NOTE BY THE EXECUTIVE SECRETARY TO THE NATIONAL SECURITY
COUNCIL ON U.S. POLICY TOWARD IRAN
The National Security Council, the Secretary of the Treasury, the
Attorney General, the Special Assistant to the President for
Disarmament, the Acting Director, Bureau of the Budget, the Chairman,
Atomic Energy Commission, and the Federal Civil Defense Administrator,
at the 312th NSC meeting on February 7,
1957 (NSC Action No. 1667–b and –c):
[Attachment]
U.S. POLICY TOWARD IRAN
General Considerations
Importance of Iran for U.S.
National Security.
1. Iran’s location between the USSR
and the Persian Gulf, as well as its great oil reserves, makes it
critically important for the United States that Iran’s friendship,
independence and territorial integrity be maintained. On the other
hand, Iran is a tempting and important target of Soviet expansion
because of its vulnerability to overt and covert penetration and its
suitability as a route to the Near East, South Asia and Persian Gulf
oil. Since 1953, Iran has been regarded in the area as a symbol of
U.S. influence, and its subjection to anti-Western control would be
a major psychological setback with chain-reaction repercussions for
U.S. prestige elsewhere in Asia. By the same token, the more Iran
develops into a positive political and economic asset the greater
would be U.S. influence beyond Iran’s borders.
International Political
Orientation.
2. Iran is disposed to be friendly toward the West and, in
particular, looks to the United States for guidance and support.
There is deep distrust of the British, exacerbated by the
British-French invasion of Egypt. Iran is not directly involved in
intra-Arab rivalries or Arab-Israeli hostilities, nor is the
Government attracted by the Afro-Asian bloc. Strategically, Iran
belongs to the Northern Tier area along with Turkey and is concerned
with the problem of defense against Soviet expansion. Iran has
actively supported the United States in international affairs. There
could, however, be a reorientation toward the Arab-Asian bloc if
Iran felt itself becoming isolated by expanding Soviet influence in
Afghanistan and the Arab states. There are extreme left-wing,
right-wing and nationalist elements which, given an opportunity,
might well form an alliance of convenience in order to take office,
turn their backs on Turkey and the West, and lead Iran into
cooperation with a neutralist bloc of Arab and Asian states.
3. Iran has felt over-extended by its formal alignment with the
pro-Western Baghdad Pact which involved the abandonment of
traditional neutrality without either the greatly increased military
aid or the
[Page 902]
U.S. commitment
to Iranian security which the Shah anticipated.7 The President’s proposed Joint Resolution of
January 5 is expected to bolster Iranian confidence in the concept
of Middle East defense and in the future effectiveness of the
Baghdad Pact. But, while the Resolution will probably help to ease
the pressure of Iranian demands for a U.S. guarantee of Iranian
security, it will not, apart from the measures that may be taken to
implement it, alter Iran’s basic vulnerability to Soviet pressure
and penetration. Iran remains concerned by the Soviet penetration of
Afghanistan and exploitation of Arab disorder which threaten to
outflank Iran, already exposed along a 1200-mile frontier with the
USSR. Nor will the Resolution,
in itself, satisfy the Shah’s desire for increased military aid.
Indeed, the Shah will probably expect the implementation of the
Resolution to include greater U.S. military and economic aid to Iran
as a component part of an announced U.S. intention to pursue a more
active and positive course of supporting pro-Western and
anti-Communist forces in the Middle East. Iran’s strong pro-Western
position, while a political asset for the United States, is regarded
in Iran as a claim for additional U.S. support, a claim which will
be strengthened by the strong support given to the January 5
Resolution by Iran and her Baghdad Pact neighbors.
Internal Strengths and
Weaknesses.
4. Outwardly, Iran’s political and economic prospects are more
favorable than at any time since the war. However, despite the
progress made since 1953, there remain fundamental weaknesses which
hamper the achievement of U.S. objectives and which could, during
the next two or three years, undermine the achievements of the past
three years, thereby increasing the opportunity for the USSR to dominate Iran.
- a.
- Internal security has been established. Neither the Tudeh
Party nor Nationalist opposition elements are currently capable
of concerted effective action. However, serious weaknesses still
exist in limiting the subversive potential of Communist and
other dissident elements.
- b.
- The present Government’s prestige is enhanced by its
exceptionally close relation to the monarchy which results from
the Shah’s assumption, since April 1955, of personal leadership
and policy-making responsibility in the Government. However, the
Shah’s personal involvement, coupled with his arbitrariness and
vacillation, imperils the effectiveness of the monarchy as the
guarantor of continuity and symbol of national unity.
- c.
- Oil revenues, which are expected to reach the agreed level by
the end of 1957, would provide Iran with the foreign exchange
resources to make possible appreciable progress toward national
economic improvement. However, unless action is taken to
overcome mismanagement, political rivalries, inertia and lack of
skills, the Government will be unable to translate this growing
economic potential into tangible benefits fast enough to gratify
popular aspirations.
- d.
- The Government in adopting a strong pro-U.S. position has gone
further than politically conscious opinion in Iran will actively
support.
5. The very considerable strengths of Iran today were, to a large
extent, induced by the policies and aid programs of the United
States. Conversely, the weaknesses reflect fundamental factors which
permeate Iran. The people’s rising aspirations have been frustrated
by archaic institutions. These frustrations of a volatile people
tend to build up dangerous political pressures which are
periodically released. The country lacks reserves of political
confidence, military strength and economic contentment to withstand
such pressures. Iran must meet the rising expectations of its people
or some other release must be found for accumulating pressures, lf
the present regime is to succeed it must capture the nation’s
imagination and confidence by proving in tangible ways its ability
to cope with Iran’s age-old weaknesses.
Economic Problems and U.S.
Aid.
6. Iran’s current economic and financial position is improving as the
result of increased oil revenues and limited progress toward
balancing the central government budget. During the first six months
of the current Iranian fiscal year, non-oil revenues rose some 32%
above the previous year, while expenditures increased only 17%. Oil
revenues are expected to continue their growth from the $29 million
in Iranian FY 1955 and $92 million in
FY 1956 to $160 million in FY 1957 and $200 million in FY 1958.
- a.
- Budgetary. Although Iran has the
financial resources to meet its ordinary budget requirements
without U.S. support, deficits in the Iranian regular budget are
likely to continue in the absence of thorough-going tax and
administrative reforms. The Shah has frequently indicated his
belief that the United States should make up such
deficits.
- b.
- Economic Development. Prospective oil
proceeds are sufficient for the requirements of Iran’s ambitious
7-year Development Plan. Although the results of the Plan will
have a great bearing on the political stability of the country,
the administrative chaos in the Plan Organization and its
slowness to produce visible results are causes of serious
concern. There is almost complete lack of over-all coordination
and rational planning of the country’s total efforts to
capitalize on its assets. Although the financial position is
improving, Iran cannot now undertake, unaided, regional economic
or military projects of importance to the development of
Northern Tier strength.
[Page 904]
Military Problems and U.S.
Aid.
7. Militarily, Iran is dangerously and directly exposed to Soviet
expansion. Iran’s defenses are totally inadequate for such a threat.
The Army is capable of maintaining internal security, preserving the
existing Government in power and offering very limited resistance to
aggression. The Air Force is weak and incapable of resisting air
attack. The Navy is weak and ineffective. Despite this meager
capability, the missions of the armed forces consist of assisting in
the maintenance of internal security, resisting external aggression
by defensive delaying action, and assisting in regional defense. The
Shah has accepted the U.S.-recommended pattern for the Iranian armed
forces, although periodically he reverts to his oft-repeated desire
for forces comparable to those created in Turkey with U.S.
assistance. However, if built up to presently contemplated levels
and partially redeployed, Iranian armed forces could make an
increased contribution to Middle East security by providing, with
outside air and logistic support, a defensive delaying capability
against Soviet forces, initially from positions in the Elburz
Mountains along Iran’s northern frontier.8 Failure to achieve forces of this minimum
capability may result in discrediting the Shah’s policy at home,
weakening the Government, and causing a gradual reversion to
neutrality and a reduction in U.S. influence.
8. The military implications for Iran of the Joint Resolution on the
Middle East cannot as yet be assessed. However, the future size and
composition of the Iranian armed forces can be effectively worked
out only in joint U.S.-Iranian planning because political
considerations are involved.
Political Impact of U.S. Policies
and Programs.
9. It is difficult to exaggerate the political impact in Iran to U.S.
policies and programs. They are regarded as criteria of American
ability and willingness to ensure or participate in the defense of
the Middle East. U.S. aid offsets the political impact of Soviet aid
offers. U.S. political and financial assistance are important
pillars supporting the Shah in his present paramount position. U.S.
military aid is particularly important as a partial offset to the
U.S. decision not to join the Baghdad Pact at this time or give Iran
the security guarantee it desires. The technical assistance program
is important as a means of making the presence of the United States
felt at all levels of the population and throughout the country. On
the other hand, there is a clear tendency in Iran to place too much
reliance on U.S. aid as a means of compensating
[Page 905]
for Iranian deficiencies. Every effort
should be made to overcome this tendency but, during the next few
years, it will continue to be important to the United States to
continue various programs in Iran.
Objectives
10. An independent, friendly Iran, free from Communist control.
11. A strong stable government with the capability and determination
to resist Soviet pressures, to prevent Communist penetration and to
cooperate actively with the anti-Communist governments of the Free
World.
12. A government that can and will make maximum balanced use of all
available resources in order to provide early and visible progress
toward economic improvements that will meet rising popular
expectations.
13. Iranian armed forces capable of maintaining internal security and
resisting external aggression by defense delaying action.
14. Active Iranian participation in Northern Tier defense
arrangements.
15. Continued availability of Iranian oil to the Free World and
denial of such resources to Communist-dominated areas.
Major Policy Guidance
General.
16. Iran presents a peculiar difficulty. Ostensibly there has been
rapid progress toward achievement of U.S. objectives. However, below
the surface, fundamental political and economic strength has not
developed. The next two or three years will be particularly
important in consolidating the gains already made. A combination of
carefully controlled influence and inducements will be necessary to
strengthen the forces working for change and to guide them into
constructive channels.
17. While the Government is now in the hands of Western-oriented,
predominantly conservative elements, acceptable to the Shah, the
ability of such elements to govern effectively in the future is
largely dependent on the following factors:
- a.
- The extent to which oil revenues are rapidly translated
into tangible economic improvements benefiting the growing
middle and working classes.
- b.
- The extent to which political means can be found to appeal
to liberal, nationalist and intellectual elements, thereby
preventing a polarization which would force these elements
into a unified opposition.
- c.
- The extent to which the stabilizing institution of the
monarchy can be protected against the Shah’s personal
inconstancy and arbitrariness.
- d.
- The extent to which the Shah’s commitment of his country
to the West is underwritten by the strengthening of Iran’s
security vis-à-vis the Soviet Union.
The ability of the United States to guide the Shah and the Government
toward solutions of the internal problems set forth in a, b, and c,
will be heavily conditioned by the extent to which the Shah’s
confidence in his country’s security is bolstered as indicated in d,
above.
U.S. Military Support.
18. Accordingly, the United States should:9
- a.
- Study the implications which the Joint Resolution may have
on the mission, size and composition of Iranian armed
forces.
- b.
- Provide necessary military assistance for the purpose of
assisting Iran (1) to build up, maintain and properly deploy
armed forces which will be capable of maintaining internal
security and with outside air and logistic support, fighting
defensive delaying actions initially from positions in
northern Iran against Soviet forces; (2) to accomplish
necessary military construction incident to this build-up
and redeployment.
- c.
- Encourage Iran to continue to participate actively and
effectively in military cooperation with its neighbors,
looking toward the development at the earliest possible time
of regional defense arrangements which will provide the
Northern Tier area with an increased element of
security.
U.S. Economic Aid.
19. In order to improve regional cooperation, to maintain confidence
in the United States and to reduce as far as possible Iranian
dependence on the United States for its ordinary requirements, the
United States should continue to provide aid on a declining scale,
such aid to be in the form of loans, unless exceptional
circumstances justify grants. General budgetary aid should be
avoided to the maximum extent practicable. Aid funds, apart from
those necessary to meet the appropriate U.S. share of local currency
costs of the military construction program, should be devoted, in so
far as practicable, to development assistance which will increase
Iran’s economic capability. Technical assistance programs should be
emphasized, especially those related to public administration
activities. U.S. economic aid should be administered in a manner
best calculated to influence the Iranian Government to make
effective fiscal and administrative reforms.
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Exercise of U.S. Influence Toward
Solution of Iranian Internal Problems.
20. The United States should exert its influence to induce and assist
Iran to:
- a.
- Translate the country’s financial and economic resources
more rapidly into politically valuable tangible benefits for
the masses of people.
- b.
- Take effective steps to introduce better over-all
coordination and national planning of the use of the
country’s resources.
21. The United States should endeavor to strengthen internal
political stability by:
- a.
- Encouraging the adoption by the Shah and the Government of
policies designed to provide a better accommodation between
the Government and the presently disorganized but widespread
and potentially important nationalism.
- b.
- Endeavoring to enhance the prestige of the monarchy as the
symbol of national unity and continuity, while encouraging a
more consistent institutionalized relationship between the
Shah’s function of broad national guidance and the
Government’s specific administrative
responsibilities.
- c.
- Encouraging the adoption of reforms which will increase
popular confidence in the gradual emergence of better
government.
22. The United States should encourage private U.S. enterprise to
participate in the development of Iranian resources.
[Heading and 10 paragraphs (1 page of source text)
not declassified] [Here follow Annex A and Annex B,
“Proposed Resolution on the Middle East Program,” submitted by
President Eisenhower to
Congress, January 5, 1957.]
Financial Appendix10
[Here follow pages 1–16 of the Financial Appendix.]
Defense Comments
The proposed levels of military assistance for Iran are based on the
force goals recommended by the JCS
and approved by the Department of Defense, together with a plan for
the reorganization and redeployment of these forces.
Estimated expenditures through 1960 are based on continuation of the
buildup of combat equipment, motor transport vehicles, and other
equipment, together with the provision of a 30-day war reserve of
ammunition. In addition, provision is made for a sizable
construction program for troop housing and related facilities, and
airfields. Provision is also made for annual recurring cost of
spares, attrition, training ammunition, and other consumption
items.
Total expenditures for the fiscal years 1957–1960 are estimated at
$185 million. These expenditures are based on undelivered balances
as of June 30, 1956, plus an illustrative program for the period
FY 1957–1960 of about $225
million, comprised of the following:
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|
(Millions of
dollars) |
| Material and supplies |
$106.3 |
| Construction |
88.2 |
| Training |
15.0 |
| PCH&T |
15.5 |
|
$225.0 |
With the exception of construction, the estimated cost of the U.S.
military aid program is, in general, consistent with the cost of
Alternative 2 of the Prochnow
Report. The recosting of certain military equipment in accordance
with the new Department of Defense pricing policy has resulted in
some reduction from the Prochnow estimates.
The Prochnow Report included
an estimated $70 million to cover the U.S. cost of construction for
Iran, divided equally between dollars (MAP) and local currency. This
amount was based on an Army construction program of about $64
million for troop housing, depots, facilities, and new roads
incident to the reorganization of forces and limited redeployment of
troops, together with about $6 million for airfield
construction.
With the adoption of the new overall defense concept in mid-1956
embracing a more extensive defense zone in both the Elburz and
Zagros Mountains, the estimated cost of construction has increased
considerably. The total U.S. cost of this construction, estimated in
January 1957 (NSC 5703) at $152
million, is now estimated at approximately $230 million, the
increase reflecting higher costs based on construction contracts
actually awarded during the past few months. Of the $230 million,
$120 million is estimated to be financed in dollars (MAP) and $110
million in local currency (including $2 million provided through the
U.S. Operations Mission). This new defense concept would entail an
estimated cost to the U.S. of about $197 million for Army housing,
access roads and other facilities—an increase of approximately $133
million over the estimated cost of the previous construction program
included in the Prochnow
Report. The new construction program would also involve an increase
in U.S. costs for air bases from approximately $6 million (Mehrabad
and Dezful), as indicated in the Prochnow Report, to $33 million (Mehrabad, Dezful
and Ghom). The costs to the U.S. for the construction of the
airfield at Kermanshah—included in the January 1957 estimates at $10
million— is not included in the present Financial Appendix, inasmuch
as the construction of this airfield is no longer contemplated.
Of the $120 million total estimated dollar cost of the construction
program chargeable to MAP appropriations, $89.2 million is assumed
to be programmed over the fiscal years 1956–1960. Of this amount,
$28 million was funded in FY
1956–1957 (including the $6 million Richards’
commitment), and $21.2 million is being proposed for FY
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1958. Specific approval
has not yet been given to completion of the construction program by
the Department of Defense. Based on estimated construction schedules
and assuming total annual appropriations for construction of
approximately $40 million, covering total dollar and local currency
costs, the above program would take approximately seven years to
complete.
