136. Memorandum From the Department of State Executive Secretary (Brubeck) to the President’s Special Assistant for National Security Affairs (Bundy)0
SUBJECT
- Recent Changes and Opportunities in Iran
During recent months the Shah has launched and pushed with boldness and determination a reform program which is drastically and irrevocably altering the political situation and prospects of Iran. Much of the earlier context and background of Iranian politics has disappeared, and the political process has moved into a new background, with new forces operating within new parameters. Only the most general outline of the future can be predicted, for the Shah’s politico-economic experimentation is without precedent.
The Shah has made a clean and irrevocable break with the traditional moneyed, land-owning, and religious elites on whom he relied so heavily in the past. He has by-passed the secular urban elite and almost alone, except for his dynamic Minister of Agriculture Arsenjani, a handful of civil-servants, and his security forces, has driven without hesitation or caution toward building the peasant masses into the fundamental pillar of a radically different and new Iranian society. This bold venture contains a unique array of dangers and opportunities for the Shah, his country and the Free World.
In early 1961 the United States faced a discouraging prospect in that strategic country. An ineffectual Shah, preoccupied with his international posture and fascinated by military equipment, branded as an American puppet, tied to reactionary traditional elites, led a nation caught in the classic squeeze between demagogic and neutralist oriented urban intellectual forces operating within and international communism pressing from just across its borders. An apathetic, poverty-ridden peasant and proletarian mass presented a rich target for would-be revolutionary agitators. Inflationary and balance-of-payment pressures threatened to liquidate gains achieved through a substantial, but haphazard economic development program. High-level corruption was widespread.
A new and positive U.S. course of action has emerged since early 1961. Steps were taken to head off the threatening financial crisis, to [Page 312] encourage the Shah to move back into a more constitutional role, to reduce the size of Iran’s military force and improve its efficiency and public image, to work toward a moderate political synthesis, and to rely on a program of carefully planned social reform and economic development to avert what appeared to be an eventual certain overthrow of the regime followed by chaos and ascendancy to power of demagogic, anti-Western forces.
Parts of this plan worked imperfectly. Anti-inflation measures, with the additional discouragement to investment resulting from the reform program, pushed the economy into a deepening depression where it still rests. The promise of a better future through planned economic development failed to capture the public imagination and the planners themselves, faced with monumental problems, gradually began to lose heart and some resigned. The plan is still being completed, but in a lower key, in a lesser magnitude and no longer the national symbol on center stage. Prime Minister Amini, a well-meaning moderate, lost control of key members of his cabinet, who took to fighting among themselves. The Shah again took over directly the reins of government.
On other lines, we were more successful. An anti-corruption campaign, sporadic and sometimes unjust, resulted in the end of even rumors of high-level corruption. The influence of corrupt high Army officers and members of the Royal family evaporated. Our five-year military assistance program resulted in a broad understanding being reached as to the strategic mission of Iran’s armed forces, its shape and equipment, and a phased military manpower reduction. Foreign exchange reserves mounted to a healthy level, and the cost of living held steady for over a year.
The most important variable in the Iranian situation was always the Shah, even though he was frequently regarded as a constant factor. The drive toward Iran’s “revolution from the top” took form slowly in his mind, and initially it lacked direction. The realization that his security forces were ineffective in the 1961 riots preyed on him, as did the mounting strength of articulate opposition from the Right and Left. It was in this state of mind that he visited the United States in April, 1962. The words of the President at that time, those of the Vice-President later in the year, and the standards which he generally attributed to the new administration in Washington, all these contributed to the Shah’s decision to set on his new and uncharted course.
Then the Shah went on a long trip into the countryside and visited areas affected by an infant experimental land reform program started under the Amini period.1 The unusual display of affection and loyalty he [Page 313] received from the peasantry under these circumstances gave him new heart and confidence, and he plunged headlong into a reform program which is rapidly destroying the basis of traditional social order and structure in Iran. Driven by the Shah’s enthusiasm, the land distribution program has moved at an ever-accelerating pace, evolving in its own peculiar Persian fashion, under growing signs of inept planning and administration. Whatever its shortcomings—and there are many—fundamental and irreversible change is clearly underway. High School students are being drafted into military service to teach peasants how to read and write. Decentralization of governmental functions has begun. A radical workers’ profit-sharing scheme and the nationalization of forests has been announced. A nation-wide referendum on this reform program will be held this month, and the Shah is toying with the idea of holding the first really free elections in the history of Iran out of confidence in his ability to win the votes of almost all the peasantry and much of the urban proletariat.
The traditional elite is frightened, confused and furious. Religious leaders tried to attack land reform by attacking newly-decreed female suffrage; the Shah made a tactical retreat on the suffrage issue, but won a moral victory, and the mullahs now have no effective weapon other than an appeal to religious prejudices against minorities. The vaunted power of the landlords has turned out to be a paper tiger; businessmen, used to traditional customs and practices, are appalled and pessimistic.
The urban intellectual elite, centered in the National Front, finds itself even more disorganized than usual, and is attempting to ignore this “revolution from the top” while attacking the Shah as dictatorial. The communists can only argue that the Shah is not moving fast enough, and accuse him of being an American puppet.
The Shah has gone out of his way to remove any cause for genuine Soviet dissatisfaction with Iran, but resolutely refuses to compromise Iran’s security or Iran’s open commitment to the collective defense of freedom. He has made serious efforts to win the loyalty of such national minorities as the Kurds. He has leaned over backward to conciliate his neutralist neighbors, Iraq and Afghanistan. Following the long-sought agreement with us on a multi-year program of military assistance, he has turned from his former pre-occupation with military affairs. He realizes, however, that military morale is all-important until he can structure his peasant political support. The greater part of those Iranians who possess a bank account and/or a high school education come from a landlord background and most would now rejoice at his death or overthrow.
It is unlikely that this reform program, particularly the land distribution aspect thereof, can be stopped even by a change of regime. The Shah is becoming in peasant eyes their savior and hero, and it is impossible to foretell what the shape of a peasant-dominated Iran will be. With [Page 314] all its inefficiencies and maladroit administration it is a Persian program carried out by the man who is the ultimate repository of power in Iran today. The greatest single danger, aside from the assassination of the Shah, is that the machinery to implement the rural reform program will never really get beyond the land redistribution stage of destroying the landlords. The resulting deterioration and chaos in the rural areas could result in turning the newly activated peasants against the Shah and the government.
Can the U.S. help Iran make this dramatic but dangerous transition? There seems to be little we could do relative to the immediate progress of the land distribution program itself, aside from discreet moral support and encouragement. As noted previously this is a Persian program with subtle political considerations. The Minister of Agriculture, Arsenjani, who is responsible for the program has not so far desired our assistance. To attempt to enter midstream might blunt the forward momentum of the program even if it were to contribute to its more technically perfect execution. The more likely area of activity lies in addressing a whole host of new problems which will inevitably follow the wake of the main program. Technical assistance in the organization and management of cooperatives, PL-480 programs to offset probable falls in agricultural production, and financial assistance to shore up thinly capitalized Agriculture banks and/or Cooperative Unions are some of the possibilities that are presently being explored in connection with our planning of our FY 64 assistance program for Iran. As other problem areas become clearer it is expected that other methods and means of U.S. assistance can be brought to bear. We are conscious of the need to exercise the maximum imagination and flexibility in these circumstances if we are to capitalize on these new but precarious opportunities, so fateful to Iran’s future.
- Source: Department of State, Central Files, 788.00/1–2163. Secret. Drafted by Bowling and Miklos on January 18 and cleared by Gaud (AID/NESA) and Grant.↩
- Additional documentation relating to Iran’s land reform program is ibid., 788.16. A December 18 memorandum from Polk to Talbot on the subject is ibid., 788.11/12–1862.↩
- Printed from a copy that indicates Furnas signed the original above Brubeck’s typed signature.↩