182. Telegram From the Embassy in Iran to the Embassy in Thailand1
Tehran, December 8, 1966,
1315Z.
2453. For Secretary Rusk. Following subjects may come up in your talk with Shah:
- 1.
- Iran’s Orientation. Although still publicly proclaiming “independent policy,” Shah has no illusions re Commie aims. His visits to East Europe, steel mill project and stepped up trade with Sov Bloc were hailed as new look in Iran policy. Some of glamour seems be wearing off, however, particularly pursuant to Moscow efforts to roil waters during recent Iranian discussions with consortium. Surveillance of Sov Bloc activities here is intensive and some inevitable frictions developing as Iranians and Sov Bloc reps try to do business. You may wish commend Shah for cautiousness in dealing with Sov Bloc and note that reduction in tensions with his northern neighbor is also of benefit to U.S. assuming, of course, that relaxation not accompanied by diminution in long-standing U.S.-Iran friendship.
- 2.
- Iran’s Stability. Due to economic boom, internal stability is at new high in Iran. Shah deserves good marks for economic and social progress notably Literacy Corps, Health Corps and land reform program. Shah determined modernize Iran a la Europe before he lays down reins. Hopefully he will not bite off more than Iran can chew. Hopefully also future will include political progress.
- 3.
- Viet-Nam. Shah will welcome opportunity exchange views on world’s number one problem. Privately he supports USG policy but except for little publicized medical team in Viet-Nam he refrains from public support. Because of improved Indonesian situation, Shah has “shifted” his view from firm military riposte in Viet-Nam to negotiated settlement. He probably favors extended bombing pause. He would be particularly gratified if there were useful role he might play in achieving settlement.
- 4.
- Oil Issue. See Tehran 24352 re State of play. In general Shah can be commended for his staying within bounds of reason.
- 5.
- Military. As you know Shah believes Iran must be capable of deterring or coping with regional threats and he thinks this is in USG interest. He been heavily influenced by Viet-Nam and by Pak plight last fall. He has been publicly critical of CENTO (for unfair reasons) but intends [Page 333] continue membership until acceptable replacement available, i.e. greater regional cooperation including hopefully Afghanistan. Without sales talk re CENTO’s future, it might be useful to remind Shah that Iran’s CENTO affiliation has had value, e.g. $800 million in US military aid to Iran, while permitting Iran’s peaceful development, and cause of shift in Soviet tactics. If subject of our military credit sales comes up, you might point out that despite our preoccupations with Viet-Nam USG did quite well by Iran last summer, e.g. first country except Brits get F–4 aircraft, relatively reasonable credit terms despite stringency of MAP supporting funds, etc.
- 6.
- Arab Threat. Shah sincerely concerned that Nasserism will emerge on southern coast of Persian Gulf, e.g., overthrow of Kuwaiti regime or some vague UAR extension from Yemen-Aden base after British withdrawal from Aden. As counter, Shah is less interested in retention British power than in building up his own capability. Without arguing potentiality of threat, it may be useful to point out that while adequate self-defense necessary (and we have recognized that) Iran’s best bet is healthy economic and social development which will thwart more sinister forms in which threat likely to occur.
- 7.
- Cooperation with Paks. Shah has stayed close to Ayub to prevent too close Pak association with ChiComs. Shah may press you for approval of M–47 tank transaction which is part of quiet and small scale effort of Shah to permit Ayub source of supplies other than from Commies. You may wish indicate we realize value in Shah’s keeping window open for Ayub but note that our whole policy re Pakistan’s military needs is under discussion.
- 8.
- Iran-Iraq. Aram will be in Baghdad when you are here. Shah does not expect substantive progress in relations with Iraqis but wants give public indication Iran’s friendly disposition if Iraq determined stay out of Nasser’s clutches.
- 9.
- U.S.-Iran. Relations very good. Main problem is instant transition from large-scale aid to more normal relationships.
- 10.
- AID Phase-out. Conceivably the phase-out of AID might be mentioned. Our line is that we are proceeding with a planned AID phase-out in FY 1968 and expect that by November 1967 we will have our mission staff pretty well on its way, although of course we will continue with an orderly conclusion of ongoing programs using Embassy facilities hereafter.
- 11.
- PL-480. A proposal for an agreement for 37.5 thousand tons of wheat is pending and is expected to be concluded this month, with another 37.5 thousand tons in January. This is for dollars under present Title IV. It is hoped that rial proceeds will be used for grain storage and processing facilities.
- 12.
- As you fly in, big military parade will be concluding in vicinity of airport. Dec. 12 is anniversary of ouster of Russians from Azerbaijan.
Meyer