Foreign Relations of the United States, 1964–1968, Volume XXII, Iran

6. Memorandum From the Acting Assistant Secretary of State for Near Eastern and South Asian Affairs (Jernegan) to the Special Group (Counter Insurgency)¹

Washington, March 2, 1964.

SUBJECT

• Progress Report, Internal Defense Plan—Iran

The Country Team’s fourth progress report on the Internal Defense Plan for Iran, covering the period September 25, 1963 to February 3, 1964, is contained in Embassy Tehran’s Airgram 421 of February 3, 1964.² Further detailed reporting on the political situation is contained in Embassy Tehran’s Airgram 361 of December 31, 1963,³ and an appraisal of police capabilities is contained in Embassy Tehran’s Airgram 420 of February 1, 1964.⁴ These reports have been reviewed and approved for transmittal to the Special Group by the interdepartmental working group, with qualifications and additional comments as indicated in this memorandum.

1. The Threat and Iran’s Vulnerabilities. The interdepartmental working group’s last progress report on Iran, dated October 14, 1963, noted that, while “Iran is subject to the basic political vulnerabilities of a society in transition,…no clearly identifiable threat to internal security is likely to develop in the near future except in the event of the demise or abdication of the Shah.” The intervening period has been relatively uneventful, and nothing has happened which would cause us to change this basic evaluation. In fact, with the passage of time, the disposition of the important disaffected groups (middle-class dissidents, clergy, tribal elements) to engage in anti-regime adventures has diminished and the Government’s control of the country has improved. (See A–361, p. 2 and A–421, p. 2.)

2. Basic Developments Affecting Internal Security.

a. The most noteworthy internal political development was the formation of the New Iran Party, based on the intellectual-bureaucratic supporters of the Shah’s reform program in the new Parliament. This move is part of an attempt to marshal public support for the reform program and prepare the groundwork for the long-planned accession of the Party’s leader, Hasan Ali Mansur, to the premiership. (See A–361, p. 6 and A–421, p. 3.)

b. The most significant actions in regard to internal security were the arrest of a retired General for “plotting against the regime,” and the apprehension of some 40 Arab “subversives” in Khuzistan. The former appears to have been strictly a precautionary move, with no apparent evidence of an actual “plot,” whereas the latter appears to have been a response to probably exaggerated Israeli “tips” on alleged Iraqi and Egyptian subversion attempts. (See A–361, p. 2 and A–421, p. 2.)

c. In respect to the oil problem, Iran has been successful so far in forestalling unilateral actions by the Organization of Petroleum Exporting Countries against the oil companies. But the issue is not yet settled: Iran faces possible dissension with its Arab neighbors as well as internal political problems if forced to make a unilateral settlement with the companies. On the other hand, if forced to go along with OPEC-voted sanctions, Iran would face financial problems. (See A–421, p. 5.)

d. The developing “normalization” of Iranian-Soviet relations was marked by: a visit from Soviet President Brezhnev (marred by the Soviet shooting-down of an Iranian plane near the border); serious negotiations for an Iran-Soviet air agreement; concrete steps toward implementation of an agreement for joint development of a border river; and tentative arrangements for a small contingent of Iranian students in the USSR. All evidence—especially Iranian cooperation in heavy publicity for U.S. assistance during the Brezhnev visit—points to continued wariness as regards Soviet intentions and determination to avoid excessive involvement. (See A–361, p. 2 and pp. 8, 9; A–421, p. 4.)

e. U.S.-Iranian Relations were affected by: Iran’s decreasing economic dependence on the U.S.; Iran’s largely verbal flirtation with “non-alignment”; and an increasing divergence of views between Iran and the U.S. as to the Arab threat. The Shah, moreover, is expressing dissatisfaction with the quantities and sophistication of military equipment being supplied under the Five-Year MAP and has indicated interest in obtaining, by purchase if necessary, equipment not included in the strategic concept of the MAP. There is as yet no reason to believe that these trends and issues portend any essential change in the character of U.S.-Iranian relations. The recent visit of Sargent Shriver afforded an occasion for a ringing affirmation by the Shah of his fundamental commitment to the West. (See A–361, pp. 1, 2; A–421, p. 2.)

3. Developments Tending to Enhance Internal Defense Capabilities.

a. The very existence of the new Parliament has, as predicted, improved the position of the Government by tempering the constitutional uncertainties about the reform program. (See A–361, p. 3.)

b. The creation of a “Health Corps” to use conscripts for an impact program in rural areas is a potentially significant new element in the reform program and, like the already functioning “Literacy Corps,” a means of engaging the participation and enthusiasm of urban youth. (See A–421, p. 2.)

c. The security forces have continued to work toward improved capabilities in several respects: (See A–421, pp. 5, 6 and A–420, p. 2):

(1) Planning with U.S. advisers was completed for a counter-insurgency Command Post Exercise and three successive Field Training Exercises in the First Army area in west and northwest Iran during the next few months;

(2) Planning also moved forward satisfactorily for the joint U.S.-Iranian exercise DELAWAR, scheduled to take place in southwest Iran in mid-April under the aegis of CENTO;

(3) The Iranian Special Forces have been reorganized from their former status as paratroop forces and have been engaging in active training for the forthcoming counter-insurgency exercises;

(4) With the arrival of most of the AID-programmed riot-control equipment for the Tehran police, plans are now under way for intensification of the training of the police in the use of this equipment. The operational plans, command arrangements, and assigned forces of the police, the Gendarmerie and the army appear sufficient to deal with any likely and foreseeable civil disturbance in Tehran.

d. Civic action programs have been given increasing support by the Imperial Iranian Forces: The Air Force has entered more actively into this field, carrying fodder to starving livestock in snow-bound areas and preparing an operation to ferry medical teams and equipment to remote southeastern port areas this month; units of the Iranian Navy participated with a U.S. destroyer in medical assistance calls to southeastern port areas in December and have scheduled further such activities for the near future; two more vocational training centers were opened; and there has been active Iranian discussion of proposals for forming “development batallions” under military supervision. These developments have been receiving an increasing amount of publicity in Iranian media and some favorable public reaction.

4. Major Areas of Continuing Concern.

a. The fundamentals of the reform program, while being addressed by the GOI in various ways, still require more vigorous action and forward planning to ensure success. Civil service reform is stalled in the Parliament and budget reform to achieve fiscal and program control has not passed the talking stage. Land reform activities have slowed down considerably, largely because of the increasingly complex administrative problems being encountered in the “Second Stage,” although severe winter weather and some potentially beneficial reorganizations in the Ministry of Agriculture have contributed to the slowdown. While programs directed to labor and women’s groups, mentioned in the last progress report, have remained in effect, there has been no great impetus on these fronts. The regime’s base of support, which is so far largely restricted to the security forces, is too narrow for comfort and has not yet been significantly broadened by reform or political measures. (See A–361, pp. 4–6.)

b. The economic recession, with its consequent large-scale urban unemployment, persists in spite of steady improvement in the government’s financial position and the adoption of expansionary credit policies. (See A–361, pp. 2, 3; A–421, p. 4.)

c. Iran’s Kurdish problem may well be affected by the recently reported cease-fire between the Iraqi Government and the Iraqi Kurds. At present writing it is too early to judge whether the cease-fire will stick and, if so, whether it will exacerbate or ameliorate Iran’s internal security problem.

5. U.S. Policy and Courses of Action. All major U.S. assistance programs in Iran except for military advisory services are being considerably affected by Iran’s increasing financial strength and, more temporarily, by unexpectedly good crops. Indicated U.S. action in the more important assistance sectors are the following:

a. PL-480. It begins to appear doubtful that there will be sizeable, if any, sales under the Title I wheat program signed in November. Therefore the anticipated rial facilities may not be available for our programs to assist agricultural credit. Title II and III programs remain significant and are having beneficial effects, although the Iranians find great difficulty in administering Title II. We intend to keep in close touch with the GOI on the grain situation to determine, in timely fashion, if the supply factors in the next season will provide scope for a Title I program, but the outlook is not promising now because of the excellent crop prospects for the coming season.

b. Development Lending. Although the scheduled reduction of AID development loans and their termination at the end of FY 1965 is commensurate with Iran’s improving financial situation, difficulties are being experienced in this transitional period. (A–421, p. 4.) Subsequent to the Country Team’s progress report, word has been received that the GOI has finally decided to reject two Export-Import Bank loans on the basis that the terms are unacceptable and the GOI can finance the imports (road and railroad maintenance equipment) itself. In general our Government export-promotion lending programs are running into effective competition from some of Iran’s other foreign suppliers. There are only two pending AID loan applications ($7.7-million for the Iranian portion of the CENTO Turkey-Iran rail link⁵ and $1.5-million for training assist-ance to the Iranian national airlines). We plan to take early action on these two requests. For purposes of retaining influence in Iranian development and reform programs and preserving markets for U.S. equipment, we intend to encourage applications for further qualifying projects within our FY 1965 development loan availabilities for Iran.

c. Police Training. Within the context of the phase-down of the Development Grant Program as projected in the approved Country Assist-ance Strategy Statement, AID plans to begin immediately a comprehensive re-evaluation to determine the scope and nature of its police training program in the near future. The recommendations already made by the Country Team (e.g., A–420) will be taken into consideration and further Country Team assistance requested in making this re-evaluation.

Prompt action has been taken to replace about $28 thousand of AID-financed communications equipment (out of the $500,000 AID program) which was lost in transit.

d. Military Assistance. As noted above, the Shah is reacting increasingly to what he considers unreasonable restraints on his procurement of military equipment. We think he understands that MAP grants cannot be increased above the amounts necessary to meet our commitments under the five-year MAP worked out in September 1962. In view of Iran’s increased financial resources, we are now studying the feasibility of Iranian purchase of certain spare parts and other items not covered in our commitments but nevertheless supplied heretofore under MAP grants.

6. No amendments in the basic Internal Defense Plan are proposed at the present time. Since the insurgency prospects in Iran are now considered latent rather than incipient, it is recommended that the schedule for consideration by the Special Group (CI) be changed to a semi-annual rather than a quarterly basis.

7. The review of the interdepartmental working group has not revealed any specific requirements for action at this time by the Special Group (CI) or any new resource requirements other than the Development Loan funds mentioned in paragraph 5-b above. It is therefore recommended that the Special Group (CI) approve the Country Team’s fourth progress report, as qualified and expanded herein, for planning purposes.⁶

John D. Jernegan

1. Source: Department of State, NEA/IRN Files: Lot 69 D 178, POL IRAN 1964, POL 23-1-a, Internal Defense Plan. Secret. Drafted by Tiger on February 28; cleared in draft by Special Assistant to the Under Secretary for Political Affairs Charles Maechling, Jr., Abe J. Moses (G/PM), Terence T. Grindall (INR), Colonel M.R. Preble (DOD/ISA/NESA), Captain Pollard (DOD), Officer in Charge of Iran Affairs Henrietta Towsley (AID/NESA/GTICC), and Edward A. Padelford, Jr. (NR). Sent through Harriman.
2. Not printed. (Ibid., Central Files, POL 23–1 IRAN)
3. Not printed. (Ibid., POL 2 IRAN)
4. Not printed. (Ibid., POL 23–1 IRAN)
5. For the interdepartmental working group’s position on the Turkey-Iran rail link project, see the previous progress report (Memorandum for the Special Group, October 14, 1963) p. 4. [Footnote in the source text. The October 14 memorandum is ibid., Special Group, Counterinsurgency Files: Lot 68 D 451.]
6. On March 16 Tiger sent a copy of this report to the Embassy in Tehran, noting that the Special Group meeting on March 6 had accepted the recommended change to a 6-month basis for IDP reporting, and that Harriman had asked that the Ambassador write to him directly in the interim if there were any particular problem or anything the Special Group could do to enhance the U.S. internal security effort in Iran. (Ibid., NEA/IRN Files: Lot 69 D 178, POL IRAN 1964, POL 23-1-a, Internal Defense Plan)