The Shah
Page 50
During the Ford and Carter administrations, in addition to the problem of oil, two new issues became irritants to the Shah’s relationship with the United States. The first was the perennial problem of the Shah’s desire to buy more military hardware, including some of the most sophisticated planes and radar. The second issue was Iran’s nuclear program. The issue of military purchases was complicated by the Shah’s desire to buy AWACS—new planes equipped with the most sophisticated radar—and F-14 and F-16 planes equipped with Phoenix air-to-air computer-guided missiles. It is estimated that close to a third of total U.S. arms sales went to Iran during the decade between 1965 and 1975.84 America’s resistance on some of these sales angered the Shah.
President Ford was particularly worried about tensions in the Iranian–American relationship. At a private dinner on October 21, 1975, he asked Ardeshir Zahedi, “Please tell me candidly: What is wrong? Is there any trouble or misunderstanding between us?”85 Zahedi complained about the American inability to understand the Shah and his motives. Attacks in the media, he said, were a good example of this “failure to communicate.” So frustrated was the Shah with these attacks that in September 1977, while in a “very somber mood,” he told William Sullivan, Carter’s choice as the American ambassador in Iran, that he thought he had arrived at “a turning point in his future relations with the US. The issues at stake,” he said, “were far greater than AWACS.” He said he had been amazed “by the things he had read” in the American media and “by the comments made by some of the senators.” The Shah ended his complaints by saying he was seriously considering forgoing the idea of AWACS and instead buying a similar plane produced by the British called the Nimrod.
Eventually, after the Shah agreed with the administration’s request for “special security” arrangements for AWACS in Iran, the United States agreed to the controversial sale. Yet, before they could be delivered, the revolution came. As the domestic situation deteriorated in Iran, the United States worried about the safety of its highly secret and sophisticated Phoenix missiles, which had been sold to Iran earlier. Lest they fall into Soviet hands, the United States, with the help of Israel, flew all Iranian air force planes armed with Phoenix missiles out of the country for “safety checks”; the aircraft were returned only after the missiles had been dismounted from the planes.86
Aside from modern weapon technologies, the question of Iran’s nuclear program was also a subject of considerable tension between the Shah and the United States. Iran’s nuclear program had begun with a small reactor given by the United States to Tehran University in 1959. It was part of the American Atoms for Peace program announced by President Eisenhower in December 1953. With Iran’s increased oil revenues, and with the Shah’s new vision of Iran as the hegemonic force in the region—even reaching as far as Africa, where the Shah was spending millions of dollars helping King Hassan of Morocco, and where Britain was “keen to persuade [the Shah] to use his oil power on South Africa”87 to convince it to become more democratic—a nuclear program became for him the symbol of progress and power. He summoned Akbar Etemad, a trained nuclear physicist, to the Court in 1973, told him of his desire to launch a nuclear program, and asked Etemad to develop a master plan.
Two weeks later, the Shah met with Etemad again. Prime Minister Hoveyda was also present. The Shah quickly read the thirteen-page draft document Etemad had prepared, went over it a second time, and then turned to the Prime Minister and ordered him to fund what turned out be one of the most expensive projects undertaken by his regime. There was no prior discussion in the Majlis, where the constitutional power of the purse lay, or in any other governmental body or council. Like every major policy decision in those days, it was a one-man act. Thus was launched Iran’s nuclear program.
Plans called for a “full-fledged nuclear power industry” with the capacity to produce 23,000 megawatts of electricity. By 1977, the Atomic Energy Organization of Iran (AEOI) had more than 1,500 employees (who were, on the order of the Shah, allowed to become the highest-paid government employees). The Shah had arranged for the training of Iranian nuclear experts around the world (including a $20 million endowment at MIT), had engaged in an intensive search for uranium mines in Iran and around the world, and had launched several nuclear research centers around the country.88 The AEOI was in those days one of the most heavily funded programs in the country.
One of the firms working with AEOI at the time was called URIRAN; it was headed by Reza Niazmand, a career technocrat. URIRAN’s job was to “prospect for uranium” and to sign contracts “with foreign aerial survey firms for a complete radiometric survey of Iran.”89 It was rumored that URIRAN was also working with companies in South Africa and Israel on nuclear-related activities. In 1976, $171.7 million was set aside for “additional purchase of uranium” while AEOI’s budget for the year was $1.3 billion.
While Germany and France showed immediate eagerness to sell Iran its desired reactors, the United States was initially reluctant to sell any, “without conditions limiting [the Shah’s] freedom of action.” The German company Kraftwerk signed the first agreement to build the now-famous Bushehr reactor with an initial completion date of 1981 and an estimated cost of $3 billion. As Bushehr was located in a dangerous zone that was prone to frequent and strong seismic activity, extra funds were set aside to protect the site against the dangers of an earthquake. It was said at the time that the German government was so eager to find a foothold in the Iranian market that it guaranteed the investment of Kraftwerk against any loss.90 The American companies, on the other hand, were barred from these contracts until the federal government’s concerns about the Shah’s intentions were mitigated.
The Shah was adamant that Iran should enjoy its “full rights” within the Treaty on the Non-Proliferation of Nuclear Weapons (NPT)—an agreement Iran had immediately signed upon its formulation and that called for non-nuclear states to forfeit the search for a nuclear bomb in return for easy access to the peaceful uses of nuclear energy. But Iran not only insisted on the right to have the “full fuel cycle,” it also was interested in processing plutonium—a faster way to a nuclear bomb than enriched uranium.
Concerns were further aroused shortly after the February 1974 Franco–Iranian agreement on nuclear cooperation, when the Shah told Le Monde that one day “sooner than is believed,” Iran would be “in possession of a nuclear bomb.”91 The Shah’s surprising comment was at least partially in response to the 1974 Indian test of a nuclear weapon.
Realizing the repercussions of his comment, the Shah ordered the Iranian Embassy in France to issue a statement declaring that stories about the Shah’s plan to develop a bomb are “totally invented and without any basis whatsoever.” The U.S. Embassy in Tehran too, after talking with the Shah, reassured the American government that he is “certainly not yet” thinking about leaving NPT or joining the nuclear club. The Shah told Ambassador Helms that he believed “this nuclear armaments race is ridiculous. What would one do with them?” But even as he was trying to reassure the American government about his intentions, the Shah did indicate that, should any country in the region develop the nuclear bomb, then “perhaps the national interests of any country at all would demand that it would do the same.”92 The embassy ended its report by indicating that it believed the Shah’s statements denying any plans to develop a bomb to “accurately reflect Shah’s current intentions.”93 Assadollah Alam, the Shah’s Court minister, claimed more than once in his Daily Journals that in his view, the Shah “wanted the bomb” but found it expedient to adamantly deny any intent at the moment.
The United States was particularly worried that “the annual plutonium production from the planned 23,000 MW Iranian nuclear power program will be equivalent to 600-700 warheads.”94 Nonetheless, by June 1974, the United States was finally willing to sell Iran nuclear reactors but only after “incorporating special bilateral controls in addition to the usual” international safeguards.95 These safeguards were, in the mind of U.S. officials, nece
ssary not just because of concerns about the Shah’s intentions but because “in a situation of instability, domestic dissidents or foreign terrorists might easily be able to seize any special nuclear materials stored in Iran for use in a bomb.”96
While the Shah was willing to consider some of these safeguards, he was insistent that Iran could not be treated “differently from countries with which [America] had previously signed power reactor agreements.” By then Iran had already signed “letters of intent” with German and French companies for a “total of four nuclear power plants,” and the Shah had signaled his plan to procure eight more from the United States. The State Department not only favored the sale of these reactors, but even encouraged the Bechtel corporation to solicit the “Shah’s investment (on the order of 300 million dollars)” in a “private uranium enrichment facility to be built in the United States.”97 These proposals were all predicated on the Shah’s willingness to accept more rigorous controls “over plutonium than [the United States] had heretofore included in our other agreements.” Although eager to offer assurances to the United States, the Shah flatly rejected the idea of affording the Americans a veto on “reprocessing of US-supplied fuel.”98
Both the Ford and the Carter administrations were under a complicated array of pressures and opportunities regarding Iran’s nuclear program. Some in Congress were increasingly worried about the Shah’s military expenditures and ambitions, and thus averse to the idea of giving him easy access to nuclear technology, but American companies were keen on getting a share of Iran’s increasingly large market for such technology. Finally, both administrations knew that negotiations with the Shah on the nuclear issue could “prove to be extremely important to [America’s] relations” with Iran. The Shah, the U.S. administrations knew, saw these negotiations as “a fundamental test to whether” Iran will continue to have a special relationship with the United States.99 At the same time, the United States was convinced that the Shah might be tempted to acquire a nuclear bomb under certain circumstances, amongst them, “dismemberment of the Pakistani buffer state . . . [a] quest to be recognized as ‘the fifth great power’ . . . [and] Iranian desire for political-military hegemony within the Persian Gulf.”100
As negotiations on these issues lingered, and seemed to have reached an impasse, and the Shah held firm to his rejection of any U.S. veto right, the Department of Defense recommended that the United States reconsider its hard-line approach and accept the Shah’s demands.101 American defense officials were worried that the Shah’s unhappiness over this issue carried the threat “of poisoning other aspects of US-Iran relations.” The fact that France and Germany were more than happy to sell to the Shah what the United States was withholding, and the fact that the Shah, through Etemad, had made clear gestures of possible cooperation with India on Iran’s nuclear program, made the case for a U.S. “reconsideration” of its position more urgent.102 President Ford, and later President Carter, agreed to accommodate the Shah, but still only to the extent that U.S. interests in non-proliferation were met.103 Only after the Shah indicated his willingness to “pursue bilateral safeguard agreements,” and signaled that he was no longer pursuing “a reprocessing plant” in Iran, was the Carter administration willing to allow American companies to sell reactors to Iran. But by then, the first hints of internal political trouble had already appeared on the horizon. Within months of this crucial agreement, the Shah was too preoccupied with the evolving domestic crisis to pay much attention to the nuclear negotiations. No sooner had Ayatollah Khomeini come to power than he ordered all work on Iran’s nuclear program stopped, criticizing the Shah for ever pursuing such a program. Within a few years Khomeini changed his mind, but by then the West was much more distrustful of Iran’s intentions.
The Shah’s crucial decade from 1965 to 1975 was also critical for the regime’s cultural politics. Iran in this period was a discordant combination of cultural freedoms and political despotism—of increasing censorship against the opposition but increasing freedoms for everyone else. It is far from hyperbole to claim that during the sixties and seventies, Iran was one of the most liberal societies in the Muslim world in terms of cultural and religious tolerance, and in the state’s aversion to interfere in the private lives of its citizens—so long as they did not politically oppose the Shah. Indications of this tolerance were many: from the quality of life of Iran’s Baha’i and Jews to the artistic innovations and aesthetic avant-gardism of the Shiraz Art Festival. The famous Italian filmmaker Pier Paolo Pasolini traveled to Iran often and shot parts of his controversial Decameron—an erotic romp about the sexual shenanigans in medieval monasteries—in Isfahan. He was not alone in making these trips. Some of the world’s foremost artists and playwrights—from Andre Grotovski to Peter Brooks—converged on Shiraz to perform or on Tehran to look for funding for films. By the early 1970s, Princess Ashraf and her husband, Mehdi Bushehri, had become interested in producing films.
Much to the consternation of the Shiite clergy in this period, the Baha’i enjoyed freedom and virtual equality with other citizens. The same was true about Iranian Jews—some 100,000 of them, who had lived in Iran for over 3,000 years. In the words of David Menasheri, it was the Jews’ “golden age,” wherein they enjoyed equality with Muslims and in terms of their per capita incomes “they might have been the richest Jewish community in the world.”104 Some of Iran’s most innovative and successful industrialists, engineers, architects, and artists were either Jewish or Baha’i. The Arjomand family, dominant in the production of home appliances in Iran; the Sabet family, who brought television and Pepsi to the country; and finally Habib Elghanian, who introduced the nation to the magic of “plastic,” were all members of the Baha’i and Jewish faiths. The Shah’s private physician, Dr. Ayadi, was an active member of the Baha’i faith and was instrumental in facilitating Baha’i security and prosperity in Iran.
The Shah had a surprisingly blithe attitude toward the sexual life of those around him. Though he occasionally received reports from SAVAK about the private lives of courtiers—a mistress here, a ménage à trois there, and an openly homosexual lifestyle in a third—he was, especially for a leader of a Muslim society, remarkably tolerant, even indifferent to the erotic and other private activities of those around him. It was, for example, a sign of his respect for the private lives of his sisters that he never made an issue of his older sister Shams’s decision to become a Catholic. Nor did he publicly take issue with the storied private life of his twin sister, Ashraf. Though more than once he commented on and chided her behavior in private, particularly to Court Minister Alam, and though he refused her entreaty to have the Iranian government underwrite her rather quixotic dream of either herself or one of her protégés becoming the secretary-general of the UN,105 he made no effort to interfere in her private life. His reticence in pressuring his sisters on these private issues was a sign of both his timidity and his liberal disposition; his aversion to confronting them about their brazen economic activities was a further indication of his timidity, as well as of the arrogance of his power.
Power is most insolent when it is most insular. It was a measure of the Shah’s isolation that he ignored one of the most telling warnings about the effects of the regime’s economic and social policy, made by Qassem Lajevardi, a senator and a scion of one of Iran’s most successful industrial conglomerates.
In a fascinating speech on the floor of the Senate, he offered a de facto manifesto for Iran’s nascent industrialist class.106 In spite of its dire warnings, no one in the government—from the Shah and the Court to the cabinet and SAVAK—deigned to ask Lajevardi to further clarify his position.107
Lajevardi began his remarks by pointing out the startling fact that 103 of the 104 government-run companies were losing money—the only one that showed any profit was the oil company.108 He also talked of the dangers of price control, knowing well the Shah’s proclivity to use force to control prices, going so far as deputizing an army of students to identify and, if nece
ssary, arrest businessmen accused of price gouging. The policy angered not just modern industrialists like Lajevardi but also members of the bazaar, long a bastion of support for the moderate opposition and for the clergy. Nowhere in the world, Lajevardi said, had the effort to forcefully control prices led to success. He went on to also criticize the government policy of arbitrarily deciding workers’ wages. Wages, he said, must correlate with productivity and cannot, as was the case in Iran, be treated as a political bonus. Industrialists will invest, he said pointedly, only if they are allowed to make a fair profit. By then, a massive flight of capital from Iran had already started—a flight that would be redoubled when the political situation deteriorated.
In spite of the disparate nature of his complaints, there was a common theme to them: capitalism needs security, rule of law, and the force of the market to develop, and it cannot grow if it is held hostage to the vagaries of a single person, even if he is a sagacious leader like the Shah.
In Lajevardi’s cautious criticism lay the essence of the contradiction that threatened the Shah’s modernizing authoritarianism: the more he won his battles with oil companies and increased Iran’s revenue, the more these petrodollars helped create and train a larger and larger technocratic middle class, the more he promised the people standards of living higher than those of Japan or Germany, the more these impressive accomplishments convinced him of his global importance—the more he inadvertently prepared the conditions of his own downfall. The middle classes he helped create wanted democracy, and the hubris of his increasing authoritarianism made them increasingly uneasy. The statistical portrait of the Shah’s accomplishments was indeed impressive. In 1941 there were only 351 high schools and 8 universities in the country; in 1974, on the eve of the Shah’s creation of the one-party system, there were 2,314 high schools and 148 universities. In 1941 there were only 482 large industrial institutions in Iran, whereas in 1974 the number had increased to 5,651.109 The annual growth of industry went from 5 percent per year in 1962 to 20 percent in 1974. The share of industrial production in the gross national product increased from 11.7 percent to about 17 percent, while employment in the private sector went from 1.3 million workers in 1962 to more than 2 million in 1974.110