77. Telegram From the Embassy in Iran to the Department of State 1

418. Subject: U.S. Persian Gulf Policy.

1. Latest draft of Persian Gulf policy paper2 recently received here strikes us in general as comprehensive, reasonable analysis of problems to be expected in post-British era and of possible measures for meeting them. Following comments offered in light of problem as seen from Tehran:

(A)

We find ourselves unable share paper’s optimism (page 19)that potential Gulf instability unlikely be of magnitude threaten U.S. interests or oil operations. As we see it here a vacuum will inevitably be created when British pull out end of 1971. Basic question is not whether there will be vacuum but who will fill it and when (i.e., before or after end of 1971). If by end 1971 no arrangements (informal though they may be) have been made for at least a limited degree of cooperation between some of more important moderate riparian states, it is difficult to believe that radical Arabs, aided and encouraged by Soviets, will fail to exploit vacuum to detriment of our vital interests. Today Prosy seems already serving as base for radical Arab subversive activities and even for armed attack on moderate Arab regimes.

Indeed paper (page 12) recognizes radical groups may be able to seize one or more governments in 3 to 5 years. Japanese Ambassador tells me in strict confidence GOJ deeply concerned re future of Gulf because Gulf oil essential to Japan’s very life. He pointed out smaller sheikhdoms that have struck oil are having to import Arab speaking teachers, technicians, etc., and they come largely from Egypt, Syria and Palestine and will facilitate radical efforts to take over. In absence of new and constructive developments Japanese Middle East experts who recently examined question only give Kuwait regime about three years before it succumbs to radicals and if there is Arab-Israel settlement, Japanese believe radicals will almost immediately step up actions against moderates.

Paper’s recognition that Soviets are devoting greatly increased attention to Gulf and to Soviet presence there also seems support this conclusion as does generally held international estimate that Gulf oil [Page 247]will be vitally important to Soviet and satellite requirements in next 10 to 15 years. Soviets already have foot in oil door and Iraq through exploitation of north Rumaila concession.

(B)
We are not quite so sanguine (page 10) that Iraq’s preoccupation with Arab-Israel, Kurds, and dispute with Iran will prevent it from undertaking, with Soviet encouragement, more active subversive role against weak, moderate Arab regimes in Gulf arena. Certainly if vacuum develops end of 1971 there will be almost irresistible temptation to subversive activity.
(C)
As to intra-Gulf tensions, paper seems obsessed with difficulties and obstacles to any meaningful cooperation (even informal) between Iran and moderate Arab regimes. While there are of course major obstacles and paper’s estimate seems valid for recent years—and indeed it may continue to be so—we do not believe that we should take a defeatist stand on this issue for vitally important period ahead. Until comparatively recently Iran’s attitude was not constructive. However, with prospect of vacuum developing after British withdrawal, Iran’s attitude has changed and it is now seeking allay fears and suspicions of Arab Gulf states by treating their leaders with respect (recent visits of Sheikhs of Sharja and Ras-al-Khaimah) and extending assistance to Saudi Arabia so that some arrangement for cooperation between Iran and moderate Gulf states can be developed. While at this juncture prospects are not very bright, when or if it becomes obvious to some moderate Arab regimes that unless something is done a vacuum may develop which could result in the disappearance their present attitude towards Arab-Iran cooperation.

Bahrein settlement involving Iranian abandonment of its traditional claim and acceptance of Bahrein membership in FAA if Bahrein so desires could increase possibility of at least informal cooperation which could result in partially filling vacuum of British departure. In any event we feel that it serves US interests to encourage Iran-Arab cooperation in Gulf where this can be done without being counterproductive, as it can be done in Iran. (See E below.)

2. Following are views re certain matters on which paper indicates early decisions needed:

(A)
Future of MIDEASTFOR. We believe continuation MIDEASTFOR useful demonstration of US interest in peace and stability of region. Conversely, its withdrawal, unless riparian states so desired, might be interpreted as US indifference to future of region. Until there is Bahrein settlement, it awkward to discuss this matter with Shah. However, when Bahrein’s future decided, we believe Shah’s hands will be free to adopt more tolerant attitude, particularly if an independent (or FAA federation member) Bahrein is agreeable to continued home porting there of MIDEASTFOR. If necessary I could discuss this matter with Shah before [Page 248]Bahrein settlement basing my presentation on assumption that independent Bahrein agrees to continuation home porting of MIDEASTFOR in Bahrein. However, it very delicate matter and pending Bahrein settlement Shah may feel unable to be very forthcoming on future arrangements re territory he considers traditionally Iranian.
(B)
US policy toward UN membership for FAA for single states. (No comment.)
(C)
US arms policy toward Gulf Arabs. We concur US should be prepared to consider any actual requests for sales carefully on case by case basis in light our over-all Gulf policy. While Iranians might be sensitive if these small states sought massive arms shipments which they obviously could not use and which might become a windfall arms cache in unfriendly hands, a reasonable policy of arms shipments should not disturb them, particularly since GOI would probably prefer to have us rather than some other states supply them.
(D)
Foreign Service posts in area. Both political factors and commercial considerations argue for establishment of additional Foreign Service presence in lower Gulf. In first place, with increasing oil revenues to small Gulf states our commercial interests alone, on which our balance of payments so heavily depend, would seem to require a presence that could assist American business and industry more effectively than now in getting a greater share of this lucrative and steadily expanding market, which British obviously hope to retain largely for themselves. While such a presence could be relatively low profile, it would enable us to explain our policies and, if coupled with some cultural and technical assistance, could lead to a slow expansion of our over-all influence. If we retain MIDEASTFOR in Gulf, it should not be only US presence there and if we withdraw it a commercial and political presence would still serve our own best interest.
(E)
We also suggest a considered decision would be useful as to whether we discreetly encourage, where we can do so without being counter-productive, cooperation between moderate Arab riparian states and Iran looking to arrangements that could strengthen security and stability in Gulf. While in no way underestimating difficulties of such cooperation in security and other fields, we think that if it could take form (even though it initially might be very informal) it would hold best hope for filling vacuum caused by British withdrawal and thus contribute to maintenance of peace and stability in this vital area so essential to our own balance of payments and other interests and even more essential to our NATO and Japanese allies. This does not involve our “sponsorship” of such an arrangement but discreet “encouragement” where possible.

MacArthur
  1. Source: National Archives, RG 59, Central Files 1970–73, POL 33 PERSIAN GULF. Secret. It was repeated to Jidda, Kuwait, London, New Delhi, and CINCSTRIKE/CINCMEAFSA.
  2. See footnote 2, Document 76.