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259. Draft National Intelligence Estimate1

SUBJECT

  • The Current Outlook in Iran (Staff Draft for Board Consideration)

The Problem

To re-assess the outlook in Iran in the light of developments since publication of NIE–75/1, “Probable Future Developments in Iran through 1953.”2

Estimate

Introduction

1. The elements of instability and uncertainty in the Iranian situation have become more pronounced since the beginning of 1953. While Mossadeq has managed to retain control of the government and the political initiative in Iran, he has made no discernable progress toward solution of the serious problems confronting the country and has suffered a long series of political setbacks. These setbacks have narrowed his base of political strength, forced him to resort to openly dishonest methods to retain the initiative, and made his survival more dependent than ever on his aggressiveness and skill as a political antagonist and on the irresolution and disunity of his opponents. Most of Mossadeq’s old colleagues in the National Front, including such leading figures as Kashani, Baghai, and Makki, now oppose him, leaving only a small group of faithful supporters. A group of ex-Army officers headed by General Zahedi is openly committed to his downfall, and such nominal Mossadeq collaborators as Minister of Court Amini (whose brother heads the gendarmérie) appear to be secretly plotting against him. Following Mossadeq’s unsuccessful effort to drive the Shah into exile in February, the Majlis opposition became so baulky that Mossadeq finally withdrew his supporters (thus precluding a quorum) and then called a “referendum” to approve final dissolution of that body pend-ing new elections. While this vote, just completed, was officially reported as an overwhelming pro-Mossadeq victory, this showing was at [Page 657]least in part due to Mossadeq’s stipulation of an open ballot system facilitating intimidation and may also have involved a fraudulent count. The opposition abstained.

2. Another unsettling development has been the emergence of the Communist Tudeh Party as the leading manipulator of mob pressure, at least in Tehran, and as an important source of support for Mossadeq vis-à-vis his non-Communist opposition. While Mossadeq and Tudeh still appear to be operating at arm’s length, he clearly accepted Tudeh collaboration in the recent referendum and in preliminary demonstrations. In the two most recent of these demonstrations, Tudeh made a far more impressive showing than Mossadeq’s own followers.

3. Finally, there has been a change in the attitudes of the US and the USSR which has almost certainly necessitated a review of Iranian foreign policy. The US attitude toward Mossadeq has gradually hardened, culminating in President Eisenhower’s warning of 30 June that Iran can expect no emergency assistance from the US so long as it refuses a reasonable oil settlement with the British.3 This development has not only helped weaken Mossadeq’s internal position, by undercutting the widespread belief that the US was backing him, but has also struck at one of Mossadeq’s own fundamental convictions—namely, that if he holds on to power long enough and thus proves that he is the man to deal with, fear of Communism will eventually compel the US to provide him with oil markets or financial assistance without requiring concessions to the British or other limitations on his freedom of action. Meanwhile, the new Soviet regime has not only agreed to a doubling of Soviet-Iranian trade but has also joined in negotiations for a general settlement of outstanding issues between the two countries. These developments have raised the possibility that Mossadeq might bolster his popular prestige by obtaining concessions from the USSR and have indirectly lessened the pressure on him to curry favor with the US.

The Outlook for Mossadeq and the non-Communist Opposition

4. As a general proposition, we believe that the odds still favor Mossadeq’s retention of power at least through the end of 1953. He is convinced that Iran needs his leadership and fiercely determined to maintain it. He is legally entitled to rule by decree until January 1954, when the plenary powers first granted him by the Majlis in August 1952 expire; appears to have effectively established his authority over the machinery of government, including the security forces; and still has a large, undefined residue of popularity and prestige on which to fall back. His financial problems are unlikely to produce an early crisis despite his probable continued resort to the printing press to meet cur[Page 658]rent expenses; crops are good, the general level of economic activity is fairly normal, and such inflation as has developed shows no signs of soon getting out of control. Finally, it is uncertain whether any serious challenge to his leadership will soon emerge. The Shah’s past unwillingness to give strong backing to an effort to oust Mossadeq is likely to be reinforced by the current absence of a Majlis which might give legal sanction to such a move, and it remains unclear whether Mossadeq’s other opponents are capable of banding together and following through with a unified and vigorous effort to overthrow him by force unless they get the Shah’s cooperation. Although Tudeh’s capabilities are manifestly increasing, we believe that it is not yet prepared to make a direct bid for power itself and—except to take advantage of a sudden crisis—will not turn against Mossadeq until it has further exploited its current tacit alliance with him.

5. Despite these favorable factors, Mossadeq will still face considerable difficulty in maintaining his present position. So long as the present unsettled situation continues, he will be constantly exposed to the danger that an effective movement to unseat him may in fact emerge, even though a successful plot against him would almost certainly require the cooperation of the security forces. Even if such a plot does not emerge, Mossadeq will remain subject to opposition harassment and will be under continuing pressure to exert himself in order to keep his opponents off balance, maintain his prestige, and reaffirm his command of the situation. This pressure is likely to increase if Mossadeq fails to secure some kind of mandate for remaining in office after his plenary powers expire in January 1954.

6. In Mossadeq’s efforts to stay in power, it is extremely unlikely that he will be able to undercut his opposition through a successful attack on the problems underlying the present political crisis in Iran—the uncertainties and financial difficulties arising from the virtual shutdown of the oil industry following nationalization and the unrest arising from the government’s failure to satisfy popular aspirations for economic and social betterment. Mossadeq’s half-hearted efforts at land reform in 1952 appear to have brought more trouble than credit to the regime. An expansion of the economic development program, now virtually restricted to projects financed by Point Four, is impossible without additional funds. And with respect to the financial problem itself, the outlook is extremely gloomy:

a. A settlement with the British providing for resumption of large-scale Iranian oil operations remains extremely unlikely. The British have no present need for Iranian oil and appear resolved to hold out for what they consider a fair basis for determining compensation. Mossadeq will almost certainly continue to reject these terms. Even if the British were induced to offer settlement terms more favorable to Iran ([Page 659]as, for example, along the lines of the lump sum compensation proposal advanced by Mossadeq this spring), Mossadeq’s innate belief in British perfidy and his predilection for haggling would probably prevent any satisfactory arrangement from being reached.

b. There is little chance that Iran can find customers for significant amounts of oil in the absence of a settlement. Despite Iran’s willingness to extend a 50 percent discount and despite the recent easing of the world tanker supply, Iran’s sales thus far have been held to extremely small proportions, mainly because the major companies which share with AIOC the domination of the world oil market are reluctant to clash with AIOC on this issue, have ample supplies of their own, and would probably react sharply against any attempts by independents to bring in large quantities of cut-rate Iranian oil. These considerations are unlikely to change in the near future.

c. Finally, little help is likely to come from the USSR. While the Soviet bloc might agree to purchase small quantities of Iranian oil, it would probably be deterred from absorbing significant amounts by (1) its lack of any need for such amounts and (2) its probable reluctance to make possible any real strengthening of Mossadeq’s position. Return of the $21 million in gold and credits owed Iran by the USSR would provide only a temporary alleviation of Iran’s financial woes, particularly since Iran is already using at least half of that amount as note cover.

7. Under these circumstances, and with the appeal to nationalist fervor less potent than it has been in the past, Mossadeq will probably have to place increased reliance on chicanery, intimidation, and military force to maintain himself. Nevertheless, this trend toward increasing authoritarianism will probably be checked at least to some extent by Mossadeq’s desire to maintain his legal status as representative of the people’s will and by his probable inability to build a strong and reliable dictatorial apparatus. While Mossadeq may attempt to use his police powers against his opponents, he will probably concentrate on efforts to secure the election of a new and more friendly Majlis which would cooperate with him and, if necessary, could authorize extension of his plenary powers. He will probably renew his efforts to undermine and demoralize the Shah, in the hope that the latter might be coerced into ceding more of his powers or actually eliminating himself as a rallying point for opposition elements. However, except as an act of desperation or opportunism, Mossadeq is unlikely to risk another full-scale onslaught on the Shah, since it would probably serve to unite the opposition as did Mossadeq’s attempt last spring and might conceivably result in Mossadeq’s own downfall.

8. While Mossadeq might succeed in securing a nominal majority in new Majlis elections, mainly through reliance on the open ballot [Page 660]technique which enabled him to roll up such overwhelming majorities in the recently completed “referendum”, the operation would be an exceedingly difficult one. The Iranian practice of holding elections over a period of weeks or months would facilitate government rigging of the balloting and enable Mossadeq once again to cancel elections in doubtful districts once he had seated a minimum number of supporters. However, Mossadeq would probably still have difficulty in invading the feudal strongholds of the old conservative landlord class, which held on to a considerable number of seats in the 1952 elections, when Mossadeq’s popular appeal and ability to secure local supporters were far greater than they are now, and which would probably have fared even better if Mossadeq had not stopped the balloting when it was little more than half-finished. This time, Mossadeq would lack the support of Kashani, whose local workers were extremely effective in 1952. Moreover, Mossadeq would probably lose some seats in Tehran and possibly other urban centers to Tudeh nominees.

9. In any event, Mossadeq is unlikely to be any more successful than in the past in finding men he can trust to stand by him after they are elected. Although Mossadeq is likely to go through with new elections so long as they show any promise of reinforcing his position, they are at best likely to provide him with only a short breathing spell.

The Communist Danger

10. In Mossadeq’s attempts to retain power, he is likely to take steps which will weaken the prestige and influence of the US in Iran and which will increase the danger of an ultimate Communist takeover.

11. In the foreign relations field, Mossadeq is likely to give Tudeh free rein in attacking the US and to become more critical of the US in his own public statements. He can be expected to accept any genuine concessions the USSR may offer him and might go so far as to eject the US military missions and to pledge Iran to refrain from entering into any defense arrangement with the West if offered sufficient Soviet inducement. Such moves are likely to result in a decline in US prestige, an improvement in the popular standing of the pro-Soviet element, and possibly widened opportunities for Soviet propaganda and subversion.

12. In the domestic field, Mossadeq will probably continue to rely on Tudeh support in his efforts to dominate his non-Communist opponents. As a result, he will probably feel compelled to wink at the continuation of Tudeh demonstrations and the re-emergence of Tudeh as an acknowledged political party, may go so far as restore Tudeh’s legal status, and might even bring some Tudeh sympathizers into the government. These moves will greatly assist Tudeh in its efforts to increase its influence both in political circles and in the bureaucracy.

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13. Despite the inherent dangers in these policies, however, we do not believe they will go so far within the next few months as to result in Iran’s coming directly or indirectly under Communist domination.

14. With respect to the USSR, it is extremely unlikely that an ardent nationalist of Mossadeq’s stripe would grant the USSR oil concessions, permit Soviet technicians to move in at Abadan, or otherwise open the way for large-scale Soviet penetration of Iran. Moreover, it is almost equally unlikely that Mossadeq will sever all ties with the US. Despite some signs that he may be changing his mind, he will probably be extremely reluctant to abandon completely the belief that the US will eventually have to come to his and Iran’s assistance, and he probably hopes that his current dealings with the USSR, together with the rise of Tudeh, will serve to impress the US with the danger of losing Iran to the Communists. In any event, Mossadeq is unquestionably convinced, as are most Iranians, that national salvation depends on balancing off the great powers and thus preventing any single one of them from achieving a dominant influence over Iran. He will therefore continue to desire US support as a counterweight to possible Soviet pressure.

15. We also consider it unlikely that Tudeh’s position will improve so rapidly under a policy of collaboration with Mossadeq as to enable it to gain power on its own initiative before the end of 1953. Despite its growth in experience, boldness, and ability to exert mob pressure, Tudeh is still a numerically small party (with an estimated card-carrying membership of 10,000) which is thus far concentrated in Tehran and a few other urban centers and is probably incapable of standing up against firm repressive measures by the security forces. While Tudeh infiltration of the security forces will probably continue, it is unlikely to reach serious proportions during the next few months, and there is also no indication that Tudeh either desires or will be able to significantly increase its own capabilities for a coup during that period.

16. In addition, Tudeh will almost certainly encounter considerable opposition from Mossadeq himself. While he will probably feel compelled to play along with Tudeh for the time being, much as did Qavam in 1946, he unquestionably recognizes it as a potential threat to his own position. He can be expected to retain firm control over the security forces, to resist Tudeh efforts to secure the direction of other important ministries, and to take action to prevent Tudeh demonstrations from getting out of hand. In this he has the support of an apparently vigorous and effective chief of staff.

17. It is possible that some unexpected opportunity might enable Tudeh to come to power within the next few months. If an armed struggle should break out between Mossadeq and his non-Communist opponents, Tudeh would almost certainly feel obliged to exploit such a [Page 662]development to the utmost. Despite its apparent paucity of military preparations and the probable unwillingness of the USSR to intervene militarily on its behalf, Tudeh might succeed in gaining the upper hand if no definite winner, willing and able to use the security forces to suppress Tudeh outbreaks, were to emerge. A similar situation might arise if, in the event of Mossadeq’s death, the Shah and Mossadeq’s non-Communist opponents failed to work out a rapid solution to the succession problem.

18. Barring such an unpredictable eventuality, however, a Tudeh assumption of power is most likely to come about as a result of one or both of the following somewhat longer-range developments:

a. Tudeh may succeed in coming to power by parliamentary means. Although Tudeh is unlikely to secure a large representation in any Majlis election which might be held in 1953, continued failure to check its growth and provide some alternate vehicle for popular sentiment might enable it to secure a dominant position or even a clear majority in some later Majlis.

b. Even if Tudeh’s purely political potential is not realized, a continuation of the present economic and political deterioration will sooner or later increase popular discontent and the demoralization and Tudeh infiltration of the bureaucracy to a point where Tudeh could readily seize power on its own initiative.

  1. Source: Central Intelligence Agency, NIC Files, Job 79R01012A, Box 32, Folder 3, (NIE 102) Probable Developments in Iran. Top Secret; Security Information. The draft estimate was prepared in the Office of National Estimates. A summary of the estimate was sent to Dulles by Kent on August 13. (Ibid., Job 79R00904A, Box 1, Folder 4, Memo for DCI (1953) (Substantive)) For the final text of the NIE, see Document 347.
  2. Document 152.
  3. See Document 230.