Foreign Relations of the United States, 1969–1976, Volume XXVII, Iran; Iraq, 1973–1976

77. Memorandum From Secretary of State Kissinger to President Ford¹

Washington, September 6, 1974.

SUBJECT

• Ambassador Helms Assessment of Situation in Near East and South Asia

When Richard Helms took up his post as our Ambassador to Iran, we asked him to keep watch over developments in the entire region stretching from Iraq, Iran, the Arabian Peninsula, Persian Gulf, and Afghanistan, to India and Pakistan. Ambassador Helms has just sent me his annual assessment of developments and prospects in this region. (A reference map of the region is at Tab A.)²

1. The Price of Oil: With oil selling at four times its October 1973 price, stabilizing the price of oil must be ranked as one of the critical problems in the area. As Helms notes, the future of oil prices depends on the success of our endeavors for a peaceful Arab-Israeli settlement.

We must stabilize the price of oil, Helms is convinced. We cannot accomplish this by using the Saudis, he believes, because they probably cannot be so used; we cannot achieve it by threatening the Shah, because this only makes him less willing to compromise.³ Helms, who knows the Shah well, believes that the Shah is “not an unreasonable man” and can see himself the calamitous consequences of an economic collapse in the West.

We should therefore try to make clear to the Shah the ruinous effects of the excessive oil prices. We should also try, Helms suggests, to get the Chinese to make the same point to the Shah. This is not a far-fetched suggestion. The Chinese (who are good friends of the Shah) should hardly welcome an economic collapse of Western Europe which would free Soviet forces for redeployment in China’s direction.

2. India–Pakistan–Iran Relations: Apart from the Indian nuclear test, most developments in the region in the past year have been favorable to our interests and the interests of our friends. The Shah has contributed to this dramatically through a series of initiatives offering, out of his new oil revenues, financial assistance to friends and adversaries in the region. He has given support to our friends in Pakistan. He has offered massive development aid to Afghanistan, which many had feared would be a Soviet client state. He has offered oil on generous credit terms to India, to mitigate their rivalry and wean India away from the Soviet Union. India has refused Soviet requests for naval base rights in Indian ports. This Iranian leverage over India and Afghanistan is a major reassurance to Pakistan and a major influence for stability.

3. The Indian Nuclear Test: The Indian nuclear explosion, of course, raises the danger of proliferation in this region. Nothing we can say will effectively calm the Pakistanis on this subject, and they are likely to turn more than ever to the Chinese for insurance, protection, and help. The Indian explosion has made Mrs. Gandhi overwhelmingly popular in India, however, and considerably strengthened her government.

4. The New U.S. Rapprochement with Egypt and Syria: This development, which Helms calls “extraordinary,” is another major event in the last year. He calls it a revolution in geopolitical relationships, giving us and our friends a chance to align Egypt firmly on our side for the first time since 1955.

5. Persian Gulf and Indian Ocean: Our friends in the Arabian Peninsula and Persian Gulf are on the whole stronger and better able to defend themselves than they were a year ago. At our urging, they are cooperating better together. The Shah’s military aid has enabled the Sultan of Oman to contain the rebellion in Dhofar which is supported by Soviet-leaning South Yemen. The Chinese seem to be living up to their promises to us and to the Shah to cease direct aid to the Dhofar rebels. The Shah secretly urged the sheikh of Bahrain to permit the U.S. to continue our naval presence (MIDEASTFOR) at Bahrain, as a counter to increasing Soviet naval activity.⁴ Long-standing boundary quarrels have been settled, meanwhile, between Iran and two Gulf states and between Saudi Arabia and Abu Dhabi.

The Soviet Union has increased its naval activity in the Indian Ocean. The Soviets signed a Treaty of Friendship with Somalia, providing Somalia with tanks and MIG–21 aircraft in exchange for a 10,000-foot airstrip which can be used by Soviet aircraft for reconnaissance over the Indian Ocean.

6. Iraq: Iraq has continued its disruptive activity against North Yemen, Iran, and the Persian Gulf states, and has continued to receive massive quantities of sophisticated Soviet military equipment. In the face of this, the Shah has expanded his own military forces and given considerable aid to the Kurdish rebellion inside Iraq. An offensive against the Kurds since May 1974 has tied down at least two-thirds of the Iraqi army and neutralized Iraq’s potential for adventures in the Persian Gulf and for disrupting the Arab-Israeli negotiation. Iraq has recently hinted to other countries that it would like to end its isolation and its dependence on the Soviet Union; the Shah and Ambassador Helms feel the pressure should be kept on Iraq, to bring a more responsible government into power.

7. China’s Role: The Chinese have spoken often to President Nixon, myself, and Ambassador Bruce of the pivotal importance of this region, which they speak of as the “southern axis” or “southern rim of Asia.” The Chinese see their interest as identical to ours and Iran’s: to counter Soviet penetration. China has supported the Shah, ended its own support of extremist movements, and encouraged us in support of conservative elements throughout the area who oppose Soviet expansion.

1. Source: Ford Library, National Security Adviser, Presidential Country Files for Middle East and South Asia, Box 12, Iran (1). Secret; Sensitive. Sent for information. A stamped notation on the memorandum indicates the President saw it. Ford also initialed the memorandum.
2. Tab A is not attached. Helms’s assessment is scheduled for publication in Foreign Relations, 1969–1976, volume E–9, Documents on Middle East Region; Arabian Peninsula; North Africa, 1973–1976.
3. Telegram 7860 from Tehran, September 18, transmitted a message to Kissinger from former Ambassador and Harvard economics professor John Kenneth Galbraith during his visit to Tehran as an official government guest: “For Christ’s sake or appropriate Islamic equivalent do urge local officialdom to cease talk about oil blackmail, boycotts and like. The talk obviously accomplishes nothing, excites serious anger and could easily complicate your tasks here and with Arabs too including oil price problem itself.” (Library of Congress, Manuscript Division, Kissinger Papers, Box CL–152, Iran, Chronological File, 4 May–23 September, 1974)
4. See Document 64.