
Internal transportatton network and the shortage a f tralned person-
,b#., '
nel. The Iranians hzvs coped remarkably well wlth these very bastc
problans, but they a n f a r k h l n d I n t h e i r plans to elf~ntnatethem.
The ctudi plan o f over 18 months ago to turn Bandar Shahpur I n t o the
country's najor port I s baraly undomy. anu the docks thare end a t
Khorrmshahr p l l e hlghrr w i t h @oods dally. The railway fraa Kennan
t o Lndar k l s s I s year! rupy. Tha htghwys are choked. crackfng
fran Increased truck t r a f f t c . and belng Inproved only slowly. Rather
than brtnglng I n a l l o f th 721.000 workers whtch the country I s
expected to be short o f durlng the FIfth P l m pertori (snafng R r c h 20,
1978). the eeonaiy to a g r e ~ extent t w i l l tnprovlsm n l y l n g on poor-
l y tmlned IrantmsB but thousands o f f o n t g n workers w i l l continue
to r r r l v e monthly. There already are badly stratnlng avallablt haus-
tng and other f a c l l l t l e s , and t)#w o n t i s )at t o cam. I t i s a
WIDENTIAL
CONFIDENTIAL
railarkable trfbute to the basic s t a b l l l t y o f Persian culture and
suclety that the I n f l u x o f forelgnen so far has created so l t t t l e
appdrent 111 feeltng. but serlous problem could s t l l l develop.
Agriculture continues t o lag serlwsly. The foreign techntctans
w r k l n g I n t h l s sector a m the m s t discouraged t n Iran. Bad
weather durlng 1973 and 1974 was the major reason f o r agrlcultural
short f a l l s durlng the f l r s t two years o f thr current Develop~lent
Plan, but otller sertous problens are not betng solved and no o m
seems to take the projected F l f t h Plan a g r l w l t u r a production
growth rate o f seven percent seriously. Agricultural poltcy makers
a m a t odds over the c y t e famlng/eooperatlv.s/ 'small f a m r
approach. A coherent po t c f~o r prlclng agrlcultural canndltles
I s mlsstng. The problems o f Iranlan agrlcultum are hardly unfque
to t i l l s country and have defled solution elsawhere, but I n the man-
tlm demand f o r a better and more varled d l e t I s r l s l n g along wtth
personal Incane. and the c l l ~ l n g food Import b l l l I s bothers-
t o plannen concerned over the country's eventual a b l l i t y to support
i t s e l f wlthout an 011 export surplus.
Inflation I s not responding to control measurns such as subsldles
o f bastc foodstuffs and governmental threats t o take serious actlons
agalnst profiteers and hoarders. These rmy haw slousd the pace o f
prtce tticrwses stmewhat, but a 25 percent annual rate o f inflation
I s n w wldely accepted as reasonably accurate. Thls rate i s more
l l k e l y t o contlnue t o creep upwards then t o decelerate. Hem agaln.
other co~lntrleshave not found the secret o f rapid econanic gi-wth
! wlthout sertous t n f l a t i o n and one should avold undue c r l t l c l s m o f
Iran, but the problem I s s e r l w s and l i k e l y w l l l grow Norse. At
least the GO1 has stopped placing the burden o f the b l a a f o r the
. problem on Imported i n f l a t i o n from other cwnt:lcs (Tehran 6867). a
u e l c ~ u estgn of reallsa amng econantc p o l l q makers.
Another lndfcation that Iran's KOIIOOI~C &clslon lnrkon are cclnlng
to grlps u1tl1 the r e a l l t i e s o f the country's sltuatlon can be seen
I n the recent publlc adntlssion that F I f t h Plan developnent goalswi:
lag bahlnd (Tehr8n 5491). Tho m t l v e s bchlnd t h l s ac$tssion are
allxed a d Include. (1) the deslra t o spread the notlon that the
country faces a flnanclal short f a l l because o f 011 production cut-
backs I n order to attempt to j u s t l f y t o world oplnlon the righteous-
ness o f a further tncrease In the price o f 011. (2) the desire t o
convince Iraalan bureaucrats that they do not have unllm'trd anounts
o f money to spend, and (3) the need t o $ w t l f y refusals to most o f
the growlng nmbar o f supplfcants f o r I r a n l m ald. but the main
reason was slmply the necesstty of aclulal.d01 the m a l l t t c s of
r o n a n l c development problem and tho l l b l y d%ys whtch were be-
m l n g d a l l y more apparent.
trm though ~ c c u n p l i s ~ n allrast ts certainly w l l l f a l l short of
rrunlres,the CXII deserves credit f o r the steps taken during 1974 to
r k e education both free m d universal and to provide nationrl
rcHl t l ~tare. The renova1 o f w s t school f m s gave thr ml incanes
ef kuch of the hard pmssed urban mlddle class a grnuim boost.
( 'her serlous efforts t o cam to grips with the i n c a r distribution
la and t o bring substantial uounts of real benefits of th.
t"nnim econmic bWn t o the poomr c l a s m include the announced
pIen8 f o r corporate and incow tax r e f m (Tehm A-131) m d tha
whma t o broaden ownership o f Iranian industry to bowfit workers.
f e m r s and the general public (Tehrm 6942 and A-163). These plans
w l l l k d i f f f c u l t to Implenient, but t h y seam b a m l to haw ram
p n v i m l y b e ~ r e f l c i d l effects and l l l u s t n t e the leedershlp's do-
(rruinrtlon t o spread the banefits o f r o n o l l l c prosperity.
Mny problecus reimin f o r the I r a n t m economy, but m s t of thea sem
vnrgeable over the long tam. It must k rms&emd that few Free
Wid countries have f u l l y logical and coherent rcorrrmic dwelop-
1 mmt plans and ~ o l i c i e s . The nature o f tho mixed e c pmludes
r a p l e t u l y r i g i d p'lanning. The country's & ~ t o c r r t l csystem of
~
I
:I.. j
by thr lncalcuable loss fran l a e M I M ~o f trained personnel end
eucutive talent remaining I n u%orn. On the other hand, t h i s loss
,
1.- i s balanced to sane extont by the ove'all benefits t o the e c o n w
fmn the training received by draftee1 ~ n drecruits i n the m i l i t a r y
m n l c e nho return to c l v l l l a n l i f e a f t ~ only
r a Caw years.
After o i l - a n d m i l i t a r y e q u l p m t . thr i11116 nost knportant category
i n U.S./Iran trade I n 1974 war rchincr! and transport qulpnent.
but foodgrains m e very elm fourth t ~ arcc d r i s i n g I n Importance.
I r a n pmbrbly looks a t u m l s as thr NAN irqmrtant thing I t buys
f m o the USA a f t e r m i l i t e r y quipnont. luch u f the machinery and
transport q u l p m n t could k purchased elwuht~m. but no other
country h s the massive amounts o f foodgrtins md mny other agrlcul-
b r a 1 PKNJUC~S f o r sale on world aur(lets i r e l l t b l e fm the U.S.
Page & o f 11
Encl. No. 1
UNIFIDENTIAL Tehran k
170
Y I U r l r l n g Incanes. Iranians expect t o eat mom and a lrlder
m r l r t y of foodstuffs. A t the s m tim, as noted above, the
l m l a n rgrlcultural swtor lags, and the prospect o f rwchlng
wlf aufftclency seats to be much farther t h n was the case only
k or three year ago. Iran I s 1Ikoly to become our tenth largest
wkat for agrlcultural products t h l s year. and sales of foodgralns
-Id total about $660 mlllloll.
M 1.1 w A t:t-n*r . c ra wH&blu.dmtaeither I n Tehran or Nashlngton
hr U. S. Investment I n frm. The Wassy c u m n t l y estimates
abut S4OD.SSM) mllllon. Thls I s a l l t t l e less Uun the total three
pm ago befom the dlssolutlon of the old a l l consortlu, but It
1 I s ex& I n only bro othrr'Allm countries--Japan and
m l f l p p f n e s . ~ u r n n pmpacts
t fir Joint v m t u m , ul\yof
*Ich rlm are i n the plannfng stagas, pplnt to good prorpacta
tr tha l e a of U.5. Investment I n Iran t o IncmaBa by three or
hmr t l u m by 1980. T k climate for foreign Investment I n thls
a m t r y I s expected t o remain favorable. but thr 801 w beccrnn even
rrr relrctlve and strlctar about Irl f m l g n investors t o
)try tho gaw only a c m l n g to ~m%n
..ltlomd
A.
above that a l l private ~ l uMthrr
~ h Fogul-nt
r
, o r not partly
(Ccllgn-ownmi, divest thmsalves o f 49 perant o f tholr shares to
rrLm, famars, and the genaral publlc wlthln f l w y u m o f tholr
UWllsImant I s a exnnple of th. 601's d . t m m l ~ t l o nthat
l v a u cc*lpanles u%?teka part I n what IS b l l w e s t o be socially
&flclrl poltcles. Fonfgn prlvate Investors should not axpact
my k l n l o f spaclal treatment except W n Wx. custw, o r other
t c m t l v e s are offered as part o f the o r l g l ~ contract
l I n order to
r t t n c t an Industry clHaad lqmrunt to mating d.veloplent objec-
Itm or to lum a new Industry to a backrnrd a r w of tho country.
CaCIDEWtUL
Page 7 of 11
Eml.7Jo. 1
Tehran A- 1 ,
cbdnbrta.h i~iayb.? able t o make better on I t s am should be avoided.
r:mt ot the $15 b i l l i o n plus i n U.S,<sales t o Iran projected over
tba nex f i v e years I n projects dlsmsed at the Fhreh Joint Coa-
rn4sslou mczting In Lshlngton probably would taka place I n any
cdse. lhe alrardy strained Iranian bureauera i s not responding
well to U.S. overtures for the support i t shou?d rer~arablybo ex-
pected to p w l d a t o Pnerlcan t e ~ ~ h n l cscheduled
i~s t o enter the
country t o carrj out various pt-ojects.
Horeover, thoro I s a real danger that the f o r i ~ l i u t i o no f U.S.
I n the Iranlm economy under tkr A i n t Cormnlssion
l~rvolveriw~~t
could beco~lsa serious thorn i n U.S./tran nlatlons. Iranian
ecolwnlc developl~entt s not going to be r m t h l y graded oneray
street. P i t f a l l s and reversals from tim t o tM a n inevitable.
The forelgn power w s t heavily involved rill cuke a convenient
scapegoat, and we probably would LM well Idviaed to kaep official
participation t o th. lareot feasible level.
Aslde frm lower o i l prices. a growing shore ef the b l n g Iranian
narket, and a continued favorable invesbmnt climate, Uie next thing
ue want most frax Iran i s responsible :~hovlou I n the l n t e m r t l o ~ l
financirl system. This country's perfonunce I n recycling I t s wtro-
dollar surplus thus far has been cmmuhble. Mhila a p u l b mson-
able case can be ma& that Iran's comessional and other lending hat
bean wade only for reasons o f i t s self-interest (either palltical or
econo,~lcor both), huge loans a t low interest rates have been
offered to ~ l a eof ttw lorgert and poorest developing countries sucll
n Indla. Pakistan. Egypt. and Afghanistan, plus purchase of Norld
iiank bonds and loans t o the IMF o i l faclllty. The higher echelons
o f the GDI ua9 well aware th. cowtry's ernmaus need for inports
for I t s oconrmlc devel-nt progm c a w t bo met without the con-
tinued m o t h functionfng of the irtematlonal f l w n c l a l system.
The Iranians can be counted upm, because their ovn self-fnterest
w i l l m a i n uppemct I n their nldr. not to support o i l p i c e in-
cmasw so high t l w t thay would seriously undennlne thr s t a b l l l t y
o f the world m e t e r y systun.
The rojected durability of th armIan petro-dollar surplus cur-
rently i s a controversial subject. both wlthtn end outride Iran
ikwmnlrg from abroad. mo8tly f o r short tam uport/i~lportf i n k -
fng and fm the World Bank for egrlcultura) p r a J ~ t Sbecause of
the desired tcchniul assistmnca csnpomti n IBRD loam. was nwer
s t o w . Thrrr pmbably w i l l IN r ur mdlun-tern fltunclng negoti-
ated wlth foreign financial l n s t l t ~ t l o n sfor Indlvldual projects
during 1976. but Iran probrbly w l l i not becaao a ~t importer of
capital, given.lts s t i l l Jarge unuttllzsd lorn ConaltPlents to a
Eaet.M!l1l
CONFIDENTIAL Tehran A- 170
rlde vdrlety of foreign countries. before 1977. or later There
am, of course, so mny varlables I n the equation that any pre-
(lctlon or projection o f Iran's I n t r m a t l o n l flnanclal position
Ir marly meaningless. The future o f o i l prices and pmduction
levels arc uncertain, and no one crn prrdlct the rate o f Increase
In l q m r t r the Iranlm economy w i l l be able to sustain. k noted
& v r . currently the GO1 seam to be trying to c o n v l m publlc
inion that the country I s poorer than I s w t u r l l y thc .are.
X Ir i s r quite msonrble policy f n the l r a n l m polar. o f vlw.
~ I v h gthe GO1 a mans o f ntionallzlng support f o r all Increase
n tile world o i l prlce. and f o r thr other masons a11.a@ cited.
Uw rmrt important of which I s the m r s s l t y o f facing up to the
r m l i t y that many projects rtll not be finished as %ir;sduled be-
c u r e of supply. Infrastructure, and other constnlntr.
~ l l $ j - c aContradlctlon:
l ~ The p u t two p a n have wftrussd
Fic changes i n U.S./lran s ~ o l i rce l r t i w with Iran r c r g i n g
u m lmportrnt and acch sought after market for k*rlun wports
end f o r equity investments I n j o i n t ventures. And k a u s e o f I t s
#Ition on o i l Ices. the 601 for the flnt tlm I n tho history
of our 30-year a6lonce i s taking a positlon on a utter o f g n r t
tiince whlch I s contrary to U.S. i n t e m t s . I n thm brslcally
k%ical sphere. not m h has changad I n U.S./lnn mlatlons. I n n
rtl11 looks to us as 145 chief protrctw fma rnrrorJwntt by the
alossus to the North. Irrn s t l l l wn be courtad upon to support
m a t F m World positlons i n l n t r n u t l o n r l fom. Tk. W mlcanes
U.S. Influence I n other counklrr b M n g tho USSR and r t least
t u l t l y approves o f Istronger U.S. mna I n the Indian Ocean to
earnterbalance the Soviet nrval buildup i n the MI.
Ulllo the major portion o f activity I n our bl-leterrl relations #nay
be on the econamlc side. homwr. the tougkrst questions to ensuer
l n Iran todqy are p o l l t i u l , not uanmlc. The whole economic
4welopr1tent/nodwlutlon p o c ~ vhlch ~ s I s pr#wdlng rpce I n nodern
Iru, 1s a contrrdlctlon w l t h p o k n t l a l l y srrlous overtoms for the
future. It I s almost lmposslble t o believe Ulrt I n the long run
m as seemingly s t m and stable r mln r s that I n power I n
Iran can get by wlth changing the country I n only r frw decades
tm a nearly Illltmtr. poor. ud b u l a l l y p e e s ~ society t Into
6 w l l educated. n u a v b l y affluent. .odrm. and qYIIM1c nation
wlthwt a t some polnt going thmugh 1: perlad of serlour polltScal
r val and perhaps even rrdlul r o c i r l chmgo. Put i n mother wy.
c u m n t I m n l r n lwdershlp I s u k l n g thr people to accept modemi-
u t l o n I n almost every respect while mlntrlnlng m r v t o r r r t i c PO-
l l t l c a l system which s t l l l denies tbm .art of the b u l c h u r n
hrodans taken f o r granted I n ~ o r of t tho advanced Uestrm socletles
Jltch Iran I s striving to r u l a t r .
OOWfDEWnAL
CONFIDENTIAL
What dm outslde obsemr. of courm, hop.) for I n Iran I s p ~ l l t l c r l
evolutlon rather than m o l u t l o n uhlch wlthln r n u o r v b l e parlod
of tinu! would brlng the count t6Wnethlng rumbling r mdm
constltutionrl monarchy. 1n3m who Ihave dtrc-
subject n l l l agree I n W r y . but tlny a m totally -Id
this
of ldro
u t o how this evolutlon mlght k brought about. Fan s w to s w
r vlrble a l t e m a t l w to the Shah. kd. rlu, history pmvldrr dls-
cour Ing pracedmts about the cksllnlng n of rutocnts. Ia n
-8 no example o f an absolut. ruler wtGngly loorming the mtns
o f power. The recent establlshmt o f tha on-party lyrtan rcmovsd
oven the facade o f the oxlstonsr of ll a y r l opporltlon t o HIS
fbjeslry's Qvennent. It cra be argued that nothlng substmtlve
m l l y changed wlth Chs r r t a b l l s of ~ tha RIsurvmeo Party, but
the portents nevertheless rm hardly a o u r r g l n g f o r tha wmtual
creatlon of a mom danncratlc wtan of g o v m m t I n Iran. Ylth
tho educrtrd a l l t o semnlng to c o m t l t u k f o r thr most part a posctiu,
n a n + o l i r i i l - body of Indlvldurls p r l r r l l y cmcenwd u l t h r k l n g
their wny wlthln the pmwnt l y s t m and unable or un(1llng t o pro-
vide the cmservrtlve l s r b n h l p fhm which peaaful chnga Ideally
mould cam, one annot help but frrr that they am aMIcatl I n
favor of tlw radlcr s. Them rm r m l r t l v e l y o r 1 1 end dl8olnted
1
gmup, but thalr ab l l Z y to parpotrato nnda acts o f t.rrorlra I n
m o n t months agrlnst both Iranlrn rnd k r l c a n o f f l c l r l s I s m o t I
dlstrerslng. Deinocrrtlc rnd much bettor organlud and mom stable
s o d e t l u than Iran haw k*l unable t o stmp out t e r r o r l r , but I n
this country only tht dlrerm rnd not I t s root wur 1s k l n g
14
attacked. HOW l : ? W + s f 4 I a t f ~ * and other act8 o f t o r m r l a seam
llbly.
Ulth a l l o f the country's developrnt problem, the rconanlc outlook
f o r Iran seerur nuJ, brlphtor than t)w p o l l t l a l progn0lls. Un the
other hand. the country s very ~ s f u w ln m l c porfotmance prob-
ably lessons the d r n g m of r o s l r l uphoavrl. k gsnulno prorperlty
becams mm wldespmd throughout tha country, nore Irrnlrns have
r vested Interest I n tho praurvatlon o f samthlng mambllng thr
status quo. The chances o f r m 3 r t j h i y . p r r a f u l aodrrnlution
u p . r l e u also rm o n k m d the basic stability o f P e n l m
roclety and culture rnd I t a tradltlonrl msprct f o r ruthorlty. I n
Splto of tha myriad futum p o l l t l a l p r o b l m rppurlng I n the
Iranian crystal ball , tho most obvlout o f &I& 1s hou I t w i l l makr
tha transltlon on tha I ~ t r bdmp8rtun l ~ d tha Shoh fron the
rcm. tho country's c h a m o f aroldlng ndlal chaqp and ldobll-
Itating extended pcrlod of Jwr rtlll rw f e l r l y good.
rnFIOENTIrU.
Pa.Wf1(l7l0
Tehm A-
f r U . S. Lever -Qnwohop.tourrtluchlnflwocrover
u ure course o events I n Iran? Parkrpa. kt r pmbrbly w l l l
not. Dn the surface It would appssr ttkt l r r n mads us o re than
m nool t h l r county. k notad abovm, we hrvr rssler accoss to
t l t r m r t l v e sources o f our o i l +.portlwsQ thrn do t4 Irealans
(O tho rophistlcated U. S. o l l l t w y quipant they hr lbrcor
wcurtomed t o and want to tsrp pmluslng o r to thr rrsslve food-
v f n Imports they w i l l nerd over th nxt hu, yurr to met rlslng
-tic d w d . Iran also wnts fm us w n par1 ~;lprtlon I n
Jofnt ventures i n thls a n ond prefers U.S. h h s w tho s a f n t
# I r a to keep i t s fomi#n m r v o a I n shcvr tom deposits.
))*wld we choose t o t r y t o we my o f our apparent laverage to
t n f l w c a I r m l r n pollclw. our f i r s t r l u probably would bo to t r y
Cl torce s m o moderrto ~ InnIan sition on the prlce o f 011. But
CIIC~~S r a m limited by our ~ i u t i o to Lm
In t h l r or any othor area I n uhic/?tm mlght t to sway I r r n t m
n mhtm -.,i
w l w an unlikely r a d t a l c h o w I n k r l a n pollclas. w probably
rm not going to InteMoro wlth the trinsfer of technology or wlth
cb 1t.l ~ m v w ~ Itnseither dlrectlon o r tho u l e o f foodgralns,
el! of whld am austly mnsged by tho prlvatr roctor on th U.S.
otC. Only mtlltary sales-to Iran mwin, and I n this ever tho
rchmfsal already rxlsts for exsrclsl USQ contml. A ralavant
-t agalnst restricting rals o f g l l t r r y equlpnrnt I n th past
h a been that Iran easlly could find another suppllrr fra mmg
H ca~petltom. Thls nar I s only p r r t l y trw. To c l t r om ox-
ryle. no other country a t present u n supply r fighter emparable
C tlm F-14. We would be wlu. however, to attrapt t o pressure
lrm by forblddlng sale o f sone typos o f m l l i t r r y s q u l p m t u n t l l
w had addrtns.6 th. broader questton of kac u mlght pwslbly In-
tlwnw other OPEC m d w 8 . Since Iran does not act alone 11
dotennlnlng the world price o f 011, pressure on thts country prob-
cbly would be Insufflclent to b r l results. YI also would have t o
ranrldar n t r t r l c t l o m on Irmlan alltry pHchrsn Cn li#t of our
MNII Perslan GulfjIndlan Oeean pollcy.
In rw cars, puttlng our r*ar energy houw i n ordrr -bly over
lk long tern I s more l l k e l y 0 s u c c d I n armsting the u rrds
tmb I n 011 prices, 1 f not actually brlnglng tkvn dorm. a n e m
Cllrttns OPEC rmben. 61vm the rrri l l r b l l l t y of 011 1 rt-
1 3 nettons thus far to act IIIcmcert,&c r r t n r s wl'll not%
*prrsred by anything short o f u llrh*\ts I n dmloplng
rltolnatlve sources o~ mrgy -h to mduco noticeably
wrlf domsnd for 011.
Pano 11 o f 11
rnci .-5,.1
Tehran R- ( i :
Ctlter than I t s starld un 011 prices. Iran seem u t ~ l l k e l yt o takr
positions seriously hamful t o v i t a l , U.S. Interests, unless
there I s a radfcdl change i n I t s w s t w o f governant. Thc U,S.
a11~1lran w i l l t w a i n natural a l l i e s against ti,@USSR. Our 11)-
terests I n the Perslan Gulf and lndlm Ocean rcgt l i k e l y t o renbain
very similar f o r a long tlw t o cane. And Iran's ambitious davelop-
r m t plans are based on the continuing prosperity o f the world
financfal system I n which the U.S. 1s tha bast Important nat;lonal
entity. Iran w i l l not autanatlcally f o l l a the U.S. lead. but i t
w i l l not openly opposa most o f our pollcies simply beauso our
basic interests s t i l l ram t o c011ciJa.
.-..
,..... ,
I .I I.,.
0 Ollor no.
III,1IOI,
3.4 c,,<,,b: $7."
I r n n i a n A t t i t u d e s Toward F o r e i g n e r s i n I r a n
I. The Sample.
The number o f t h o s e i n t e r v i e w e d (26) is q u i t e s m a l l , and of
L h o ~ e ,a s i g n i f i c a n t m a j o r i t y a r e members o f I r a n ' s middle o r
uppor l e v e l e l i t e . These i n d i v i d u a l s a r e f a r more s o p h i s t i c a t e d
t h a n most I r a n i a n s ; c o n v e r s e l y , t h e i r - v i e w s a r e a l - o more i m -
p o r t a n t t h a n t h o s e of t h e l a a n - i n - t h e - s t r e e t , s i n c e t h e y tend t o
bo o p i n i o n l e a d e r s . I t is worthwhile n o t i n g t h a t t h e concoins
oxpressed by t h e s e more s o p h i s t i c a t e d I r a n i a n s a r e almost wholly
r l ~ r e n tfrom t h e r e p l i e s of t h o s e who c o u l d be c o n b i d e r e d r e p r e -
n c n t o t i v c of a f a r g r e a t e r w r c e n t a g e o f I r a n ' s p o p u l a t i o n .
C l o a r l y , t h o " f o r e i g n p r e s e n c e problem" a f f e c t s l a r g o l y t h o s e
who have a t $ e a s t a r e a s o n a b l e amount of c o n t a c t w i t h f o r c ~ g n c r s .
Many of t h o s o i n t e r v i e w e d a r e concerned i n a g e n e r a l way
rbout t h e pl'esence of f o r c i g n e r s i n I r a n , b u t n o t s p e c i f i c a l l y
Americans. Remarkably, t w o - t h i r d s of t h e group mentj onctl
I C k i s t a n i s , I a d i a n s , and "East A s i a n s t ' - - F i l i p i n o s and South
Koreans--as g r o u p s which had grown t h e most (and by i n f e r o n c e
1110 groups which had a f f e c t e d them most). Only o n o - t h i r d of
Ole sample s a i d t h e American p r e s e n c e had grown o v e r t h e p a s t
two o r t h r e e y e a r s . E s t i m a t e s of t h o number of A w r i c r r n s 111
h ~ l ~ r aranged
n from a low of 4 , 0 0 0 t o a h i g h of 4 0 , 0 0 0 , with a
v l d l a n r e p l y of between 10,000 and 15,000. Only e i g h t of t h e
mrmplu d e s c r i b e d Ihemselves a s more c o n s c i o u s o i f o r e i g n e i . s ' .
Iwctlence t h a n t h e y were two y e a r s ago. S e v e r a l o f t h o a o i n l c r -
vlowod have !lad e ~ t e n s i v ee d u c a t i o n abroad o r a r e marrjctl t o
I t ~ r e i g nw i v e s , b u t t h i s is n o t uncommon among middle and upper
4 labs I r a n i a n s .
C0??1.'[DmTI~II~/NOi'ORN
---.-.--- \
Seven r e s p o n d e n t s s a i d tile c u r r c n t number 01 f o r e l ,>~IC.J.S h:td
l i t t l e o r no e f f o c t on them. 'me r e s t e a t h e r d i s a g r e e d 01. by
i n f e r e n c o s u g g e s t c d t h a t f o r e i g n e r s ' d i d a f f e c t thcm. S c v o r a l
r e f e r r e d t o t h e por:itive a s p e c t s of t h e f o r c i g l l presence--
increased t o c h a o l o g i c a l s k i l l s , rnorc t r a i n e d manpower. Over
h a l f of t h e sample s a i d t h e y and t h e i r f r i e n d s c o n s i d e r c d
Americans and o t h e r Europeans r e s p o n s i b l e f o r t h e st i f f I n c r e d s e
i n r e n t s o v e r t h e p a s t two y e a r s . Seven c i t e d groblems a i ' i s i n g
from f o r c i g n d r i v e r s . S u r p r i s i n g l y , o n l y e i g h t ~nontiollctlunfav-
o r a b l e i n c i d e n t s , and most of them had t o d o w i t h "lowcr c l a s s "
Americans d r i n k i n g and b r a w l i n g i n p u b l i c .
There was a s u r p r i s i n g l a c k of ltnowledge about s p e c i a l
f a c i l i t i e s f o r f o r e i g n e r s . The ovel'uhclming ma.jority o i t h e
sample a c c e p t e d and f a v o r e d t h e p r e s e n c e of AFRTS; many who
watch o r l i s t e n do n o t even c o n s i d e r i t a f o r e i g n f a c i l i t y .
Only two s u g g e s t e d i t s h o u l d be brought under I r a n i a n c o n t r o l ,
though onc o t h e r warned t h a t s h o u l d t e n s i o n s between 11-nians
and f o r e i g n c i s i n c r e a s e a t some t i m e i n t h e f u t u r e , AFIlTS would
be a l o g i c a l t a r g e t f o r a t t a c k . Only f i v e people mentioned
s p e c i a l r a c i l i t l e s f o r Americans (Commissai'y and Gulf D i s t r i c t ) ,
and o n l y t w of ~ t h o s e s u g g e s t e d t h e r e was any envy'r%gartling
t h e s e f a c i l i t i e s . Three s u g g e s t e d t h a t s u c h f a c i l i t i e s c o u l d
become t a r g e t s of d i s c o n t e n t i f r e l a t i o n s between I r a n i a n s and
Americans become worse.
3. =to Living Versus Assimilation.
Not one i n d i v i d u a l sup1)orted t h e i d u a of s p e c i a l o o t ~ u i ~ n n i t i c s
fsr forc.igners, a l t h o u g h two s u g g e s t e d it would be a l l r i g l i t i n
s p e c i a l c n s e s ( S o v i e t Bloc n a t i o n a l s and f o r o t h e r s i n pl'ovin-
c i a 1 ~olciiswhere new f a c i l i t i e s must be b u i l t ) . Well OVPJ. h a l f
t h e sample (from e v e r y l e v e l ) t h o u g h t i t was a s v a l u a b l c l o r
t h e f o r e i g n e r s a s f o r t h e m s e l v e s t o have f o r e i g n r e s i d c u c e s
s p r e a d o u t i n t h e community. Only t h r e e people suggestt~cl ;my
problel~lsw i t h t h o i n t e g r a t e d l i v i n g , a l l i n ternis of p o c j s i l ~ l e
s e c u r i t y t h r e a t s posed by P a k i s t a n i s and I n d i a n s g a t h e r i n g
topthcr.
Only t l l r e e i n d i v i d u a l s t h o u g h t ir d o u b l i n g o r t r i p l i l ~ gof
t h e A n l e r . i ~ a ~ o n l m u l l i twould
y pose problems, and two o f . l.liose ..
r e l a t e d such growth t o t h e l a c k of a d e q u a t e h u u s i n g uncl rhop-
p i n g f a c . i l . i t i e s . F i v c r c s p o n d c n t s thought I r a n would f:i~lll
p o s i t i v o aclvantazcs from having Inore Al~rericans, crspeci :I].] y i n
t h e tcchnio:tl ;rrcli:t.
( : ~ I I C ( ~oIv.eIrI tllf illcreasiill: f o r e i g n presenco ssemr-; 1.0 IN+
# l ' u w l n ~n l i g h t l y among p e r c e p t i v e I r a n i a n s , but t h e r e a r c 110
0orlotlx i l ~ u ~ ~ e d i px'oblems.
ate S e v e r a l r e s p o n d e n t s n o t e d t1i:rt t h e
. ~ p a n a i o n of t h e fol.eign community i s c o n c u r r e n t w i t h o t l l e r
Ml l o n n l (.'rowth. 'I'liu i n c r e a s e d f r u s t r a t i o n s of u r b a n l i v i ~ g
a l t o a t b ~ t bf o r c i p ; n e r s and I r a n i a n s . I f occasionally tho for-
.Innor Js blamed f o r t h e s e f r u s t r a t i o n s , it is n o t always h i s
r r u l t , and many I r a n i a n s r e c o g n i z e t h a t f a c t .
Those 111usta f f e c t e d by f o r e i g n e r s a r e t h o s e i l l t h e middle
et 010 1r:lnian socio/economic spectrum. They d c a l e x t e l ~ s i v e l y
wlllt f u r c ~ l ; i i e r son a d a i l y b a s i s and t h e i r p r o f e s s i o n a l n l ~ d
p r m o n n l s u c c e s s is bound u p w i t h t h e p r o j e c t s f o r whom for-
e I g n o r s m.c h i r e d . The v e r y t o p e l i t e a r e l e s s exposed t o
f o r o i ~ n o r s . Lower c l a s s I r a n i a n s c a r e l i t t l e a b o u t t h e American
monco but f e a r and d i s l i k e t h e I n d i a n s and A s i a n s who have
t o I r a n i n r e s p o n s e t o t h e P e r s i a n economic boom.
In a law s p e c i f i c c a s e s , s u c h a s i n u n i v e r s i t y a d m l n i s t r a t l o n ,
I hcw~uw i t h European academic t r a i n i n g d o r e s e n t American ways,
I I #lot tile American p r e s e n c e , because t h e i r American-tralned
w ~ l l n a ~ t t c(and
s c o m l ~ t i t o r son t h e c a r e e r l a d d e r ) a r e bclcining
8o tonch commanding p o s i t i o n s i n t h e I r a n i a n e s t a b l i s h n i o n t . The
outla ens o Y t h o Amerxcan--rained I r a n i a n t h u s provokes ienr and
envy ill solno q u a r t ~ r swhich i s o c c a s i o n a l l y d i r e c t e d nlol'o
1?.110tnl1y a g a i n s t t h o American community.
Whill: Ccars of r i s i n g widespread anti-Americanism scum
r n r ~ ~ t l n d e dt ,h e concorns e x p r e s s e d by o u r intervic?wces desui-ve
L l c l l t i o n n l thought. Perhaps t h e most iuiportalll: o b s e r v a t i o n is
@ha1 i n n p e r i o d of i n c r e a s i n g u r b a n f r u s t r a t i o n s and r i s i n g
t n m l g n p r e s e n c e , i t is more t h a n e v e r n e c e s s a r y t h a t wc send
eb l l u r s l I y s e n s i t i v e and mature Americans h e r e . Four o r f i v e
I*mln~ndor~l.ss p e c i f i c a l l y urged U.S. companies t o s e l e c l : t h e i r
p r n o l l n c l w i t h more r e g a r d t o I r a n i a n s e n s i t i v i t i e s . T h i s , of
W~II.UO, wc~uld a p p l y t o t h e U.S'. Government a s w e l l a s t u l > r i v s t e
Imlllmtry.
Hlncc urban l i f e i n I r a n i s becoming more d i f f i c u l t for
.r*r y ono , and p a r t i c u l a r l y s i n c e t h e r e is a reasonable p r o s p e c t
r l all ocollo~uicslowdown, i t would a p p e a r highly d e s i r : ~ l ~ l e
Id* ~ l t r wh:~t we c a n t o hold down t h e number of Am.:rUicans c o m i ~ ~ g .
-*,a*. I l i ~ v i n gs a i d t h a t , i t i n worth n o t i n g th::L: probably rest
1111, I)ojn t s of c r i t i c i s m would have been nron.t:ioncd i f llio
~*-I.I~.!III prcserrcc had been o n l y 1 , 0 0 0 i n s t e a d of 25,000. Tlle
a t t i t u d e s < ' s p l ' c s s e d i n t!lj.s s u r v e y s h o u l d L;hus be ro::nrdcc! :is
a bcncll n o t a s a d e f i n i t i v e . d e s c r i p t i o n of I r n n i n n i.llil1.1i-
ing.
DISTRIBUTION:
AlB/DCM
US I S
OR
ECON
POL (3)
NEA/IRN
INR/RNA
DEFREP
ARMISH/MAAG
A m c o n s u l SHIRAZ
A m c o n s u l TAImIZ
A m c o n s u l ISYAHAN
CHRON
CONFIDENTIAL
O r , k l c h began t o comnent on t h e i n t e r v i e w i t s e l f by s t a t i n g t h a t he f e l t
tho1 t h i s was long overdue and he was v e r y pleased t o l e a r n t h a t the Embassy
mb m e k l n g information w i t h a view t o some p o s i t i v e action.
CONFIDENTIAL
CONFIOCNTIAL.
CONFIDEIITIAL
CONFIDENTIAL
tf the presence o f the Americans,,that more and more Iranians are saying
We don't want the American way. I r o n i c a l l y , Dr. Saleh pointed out.
American cars, rrachincry and oti,<r manufactured goods are s t i l l widely
considered t o be the best i n the world. "Iranians seem t o forget that
thesellmanufactured goods grew out o f the American systems they do not
want.
The presence o f Americans i n public places I s a problem. Dr. Saleh does
not see i t i n the restaurants where he eats. because the higher-level
Americans frequent those places. Howvfr. h i s wife and her friends sense
problems verq: deeply i n supermarkets. Supermarkets are hot beds o f
antagonisms, Dr. Saleh noted. He sald forelgners have caused prices t o
sky-rocket i n the supermarkets and t h a t %hen 5 r i c a n s go through a super
market they clean out everything " l i k e locusts. When the Iranians get
there t o shop. there I s nothin: l e f t . He pointed out that he i s not
absolutely ture t h i s I s true, but what i s s i g n i f i c a n t i s t h a t people
believe it,
He noted t h a t "there i s no hope f o r us i n housing," and went on t o say
t h a t i f he and h i s wife d i d not have t h e i r own home they simply could not
l i v e i n Tehran. They would have t o leave the country. They could not
a f f o r d t o r e n t a suitable dwell ing. He sald t h a t a l l desirable housing
has been taken by foreigners. He said the same i s true o f o f f i c e space,
trained o f f i c e help an$ domestic help. "Americans have taken a l l the
chauffwrsand drivers, he said.
Seine o f the most frightening sections o f the morning inglish-language
newspapcrs, according t o Dr. Saleh, are the growing want-ad sections whic
constitute a d a i l y reminder o f the Amertcan presence. It i s a niarket pla
f o r everything. He opened Kayhan Internatio~~aJand showe! me the column
o f want ads printed I n the paper y "epart n Americans. "They want t o
s e l l us everythins and i t ' s a l l jukt.( He :a&. "I've even seen ads wher
they have t r j e d t o s e l l us used underwear." He also noted t h a t p r i o r t o
s i x months t o a year ago "we never saw ads put I n the papers by con a r t i s
such as those t h a t are t r y i n g t o get r i c h quick by s e l l i n g land I n Spain.
He said i t would be a t e r r i b l e mistake f o r Americans t o be herded i n t o
s t r i c t l y American comnunfties. He noted t h a t even when you drive through
the t y p i c a l l y foreign 01- Aoerican neighborhoods you do see American and
Persian kids playing together i n the street. -He termed t h i s a heartening
factor because there i s some v i s i b l e interaction. He does not feel.
however, t h a t placing the American m i l i t a r y cadre i n a comnunity by i t s e l
would create a p a r t i c u l a r problem. He said he thought i t might be useful
t o get them o f f the street. His general f e e l i n g about them seemed to. be
negative; he had the erroneous Impression t h a t the grzater bulk o f them
were enlisted men "driving down the s t r e e t i n a jeep. He was surprised
CONFIDENTIAL
CONFIDENTIAL
--
CONFIDENTIAL
LIIITED OFFICIAL USE
Studc%lt
-
-.- -
Intorviows.
Two l r a n i a i ~:;tudents i n my c l a s s a t HCD C o l l e g e (wl~ichi n -
c l u d o s I r a n i i t l ~ s ,P a k i s t a n i s and T u r k s ) , saw a n i n c r e a s e i n I
Asiaits i n Tollran. They d i d not f e e l t h e r e had been much of 1
a n i n c r e a s e j n o t h e r f o r e i g n groups and found i t d i f f i c u l t
t o d i s t i n g u i ? ; l ~Americans from o t h e r Western Europeans and
Scandinavians. T h e i r p r i n c i p a l concern about t h e e f f e c t of
f o r e i g n e r s was whother t h e y would t a k e p l a c e s i n u n i v e r s i t i e s
1]
t h a t I m n i a ~s t~u d e n t s might f i l l . N e i t h e r was aware of any
s p e c i a l f a c i l i t i e s f o r f o i ' e i g n e r s , o t h e r t h a n Hindu tenlples
and somo C h r i s t i a n churches. Bot;i,thought it was b e t t o r not
t o s e g r e g a t e f o r e i g n e r s i n one a r e a . Both s t u d e n t s appeared
uninformed and u n i n t e r e s t e d i n t h e American presence i n I r n n .
A 24-Year Old. I r a n i a n i n Business.
Reza s e l l s t r a f f i c equipment and o t h e r c i v i l e n g i n e e r i n g
g e a r f o r a sm:tll Tehran company. A g r a d u a t e of P a h l a v i
U n i v e r s i t y , S h i r a z , he has l i v e d i n Tehran f o u r y e a r s and
h a s noted a s l i g h t i n c r e a s e i n f o r e i g n e r s . By c a t e g o r y
!there a r e JlJnny more I n d i a n s and P a k i s t a n i s i n Tehran now ho-
'cause "1rani:rns used t o go t o t h e P e r s i a n Gulf Emirates t o
work but now t h e whole s u b - c o n t i i ~ c n t is f l o c k i n g t o Tehran
t o t a k e a d v a ~ l t a g eof o u r oi.1 money.,''. Reza b e l i e v e s t h e r e
are s l i g h t l y Jllore Americans i n Tehran t h a n t h e r e used t o be
b u t i s unalvarc of s p e c i a l f a c i l i t i e s f o r f o r e i g n e r s (althou[:I~
I know t h i s i:ldividual and h i s wife o c c a s i o n a l l y watch AFKTS
t e l o v i s i o ~ r ,i!.!ha never mentioned i t , d e s p i t e a t t e m p t s t o dm:!,
him o u t ) . );(:zn b e l i e v e s f o r e i g n e r s should n o t he segregatatl
by g h e t t o beciruso i n 'tho c a s e of Arabs and o t h e r sub-continc~l-La1
i n d i v i d u a l s , t h i s migill: c r e a t e s e c u r i t y problems f o r t h e
Govcrlllnent of I r a n . Ile thought s p o c i a l housing pi.ojocts
i n p r o v i n c i a l c i t i e s were a l l r i g h t , a s l o n g a s t h c c o n t r a s t
w i t h l o c a l l i f e was not t o o g l a r i n g .
--
LIMITED OPPICIAL USE
A
-.
.".,...
I".
1'1""
,.,,,to,.,,.
Q.,,_. ..,T,O*
UI. (.
=~*=TJm OFFICIAL USE
UNITED srxres GOVBRNMW
Memorandum
m : P o l i t i c a l Section Mm: February 19, 1076
/h
k o ~
: Econ/C - J/.
Lange ~cherme'r'9&
+.tudents.
-
LII4ITED OFFICIAL USE+
LlMITED OFFICIAL USE 4
- -OFFICIAL
LIMITED - USE
LIMITED OFFICIAL USE
UNCLASSIFIED
DnlO..L .,?*I U 1 ,p
Y
.. Ill, LI.lll.*
V...,"" 1.8 cr*) *,.,I..
UNI'I'EU SI'ATES GOVERNMENT
4. He f c o l s t h a t i t . i s d e f i n i t e l y b e t t e r f o r both f o r l r i l ~ n u r sarid
Iranians .to have thc foreigners l i v e on the economy rdil:~~' thar. i n
separate co~~~pountls.The co~i~pound approach seemed t o lri141a kind of
"self osti-aism" a t ~ dadded t h a t "if you draw a borderline around an
i d e n t i f i a b l e groop, t i ~ c ybeconie a focus o f a t t e n t i o n and possibly
o f rescntiec~.it." lie s a i d h i s answer would not be d i t i c r e n t i n tile
case o f 1;lrgc groups o f f o r e i gnc?rs betng s e t t l e d i n provi ncia1
towns. His reaction, i f he heard t h a t the r~ul~iber o f for:lgners
i n 1l;an ~ i ~ i y doublu
ht o r t r i p l e i n the next few years i s no prob-
lem.
Like a l l t.11~Iranians I know. Chubln does assign a large share o f
blame t o rurcigners f o r the v i l d bidding up o f rents. He we1 1
undersisrl~!:; t h a t the underlying problem i s one o f su!~ply, but
though r?co!;r~i z i n g tile p r a c t i c a l d i f f i c u l t i e s o f such arl approach,
expressed the wish t h a t a l l foreign conunu~~ities rrould get together
and agree on guidelines f o r niaximum rents they would pay. He also
shares the a l18:ost universal view t h a t I r a n i a n landlords d i s c r i m i -
ndte agairist p o t e n t i a l I r a n i a n tenants (out o f f e a r t h a t the
I r a n i a n t m a n t s w i l l remain i n d e f i n i t e l y i n a house 01- apartmel~t)
i n favor o f forc!igncrs.
, ,'--
I . ~ I ~ I T E LOi'Tli.ldL
I USE
OCIDH.6 .OR* *0. 4.
I I"*,SW F.(11710"
C s l r l l l.8 6 r l l 101-11.6
S u b j e c t r e s p o n s e t o questionnaire a s f o l l o w s :
1. He is more c o n s c i o u s of t h e p r e s e n c e of f o r e i g n e r s i n
I r a n t h a n he was two t o t h r e e y e a r s ago. However, he b e l i e v e s
t h a t t h e p r e s e n c e of f o r e i g n e r s i s b e n e f i c i a l , s i n c e t h e y provide
n e c e s s a r y technology f o r I r a n i a n developmental programs a s w e l l
a s s k i l l e d l a b o r , which i s i n s h o r t s u p p l y , p a r t i c u l a r l y i n t h e
c o n s t r u c t i o n s e c t o r . He b e l i e v e s t h e p r e s e n c e of f o r e i g n e r s who
have p r e v i o u h l y l i v e d abroad i n o t h e r c o u n t r i e s is more bene-
f i c i a l than t h e " o f f t h e ranch" v a r i e t y , and h e f e e l s t h o s e
f o r e i g n e r s ( u n f o r t u n a t e l y t o o few) who p a r t i c p a t e i n l o c a l
e v e n t s and H'I~o adopt a few I r a n i a n customs have a b e t t e r t o u r
i n I r a n and a r e a p p r e c i a t e d more by I r a n i a n s . He b e l i e v e s
t h a t Americans and South Koreans c o n s t i t * t h e predominant
f o r c i g n r e s i d e n t conununity and he b e l i e v e s a b o u t 10,000
Americans l i v e i n Tehran. He c l a i m s he c a n i d e n t i f y an
American ilnrnediately by h i s appearance, d r e s s and demeanor.
Be can a l s o i d e n t i f y n o r t h e r n Europeans v e r s u s s o u t h e r n
Europeans, b u t is u n a b l e t o t e l l t h e p r e c i s e c o u n t r y o f
origin.
2. The p r e s e n c c o f f o r e i g n e r s does n o t have any s p e c i a l
e f f e c t on his l i f e o r t h e l i v e s o f h i s f a m i l y o r f r i e n d s .
The o n l y s p c c i a l f a c i l i t y j u s t f o r f o r e i g n e r s t h a t he is
aware of is t h e American commissary, a b o u t which he h a s no
o p i n i o n . He l i s t e n s f r e q u e n t l y t o American r a d i o and t e l e -
v i s i o n progranis, hopes t h e y c o n t i n u e , and w i s h e s t h e y would
improve i n c o n t e n t . M r . N e d j a d i ' s c h i l d r e n a t t e n d Community
S c h o o l and l i s t e n t o American b r o a d c a s t s t o improve t h e i r
English.
He i s aware o i d i s a g r e e a b l e i n c i d e n t s between I r a n i a n s and
f o r e i g n e r f i . Ha c l a i m s t h a t most o f t h e i n c i d e n t s have i n v o l v e d
"low c l a s s " Aracricans who t e n d t o drink i n e r c e s a which r e s u l t s
i n a g g r s s s i v e b e h a v i o r toward remians. Such i n c i d e n t s have
i n c r e a s e d o v e r r e c e n t y e a r s , b u t i n v o l v e a s m a l l m i n o r i t y of
Americans r e b l d e n t i n I r a n .
- 2 -
3. M r . Nedj:~ili.b e l i e v e s t h a t f o r e i g n e r s s h o u l d as:;ilnilate
w i t h t h e 1or:nl popul:ltion, becriuse b o t h have mucll Lo l e a r l ~
trom t h e c u l i u r a l ha11its o f t h e o t h e r . 11e b e l i e v e s t h a t
s p e a r a t e conl[iounds would c r e a t e a ' c u l t u r a l problerll and
would e l i m i n a t e t h e b e n e f i t s o f i n t e r n a t i o n a l exchnnge.
H i s a t t i t u d e toward s e p a r a t e compounds is t h e saule f o r
'Tehran, S h i r i l z and o t l i e r p r o v i n c i a l a r e a s , lie ~ ~ ~ o u l d
wolcome a l a r g o f o r e i g n community i n t h e n e x t f i v e y e a r s
p a r t i c u l a r l y i f i t i s a cominunity which c a n t r a i n I r a n i a n s
i n n e c e s s a r y s k i l l s end c a n a s s W t t h e I r a n i a n development
I'rogram. IIe would urge t h a t a g r e a t e r d e g r e e o f c u l t u r a l
o r i e n t a t i o n l ~ eg i v e n t o newcomers and t h a t o n l y t h o s e
f o r e i g n e r s vllo a r e r e a l l y i n t e r e s t e d i n i n t e r n a t l o r l a 1 l i v i n g
nnd l e a r n i n l : . a b o u t I r a n b e s e l e c t e d f o r a s s i g n m e n t s here.
Memorazdum
. -
POL Mr. John ?tempel DATE: March 15, 1976
THRU : E/C-Mr.Odv,dE.Westley
pllo~ SClATT - A l b e r t S. Chapman
' i/l'
SUnJRCC: lnfonnal Survey o f I r a n i a n Attitudes Toward Increasing Foreign Presence
i n Iran
SC1ATT:ASChnlnt1an:ej 3/15/76
UNITY33 STATES G O V E R N M m
9'
*y
:;) *
LIIiITEG OFFICIAL USE
ti8
LIMITED OFFICIAL USE
-, -.. ..---
-.--s1;rer:l:
M r . YeIi:~bi, c l e n n c r who works j u s t ) e ~ o f - N ; ! f i < r ?
---
T h i s i n c l i v i . 2 ~ ~was
1 bctwocr: 55 and 70 and h a s \.rorltcd l o r
a b o u t 25 y e a r n a t h i s p r o s o n t job: H i s somewhat u n i q u e views
d o n o t r o a l l y f i t t h e intellectual framework of a u r s u r v e y ,
b u t a s t h e y m y I.m r e p r e v a n t a t i v e of a g r e a t many "average"
lower c l a s s u r b a n I r a n i a n s , I am i n c l u d i n g thcm:
Mehabi t h o u g h t t h e r e were p r o b a b l y more f o r e i g n e r s i n Tehran
now, though it was h a r d t o t e l l , s i n c e t h e r o wore s o many
m r o poople g e n e r a l l y . Everybody was m e s s i e r , t o o ; c s p c i a l l y
t h o young I r a n i a n s who threw s t u f f o u t o f c a r s . At le.lst t h e
f o r e i g n e r s ("khoragee") d i d n o t mess u p t h e s t r e e t s . No,
f o r e i g n e r & d i d n o t b o t h e r him v e r y 1nuc11; t h e y were n o t n e n r l y
as bad a s somo o f f i c i a l s he knew, irnd h e w i ~ l ~ esome d Amerlc.tnn
would movr 2 n t o h t s d i s t r i c t , s i n c e h i s f r i e n d s f r o m
Abbasabatl a i d tllcy t i p p e d p r e t t y w e l l . "Who c a r c s where
f o r e i g n o r f i l l v e ? I ' v e g o t problems o f my own." (Tills l a s t
s e n t e n c o wns sirid i n a t o n e of v o i c e which s u g g e s t e d t h a t thc-
i n t c r r ~ i e \ ~ c n~ ui .s t be s l i d ~ t l yc r a z y , i f o t h e r a j se h a r m l o s s ,
s o we p a r t e d OII f r i e n d l y t e r m . )
ACADEMIC CENTER
JW a>V
THE IRAN-AMERICA SOCIETY
78 VESALE SHIRAZI A M . ,
TEHRAN
dd JL-8 3 11
U
* A Vb ul.r
The D i r e c t o r of ~ o u r s e si l ~ t e r v i e w e dan I r a n i a n . a r t - t i n e
t e a c h e r of F r ~ z l i s hf o l l o w i n g t h e format s u & e s t ~ d by t h e
o u t l i n e s u p p l i e d . The person interviewed was most
c o o p e r a t i v e and apseared extremely pleased t o have Q criance
t o expxeas hilaself on t h e s u b j e c t .
- Yes. iie
forci:ne!:e
s t a t e d t h n t he d i d know of f a c i l i t i e s j u s t ' f o r
i n Tehran. He nnced t h e z i i n iiotul as on=
:iuch a~;o ::::ici t h a t one s e c t i o n of t h c h o t e l use:i oilly
doll.,:,.: . .: t h e currency. .:e a l s o nan.ed the ..ov!lirl,
I . , - - z::;otl?er ouch f a , c i l i t y which c ! l e r ~ c d 1rani:;r.:
hn ch;. ..:i? f e e and d i d n ' t c s k n r g e fcroi:.r?ers. 'illis, A L
:;:-j;: ?I-!- cSsr,:cd with' p r i c e c o n t r o l .
- ,;e cx; r e s s c d a stron; resentment a g a i n s t such , r a c t i c e ' ,
sayin, t h a t he " h a t e s t h e i d e a . "
- -
-/
Corments
I received t h e impression t h a t t h e man interviewed was
happy, t o have t h e chance t o e x p r e s s h i s views and t h a t i ~ er e s e n t s
t h e irlcre-~si:~:number of f o r e i g n e r s , He mentioned a l s o t h d L
accordin;: t o hid f r i e n d s , f o r e i g n e r s r e c e t v e ~ u c hh i g h e r salaritar;
t h a n I r d n i a n a f o r t h e some work. lie emphasized t h z t l r z n i a n s
look western i n d r e s s , r t c . , but t h a t t h i s is a s u p e r f i c i a l
resemblar~ce only.
Ll"lO*.L .om" "0. I"
I.,
,",I LOITIO*
L_.* *rum 1.1 C."I IO8.ll.Y
M r . P i s h v a i a n r e p o r t e d t h a t he was c u r r e n i l y more c o n s c i o u s
of t h e p r e s e n c e of f o r e i g n e r s i n I r a n and was most aware of
Americans. He e s t i m a t e d t h a t some 40,000 Americans l i v e i n
Tehran. lie a s s e r t e d t h a t h e c o u l d e a s i l y s p o t a n American
by h i s c l o t h e s , s p e e c h and a c t i o n s ( f o r example, an American's
e a t i n g habits-method o f h a n d l i n g h i s s i l v e r w a r e and t h e f a c t
t h a t i f he wished t o s k i p a r e s t a u r a n t c o u r s e h e would proceed
t o t h e n e x t c o u r s e w i t h o u t w a i t i n g f o r h i s e a t i n g companions
40 f i n i s h ) .
M r . P i s h v a i a n i n d i c a t e d a b e l i e f t h a t t h e p r e s e n c e of
f o r e i g n e r s had a n e f f e c t i n hoping t o i n t r o d u c e new and
u s e f u l i d e a s and r a i s e l i v i n g s t a n d a r d s t h r o u g h s u c h t h i n g s
a s t h e i n t r o d u c t i o n of new foods.. I n t h e latter r e s p e c t , he
c i t e d t h e impact o f new d i e t a r y h a b i t s i n t r o d u c e d by Americalls
o n t h e h e a l t h and s i z e of t h e pomt-World..War.II Japanese.
P i s h v a i a n was aware b o t h o f t h e commissary a n d USAFOOM and
Peykan Clubs and t h a t t h e y were r e s t r i c t e d t o Americans. He
f e l t no r e s e n t m e n t f o r h i m s e l f o r t h e Iranians-Americans
were e n t i t l e d t o thom i f t h e y wanted them-but f e l t strongly
t h a t t h e y u n f a i r l y d i s c r i m i n a t e d among Americans themselves.
He s a i d t h a n k s t o - t h o Commissary h e c o u l d p u r c h a s e a l m o s t
any American p r o d u c t o n t h e l o c a l ' m a r k e t a t 2-3 t i m e s t h e
intended p r i c e .
He s a i d t h a t i n h i s home ( h i s w i f e is American) one h e a r d
o n l y t h e American r a d i o and TV. H i s c h i l d r e n watched t h e
I r a n i a n c l ~ a n n e lo n l y when viewing a U.S. f i l m w i t h t h e a i d
o f a n FM r a d i o t o h e a r t h e o r i g i i a l v e r s i o n . Ile t h o u g h t i t
was u s e f u l i n t e a c h i n g t h e c h i l d r e n E n g l i s h . He saw no r e u s o n
why b o t h s h o u l d n o t c o n t i n u e even i f t h e I r a n i a n s t a t i o n
i n c r e a s e d its E n g l i s h c o n t e n t .
ECON/C:DEWestley:jt
~ohscD
i ~a r b a n i , P a r s o n n o l Manager, O t i s E l e v a t o r Corp. of
Iran.
Darbani was SLaff Aide t o M i n i s t e r of I n t o r i o r Amouzegar f o r
f i v e y e a r s u n t i l e a r l y l a s t Deceuiber; he knows a g r e a t d e a l
about t h e a c t u a l f o r e i g n p r e s e n c e s i n I r a n and is probably t h e
most knowledgeable s o u r c e I intorviewed.
Darbani s a y s t h e number of f o r e i g n e r s i n I r a n h a s s i g n i f i -
c a n t l y increased over t h e past f o u r years. There aye now
many more P a k i s t a n i s , I n d i a n s , F i l i p i n o s , and S o u t h Koreans.
p l u s a modest i n c r e a s e i n "Europo;ms"--including Americans.
P r i n c i p a l problems a r e b e i n g c r e a t e d by t h e F i l i p i n o s and
South Koreans, who f i l l j o b s which I r a n i a n s could f j l l .
(COMMEXT: While t h o s e two f o r e i g n groups a r e supposed t o be
s k i l l e d c o n s t r u c t i o n workers, t r u c k d r i v e r s , e t c . , Darbani
s a y s I r a n i a n s p e r c e i v e them a s u n s k i l l e d l a b o r e r s , p a r t i c u -
l a r l y along t h e Persian Gulf.) I r a n i a n s do n o t understand
why t h e y should a c c e p t and work w i t h ( o f t e n ) i l l i t e r n t c
Asians i n s t e a d of thelnselves b e i n g t r a i n e d i n t h e needed
skills.
Most I r a n i a n s do n o t r e s e n t Americans o r Germans because t h e y
know t h a t t h e s e f o r e i g n e r s b r i n g " s k i l l s which t a k e a l o n g
time t o l e a r n , " hence a g e n e r a l d e f e r e n c e t o Europeans and
Americans. Darbani s e e s r e a l problems w i t h t h e i n f l u x of
A s i a n s , but notmuch w i t h t h e g r e a t e r numbers of Europeans,
s i n c e t h e i r l i v e s d o n o t impinge much on t h e a v e r a g e c i t i z e n .
Ile thought no s p e c i a l f a z i l i t i e s were b e i n g provided f o r
f o r e i g n e r s (Darbani, a s w i t h many o t h e r i n t e r v i e w e d , seems
t o c o n s i d e r t h e U.S. Armed F o r c e s r a d i o and TV s t a t i o n s a s
p a r t of t h e l o c a l s c e n e r y , i . e . , f o r I r a n i a n s a s w e l l a s
foreigners.)
g e t contracts and soak up money being thrown around. That wave has '
passed. Now he doesn It sense resentment. Reasonable people know
f o r e i g n experts are e s s e n t i a l t o g e t Job done and are w i l l i n g t o
----
Gordon Wir~klcrInte~.viewwith Khodadad F'nr_nanfarmairrn, Chairmnr~,
i c ~: Tran
htarch 16, 1976. ~ i ~ t r r vcd
I n d ~ , ? iIrP I B~III>. of' 7 ~ 7 - 5
- -
Amcrlcr :- .LX.
-
CONYlDrnUL
lie i s very t~~uch aware of t h e f a s t buck operators and apparently
1s p1n::ued l r j 3 181 ( ' ' of peoy'i 7rh.o have b ~ e ngive^, h i > r r A 1 . r L I , , ~
i n s i s t on seeing him, "Just so t h r y can say t h a t they have done L C ,
when they r ~ p o r tback t o t h e i r bosses.''
On t h e question of r a d i o / t e l e v i s i o n , he anid t h a t he l i s t e n e d t o
chunnel 7 " a l l o r ~ 1 . et r n ~ e "uiu would hate t o see it abtmaoned.
tle s a i d t h a t he a l s o f e e l s t h a t NIRT I n t e r n a t i o n a l i s worthwhile
but t h a t it i s healthy t o have two broadcasting operation8 i n
English.
i
l i k e us," but he f e l t t h a t most Iranians do not perceive overly
aggressive o r clumsy behavior by American motorists because they do
not perceive it among themselves." They do not f e e l it i s wrong t o
c u t someone e l s e off ," he noted.
CONFIDENTIAL
C_-
LIMITED OFFICIAL USE
BACKGROUIiD:
Mr. TAIIERI i s the I!anaqing Director o f the P h i l v e r Company and seems
t o be d e f i n i t e l y on h i s way up. We I s i n h i s e a r l y 401s, a r t i c u l a t e and
s o c i a l l y prominent. He has been asked to take a leading r o l e i n the
up-coming US/Iran Join$ Business Council meeting. He spent 10 years i n
the U.S. a t various u n l v e r s t t i e s receiving a Ph. D. i n engineering.
/
Mr. TAHERI said t h a t a1 though he has noticed, o f course, the r i s i n g
numbers o f foreiqncrs i n Iran, such had n o t caused him any problems nor
d i d he think t h a t the I r a n i a n business cormunity (and by t h i s he seemed
t o mean the upper echelons) was troubled by .this I n f l u x . I n response t o
my question, he estimated the number o f Americans i n Tehran t o bc between
10,000 and 15.000. He said t h a t bb u s u a l l y can t e l l i f a foreigner i s an
h e r l c i i n o r not --- Americans scem t o be more informal i n their lifestyle,
p a r t i c u l a r l y i n t h e i r dress, than other foreigners. He d i d n o t say t h i s
i n a pejorative sense, merely noting t l ~ i st r a i t .
He went on t o say t h a t he finds Americans to be s u b s t a n t i a l l y more
"c1annish"than other groups o f foreigners. The vast m a j o r i t y seem to
l i v e I n the Saltalb~tabadarea, perhaps understandably since t h i s i s where
Armish/Maag i s . E a r l i e r i n the conversation he seemed t o imply t h a t t h i s
clannishness was perhaps denying to the Americans thenbenefits which a,
Wb-J -
f u l l e r i n t e g r a t i o n i n t o I r a n i a n society would provide. For example, i f
he ware all Irani'rn i n France, he would be t r y i n g to buy French products
84
LIMITED OFFICIAL USE -2-
--
TAHtKI
fCOtI:RCOri?win:dfg
2117176 ----
LIMITCU -OFFICIAL USE
Subject: The A:.i~~'i~;i:i
IPrcsence ill Irrm
March 25, 1 n 6
Ilrmoran2i~~~
t h_e~ p
Files
c.
E l a l ~ i , Proi:C_Ssor
1.11s'
i'Y of Economics a t N a t i o n a l U n i v e r s i t y
-.
LIMITED OFFICIAL IlSX
91
LIMITED OWICIAL USE
a< m RGP
&a@@~&~
Ollginml I- b. F1I.d ln D.c.naoll..d Fl1.n. CZ-'
FILE DESIGNATION
,H CONFIDENTIAL A-04
mlFRoM
"0.
DEPARTMENT OF STATE
:
INFO : AMCONSUL ISFAHAN
AMCONSUL SHIRAZ
1
- AMEMBASSY TEHRAN
E.0. 11652: GDS
TAGS : SHUM, PINS, IR
.-. EOI VR. INI
AMCONSUL TABRIZ DATE: February 2 3 , 1978
A" ,A"
SUBJECT : RIOTING AND CIVIL INSURRECTION IN TABRIZ: AN
.,i
*EM" *A"" 0.0
INITIAL ANALYSIS
REF : TABRIZ 004
-7
..,A N.. CIA
1
'BEGIN SUMMARY: On Saturday, February 18, 1978, crowds
estimated in the low thousands spent a full day rioting
ccrrEoo,rrR,sur,eu
,,,G
and fighting police and army forces. Damage to govern-
ment and private property was extensive, and injuries
and fatalities were estimated to be in the hundreds.
As of February 21, the city streets are still under
military control, and the effects of the disturbance
are expected to be long-lasting. END SUM.MSiRY.
'L
I Beginning shortly before 10 a.m. on Saturday, February 18,
crowds of mainly young men began to form in the bazaar
and central shopping district of the city, and after
some attempt by local police to break up the gatllerinq
mobs, fighting broke out in earnest, cpreading rapidly
and violently to other city areos. Despite h e fact
that Saturcay was an official work day, printed leaflet:.
had been in circulation since the preceding week-orderin3
city shops to remain shut on Saturday in commemoration
of the 40th day anniversary of the deaths in the
religious center of Ghom, and the bazaar area, as well
as the vast majority of the city shops were closed. All
government offices, government shops and banks were open,
however, and as the rioting began, these places were
attacked by mobs. As the rioting continued during the
course of the day, it becane more and more evident that
the attacks on various buildings had been well planned,
and that the mobs had specific targets in mind.
FABR1Z:MJMetrlnko:nbt 2/21/78
< / < " *"l*.
C0NGEN:LPGoelz 9OL:JDStempel
D-IZW
--
9
TABRIZ A-04
CONFIDENTIAL
CONFIDENTIAL
TABRIZ A-04
CONFIDENTIAL Page 4 .
that the mob (as such in Iran) and the whole disaffected class
of people from whom the mob sprung have once again become a
potent weapon to use against the regime. Whether the people
who planned the rioting were clergy intent on proving their
in~ensityof faith and devotion to an Islam they see as
threatened by the government, or whether they were indeed
"Marxist instigators,'' the serious challenge posed to the
regime by the attack on so many institutions will have far
reaching effects.
I n the short run the city's social and economic life will be
strongly affected as the damaged institutions start to return
to normal business, and presumably there will be a serious
~hake-upin the local government hierarchy for its failure to
foresee and prevent the rioting. Many of the easy-going and
8omewhat placid city and province officials will undoubtedly
be replaced by a more strict and repressive group, and one
can predict that the regime will react by cancelling development
and social projects in the area. In the longer run, and far
more importantly, the Tabriz insurrection has shown that the
actual control of the regime over the provinces can be seriously
threatened by religious and social forces long ignored by
Tehran, and now far too powerful to be dismissed or easily
placated.
METRINKO
CONFIDENTIAL
UNITED STA GOVERNMENT
I-r
m*orz
mres
TO
S March 1978
B/C - Clyde D. Tayl
memorc~idurn
wue-: Qom and.Tabriz Unrest
CC: RCB/RF
E/C:CDTaylor:wh CONFIDENTIAL
CONFIDENTIAL
XGDS-3
CONFI TEITIAL
7 G & i
The General said that he knew that the Shdh was grc'itly conccrli~d
over present qconomic and political conditlo~rsin Irdn (I,y thi.
he was not only referring to the economlc lmbaldncrs, thc. over-
extended economy and the frustrations that have built clue to L11e
underachievement of Iran's Fifth Plan goals, which we had just
discussed, but the increasing dissidence of a political, social
and religious nature in Iran). He said that he is anxious ovcr the
fact that the Shah is increasingly Isolated and that he has few if
anyone to his knowledge who out of a real concern for the welfare
of Iran is giving him honest information. He, himself, is very
pessimistic that Iran can achieve its stated economic goals; there-
fore, it.. qoals must be lowered if a long-term viable cconomy is
to be bullt and without highly adverse socio-political consequences.
I asked if it were not true, as I had repeatedly heard, that tlrr
Shah maintained access with a select group of businessmen in orclcr
to maintain a touch with the business world. The Gcneral said that
unfortunately those businessmen who used to have access to the shah
either do not now or arc not candid with him. 1le admitted that the
Shah has perhaps become so wedded to his ow11 goals that hc is more
suspicious than in years past of people who are giving him "bad
news". On the official side, he said that unfortunately his
Ministers as well as leaders of foreign commerce and Bcads of State
"act likc Iranians," i.e. they approach thc Shah with hopes of what
they can get from him and Iran.
The point of his entire djscussion was his plea that I convey thc
need for the USG or respected American non-government 1c:aders (11o
mentioncd David Rockefeller) to actively pursue an advisory role
with the Shah. Ilc said he assumeil, as in years past., this was to
some extent done by the U.S., by the President and the An~bessdcior,
but he believed it must now be a role more earnestly pursued, of
course in a spirit of sincere concern for Iran and in the most
diplomatic way. He warned that the Shah "might get angry and
shout," as is his nature, over what he hears, but hc needs to I)c
told before the present trends are even less reversible. Conccrninq
Iran's domestic political problems, he said that thcy are best
left alone by outsiders but that the Shah from the early 60's
(at which time the General was Head of Savak and would have bern
in extrcmely,close contact with the Shah) accepted the fact that
he must. set in train the democratization of Iran. Ile said he
was hoping I would convey his suggestion to the Ambassador becat~se
he felt that the U.S. was in the best position to give statesman-
like advice to the Shah which would be well received. Ae said
CONFIDENTIAL
XGDS- 3
t hcre should bc some others, such as the leaders of Gcrnijny,
111ltain, Francc and perhaps Japan who could obtain the S : rh's L , , I
~ndbe willing Lo speak honr-stly and with a sincere con~:~,n for
J tan's future viability, and well being,subordinaLing their conunerc ,I
interests in Ira. /
( j
l:/C:CDTaylor:dd
CONFIDENTIAL
XGDS-3
DATE: 4 / 2 7 / 7 8
P0L:GBLambrak~e
v.1-818
104
Shiraz A - 1 2
CONFIDENTIAL 2
TCMSETH
.,..
.: "~,. h
,:,: ,
1
li, : Or':,i;rtncrt c? S t a t c
:,::I1
I
-..-
-CQPP1DENTit.L --.----.
.. - :,.
L , , ~ I ,. C Z
. . - ~ ~ > , - .~ s r :.. ; , ~ ~ -
L T-Tjij%
---- .
BAI<~*.:>::c*T
-. -- . .-.
CL*S,,FIC
E:,:*TCI.TS
.?iC*
AND CLI~I.~.C*TIUI.
-:-AI - - ~ _ L : F ~ Y ~ ~ . D _ c ~ ~ : Y ~ ~ ~ L E
-
8 ~ : . IJV~:, OV:
.-,:&',.4,
I . S:rr.t:c c r o i . 2 ~qiliciily ~ e t u c n r d Cu.normd1,
+ a s did
'rur:loycc s t t c u i l a n c e sod r h c nu:,il>rr of pol i c e a t t r a i f i c p o s t s .
Il.~wzve~,two days l ~ t : c r , and t11.w a l ~ l l o s tr v e r y day . i F ~ e rt l ~ o t
l o r (L VIW!,, t 1 1 ~ r i-: ~ . ~ , r tu.r-~fI 1 c ~ rs. i m t l e r i l ? ~ i d e ~ l t si 1. . 1 ~ ~ ~ 1 v i n g
a Svw lacr!;o,is, i n a ~ , , or:'t>.~ r i n o t o r c y c l ~ s , S W O L I B ~ I I r~l $ u i ~011
rtngunrdr>d jaci1iLil.r; ibanb:;, lnuvle t h e a t r e s , l i q u ~ xa t o r e s ,
inor or ):i;v.:rrml~?nt c>:-<ices) throwflip, s t o n e s o r c r u d e f i r e bombs,
vi~iclr us;i:iily f r i l i l d t o i g n i t e , through windovs, and lrben
vanishin);. O f L I I rty-lj ~ lx r e p o r t e d i r l c i d e n c s , none r e s u l red
i l l coni.;:ct wltll ~ ~ u l . i c co,r t h e r e f o r e , i n a r r e s t s . Aft:cr t h e
i n L t i u l t e n d.ayr, Lliq.:cc i n c i i i e r ~ t sdeclincrl i n number, b u t
c o ~ ~ t i n u eidn tile s.~l,!c forni u n t . i l mid-April.
A s t h e s e i l ~ c i d c r t t sc t ~ n t i n u e d , a l w a y s o c c u r r i n g whcrev .r p o l i c e
were a l ) s c n t , and wi.LIt p o l i c e i r ~ v e s t i g a t i o n sy i e l d i n g i r ~ i t h r r
i n f o r l n s t i o ~n~o r a r r e s t s , t h e newspapers began t o f e a t u r e
i n c r e a r i n p , l y hor!~lr condemnat ion of " a n t i - s t n ~ e elfmcnl-s" who
must b e s t o p p e d by " l o y a l I r a n i a n popul.ar org;inizatio;;s",
c u l m i n a r i n g i n t h e i ~ ~ ~ n o u n c e m eof
nt the establishment i n
S s f a h a n of C i v i l Dcfcnse O r g a n i z a t i o n (CDO) "Action Squads1',*
who, u n l i k e t h e p o l i c e , had immediate s u c c e s s i n c o n f r o n t i n g
and c a p t u r i n g "suspected d i s r u p t i o n i s t s " and t u r n i n g them o v e r
t o the police..
I n c r c a s i ~ ~ : : l y , i n I s f a h n n , t h i s p a t t e r n became s u s p e c t , u n t i l a n
a p p a r c n c l n a j o r i t y of t h e p o p u l a t i o n of I s f a h a n h a s come t o
b e l i e v e tlrnt t h e 11it-and-run vandalisin wes i n f a c t Govc*rnn~ent
of I r a n (COI) d i r c c t c d , a t a t minimum i n s p i r e d and c o l l u d e d w i t h .
The presumed GO1 purpose b e i n g t o g e n e r a t e a n excuse f o r t h e
c r e a t i o n of "goon squads" of a p p a r e n t p o p u l a r o r i g i n , though
a c t u a l l y GO1 m i l i t a r y o t s e c u r i t y a g e n t s . These CUO A c t i o n
Squads could t h e n be used f o r i l l e g a l o r s e m i - l e g a l a c t i o n
a g a l ~ i s tGO1 o p p u n o i t n , which t h e GO1 c o u l d n o t t a k e d t r e c t l y
b e c a u s e of world-wide (and p a r t i c u l a r l y U.S.) concerr. a b o u t
huinan r i g h t s and goverlllnent o p p r e s s i o n . T h i s would p u t t h e GO1
i n tlic p o s i t i o n of p u b l i c l y e n d o r s i n g g r c a t c r freedom nnd r i g h t s ,
while g e n t l y deploring t h e "understandable excesses" o f t h e s e
"concer.rl~?d p r i v a t e c i t i z e n groups" v h i c h could b r u t a l l y s u p p r e s s
any o p p o s i t i o n f i g u r e s .
A s e v i d e n c o of t h i s c o l l u ~ i o n , I s f a h a n i e p o i n t o u t the t o t a l
l a r k of r o n t a c t between t h e v a n d a l s end p o l i c e , i n a n a l e r t and
h e a v i l y p a t r o l l e d c i t y , which argues e i t h e r : ~ n b e l i e v ~ ~ hgood
ly
i n t e l l i g e n c e a b o u t p o l i c e movements; auch t o t a l p o p u l a r a n t i p a t h y
t h a t v a i l d a l s a p p e a r wherever there a r e n o p o l i c e ; o r c o l l u s i o n .
CONFTDENTS AL
I n angl-y r c a c t i o i ? t o t h e H n s s e i n a h a d i n c i d e n t , a b o u t 5110 s t u d c n t s
a s s c i i ~ h l e d a t t h e U ! ~ i v e r s f t y of I s f a h a n campus o n T u e s d a y , AprLl 18,
p r o c e ~ ~ l e :o d s ~ ~ . . ~ swindr!w:;
lr of campus b u i l d i ~ ~ gand s c a r s p:~ricud a n
i , a q ; i i s . t h t n in:~rclied o f f campus t h r o w i n g r o c k s a t a n e s r h y h o t e l
and d t)1a11cl1of Bank S a d a r a t . and f i n a l l y a t t a c k e d t h e P e p s i - C o l a
p l a n t ou a lndjor aveciue n e a r t h e campus. P o l i c e poured i n t o t h e
a r e a , s h o t s w e r e f i r e d , and a t l e a s t two studcnts w e r e a r r e s t e d .
(Eyewitnesses r e p o r t l;sg-. r i ~ h , i i ~ o~i- ~stud; s
4t s w e r t c a r r i e d o f f
by p o l i c e b u t l a t e r r e l e a s e d , c l a i m i n z they Weqe b e a t e n d u r i n g
q u e s t i o n i n g . ) On Sunday, L p r i l 23, an e s t i m a t e d 2000 s t u d e n t s
l e f t canpus, blocked a major t r a f f j c c i r c l e , p u l l i n g some
m o t o r i s t s from t h e i r c a r s , and r e t r e a t e d t o a nearby mosque when
ar.tGcked by p o l i c e . Upwards of 20 were l a t e r a r r e s t e d a t t h e
nosc;uz.
Meanwhile, on campus, a n e s t i m a t e d 10 p e r c e n t of t h e s t u d e n t s
st-iged d a i l y d e n ~ o n s t r a t i o n sof a r e a c t i o n a r y r e l j g i o u s n a t u r e ,
v e r b a l l y a b u s i n g female s t u d e n t s n o t wearing chador ( t h e Plusllm
v e i l ) and a t t e m p t i n g t o f o r r e s t u d e n c s t o ahandcn c l a s s e s a t
prayer-time. The m a j o r i t y of s t u d e n t s , involved w i t h exams,
continued t o a t t e n d c l a s s e s , but i n c r e a s i n g l y l a r g e numbers
a t t e n d e d scheduled meetings w i t h Deans and o t h e r a d m i n i s t r a t i f i n
members, where they demanded t h e U n i v e r s i t y adopt s t r i c t Iluc;lim
p r a c t i c e s (women must be v e l l e d , s e p a r a t e e s t i n g f a c i f i t l e s f o r
women, c l a s s e s suspended f o r p r a y e r , a s much a s 30 p e r c e n t of
t h e f a c u l t y suspended f o r "non-lslcmic 1ea.nings"). An
e s t i m a t e d 3000 a t t e n d e d a meeting on A p r i l 29 t o p r e s e n t t h e s e
denlands t o t h e U n i v e r s i t y Chancellor. The Charicellor appeared a t
t h e meeting, r e j e c t e d a l l demands, a.~d o r d e r e d t h e s t u d e n t s t o
r e t u r n t o c l a s s e s o r be e x p e l l e d . A f t e r h i s d e p a r t u r e , t h e
a n g r y crowd was d i s p e r s e d by f i r e hoses.
109
CONFIDENTIAL
~CCUI'TPF'TTAI‘ 5
Analysis
1 b e l i e v e t h a t G O 1 f o r c e s i n I s f a h a n have handled t h e s i t u a t i o n
i n I s f a h a n badly. Whether o r n o t t i , r G3I c o l l u d e d i n t h e hit-and-
r u n vandalism ( u n l i k e l y , b u t i m p o s s i b l e t o prove o r d i s p r o v e )
t h e i r s h a r p l y d i f f e r e n t t a c t i c s a g a i n e t t h o s e and t h e s t u d e n t /
c o n s e r v a t i v e demonstrat,:r?, p l u s t h e f o r m a t i o n of t h e CDO Action
Squads, have made t h e s r b d e n t s and t h e m a j o r i t y of t h e
p o p u l a t i o n b e l l e v e t h e y d i d . The s t r e n g t h and growing v i o l e n c e o f '
t h e c o n s e r v a t i v e d e m o n s t r a t i o n s i s a r e a c t r o l l t o a perceived
mldrrcover GO1 t h r e a t . As It grows i n s t r e n g t h , t h e r e i s a n
incrcaasing danger t h a t additional t a r g e t s w i l l be added t o t h e
anti-government a c t i o n s : I s f a h a n ' s Jewish, Armenian, and Bahai
comninnities a r e i n c r e a s i n g l y f e a r f u l , and Americans a r e on t h e
v e r g e of panic. An open c l a s h between CD0,squads and c o n s e r v a t i v e
s e l f - d e f e n s e f o r c e s could b u i l d t o widespread r i o t s . The g e n e r a l
p o p u l ~ t i o a ,w h i l e unhappy w i t h t h e s i t u a t i o n , i s l a r g e l y
s y m p a t h e t i c t o t h e c o n s e r v a t i v e r e a c t i o n . While o n l y a s m a l l
m i n o r i t y of s t u d e n t s , for.example, a c e t r u l y r e a c t i o n a r y , t h e
campus p r o t e s t meeting w i t h t h e Chancellor drew almost 45% of
t h e s t u d e n t body, and d i s p e r s a l by f i r e h o s e s probably gained t h e
e x t r e m i s t s some a d d i t i o n a l a d h e r e n t s . S e c u r i t y o f f i c i a l s a r e now
beginning t o i s s u e warnings t o Americans, a f t e r weeks o f a s s u r a n c e s
t h a t t'lerc was n o t h i n g t o f e a r .
I c u r r e n t l y s e e no d i r e c t t h r e a t i n t h i n t o Americans o r ~ m e r i c d n
i n t e r e s t h e r e . A s h o r t p e r i o d of calm w i l l b e s u f f i c i e n t t o e a s e
t h e f r e r s of American r e s i d e n t s , but any esca1a:ion w i l l of
n e c e s s i t y endanger t h e p e r s o n a l s e c u r i t y of Americrln r e s i d e n t s , and
t h e U.S. p r o j e c t s and p e r s o n n e l h e r e could e a s i l y b e a major
hecondary t a r g e t of widespread p r o t e s t .
I n t h i s growing s p i r i t of c o n t r o u t a t i o n , i t a p p e a r s t h a t o n l y
some o u ~ s i d ei n f l u e n c e c a n p r e v e n t f u r t h e r e s c a l a t i o n of v i o l e n c e .
I n f a c t . t h a t o u t s i d e e v e n t may have o c c u r r e d . The Communjst-led
110 CONFIDENTIAL
coup-d'etat i n n e i g h b s r l n ~X i y f i n n l s t d ~ li,+~$ h e r e t o have oeen
i n i t i a t e d under cover of c o n s e r v a t i v e , r e l i g i o u s p r o t e s t , h a s
had a s o b e r i n g e f f e c t . Thrre have been no d e m o n s t r a t i o n s f o r
t h r e e days. I f t h e c o n s e r ? a t i v e s a r e persuaded t h a t t h e i r
p r o t e s t w i l l i n ' f a c t a s s i s t Communist aims, t h e y m3y w e l l mute
t h e i r v o i c e s . Hor~ever, even i f 1sfahn.l calms down f o r now, i t
has been demonstrated t h a t r e a c t i o n a r y r e l i g i o u s elements a r e
a b l e both t o e n l i s t t h e sympathy of l a r g e numbers and a t t r a c t
s i g n i f i c a n t cro'trds to dcmonstrations; and (while b a s i c a l l y
p e a c e f u l ) t h e s e demonstrators do n o t s h r i n k from c o n f r o n t a t i o n
and v i o l e n c e . T h i s is a r e f l e c t i o n of a g e n e r a l m a l a i s e , n o t a
response t o a s p e c i f i c e v e n t , and w i l l c o n t i n u e a s a smouldering
t h r e a t t o s t a b i l i t y even i f t h i s s e r i e s of p r o t e s t s q u i e t s
down.
CfiL MC GAFFEY
CONFIDENTIAL
, .
i " . ..
.,
...',.
. ..
- .;li.i!:
9,-m-.w
.;
--
D".r7su
-- b"
-
- ~ -
.
r L
-
... .. -.
\,iLS
,'or., OI.13
, .. ,,
112
S h i r a z :i-15
clllle m o d e r n i s t s o p e n l y a d m i t t h a t t h e p a r t n e r s h i p i s orie o f
l ~ i v e ~ ~ i c n ca ne d, o t h e r s a n o n g thein - c e r t a i n l y i n c l u d i r l g
i r x l s t e l e m e n t s - have no doubt a t t e m p t e d t o e x p l o i t con-
~ v a t ~ va ne t i - r e g 7 m e s e n t i n l e n t t o f u r t h e r e n d s of h h i c h
t > conservatives w o u l d n o t a p p r o v e . ilowevcr, a t l e a s t i n
~ ~ t h c rI rn a n , i t i n c r e a s i n g l y a p p e a r s t h a t rilotlernist p a r -
~ i l p a n t si n a n t i - r e g i m e a c t i v i t j c s a r e t h e t a i l o f a h a s -
r l l y conservative d o g . K a t l i e r tliL7n c v n p r l s l n g t h e v a n -
I 11-d o f t h e movement, t h e m o d e r n i s r s a r e b e i n g slcept a l o n g
a c o ~ : s e r v a t i v e t i d e . A number o f f a c t o r s aeem t o b e I n -
Iveii: t i r s t , d e s p i t e d r a m a t i c c h a n g e s d u r l ~ l gt h e l a s t two
I '~des, Iran ( n t l e a s t o u t s i d e T e h r a n ) r e n a i n s for t h e
t p a r t a p r e - m o d e r n s o c i e t y . Even l a r g e e l e m e n t s anlong
r a p i d l y g r o v l n g populations o f u r b a n c e n : e r s l l k e S l l i -
Ah{$a z , A b a d a n / K h o r r a r i ~ s h n h r , Kerman a n d U a n d a r Abhas
o n l y r e c e n t 1 y I emoved from t s a d i t i o n a l sm*l to\>n or
ngc e n v i r o n , r ~ e n t s . S e c o n d , among t h e moder-lj z e d s e c c o r
.
,7 ,. h p ~ n - 7 :tin 1 ~ 1 1 I + ' (T P4 I, . -
S h i r a z A-IS
, , . t
CONFlDENTIAL
14
11 . .? r.irvcrr.?l o f thc ;,~ilil;): o f J f l ) e r a l i . z a t i o n w h i c t t t i n s
:I) Ir~'b,cti d ~ s ~ : r i . ~ i~l t~; i tml~~e rdi t <i n Jrnn t o e x p r e s s t l ~ c m s c l v r ~
r~ii:.lit 1 1 1 1 t ; I T ? ,-:.rl t n r : : i l ~ i i <r. : a n i f r ? t n t i o ~ ! a of t h e 5 a c i n l
j j t 1 1 n t 1 i:,!
t ~ ~ l . : : : c1 i..i,:ii'ri! i r ; l : I C I L III.OCCSS h a s engendc:ri:d, b u t
i t i s dvuI?t:!rl t ! . 2 t i L !:auld a f i c c r i t s r o o t c a u s e s i n any
111aitrr way. h t ' r c r n l - I , j o y e t r o s p e c t i t i s c l e a r t h a t h c f o r c
i t h a s JcciLLcJ to I c l ii IlunJred flowers hloorn, r v p r e s s i o n
alld c c n h o r s h i l , were i l l c r f o c t i v e i n p r e v e n t i n g t h e s o c i a l
u n r c a s t n o r v orlt i n ~ l l co p e n .
TOMSETH
CONFIDENTIAL
SECRET/NOFORN
UNITED STATES GOVERN
DATE.
l rA, L
TY
SYULCT:
T N TO
OF:
E/C
LIMITED OFF
J u n e 7 , 1978
THRU :
REF :
10 The Ambassador
DCM
E/C
A.
-
M r . C h a r l e s Na
-
M r . Roger Brew @
Tehran A-70 (1977 Foreign Trade Report)
B. Your Undated Request f o r S u b j e c t Data
C. My Memorandum of May 2 4 t o Messrs. Bash and Martin, same
subject
Attached a r e t a b l e s r e p r e s e n t i n g c o l l e c t i o n s of d a t a and
e s t i m a t e s c o n c e r n i n g I r a n ' s m i l i t a r y i m p o r t s and o i l e x p o r t s
p l a c e d w i t h i n d a t a c o v e r i n g a l l I r a n i a n f o r e i g n t r a d e (goods
and s e r v i c e s ) and w i t h t h e United S t a t e s . A c o v e r i n g s t a t e -
ment a d d r e s s e s t h e d i f f i c u l t i e s i n a r r i v i n g a t t h e s e d a t a
and c a u t i o n s c o n c e r n i n g t h e i r r e l i a b i l i t y .
I have been s e i z e d w i t h t h e l a c k of i n c l u s i v e I r a n i a n t r a d e
d a t a s i n c e my a r r i v a l and know my p r e d e c e s s o r s l i k e w i s e
wrestled with t h e issue. Mr. Gary f l u f b a u e r , Deputy A s s i s t a n t
s e c r e t a r y o f T r e a s u r y f o r I n t e r n a t i o n a l Trade and Investment,
and I d i s c u s s e d t h i s i s s u e t h o r o u g h l y e a r l y t h i s y e a r . He
k i n d l y worked on it and provided i n f o r m a t i o n c o l l e c t e d from
f o u r U.S. o f f i c e s . His comment a f t e r h i s e f f o r t s a n d . c o n c e r n i n g
t h e d a t a was, "It d o e s n o t f i t t o g e t h e r t o m a k e a very n e a t
report." I am e n c l o s i n g a copy of h i s l e t t e r and d a t a s h e e t
f o r your i n f o r m a t i o n .
I n a d d i t i o n t o M r . Haufbauer, I acknowledge t h e c o n t r i b u t i o n
of M r . Bash t o t h i s e f f o r t .
Attachments:
1. Haufbauer t o T a y l o r l e t t e r d a t e d March 1 3 , 1978 w/attachmen
(several)
2. " ' r a n ' s Foreign Trade and C u r r e n t Account Balances Worldwid.
and w i t h t h e United S t a t e s w/Tables I , I1 and I11
cc: NEA/IRN
Commerce/CAGNE
~ r e a s u r y / O ~ S I ~ - M r~. u f b a u e r / M r . Maslin
CIA/OER
RCB/RF
SECRET/NOFORN
LIMITED OFFICIAL USE WITHOUT ATTACHMENTS
Buy U.S. Savings Bonds Regularly on the Payroll Savtngs Plan ,FT,,,.A,romMNo, ,
,REV 7.76,
4 r A F P M I t l l C F e I 100-IS
10,0.111
IRAN'S FOREIGN TRADE AND CURRENT ACCOUNT BALANCES
WORLDWIDE AND WITH THE UNITED STATES 1976 AND 1977
The Problems and Caveats Concerning Attached Data
Complete data of Iran's foreign trade are not published or, to
my knowledgc, maintained by the Government of Iran. Merchandise
trade statistics exclude oil from exports and goods imported by
the military, not all of which are "military" goods. Current account
invisible flows--tourism, medical, transfers, interest, transport,
etc.--are recorded as a "basket" grouping only in the balance of
payments presentation and no country breakdown is available.
Those wishing data concerning Iran's oil exports by value and
destination must estimate, use intelligence sources or collect data
from recipient countries. The latter, of course, introduces problems
of "leads and lags" as well as basis of valuation, e.g. FAS, CIF, FOB.
Data concerning Iran's military imports are more difficult to
develop. As a rule of thumb, it was assumed that it was the dif-
ference between the value of non-military imports, as reported by
the Customs Department (Ministry of Economic Affairs and Finance)
and the total payments for merchandise imports reported by the
Central Bank on the foreign exchange balance of payments. Thus, as
reflected on Table 11, military imports in recent years should have
been (U.S. $ millions). 1975-$5,298, 1976-$3,309, 1977-$zr50.
The validity of this assumption depended mostly on a close correla-
tion of imports and payments, since it relates two distinct trade
concepts, customs (based on documents of goods received) and cash
flow balance of payments. This should have been ttie case until
about March 1976. Since that time, particularly Iran's public
sector imported goods on a credit basis rather than cash. This
altered payment terms for non-military imports much more than military,
the bulk of the latter presumed to be under U.S. Foreign Military
Sales (FMS) terms. This would result in an understatement of imports
balance of payments basis relative to customs (actual) basis and an
understatement of presumed military imports. Another weakness in
the assumption, resulting in an overstatement of imports, balance
of payments basis, is the prepayment of imports, (i.e. higher cash
payments than would be supported by customs goods received, infla-
ting the presumed military import figure) which would affect the
1975 data and to a lesser extent those of 1976. (See lines VI and
V I I of Table 11).
(i-
E/C: Tay1or:dd
6/7/78
s~cw~/~,.oirn.trs~~
LIMITED OFFICIAL US? VITHOUT ATTACHMENTS
-
SECRET-
NOFORN
TABLE I
IRAN'S FOREIGN TRADE
( S MILLIONS)
I!,t a1 Exports-Goods
and Services
I:oods
-.-
011 A_/
Crude
Product
Gas g/
Other C/
services
:ources
A / calculatio;
~ S ~ using ~
OSCO/NI(X: data for w l d , rmbassy e s t h t e s for U.S. ,FOB.
I!/ Central Bank of Iran foreign exchange balance of payments data
constructed for Gregorian year.
( ' / Embassy "Foreign Trade statistics of Iran", Ministry of Economic
Affairs and Finance, FOB exports and CIF imports.
I > / USDOC (for Munitions Control), U S W D (for FMS) and CIA (for non-US),
FOB basis
r / Embassy estimates including USDOD/FMS Services.
Percent Percent
of Tota1/1975 of lbta1/1976
I. Fmn U.S.
A. Mmltions controlled 1t- %' 118.5 106.5
B. Forelgn Mllltary Sdles g/ 755.7 1,073.2
c. mtal U.S. C/ rao.1) 874.2 (78.4)1,179.7
D. (Forelgn Mlltary Sales Support (157.6) (393.5)
ServlceS)
(Total Incl. "C") (1,031.8) (1,573.2)
11. F m other countries D/
A. USSR 84 62
B. Western (non-US) 133 263
Total (19.9) 217 (21.6) 325 (14.4) 306
111. Total (100)1,091.2 (100)1,504.7 (10012,127.9
IV. Ilnport Payments (Balanceof
Payments Basls) 15,602 16,061
V. m r t s (CIF, 1ranlan ust tans) 3' 10,304 12,752
VI. Asdm133 Mllltary Imprts (IV-V) 5,298 3.309
VII. bklltary JiIp3rt.s (FOB Pomt of
origm, Item 111) 1,091 1,'05
VIII . Unexplained Gap (VI-VII) 4,207 1,804
IX. S u m ~ l yUS Rece~ptsfran Iran
Mllltary (Fran 1.B) 756 1.073
0th- (Custnn Wlreau, Incl. 1.A) 3,242 2,776
mtal M M s e (3,998) (3.849)
FcS Services (TOSS, fran 1.D) 158 394
Estumted Gther Services 626 964
mtal services
Total .E?celpg - (884)
4,882 -
(1.358)
5.207
A/ Source: M tions Control Office, Dept. of State, Bureau of Census, Calendar Year.
Blscal Year (1977 mcl. 5 qtrs.), at t m tltle passes to Iran
c/BD// USExcludes w r t s of non-ltlons control ltans by camerclal (non-rn) SuppllerS
Dfliverles, not agreements; source: CIA, calendar year
F/ mcludes nonrmlitary oomrdlties l m p ~ r t e dby ElI.nlstJ3 of War
F/ BJsed on 30% of private payments and 20% of publlc payments: Central Bank of Iran
-
Foreign Ikchange &lance of Payments data contructed for Greqorlan Years
E/C:CDTaylor wh 5/28/78
Contributor Treasury/OASIA/DAS/GHufbaUer
SZCRET/NOFORN
120
LIMITED OFFICIAL USE
TABLE I11
IRANIAN PETROLEUM EXPORTS AND ESTIMATED REVENUE:
1 9 7 6 AND 1 9 7 7
1 9 7 6
Estimated Estimated
Quantity Govt. Take: Govt. Revenue:
(MMBblS) Per Bbl. FOB(!lillions o f $
I. Crude:
Estimated Estimated
Quantity Govt. Take: Govt. Revenue:
(MMBbls) P e r ~ b l . FOB(Mllll0nS o f $ )
I. Crude:
Others
NO P
-
'
O TCr1 DISrl' ' ::'Tics.
DEPARTMCNT OF THE 7 REASURY
WASIiINGTON DC 20220
M r . Ck@@ %yl@
Pimny:iaiL 'OhFLce*
EciWiOiTiLc SeQ't.%*
AmeKicdn Zmbassy
~ e h t a h ,f r a n
Dear Cllyde,
YW ha$ asked i f we would pmvl@em h r s oZ *cat
amus shtpnents t b PFen. a 4 s h a tWqel~2-du'6 to s&k @eta
6 m hut wrces: (1) t h e @e&nw kpattmeht, (43 the
Office of Nunltisnrr Control, De@tt*rpht aE Steke ( 3 ) khe
!&pertmeat a f F ~ t e e an$ , ( 4 ) the C a t t a i l tnteiii'gefire
Agency. W e haw centacted tPvese !&Uk 6gehcle4 and hdW
gathered t h e d a t a *lch a r e available; b u t It does not
f i t together t o -kc? a m r g n e a t wprit.
?Sire W .S. kpat-tment 8t Dekhace h s d e t a l l e h daka &I
ntvl t o Tran uhlch it a a l n t e i n 8 oi! d u.S. 'fiscal year
E:kr have a t t a e k d d ro y oC c b i r computer riMtaut
m o r d e r t o preuLde as ~h % ~ h n M t t m a8 proa8fbfe Fo-r
m, "dellvery of mcatericrlHmeal$ t h a t t i t l e b a peised t o
tho rehavli WW2-t '* BR& t~,??i@kly t i t l e paEkQS
.
~ i t h tgh e U% a t t h e whet@ the wterieb i b reedy
fop shi-t (and thus e b e r t l y p p i k0
~ w t u d 1 t h e bf
export from t h e U.S.). 1 have d s o ineluded the BOD t-int-
o u t on t h e i r s a r e s agreements ~ L t h%ran, a s it w i l l *!low
you t a coiqxire dekiwrke8 ~ l t Bales h o&et-a,
The O f f i c e sf NunfthrIi CoAtrel h a provided i n E 6 m -
t i o n on t h e export of ntaterie1 whlCh i s contkolled under
t h e a u t h o r i t y o f the hta%wttioaaL P r a f f i c i n ~ n n s~egu1.a-
tims (ITM) ( T i t l e a&, CFR 121-138) as Eollows:
LLL.B U,S, Bllars
1975 $116,496,219
::::
1977
( T r a n s i t i o n a l Qtr)
106,5L0,107
2'0,106,769
119,124,106
These exports a r e based an Bureau & Censuti $at& h i t h
r e f l e c t s a c t u a l shipments £tarn t h e U.S. t have not i n -
cluded information on autherizatitms issued f o r ekpot-ts
to I r a n a s they would be heaningleea tiguces, Natty expert
l i c e n s e s a r e never used.
SECRET
ras
SECRET
NO FOREIGN PISS~II~IAIATIWI
-2-
We have c o n t a c t e d t h e Department of Commerce t o
o b t a i n d a t a oq commercial e x p o r t s o t h e r than t h e items
included i n t h e ITAR and c o q t r o l l e d by t h e O f f i c e of
I$unitions Control. These a r e non-military i t e m s , aqd
items o f d u a l commercial and m i l i t a r y a p p l i c a t i o n , such
a s c o n s t r u c t i o n equipment, t e n t a g e , p e r s q n a l c l o t h i g
and equipmeqt, a i r c r a f t engines, e t c . , which could %e
purchased from commercial sources i n t h e United S t a t e s .
Commerce i s a b l e t o rovide d a t a on t o t a l t r a d e with I r a n
by i q d i v i d u q l commod!ty, b u t u n f o r t u n a t e l y cpnnot routde
a breakout by epd-user; therefoye, i t cannot i d e n t f f y
T r a n i w m i l i t a ~ y uychaqer). Thus, we haue t q say t h a t
ye a r e awarg Q* t R i s c a t s g o r y o f e x p o r t s b u t a r e unab e
t~ p b f a i n t h e r e l e v a n t $nformation. The deugce u s u a l y
used i n r e p o r t s o f t h i s q q t p r e is t o say Fh@t "ex o r t s
i
of nop-munitipns c o n t r o l items by c p m e r c ~ a lsupp!iers
q r e eqcluded from thgs reRRrt."
The C I A h a s pyovided dapa oq m i l i t a r y d e l i v e r i e s t o
f ~ q qfrom c o u n t r i e s o t h e r t h a n t h e U.S. This informat$oq
s p r q ~ i d e don a ~ f + l e ~ d a & year
- b a s i s . The column marked
h ~ ~ y e e m cs" n r ref e c t s comatments by Trqn ts purchase and
t t p e t $ y r $ e s t l 9 p p f i e s t o r p k e i p f s .$th+!l Irm. This F@Bsrt
i n c I.I gs a g r e m e p t s iari y ~ $ +BB de$gupr$es e i n c c spmg C Q U ~ -
t r j p a have copcluded ~ F P ) @8gremeRto bup P p e not y e t
a p p a r e q t l y s c a r p d d e l i v e r i e s , q r 4~ i e q s t tfp h q ~ eno
reR@rpOR t h e @ p f i v e r $ e s $4 egfhcy f?v*nF i t w + l l g t ~ r
yqu snme ideq nf p o f e a t f a l d e l g y e r i e s . copy pf tFp C I A
t86le i s qtfq~hed.
This i s t h e beqp i p f o r n t i o n ~p hsye been a b l e t;o
assemble, and I hope it cap s e r v e your purpose. I f ye
~ s i s t filythey, ~ 1 p i ) ~J ect me b o w .
c q w
2 Encls.
1. DQD r i n t o u t s ( q n c l . )
a.G T $qb$e
~ [Secret-wnfsr~)
..-. .--i.,:.lL 10
SECHET FDRElCN rullOr:,xs
Tor&
-
1,016 -
-
217 -
1
.))
1 -315 -
5% -
3-
C c . m w m i ~T a M %!!& -
84 -544 -
62 ..
- ?E'
....
.... -.
Soviet 84 544 k2 3E
east-
C h l ~
EU~OPO 4i
.. -2
.. -1
.. ., ..
AUEtrati. ..
71
2%- 51
UP-
Cemn,
India.
Rd, RC.
..
10
9
2
1
6+
i1 , -. - -- - -
5ue=:e,~~i~:;~---
......
., . , , , . . -.
.....,
11 2 8
.....
,?7*, 5.1.0.1 115.?11
- - ,".l,**
--
"ill.. . . . . a . .........
I
'f . -- I'.
_r.c<'.
I
">.S"C
__
.--
"L"C"I ALL
-
-'
- ~
.... .
vv 7,
c.:e
ccvr
?b."L?,
FV ,>-?I
1°C *c"
Cchl
-
-. --..- -- - ......
-
-+
-. irr