IRAN: Oil, Grandeur and a Challenge to the West

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The Shah's underlying aim in building his Great Civilization is to make Iran not only secure but self-sufficient. "Since World War II," says Premier Amir-Abbas Hoveida, "we have seen that pacts and bilateral arrangements don't work when you need them. Our buildup is our only way of survival." The Shah is succeeding so adroitly that even old adversaries look at him with respect. The Arab states of the Persian Gulf, who share nothing culturally with Iran but religion,* are apprehensive about the massive military power the Shah has been building up with oil income. At the same time, they are pleased with the Shah's insistence on higher oil prices.

The Soviet Union, which during World War II occupied and attempted to annex Iran's northernmost province of Azerbaijan, is now almost purringly cooperative. Moscow has toned down the anti-Shah propaganda it formerly beamed forth as a way of promoting Iran's outlawed Communist (Tudeh) Party. In exchange for Iranian natural gas, which is piped over the border from Aga-jari, the Soviets constructed Iran's first super steel plant at Isfahan—now only 24 miles from an American-staffed helicopter school that is the world's largest. Relations with Moscow are so correct these days that the Russians made no complaints when the Shah recently raised the price of natural gas from 30.7¢ per 1,000 cu. ft. to 57¢.

The Shah considers himself a good friend of the U.S. Indeed, relations between Washington and Tehran have generally been excellent since 1953, when the CIA fomented demonstrations that led to a coup against the late leftist Premier Mohammed Mossadegh, thereby allowing the fledgling Shah to return to power after a brief, humiliating exile in Rome. These days, however, there is more than a single view of the Shah in official Washington, and sometimes he is given to wondering which one reflects the real Government position.

Hired Gun. At the Treasury Department, for instance, the Shah is generally thought of as a tyrant and a megalomaniac whose stubbornness and greed over oil prices represent a threat to the economic stability of the world. Treasury Secretary William Simon has publicly described the Shah as a "nut" and as "irresponsible and reckless." The Shah is somewhat more highly regarded at the Pentagon. The Defense Department is pleased with the Shah's massive purchases of sophisticated U.S. weapons, but some intelligence analysts cynically regard the Shah as little more than America's hired gun in the Middle East. At the State Department, by contrast, the Shah is considered an enlightened ruler who is propelling his backward people into prosperity and is defending his own country, as well as U.S. interests, against the spread of Communism.

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