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88. Memorandum of Conversation1

PARTICIPANTS

  • Mr. Hushang Ansary, Iranian Minister of Economic Affairs and Finance
  • Dr. Etemad, Deputy to Prime Minister for Atomic Energy Affairs
  • Mr. Mustoufi, Petroleum Industry
  • Mr. Vafa, Under Secretary for International Affairs, Ministry of Economics
  • Dr. Hatef, Ministry of Foreign Affairs
  • Rear Admiral Ardnan, President of Electronics Industry
  • Mrs. Rouhi, Director General, Ministry of Communications
  • Mr. Fardshisheh, Special Assistant, Minister of Industry
  • Ambassador Sadri, Protocol
  • Dr. Henry A. Kissinger, Secretary of State and Assistant to the President for National Security Affairs
  • Ambassador Richard Helms, U.S. Ambassador to Iran
  • Mr. Alfred Atherton, Jr. Assistant Secretary of State for Near Eastern and South Asian Affairs
  • Mr. Winston Lord, Director, Policy Planning Staff
  • Mr. Robert Oakley, NSC Staff
  • Ambassador Robert Anderson, Special Assistant to the Secretary for Press Relations
  • Mr. Peter W. Rodman, NSC Staff
  • Mr. Miklos, DCM

SUBJECT

  • First Meeting of US–Iran Joint Commission

[The Secretary flew from the Guest House to the Foreign Ministry by helicopter and then traveled by motorcade to the Ministry of Economic Affairs and Finance. Greeted by Minister Ansary, the Secretary and Ambassador Helms conferred privately in the Minister’s Office from 9:30–9:40 a.m., and then joined the larger group in the conference room.]

Ansary: We’ve had a request from the press whether they can take pictures at this meeting of the Commission. I said it would be subject to your approval.

Kissinger: As long as you don’t point a finger at me while they’re doing it. [Laughter] [The press was admitted briefly to take photographs, and then dismissed.]

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Ansary: With your permission, may I extend a warm welcome to you and the members of your party. We are delighted to have you with us. And may I say we follow your itinerary closely, and we are very appreciative of your perseverance, your hard work and your dedicated efforts to the maintenance of peace in the area. We feel strongly that the time has come for the countries of the region finally to disengage themselves from policies of confrontation and to engage themselves in improving the economic and social welfare of their peoples. Therefore we are very appreciative of your great efforts since you assumed your high office.

We also are very gratified at the formation of the joint ministerial commission. It is very gratifying that you have agreed to serve as co-chairman of this commission. I recall warmly my days in Washington and serving with you and your colleagues. I look forward to the constructive work of the commission. With your leadership and your great contribution, we will be able to embark on many projects of mutual benefit, the advantages of which will go beyond the boundaries of our two countries, for other countries in the area and in other respects.

I’m sure, Mr. Secretary, you are familiar with the efforts made in this country under the dynamic leadership and initiative of His Imperial Majesty, the Shahanshah. But let me discuss it insofar as it has a bearing on our discussions.

In the next decade, we expect to pump $180 billion into the development of our economy. By 1983, we expect our Gross National Product will reach $190 billion.

Kissinger: In current dollars?

Ansary: Yes. It’s trivial compared to yours, but it is significant compared to that of many advanced countries.

Kissinger: Western Europe.

Ansary: Yes. We expect per capita income to reach $4000 by that time. We expect our industry by that time will grow 16–18% a year. Our agriculture growth rate hopefully is expected to reach 7–8%—which is rather ambitious, but with the priorities we are placing on it, we hope to achieve this. By 1983, we hope we will produce one million cars a year, 3 million television sets a year, 3.2 million refrigerators a year, 1.5 square miles of textiles, 400 million pairs of shoes, 15 million tons of steel, and one million tons of aluminium. And we hope to be the seventh largest manufacturer of copper and copper products by then, with a production of $1 billion a year. By 1983, we hope every three households will have two cars, every household will have a TV and refrigerator, and every third household will have two phones.

We hope our trade will reach $40 billion in annual transactions. And we hope the United States will remain a large trading partner, and [Page 261]maintain her share of our trade. Trade in goods and services remain the most effective method of recycling petrodollars. Our imports this year will be $10 billion, as against $4.3 billion last year.

Also, under the direct orders of His Imperial Majesty, we have begun an extensive overseas investment program.

Our objectives in this, first, are to help increase world food production and to try to avert the shortages we face. Second, we are aiming at helping the developed countries and the less developed countries in their efforts to overcome a serious economic recession. Our efforts are aimed at helping the countries in the area in their economic development programs, because only in that fashion can we maintain peace and stability in the area. Fourth, our intention is to ensure our continued access to a steady supply of raw materials and modern technology for Iran, and access to materials in countries in the region.

In this way, we will be able to embark on extensive manpower training, which is of critical importance. These programs in the area require foreign assistance. We have done this in highly concessionary terms, with soft loans and in limited cases through grants. We have done this in Asia, Africa, and a few in Western Europe. Our commitments exceed $7.7 billion. By 1983, we expect 6% of our Gross National Product will be earmarked for these programs.

We feel that the long-standing bonds of friendship between our two countries have opened many doors for new opportunities for cooperation. The areas are already varied and cover an impressive list of activities. Therefore we feel the Joint Commission should focus on the more important areas. We should emphasize private enterprise in both countries and work to shape regulations for their activities in our country, because of our public sector. On our side, we should be able to contribute towards coordinating efforts to make it possible for American enterprise to participate more extensively in our development.

In our opinion, while a very broad range of subjects have been envisaged, and reflected in the communiqué,2 some of the aspects could be undertaken immediately through the formation of subcommittees. We are flexible. We think that to prepare for the next meeting of the Commission, the work of the subcommittees should begin immediately so we can have the results by the next meeting.

In our opinion, the field of nuclear energy is one of the most important areas. This includes nuclear reactors and plants, uranium enrich[Page 262]ment, and also training of manpower. Already an extensive dialogue is going on, and we can iron out the difficulties.

In the field of agriculture, we are prepared to go extensively into cooperation both in Iran and third countries for solution of the food shortage. With India, Indonesia, Sri Lanka, Egypt, we have already started in fertilizer production.3 We would welcome your assistance.

We are also interested in a long-term agreement with the United States to meet some of the requirements of our country in this area. We are looking beyond the immediate supply situation, and arrangements should be possible that are of advantage to both, regardless of fluctuations in the world supply and demand.

In addition, more extensive contact with NASA on a more direct basis would be helpful to us.

Let me turn now to industry. Of particular importance is the development of a modern electronics industry, manufacture of steel through new processes, aluminum industry, ferrochrome and ferromanganese, and transfer of technology and manpower training. In these fields, and the petrochemical field, we not only are prepared for joint ventures in Iran but also to go into third markets with the United States making the maximum use of the comparative advantages of both for mutual benefit.

I can express full confidence that taking advantage of your presence here today, and with your leadership and personal attention, we should be able to get the Commission off the ground on these and any other ideas you have and we can emerge from the meetings with highly impressive decisions.

I am sorry your visit here is very short. I am pleased you can visit Isfahan and Shiraz with your very charming wife, and on the basis of your talks with His Imperial Majesty, I hope you can find the time for including Iran on future itinerary.

May I introduce my colleagues: To my right is Mr. Etemad, who is in charge of atomic energy affairs; His Excellency Mr. Mustoufi, of the petroleum industry; Dr. Vafa, Under Secretary for International Affairs at the Economics Ministry; Rear Admiral Ardnan, President of the electronics industry; and Ambassador Sadri, who has been with you. Behind me, Mr. Hatef, of the Ministry of Foreign Affairs; Mr. Fardshisheh, Special Assistant to the Minister of Industry; and Mrs. Rouhi, of the Ministry of Commerce.

Kissinger: Mr. Minister, after listening to your presentation, I can see why in the long and distinguished history of Iran there were so [Page 263]many grandiose political structures. Because you certainly think in big terms, and that is what the world certainly needs now.

You know Ambassador Helms. To his right is Winston Lord, now Director of Policy Planning, who has been a close associate of mine; then Peter Rodman, another close associate of mine over the years; Mr. Atherton, who is Assistant Secretary for Near Eastern and South Asian Affairs; Mr. Robert Oakley, who was at the Department of State and is now an assistant on the National Security Council Staff. Then Mr. Robert Anderson, who is our press spokesman but also has substantive responsibilities.

First, let me thank you for your warm hospitality. When we come to Iran, we feel we are with friends, and we deal with each other in that way. I am pleased to be associated with His Excellency the Minister, and I know the Commission will make a contribution not only to the region but beyond the region.

Your outline of the future of Iran was impressive—because of the scale of endeavor—and it was quite moving, because what the world needs now is a conception of its possibilities. On one end of the scale is Bangladesh, which can project only misery. But at the other end are countries like Western Europe, that are at the level you are aiming at, who are seized with self-doubt. To see somewhere in the world a country that takes charge of its future will have an effect beyond Iran.

From the Minister’s presentation, to get away from confrontation and to take advantage of the possibilities of technology is indeed the way to peace, not the day-to-day issues the press always reports. How to solve the Middle East is complicated, and in a way irrelevant; but what the Minister outlined today, even though it is not as melodramatic, will have more effect on people’s lives.

As my colleagues know, I’m a passionate advocate of these commissions. Even though they often fall into the hands of bureaucrats who do what they know how to do, plus 5%. [Laughter] I see it in the terms the Minister outlined. This framework gives me great hope.

On our side, within the limits of a bureaucracy which can’t avoid twenty endorsements on every paper, we will do our best to streamline the procedures and think creatively. We should both offer ideas and instruct our subordinates to be daring.

No doubt we will find other areas. But let me say:

On nuclear energy, we talked privately before. We have a concern to prevent the spread of nuclear weapons, and therefore a concern to avoid countries who get nuclear technology from spreading into weaponry. So far we are fortunate that the weapons are now in the hands of countries who are either responsible or cowardly [Laughter]—one or the other. But we can’t count on this. The world is tense enough as it is without compounding it.

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This doesn’t affect your program on peaceful uses; it has to do with the safeguards. We strongly support your program.

Agriculture is a field I’ve discussed with His Imperial Majesty last night.4 I had the impression he shares our view that world food, like energy and inflation, is a major world problem for cooperation, and that Iran can play a major role. We didn’t go into detail, but I think Iran could act as the center for the whole region for advanced technology, for example, fertilizer, and resources for investment in the area. We would be prepared to deal with Iran in this spirit to see how we can be helpful, not only with Iran’s national problem, but beyond this, how Iran can help organize the food needs of the whole region. One subcommittee could do this.

The Minister mentioned a long-term agreement to meet the needs of Iran. In principle, we would be receptive, but I need a clear idea of what he had in mind.

The Minister mentioned NASA. Is this in connection with agriculture? We are now using satellites for surveying and forecasting. We will share the results certainly with Iran. If you have in mind space cooperation, in principle we don’t exclude it. But at a minimum, for the use of space techniques for stimulating agricultural production, I can tell you now we would be prepared to design joint projects.

The perspectives for industry—again, we should get our people together and ask them to think in big terms. Because what you said is in principle the direction we think we should go.

I say this in a spirit of self-criticism—we ought to give this Commission and Iran–US relations the forward thrust implicit in your remarks. But in 1969, His Imperial Majesty first said to me the importance of increasing Iran’s oil production from four million barrels to 6. I owe it to our Iranian friends to point out that I submitted this proposal to our experts, who said this was a sly Iranian trick to capture a bigger share of the limited oil market and to squeeze the Arabs out. The Shah said we could have most of this new production. This sounds ridiculous today. Our Iranian friends were 100% right, and we were 100% wrong. So we should look ahead into the real future, not just project a little bit forward like bureaucrats.

I come here at a time when it isn’t clear from the American press and even one or two American officials whether I’m here to negotiate a disengagement of our forces [Laughter] or an armistice [Laughter], or whether we’re dealing with friends. But the press isn’t making foreign policy. If we could control them, we would keep them from writing against me [Laughter]. So the people who make foreign policy consider [Page 265]Iran a traditional friend, and our relationship has a political significance far beyond our bilateral relationship. Therefore, I am not here to discuss this or that technical issue. Five years from now, our discussion about oil prices may seem as limited as what I said about oil production in 1969. We are two countries who have always had no complexes about each other and who think with the long view. This is the President’s view. We have the greatest admiration for His Imperial Majesty, not just as a leader of a friendly country but as a statesman. Therefore this is the most important stop on my trip.

Could you answer my question?

Ansary: Yes, thank you for your very kind remarks. Likewise on our side we will do everything we can to move in the direction you pointed to. I am also pleased at your remarks at the public relations aspect of our relationship. Nothing in the press has affected the close relationship we have. But to the extent that the news media in any country play a part in giving an impression of an attitude, your remarks have a great deal of impact. I note you have the intention of saying a few words at the press conference.

When I was in Washington last month, I answered a question by Andre Marton of the Associated Press that the fact of differing views doesn’t affect the close bonds we have. And your affirmation of these sentiments goes a long way to help the situation.

With respect to a long-term agricultural agreement, there are three items of importance to us: Wheat, maize, and barley are of immediate interest to us, but there may be others.

With respect to NASA, our proposal is aimed mainly at our agricultural development program. We welcome your positive reaction, Mr. Secretary, because we think a direct link between our Ministry of Agriculture and NASA would be very helpful.

With respect to Iran acting as the center for regional development of agricultural technology and coordinating efforts in the region: If subcommittees including agriculture are agreeable to you, I suggest we ask a subcommittee to study this and do a paper for the next meeting.

Kissinger: I agree. May I make one suggestion: We are now in a period of transition in America between the orientation of our agriculture towards a totally free market, and the new world reality. This is why we had to cancel some contracts made—in good faith—with the Soviet Union, and postpone some with Iran. So, before we get this long-term arrangement set up, if we could exchange information better on needs . . . .

[To Ambassador Helms:] You have an agricultural attaché.

Helms: A very good one.

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Kissinger: It’s now really an informal export control. Iran would receive the highest priority, so you would run no risk. But it would help to plan.

Ansary: We would be happy to do that.

Kissinger: Then when we have a Commission, we can do it in that framework. Can we say we’ll set up subcommittees within 30 days? Get some recommendations to us.

Ansary: Yes.

Kissinger: Bear in mind that it takes 28 out of 30 days to get a paper from where it’s received in the State Department to my office [Laughter].

Ansary: Shall we say 60 days? Because we have the same thing on our side. [Laughter]

Kissinger: The State Department computer broke down last night and we weren’t getting cables. We have no other capability. We are worse off with the computer! We should get an appropriation for a manual system. [Laughter] The computer is fixed anyway so I see nothing of consequence. [Laughter]

Ansary: We’re very pleased with this meeting, Mr. Secretary.

[The meeting ended at 10:35 and the Secretary and the Minister proceeded down the hall to hold a joint press conference. The transcript of the press conference is at Tab A.]5

  1. Source: National Archives, RG 59, Records of Henry Kissinger, 1973–1974: Lot 91D414, Box 21. Secret; Nodis. The meeting was held at the Iranian Ministry of Economic Affairs and Finance. All brackets are in the original. Telegram 220253 to Tehran, October 6, contains the Department’s conclusions concerning the planning and preparation for this first meeting of the Joint Commission. (Ibid., Central Foreign Policy Files, D740283–0453)
  2. The communiqué released on November 2 is in telegram Secto 336/9236 from Tehran, November 1. (Ibid., D740313–0826) It is printed in the Department of State Bulletin, November 25, 1974, pp. 729–730.
  3. See footnote 9, Document 89.
  4. Presumably at the meeting on the evening of November 1; see Document 89.
  5. Attached; it is printed in the Department of State Bulletin, November 29, 1974, pp. 724–729.