Foreign Relations of the United States, 1955–1957, Near East Region; Iran; Iraq, Volume XII

389. Memorandum From the Assistant Secretary of State for Near Eastern, South Asian, and African Affairs (Rountree) to the Secretary of State¹

Washington, February 6, 1957.

SUBJECT

• NSC 5703—Draft Policy Toward Iran

There will be a Departmental briefing on this paper February 6 at 11:00 a.m.²

Discussion:

The attached draft (NSC 5703), which is scheduled for consideration by the Council on February 7, points out that Iran has made significant progress in recent years; under the Shah’s personal leadership the Government has strengthened internal security, begun a development program financed out of rising oil revenues and aligned the country with the West. The paper also notes the effects of the Shah’s personal weaknesses and the failure to make budgetary and administrative reforms or to meet rising popular expectations of a better living standard.

Internationally, as the paper explains, Iran is becoming a positive Free World asset, as evidenced by its adherence to the Baghdad Pact and its support of the United States on major Middle East issues. But, in view of its exposed position and relative weakness Iran continues to need U.S. political, military and economic support. This draft paper takes the position that it is in the U.S. interest to support Iran within reasonable limits in order to bolster its confidence in its new international posture. This is particularly important at a time when the U.S. is trying to obtain Middle East support for the President’s January 5 proposals.

Politically, the President’s proposals have strengthened the Iranian Government’s confidence in itself, in the U.S. and in the future of Middle East defense. The proposals will ease the pressure for a U.S. guarantee of Iranian territorial integrity but will encourage the Shah to hope for more military aid.

Militarily, the paper proposes a somewhat stepped-up aid program designed to give the armed forces some defensive delaying capability within a framework of JCS-approved goals (which the Shah has agreed to) and of Iranian limited military and economic capacities. Besides the usual end-items, the plan includes a large military construction program to relocate Iranian units in better defensive positions.

Economically, the paper recommends a declining scale of aid after FY 1958. Since the Government of Iran has adequate resources to meet its normal budgetary requirements, provided reforms are made, it is planned to avoid direct budgetary aid unless required by unusual circumstances to protect U.S. interests in the area.

While the sources of many of Iran’s weaknesses are internal, the ability of the U.S. to encourage difficult reforms depends on preserving confidence in the U.S. The recommended aid programs are calculated to maintain the U.S. ability to influence Iran while simultaneously tending to reduce the present Iranian over-reliance on the U.S. to compensate for internal weaknesses.

Recommendation:

That you recommend NSC approval of the proposed new policy.

1. Source: Department of State, S/S-NSC Files: Lot 63 D 351, NSC 5703 Series. Top Secret. Drafted by Hannah and concurred in by Barnes, Murphy, and Kalijarvi, who added as a comment a copy of his memorandum to the Secretary, supra. According to a covering note from Fisher Howe to Dulles, February 6, Murphy approved this paper and read Kalijarvi’s comment. Murphy did not, to use Howe’s words, “feel that any disagreement on policy is involved, but has suggested to Mr. Kalijarvi that he attend the NSC briefing in order to present E’s views.”
2. See infra.