In the name of Allah the most Compassionate and Mercif u The Center for the Publication of the U.S. Espionage Den's ~Iocuments Ayatollah Taleghani and Dr. Mofatteh intersection,
P.O. Box: 15815-3479 Tel: 824005 TABLE OF CONTENTS 1- A Letter For Khalatbari From Helms ...... 1 Annex of General Security Procedures ...... 3 A Letter For Helms From Khalatbari ...... 4 2- Senator Percy's Visit: Political Issues ...... 9 a- 601 Attitude TowardsArab-Israel Confrotantion ...... 9 b- Palestinian States ...... 10 c- ~uture of saudi ~rabia...... 10 d- ELws of Iranian Public ...... 10 3- Movmwnt mardsa Welfare State ...... 12 A- m~rtionand Manpower ...... 12 B- Wdiolal Reform ...... 15 C- Housing ...... 16 D- Land Usage ...... 18 E- Orqanization of Iran's Farmers ...... 19 F- welfare and Social Security ...... 21 Conclusion ...... -22 Anti-land Speculation Bill ...... 23 Law of Formation of Corporate Farming Companies ...... 25 4- End of Tour Report - The outlook for Iran ...... 31 ~ntroduction'...... 32 The Domestic Economy ...... 32 External Economic Relations- Implications for the U.S. ... 35 The Political Contradiction ...... 39 Possible U.8. Leverage ...... 41 5- iranian Attitude Towards Foreisners in Iran ...... 43 Interview with Dr. Keyvan Saleh ...... 47 Interview with Students ...... 51 Interview with A 24-Year Old Iranian in Business ...... 51 Interview with Mrs. Farhang Mehr ...... 53 Interview with Dr . Mehdi Heravi ...... 54 Interview with Shaul Bakhash ...... 58 Interview with shahram Chubin ...... 61 Interview with Barry Chubin ...... 62 Interview with Mr . -himi Nedjadi ...... 64 Interview with Mr. Behrouz Shahandeh ...... 66 Interview with Ali Ghazi ...... 68 Interview with Mr . Mehabi ...... 70 Interview with An Iranian Teacher ...... 71 Interview with Mike Pishvaian ...... 73 Interview with Mohsen Darbani ...... 75 Interview with Mahnaz Afkhami ...... 76 Interview with Dr. Ziai ...... 78 . Interview with KHodadad Famanfamaian ...... 80 Interview wit11 Mohamad ~aheri...... 84 Interview with Sa'id Kokabi ...... 86 Interview with Mr.. Parsa ...... 87 ~nterviewwith Mr . Shabi ...... 88 Interview with Cyrus Elahi ...... 89 Interview with Dr . Kambiz Mahmoudi ...... 90 6- Tabriz Riots of'narch 18, 1978 ...... 93 7- Rioting and Civil Insurrection in Tabriz ...... 95 8- porn and Tabriz Unrest ...... 100 9- General Hassan Pakravan's Desire for Greater U.S. Advisory Role to the Shah ...... 101 10- Popular Perceptions of the Amouaegar Government ...... 104 11- Discurbances in Isfahan ...... 106 Hit-and-Run Vandalism ...... 106 GO1 Involvement/Collusion ...... 107 Second-Phase Demonstration ...... 108 Rumors. Rumors. and Reaction ...... 109 Analysis ...... 110 12- Social Unrest in Iran (Shiraz) ...... 112 13- Iran's Military Imports and Petroleum Exports ...... 116 Iran's Foreign Trade and current Account Balances Worldwide and with the United States 1976 &77 ...... 117 Table.1 . Iran's Foreign Trade ...... 119 Table.2 . Merchandies Military Imports of Iran ...... 120 Table.3 . Iranian Retroleum Exports and Estimated Revenue 1976 and 1977 ...... 121 A Letter For Financial Officer ...... 123 Iran: Military Aid Agreement and Deliveries ...... 125 Foreign Military Sales .Programs ...... 126 Foreign Military Sales .deliveries ...... 127 IRAN Safc!!guarding of Classified Infornration
-4greenccnt ~~ictedby exclurrage uJ notrs Sig~ccdat fikrurr May 28 arid June 6,1971; Kntrrecl irrto$orrr J~crre6, IY7C.
EXCELI~E~(:T : I linve t11o honor to reft.1. to the growing c.\c.I~~~ugeof classified inforn~alio~~between our two governments. As is cudtornary in the c~onductof diplornntic rclatiorls, ~uchinformation iu excharlged in confidence, with dre explicit or tacit understunding that the confidence will be respoctctl. Tllia priuciple is reflected in domestic ls~sant1 rc~ulatiotlsprotecting State and Military secrets and is ulso elnbodiecl in vurious lnultilatcral uritl biluteral agreements. The Uiiited States Government believes it t desirublo to record tl~c basic pl.it~ciplcswhich govern tho exchange of such infornmlion in order to fwilitatu and furtllor pron~oteercliangeu of such information between our two governments. I have the honor to propose, therefore, a confirmation of tlio Mutual Understanding tlitlt, with respoct to the exchange of* colaqsified information commi~rricutetl directly or indirectly Betwcell our two governlaents, the recipient: a. will not reluasu the infornlution to a third govcrnnlclrt without tl~eapprov~~l of the rulcnring govenlnlent; b. %willuntlerttbko to afford tlio information eubtdantiully tho sanic! dfgec of protection ufrortled it I)y tllu rduaving govt?rnment; c. wlll not use thu infonnution for othex tllan tliu plvpose for which/ it was givcil; ant1 tl. will rc~spectprivate riglrtu, suclr as puto~tts,copyright*, or trudn sc.crcis w1Jcl1 are ulvolvcd in tho infolalabion. For the ~)urlx)wsof tliis ugrec~irent,infor~rlation is uutlerstootl ill iki broadest sense to include, among other things, any documerrt, writing, sketcl~,phoiog~.t\pll, plun, ~notlel,specification, tlesipl or prototypo, whetlier co~~unrrrricatodby orul, viuuul, or written u~eunuor by (runs- fcr of cquipl~le~~tor 1111ilclia1s. 1 Tl~csuplillciples will r~pplgin tlio cRSC of tho Govcrnniont of the IJlri(ct1 Sttttrs to irifor~~~nt~io~idczi~w~tetl by the Govcrnmnnt, of tho U~iibtlSlatrs us "<:onficieliti\iJ", "Sccrct", or "Top Secret", ant1 to i~rfornlt~tionclcsignnttrcl by ,yy!)ucGover~inirnt c:omhig within tlio ~)urvicwof tlris agree~i~eat.Tliis ugrccmc~itwill ilot, llowcvc~r,apply to i~~fot~rncllio~ifor wliic.11 sl)ociul agrc!ernt!ut:: nrny be requirctl. ,,1 llis ~n~ His Excrllency AIIBAB-ALIK,HALATBABI, MiniBtur jor Foreign Affairs, Tehran 2 Annex of C;cnerul Security Procedures I. O1Hcit~linformulion givori u security clussilicuiio~~by citlror of ol~r~wo G~VO~III~~OII~.~ or I)y IL~~(~I~I~ICII~ of o11r t~vo Govcr~i~ni~~its n~id i'~~~*~iisliedby ctitl~rr Ciovernriicnt to tho other tllluugli Goverllliirnt c.l~~~~lnelswill I)H ~hsig~i(r(Ia (:llik4licati01i by al11)rol)riillls authorilios of I lie rec~livirigG~VC~IIIIICII~ which will US+LIPO 11 (IC~PIWof protcct.io11 11iv1eI or r~tr1i1i itrcq~iril by tbc Ge)vonil~lcot III lli+liing t IIP i~~foi.~n~~tion. 2. 'rho rcbc-il)irnl(;r~vrr~u~~cr~lt I\ ill iiot II>C ~IICIIi~ifor~nutio~~ lor ollicr I li.111 tllc I)II~~JI)+~Sfor wlii(.ll it W~I- I~~r~iiJ~evlIIIIII \\ 111 111)ldiwlos~ III 11 inforl~i~~lion(I* II t IlirO ( ;(I\ (br11111~lit\vi~liottt tlic prior (50~~st!i~t of I l~c*Govor~~~~i(!~it ~vlli011 I'III'III~I~I-(I I lie i~~l'or~iiutioll. .:. Wit11 I (-YIII~(.I, 11) 4111'11 ~II~~I.III,I~ioli I'III ~iirIi~:(lill ce)~i~i~*(-tictliwith 4 o111,ruc:lsIIIII~I~ by c~it~llc*rC;ovc~~.~r~~~otit, it-, ILRI:III-~I-,, or privlrlo cntiticb+ or ~udividrlnl?witlli~i its k:rriiot~ will) the o~1rc.r Govcr~iniolit, its it!:c~ucios, 01. privutc1 c!lititics 01 i~~tlivi~l~irrlswitliiii ila tctrritory, tho (;ovcrtl~~it~~Iul tllo cb~)\llitryin wliic:ll pcrt'o~.~~~~~~iceuntler tho contract I- Inking j)I~ie~bwill assuuw ~~q)ol~+ibilityfur atl~rii~~ihtoriilg security Illchilrlirosfor I llc protectioll of ~LI(.IIrlll.i~ili~(I i~il'vr~ii~tti~ii ill u~cordance wit11 sbanclurrl; t~rid rcquirt311icnts wlli~liarc ~~d~ilinisteredby that (fc~veniinc~ibiu Llic r:rLsu or c~o11lrucLuu1trrr~~ugu~nniit,s i~lvolving i~iforli~tlt,ionil origi~~ntcsof tlic! SI~II~s~c#urit,y cl~~ssific-ution. Prior to t,lio rclctlsc of u~yHLICI~ i~~lornlation wliich is clussiliod CONYl- I)J l%e lrctniulb -4fini~tcrfor liwt $I& A#air~~to !ice Americutl Ambassador IUI'ERIAL IIINISTI~Y OF FOREION AFFAIRS NO. IWI~I TEHRAN,6 JUM lor4 h41t. An~sassar)oa: I lluve the honor to refer to your Note No. 370 of 28 May 1974 and the Annex fhoroto proposing that cldficd information exclianged between tho Imperial Govenllnent of Iran wid the Government of tho Unitod Stute~of Amoricu be subject to ccrtuin %reed aocurity principles md procedures set forth therein. I 111ivo tho honor to inform Your Excollrllcy that tho In~periul Govcrnnlent of Iran concurs in the proposda contuil~edin tho ufore- montiolled Note and Anncx thcroto. Wit11 1.egmd to iufonnution originuting with tho Cfovern~~~untof fruit, tlln p~inciplcsund procedures set forth will be considorecl to apply tr) ull info~mationdesignated "Confidcntiul", "Vely Conlitlentid", "Secr~t" and "Top Secret", .c!xccpl, whore spccial agree~iierltscoveri~ig sr~cl~ iriforn~ntion nltty br reyuirotl. In accordance with tho rioggestion contuincd in your Note, it is hurcby rimed tlitrt your Noto No. 370 of 28 Muy 1074 nlid thc Anr~extlicreto u11d this reply tihull conbtituto twi ttgrcur~luritbetwce~~ our two goven~rne~ttu effective im~~lc~cliutuly. 4 Tehran, 6 Junc 1973 HI.. Ambassador: I have thc honor to refer to your Iiote Iio. 370 02 28 Kzy 1974 ad tile hex thereto proposing tllat classified information exchanged between the Imperirrl Government of Iran and the Government of the United Stntes of rimerica'be subject to certain agreed secu- rity grir~uiplesand procedures set forth therein. I have the honor to inform Your Excellency that the Irnperinl Government of Iran concur: in 'tile proposals contained in the aforenkntioned Hote ad Annex theref o. ilith regard to information ori;-i:?-$- in& with the Goverrient of Iran, the principles and procedures set forth will be considered to appl;. to all inf orn'8,tion designated "Conf identiall*, ** Very Confidentidll', l*Secret**and "fop Secretu, except where spec331 agreements covering such ipformation may be required. In accordance with the suggestion contnineci in your Note, it io hereby agreed that your Note No. 370 nf 28 Xn_y 1571 md the -ex thereto ad ,this reply sh~llconstitute an agrecrnent.bctaecn our two governqcnts effective inunediat cly: I zvnil myself of this opportunity to rcnuN the assurances of my highest consideration. ~ichnrdHelms, Ambassador ~f the Unitedstates ofAmerica, Tehran, Iran. rmtpwwaw wj ueprtrrrsr of 3'1 H *, *4,s 0' ,j::: . AllWllUIlmuw .- ---.------..- - a11 aitcn ACTW, llORllll 0210 - t JM 9-75 11292 m - 1- um I L-6j 2 j nrQ QU I-- rPPIU 0210 8,O. lUM8 apr mu TMI Nlrr (111 All tbma er tht Iruirr, Wtloo M bUi-4 -, i.0. , I)* &u Itrb. .ilit.Til -I -- --- Wa8BqYilk 3 A-L T- -- ".I 1, -'a - liigninmt Israel and would not join oil emba.'go. lublmui j tbo-t tbat Imn ..s rgoiw Arabe, aspeui:~llyaypt, to cmL suppart in Iran-Iraq diffioultiea and to bolster 1rmi.n position in Oult. Quht oooperrtion with Israel eontimod. ha Imt+d) dampst. plitieal OllllitiViti.6. b* 7 8nd t-t areation of Palestinian atate idtable .nd vhbh gropasitiun. Botb rero vague u to bow or .b.rr state mi*t .rist and botb horn tlou(lit F~SSa aborrdom with P8k.tini.u 8nd tb.t 8h.h intended to mime up Humminos pprayot. kfoau hi. tamdtb Badat. o.. ?utm of 88udi lurM.1 Amwegar am4 Lubrrni felt 8AO a very fngilo lugin witb ntber goad prolipeota for nplaount by anti- Weatern Qaddafi-tm. Ammagar t-t orestion of mall Persian Gulf mtatw bad been aeriow aiat8ka and implied tbat Mntw 8bould regroup tbsnrrelvep in wpe larger entity. Botb bm and Lubrnni tbougbt Paleatininn . state would focw st- pr~esureson lbninsula states. Lubrani tbougbt Lrrn would intervene mnua tbe Oulf ebould political cbangoa amar oontroq to GO1 interests. d. Moo0 of Inaiaa Public: Ansary deaioribed preeent period as "very delicate I-_ ..-I jaucl neusitivc", owing to high Irauinr. oxpectut~onsof ? personal benefits from oil inowre and infl.ationary tensions resulting iron, injection of large sw of new money into economy. Arousegar described problelps of GOY in even sharper team, noting personnel and pbysical impediments to develolopwnt and fact that urban incone is reven times greater than rural. Annary said GO1 was bandling situation witb great nz care. Botb be and Amueegar tbougbt QOI bad done maaooable job witb aubeidie.3 on basic coawditiesl to refitrain inflation (now at 12 per cent according to Ansary) and provide social nervices. Both agreed tbere bad been grumbling by students and otherm over new Iranian foreign aid progrrsr while domstic want8 not aatimfisd. Botb thought GO1 bucl convinced public of bmcrder interests at stake. Lubrani was leas optimi8tic or poeitive in outlook. He feared Sbah'm form of "mgalounia" fight load bin to order social or econoaic programs wbicb subordinates could not poeeibly handle, tbereby creating public disappointment. Lubrnni wan also worried by incom gap and reactionary influence of kligioua elewnta. Amoumgnr maintained religions power on decline. In sumnr.ry, all tbreemn doplcted internal situation in varying buas lese than rose color on political epectnu. MLIOU)B I- Depalemnt of state Dorwa.mt Pass mllssn SUliLil!!~ UtiUzIr Ms vaatly lmm&wd oil rrwrmos, tho &&ah ad W aannnmt hove Mioatad tW btmtim to hunch wries uf ~lfam Wh btbnr hulth ed~cotl~nd carlit- ions (dltfetoth.~~rad~:ocrraoqult.,bla distrihrtial d dl rmnr. aur, .IIMuaw puma inOLdo poem- tialWnQarurafaindMiardunpaurhrPLdng -1 o.Mma, haEiw, M cue, h. -on 0f I~~oi-m Pnbw8194nmd.od.l~~.rldabahighlightediot~ rryoet. Jlnutlmr NY in dwit, uUl disclvsr in~thrpqirur,oftta EBoalutLPr. llln nuLiul tim of rtrn -I dn -mmm ttm smmirn ot rhalr~&~eatd~irbsw~crhiak~,LIts~at ahsr daftladm dam. muantt lmb. Imn% uowea in find- ing to * out thi.i ud4U-k wai.1 rf- w @ vial to - neima d.HloeSM .lid .taMIlw. 8Ug=. A. Education and knpamsr In tho @mci1ol field ot WIfant Bd ~tiauldovolOFcgnt th? Idan qovomrnnt scww pmaOntly to be dev- a pnotw a11ptxr of it8 &tunt-m to the pmblom af -ion md tho emWW ad utilttatipl of -r thm to any ehm sloa. T3w mvhoJ ~fthPL~ h.cl ~ll~ottduo Mum afs (a-4 61.9 billion) for alumtian inelmling 10 blUirn -la (appcooclmate4 $297 nlWd tk hu wryduretim em. Though iprsrsivo, ths $1.9 bdllial -ta a Sncmaoo ot I a1ly2.oSSin~~ottlm~ll*,ofth.~oducs- j timl ayoton to bb- a gnstw auamt. OI tk, lS,00d Ixu&~l I 8tuknt. tmemtp t.dmieior. dn108t 41.000 MVGg~~maent I t~dother rn intrbd-t~-...;(.* tle muhg t~*dstiyin rho -of~tsa~tiaa mmarrd~ar~momeffuctic,ta0 poneam diuet or roc, %mm;;nrrrr+.u. tam a:Cdd-of e $60 ~~lli~djamnmatroa,mn~blvvobooa~u.hd.nmcsametiw -alllrdr.id~~vltma%a~a,ald8.maomoro *Wbd.brwmcnLb.&aa,lrtrr~~....tuUyanodat UItimofitBt-, YrlahllllOY.~o1dtk~o~'e pontwrnthrdr-. 8brr.kn~tt;la.aotlnn- -lard -tdOp. ul -< OorecnJ d*,pDtr--)aw-ZZZopDLtFae q*dn~dby--rnab rd-utamB* w.oa drCrt.#claO.rldOL--mrlP-s-----a L.OOdmY.0111aepl~ .rB...dt#..'1-31~1~r(at.Lttr~ u~m~m~~a,.o.pnrj~a~ ~at~~na~(hyM.rydiwmndble¶ntLurrraan ntiorr*ddo -Wan. n* hwm not Wawd thir mHcatSm 'DraoOgaNu~oadfaRarporotkarbM.of.rd~~. gM.r yoLantt.l fm domtbtmdi~~~tnmtur~ nabrinllinrJVI-% gausrr* dMmUun far aavimaarirwrovrdf.ndae.Mliarrd-umta% Todata -AUrJ-~ llv.z?oN BILL: lirrICLt 1 - ham8atia of L.ad lot. Win# buildilrp pmportionete witb tb .in of tbm lami i. allmod only onw, .Itor tho admatof tb 1L.w. TwtW tra.rlnotior ur ttd oau deer tho ooutmotia, of bald%.~rpropar- r""lout. to tbm .in of tbm W. ARTIM II - *..i.tmtio~~ of d8emtm tor tho 08lO otkr kimd of tnruotiar, *tLu rttlmut pau oi attorno,, m-, oolditioll.1 .a& or thr 4 of Lud btm oontw to tbo oontemtm of Artiolr, 1 i. forbidden, DI.)O- OII mot- maoffion that riohte tbo law uo 1i8bk to prrarlbd for mtq public 0ffr.cw. C)[9mx Oaditioul or .rtW. truuotioru ror oautructiar or- hm lour or iadwtri.1 mtiviti.., I- oifiei.1 fiuuot=j[ irtitrtr ur froll m- mtrictiar ad -tiom i-~i. =s, lirr1U.S 5 - Yb-mt oam mwl8.d for tk oortrwtim of hamsly rrrit# or f.r it8 otW mom at oarrant lud m,miy to th. Olu ud Dudlpt law, faland onrrr. ao#rro l8md i. oxnpt frar rutricti- outurn i. .rttoP UTICrr 4 - k.d off^ b, onur for uL; to tb oovarmont will b mt ad -mt morn Tbt, a0n-t will pny up to tro &Ilia r*alm i. ouh 8ad tho rut in iivr ~nradtb 80 iat-t rat. equal to thut os. aovemunt bode, Tb. malr, of dfmd lud bt. will b. p0mitt.d onno win if tho doom mot tbw. will k remted w trudwnd to mmumiw ad lbmPlrolpliy U. holm* gmjaat. If tk trwt .D -of mu& l8m fail. to ooclplete tlw avprwd briq -mot dtblm tL. mtigrhtod dradliu, tbo -at dl1 low a fir to tro m.n* mt or dalwt pm~oont of prroh.lwoaot M II fiw ud -1 tbodoauw8tmfw~~arbdthwlud. - ~i!t~.tonmta~oitbm~ rrfrvim fmm mw for U. amoLl8tim of tbo -t or ulr, .II u.L,-tho -1 proawutu .ill eign ar hi. b.L.lf. LUlIUU4 A AH& ~li ,bur" 3. Page 2 of 2 A- 28 ARTICLE 6 - Bowing units located inside city servicee limite that remive autifioatem for corpletion of construc- tion will bm exempted from ~triotionopsuscribsd in tbe Tenant-Landlord Eolatiomsbip Ur, after this law is enforcod. Eolatioruhip betwoon landlord and tenant in swb cases rill bm judged by tbe Civil Code or agronente ktmn the tw eid.s* ARTICLE I - Lad lot. located outside city limits will apply to tho law u of tbo date wbmn they .n imaluded in the city limits or u of tbo date local mniciplitiea iesub wnotroction permits for the land. Land lots located imide City li.itm Of sat~llit~t- will 8100 k OOVOred by the law as .eon as pormits for st& of conetruction work an issued, ARTICLE 8 - Trnnofmr or otbor kinds of tnwactiono on Land lots located outmide city lirite rill bo applied witb twice tbe srwnt of t- pm4lrib.d in Article 819 or the direct taxen law. Tbim rat. rill k doublod each tin the land lot chawbaade. mICLS 9 - Womorot ~~8 for tbim law will b preprod by tbo Yiaiatry of ilocl.ln# and Twn Planning and tbo Ministry of Juatioo and will k irplonnkd witb the appoval of the cabimt. A- 28 UWW FOBYPTION OP OOOIWUTB FAMXNQ COAU'AIOIEB AETICLB 1 - To bolp.incroau tbe iwom of farears, lo acquaint them witb mdern agricultural and livestock raising mtbods, to prevent division of fun lands into aull umcon- odcnl pieces, to roclaim and ntilir boretofore arid lands mnd to develop and utond aon-agrioultnral acti7,Cties such u handicrafts in rural areu, tbe Ministry of k~peratives and Bural Affairs sball gmdually rtablisb funing corpora- tiow in tbe aountryus rural units (colprisinv villages and fur) 113 V1fl01P. -Us SOd YY?OV%W 8.d C' ..llgO %be operation area of eaob carporation if wcemma.7~. Tbew oorporate fardug ocmpanies u -11 as tbe a1 production cooperatives in each area uy jointsy wtablirb livestock and dairy units and agricultural industries to furtber pmcems tbeir agricultunl and livutock products. mtT1cx.B % - Bbrroboldera of the corporate farring / ooapanies dl1 be tbe fo1U.Y --8 1. P-rr rbo ban aoquired tkir lands in tbe process of Land %form and tbo di8tribrrtion and male of gowmrnt estates. 3. 8-11 emtate landlords rho ban opted to divido their lands (and hwp tbeir mbua), in me of tbeir desire and appmval of tbe Minimtry of Caopsmtives and Run1 Affairs.. 3, rarwrs uui ml1 astat. arrwn rho we not subject to any of tbe Land Reform lam and stages and .ere personrrlly and directly famial tbolr lands .b.n tbe Bupplematary Und Reform Law .as approved in 196s. llQFP fb. mbarobolderr &all pruantly transfer tbe hkolute w- of tkir Uadm to tbe oorgorate farming company had recein duos in p~roportionto the ~icultural~valw and elemnts tbermof. am set up, the uinimtw of ~00p.ntirus a- ~urmi~ffiirr UY transfer tbe absolute 8011 amnont IIW of cultivated or-arid govermrnt knd8 to tbi +ration, in which case tbe Ministry will proportionately aoquir, sbms and may w tbe dividend iwa to mtroagtba tbe wrporation or to help tk us#.; sh.mholdera .cwordi~to s0.~ia1~gulations~ ARTICU 4 Tb Itinistry of Cwpmrrtivr and Pas81 Affairs my provide- t.obni-1 and Zi-1.1 wistawe CON1 IUUNPIAL A- -JL.u,~ Page 2 of (i A- 20 within rogulatione to ownorm of mchanirud fa- and ayri- aultural units of any given area who apply for the fonution of a corporate farmi.(r coujmny AltTICLP 5 - Corporato famia~oog.ni.8 ohall bu vramgecl according to a oonstitution bwd on corsrcial priociplea and approvd by tbo Yini8try of Cooperatives and Rural Affain and by tbo Cabinet. The establishwnt op.ratiow aad champ. of tho corporato fami- companiee will k rogi~temat a apoaial offioo. Tho wrporatione rill be lsgal entitim. ABTIQI 6 - In arru .bur ostablimhunt of corporate farring companiee ie dwM, in tbo ovont a ainirm of 51% of potential sbarobolderm citod in Miale 2 acaopt member- ship and the rout nfwo it, tk Ministry of Cooperatibos and Rural Affaim will act on bohalf of thw rafraining from subsoription, AUTPCU 7 - Tbmllugorm of the aorporate farring w-ieo rill act rs tnutoom and aay lidoad on tb0jr part or on tho part of official. oonound in connection with the oorgorrtiowe .ifaim will b~ promptly promocuted with sonteaaem of auimm p.mltiw provided by tbo law, ARTIW 8 - M8011tea botmn mhareholdet. and unago- mat will k mottled by a thm-uo collrittee appointed by the Uinistry of Coopomtim and -141 Affairs, and tho ~lill(l of tho80 mtt-8 ~111bo 1,gaXly enio~oablo, mT1- 8 - 8wboldOrcl of tbo 00rpoT.t. f8a~ companies may tnmfer their sbuw to the corporation, to othor 8harohold.n of tbo mucorporation or to their childron with th. amnlof the aorporationos unagownt and tho Minimtry of coopmrativem .kl Purr1 Affairm. Wo aha- boldorom sham cam bo las than that equivalent to 10 h.ct- of irrig8t.d and cultivated laad, ARTICLE 10 - In oan of a shueholderas death, tk corporation will my. tho 8bams oi tbo decoaeod .ham- boldor and will divide dividoadm ..DO#the 1-1 kin, of tbo doconmod in legal proportion. 8.ia-m can promoat oau of theoolvo8 to tk oorgorrtion u tbo docouod 8h- boldores offioial np.wntatin, or anapply for 881, of tho .bar08 to tk oorgorrtion. ARTICW 11 - corpar8tm fumiy oolguie. .ill bo -t for 10 maxu from the date of tboir ostabliebmnt fm.nl tax08 and obugu kviod on other ~lp.nios~ I 1 CmFXD~IAL En~~osura2 mg. 3 of 6 A- 28 NOTI - 8-11 utatr landlord. becoriy mbmroholdorm ~IOMobuo. oxond tko nxium bold by any fumr fully in tbeir raprotin area will k mbjoat to tun- tion aGMrdiag to tu Inr. ARTICUL 11 - Sbu*holdor fuur* failiy to p.7 in- otmllmt. of tkir debt in tir will Law their debt. mid for by tho oorgormbim wimt tbir fntw profit., ARTICLL 13 - Tk Yini~tryof wrrtirecl and mural Atfairm will protido mpport to tb. oo-ato farminu cor- ~niesin tkir opratiom by &o.diB# loam and gr8tuitwr toabniaal and fi~noialmidm out oi tb. lo+.-at0. aunwit or developant budgot.. Tbo latorat rrta of tbo loam oxtoadd #ball mt uoood tboa of 1- oxtondd to rural ampera tive~. 14 - Tb0 -rat. fud- collpni.8' mill bavo priority im aonlwotion wltb a11 rural dom10p.nt opontiolu and projoat. ondort.l.8 by m-nt .FM~U mmd org8nirtiom. ARTICU IS Tbm Hiahtry of Wp.rativu and Purml Alfair~is autbori..d- to rtab1i.L witb tbo Cabinot'm appmval any maonuy organintior for providing toab- 1 mioal ad coc.rroia1 wrriao to tb oor-to tarring oa- maloll" If luy.d ~re*ally,th. ooutitutiom of wntar? colritkr. I ARTICUL 16 SburboWm faiiiy to dh~b8rmtkir mpo~ibilitiu-in aaaomlmoo with tb. o&porrtion0s opora- clonal plasm, my k d.pri..d of -ip by tbo m- wntDodoaimion ud tb Yiai.try9m approval, tboir sbam hi- purabuod im ouh or by imtmllvmt. and offord in tk firmt plaao to otbu lwrr mbuohldon and in tho ..sand 91- to tk lo.rlpontlom, ARTICLP 17 - A ooumil will b. mot up kadd by th. Pinlmter of Qoopomtirn .ad Rural Affairr ud witb wd.r- dip of otbor mpomibk offiaialm to draw up mnoral m~iaiomand phm of tk oorpmut. furiy oolp.niu and -1 produation aoopmtim, to prwurr -ary fund. m.d to mumrvir tboir o~rattom. Tho doaioione of tbo -11 will bo our- out tb. YLni.try of cooporatim amd Rural Mfairr a114 tb. organiutlom eowund. ABTICLI l8 - Tbm willmgm oouwilm oi v11lBg.m falling within tho ur~of oorp~k furi8g will bo diruaolved and a 8ingle rural ultit aouncil for the entire area rill be forwd in accordauao witb village council election law, to di8cbup all tk nffairs and r08P0Mi- bilities of tbe rillago ownoil8 tbat it replacom. ARTICLE 1s - In rural uuu whom tbo Ministry of Cooperativo8 and Rural Affairm findm it noceserry to set up corporate faning 0~panie8or rural production coopora- tivos to help rrcto~elopntafter natural di8asto1-8 much am oartbqukm, floods, dm~~gbt..ton. it will dotemiw an appropriate area of oporation adwill prrcbue and placcr at tbe disposal of tbm oorporation or ooopontiro a11 tbe land, water and otbor mouroom within tbo area. Ilban- boldere will b. th. fa-- of tho am. aW tboir abate8 will be determinod in accordamo witb tbo extent o? their provioua farming. Birilar action rybo tnbn in tbe case of area8 fallily witbin tbe mrrvoin of ww dam. ABTIQ.8 PO - Lands, installatiom, wtanding property, qanate. wlls and irrigation oquipnt situ~tuJwishin tina operation area of tho carporrto fanring cwp.nie8 or rural production cooporatiroo -blob uu mot owned or rooted by shuobolden at tk ti- of tboir formation will bo tram- forred to tbo Minimt~of Coopontiroo and Rural Affair8 wbicb will bee- a mbamboldor in psopbrtion theroto accord- ing to Article 3 o? tbim law. Lraluation of sucb lands and property and paymnt tberefolu to tb. rolovant ownen will bo mado in tbe following manner: a. Lands, wbotbor portaiaing to rillago farming loto or mcbanimd fur land., will k evallutod bf the Miniatry of Cwporatirw and Rural Affaim on tbm baais of tbo Suppl-nty bad Refom &w oi 1981 aW it8 pertiwnt ngulat,om, Btandily pmporty (buildinp, tree., otc.). i~~~tallatioas,wllm and irrigation oquipmt as well as farring ucbiwry uwld by tbo c-ny rill k evaluated by tbe conittoo spcifiod in Yoto P under Articlo 8 of tho Ilupplerntary Articln of lard bfom tsocutire bgulatiom of 1967, In tk owof 8taoding property and installatiom the price det8rrirwd rill k paid in l&yoar installrsnts troll tho dato of tranmfer witb a amwl intomst, and tbo prim of wollm, plrpl snd rrlatod robioory will bo wid in cub. b. Rivate e.dorYat8 falliy within tbo operation uua of tho oorp.ni.a rill bo pvabawd in tk abow nnnor and tbo p%woodmrill b. wmd under th mupervieion of tbo Momoat8 Org.nimatiom ?or tba paraban ad) endonrat of mow property. Rublic mod-nt not yet tnnmforrod to tbo 1 puavanta faruling tbem under tbe hw of Transfer of Endowed Vnrdaudm to Furs= will bo lamed for OQ year8 to tbe uorprute taming a-q or rural oooperative artbe ! rental will be deternilud bM paid on tbe bas18 of tbe net two^ of the tbreo pan plroedimg tbe rntification of MYFg I - All docwent8, agreements or oontraat8 aowti- tutlng an obstacle to tho i=plorntatlon of Articlee 19 and 10 of tbie law u7 be nullifid by tbe written declaration of tbe Ministry of Coomntive8 and Ilwal Affairs, ARTICLP 21 - The Uinimtry of Oooporativea and Rural Affaim will mign aL1 o~.warydoaunts on Issbali of (boa6 shamboldern OT otbr rcllerant polroru wbo fail to appear in pewon in ti- for 8igni11g doauunt8. Tbe uinietry will take mimilar action in of undeterrind ow~rabip.inborltauae, guardiacubip. eto. ARTICJ.8 23 - Tbe ~istrrtionoffic+m .nd tbe wtarie8 public are duty-bawd to follow tb. imtruatiou of the Minimtry of Cooprativem .nd Rwal Affair8 in drawing UP Or aawolling dwwntm rr1at.d to the oprrtion amae of tbo oorporate farming oaprnir or rural production ~00pratiV08, &B am erooutive and wurity offiaiub in takiw ovu or ocoupying pmmrty withim tbw anu. AllTICU-28 In eonmeetion witb mul-ted and arid lands in vi1l~looat.d- ritbin farming oarpbru$ion and rural oooperatlr9l~tionuru wbiob bave beon eubJect to tbe various stagem of Laad hform, aotion rill be taken nocordinp to Article S of nri. lw. ARTICLL 24 - Afay dfmp~temaridi-ng dter tbe d8terrina- tlon and ismualuu of &am will k mttlod by tba three- 0ollitt.e Cited in Utiole 8 of tbi8 law, ABTICLI 1s - -loyoem of tbo Cmntrrl Orgunlaation of Rural Cooperatirw or tk Apriaultwal Coop.rative Bank elected rs urngenet offiolalm of corporate farming cob p.nie8 or nual prodwtion oooporatiwr, will raceiv8 their bamic 8alariem and altaoow from their rempetire organisa- tlon or bank Uld other hlavant allaa~momad privilof~OO as approved by th oaunail 0it.d in Article 17 out of tb. project fulrdm. Tb8 addoimtntin atructuru of tbe Central Organisatioa of Run1 Cooprmtivw and itm relativao with tbo offices and agaaciem of th. ~imimtryof Coopntivo8 ad Rural ~ffairru wzi u tb. of gndual traufer COdlYIDml& Xnc~ocrurii P -- Page 8 of B A- ef3 or Itrc rnmgoi~aibilitie8and %uthorftim8 to loaal rural cooperative uniow will ha determind with the avproval Of the Minister of Coop.ratirvm and Rural Affair., AUTICLP 16 - Tb. Rewaroh Center of the Yini8try of Cooperatives a& Bural Affair. will contin~mto operate under. the aonetitution appmvod by prrliuntary oolittae8, and any ahango in it8 ooomtitution &all rmquire approval of tb. said corittcni.. AElTICLP 27 - The Yini8tmr of Coonantires and Rural Affnirm im autborised to turn over to-anl of th. Ministryq8 affiliated aeeocir tho tuk of o~inrrout tb. 8tudicm concorning .kket-regulation and &t=finding for tb. bsmia product8 of tb. aorporate fuming ~41~ni.sand rural cooporativp. a8 wall 8. ODll-mo&mr fanm. , ARTICLII111 - ~lltho aotiom tmn up to tbe approval of tbis law bued on th. t.r of corporatm ?amnu Companie. 02 1986 .ad it. undmtm will rommim in forom. USlS E.O. 11652: 61s krgUlt 4. 1975 CAI TAGS : EW. ETRD, EIW. EFIN. PFOR. PIIFT, IR W of Tour Report The Outlook for Iran mucn - MOR TAM 16/rlb This airgram transmits m end of tour assesrnsnt drafted by the financlal/ecomic dwelopnrnt officer at -sty Tehran for the past bro yam. It attmpts to crmbine both accf~oalcmd political factors and concludes that, while the economic outlook for the country Is very f.torable, Increasing U. S. involvamnt in the econ- omy contains the swds of potatfal, though probably not seriwr. bi- lataral conflict. The outlook for continued even and raasombly good bi-lateral political relations is bright. Tho conflict between rapid economic growth and moderniratio~ivis-a-vis a still autocratic wle. ca~lnittedto more econamlc prosper1 for the mass of the population and to social--but not po1itlc~--change, Is the great- est uncertainty marring m othenlse optlmistlc prognosis for Iran. If the country mamgss to arlnbln relative stabllit;y by sanehow working out m evolutionary rather than revolutionary mans of Ilberdllzing its system of governnent. then the long range outlook fw its continued proapcrity prohbly is as encouraging as for any developing country In tJm world. TbU. 5. ad Iran both nud thinw Crar each other. Only a radlcal C~UIQI In the systm of govermmnt or a breakdarn in tho world financial systm would sea# likely to disturb seriously the preselt autuelly knrflclal mlationshlp. Tile U. 5. probably wlll not ex- ercise much influence over the cmm of developants In Iran. Enclosure Page 1 of 11 Encl.7io. 1 COi1FIOENTIM Tehran A- / 70 -Intrnductlon: The rapld increase In world 011 prlces and the patmmwindfall have wrought such dranatlc changes In Iran's econwic prospacts over the past two years, that one tends to for- get that In mid-1973 thfs already was one of the world's nost rapfdly developing countrfes. Durfng the Fourth Developnent Plan period (Ebrch 21. 1968-March 20. 1973). the Innfan growth rate In rerl terns averaged 11 percent annually. The fomlgn exchange surplus generated from of1 exports at four to flve tlmes the 1972- 73 prfce came at an extrenly lucky tlnh? for Iran. The country was just aabarklng on a hlghly smbltlous Fifth Developmnt Plan and already had crested an fnfrastructure far superior to that of any other country bordering the Persian Gulf of1 pool. The econmfc and polltlcal policies that Iran has followed over the past two years. fm the vlw polnt of the country's arn national Interests, have been rational and almost ulthout exception hfghly successful. Ulth the sfgnlflcmt exception of the Iranian posltlon on the price of 011. the country's pol tcles have not ken contrary to U. S. Interests. A strong and stable and pro-lkstern Iran Is more llkely to rmfn a rellable ally borderlng a long stretch of Russla's southwestern fmntler. ff Its econany remains strong and Its people prosperous. Iran Is finnly cmltted to the mixed econ- my and has feu ldeologlcal hangups. hrfcan and other foreign Investment Is welcane, on Iranlan tents. We danlnate Iranian rnllftary Imports and we are supplying a groulng share of its non- mflftary purchases at the expense of kkstem Europe and Japan. 111th or without any push hnthe U. S. Government our Interests In this country should contlnue to grow drdmatlcally. The Dcnmstlc Ecomn - Boanln but Stfll Oottleneciu: Tren Is grow- 1 nwdcurrent Fr cer or r astlmated at about $61 bllllon. a growth In La1 t!: oofl!i5pkent over 1974. Estimated current prlces per capfta GMP of nearly $1.800 this year 1 thrusts Iran into the rat& of the rlchust of developing countries. 1 It can easlly be argwd thltt the juap In 011 prlces accounts for half the Iranian growth rate. but even without the of1 prlce in- crease. Iran's econanic perfomwe Is fmpressfve. Them Is poverty. / but tile dtre poverty of much of South and Southeast Asia Is gmlrtg , harder and harder to ftnd In Iran and does not exfst on a mass scale either In rural or w$an areas. There remalns a serlous In- come dlstrlbutlon problem. Lltb the gap between rlch and poor my be wldenlng. Ilevertheless, though the statfstlcal base 1s poor. most obsewen thlnk the poorer classes In both clty and cwntryslde can perceive thelr lot to be Improving each year. CONFIDENTIAL Pa 2 f 11 Pil8;tPo. 1 COllFIDENTIAL Tehran A- , 7o Wl~en ccniparl to tl~eglociny econmlc prospects for most of the dcveloplng world, one can almost becane euphorlc about Iran. As brlght as the long range wtlOok Is. hawvor. It must be remembered that no one can yet sqy wlth ctrtatnty that this country, especially after havlnq beccmo accustomed to a wch hl her standard of lfvlng durlng Its bll export bm, wlll have estab!ished the klnd of tn- dustrlrl bas0 It will need In 20 to 30 yews for continued econ- mlc prorperlty when the 011 export surplus has prssed its peak 1 and wlll be nottceably taperfn off. Nevertheless. Iran is movlng In the right dlrectlon to attaen economtc grahh whlch can be our- * . toined wlthout a large 011 surplus. Its developnent plan (Tehran *f c' A-51) Is loglcal, but the glgantlc rteol and petro-chenlicals In- 'f, ( id - dustry projects whtch are tha plan's backbone are far behlnd - c(r ,,. schedule ond for the mst pert stlll on ti* drawing brd. The ,, only Free World country betwoen Europe and Japan wlth awthlng re- serrbling a self-contained heavy Industry sector Is stlll Indla ;,'o.lr where steel production began 50 years before It started in Iran. While Iran's Revlsed Flfq, Developimnt Plan ls a reasonable projec- #/ tlon. Its relevance to what Is actually happenlng In the country Is ltmfted. The power of the old Plan Organtzatlon (now the Plan and Budget Otyanfratlon) was effecttvely ended more than two years ago when It lost the last of Its lmpMmentatlon rerponsfbllllles. UIth the MI'S current pullback iron sane of Its aore ambftious short range developnent goals (sea blow) and the publlc adoisslon that Its fontgn exchange resources are not Inftntte and must not be sq~undered, the planners my rrgrln sane of thelr lost parer, but fhfs ts not yet apparent. , , , For thu past year and a &If, whhas been sald about the two (. major bottlemks tn the IronIan .conmy--the inadequate port ana Internal transportatton network and the shortage af tralned person- ,b#., ' nel. The Iranians hzvs coped remarkably well wlth these very bastc problans, but they an far khlnd In their plans to elf~ntnatethem. The ctudi plan of over 18 months ago to turn Bandar Shahpur Into the country's najor port Is baraly undomy. anu the docks thare end at Khorrmshahr plle hlghrr with @oods dally. The railway fraa Kennan to Lndar klss Is year! rupy. Tha htghwys are choked. crackfng fran Increased truck trafftc. and belng Inproved only slowly. Rather than brtnglng In all of th 721.000 workers whtch the country Is expected to be short of durlng the FIfth Plm pertori (snafng Rrch 20, 1978). the eeonaiy to a gre~textent will tnprovlsm nlylng on poor- ly tmlned IrantmsB but thousands of fontgn workers will continue to rrrlve monthly. There already are badly stratnlng avallablt haus- tng and other facllltles, and t)#wont is )at to cam. It is a WIDENTIAL CONFIDENTIAL railarkable trfbute to the basic stablllty of Persian culture and suclety that the Influx of forelgnen so far has created so ltttle appdrent 111 feeltng. but serlous problem could stlll develop. Agriculture continues to lag serlwsly. The foreign techntctans wrklng In thls sector am the mst discouraged tn Iran. Bad weather durlng 1973 and 1974 was the major reason for agrlcultural short falls durlng the flrst two years of thr current Develop~lent Plan, but otller sertous problens are not betng solved and no om seems to take the projected Flfth Plan agrlwltura production growth rate of seven percent seriously. Agricultural poltcy makers am at odds over the cytefamlng/eooperatlv.s/ 'small famr approach. A coherent po tc~for prlclng agrlcultural canndltles Is mlsstng. The problems of Iranlan agrlcultum are hardly unfque to tills country and have defled solution elsawhere, but In the man- tlm demand for a better and more varled dlet Is rlslng along wtth personal Incane. and the cll~lngfood Import blll Is bothers- to plannen concerned over the country's eventual abllity to support itself wlthout an 011 export surplus. Inflation Is not responding to control measurns such as subsldles of bastc foodstuffs and governmental threats to take serious actlons agalnst profiteers and hoarders. These rmy haw slousd the pace of prtce tticrwses stmewhat, but a 25 percent annual rate of inflation Is nw wldely accepted as reasonably accurate. Thls rate is more llkely to contlnue to creep upwards then to decelerate. Hem agaln. other co~lntrleshave not found the secret of rapid econanic gi-wth ! wlthout sertous tnflation and one should avold undue crltlclsm of Iran, but the problem Is serlws and likely wlll grow Norse. At least the GO1 has stopped placing the burden of the blaa for the . problem on Imported inflation from other cwnt:lcs (Tehran 6867). a uelc~uestgn of reallsa amng econantc pollq makers. Another lndfcation that Iran's KOIIOOI~C &clslon lnrkon are cclnlng to grlps u1tl1 the reallties of the country's sltuatlon can be seen In the recent publlc adntlssion that FIfth Plan developnent goalswi: lag bahlnd (Tehr8n 5491). Tho mtlves bchlnd thls ac$tssion are allxed ad Include. (1) the deslra to spread the notlon that the country faces a flnanclal short fall because of 011 production cut- backs In order to attempt to justlfy to world oplnlon the righteous- ness of a further tncrease In the price of 011. (2) the desire to convince Iraalan bureaucrats that they do not have unllm'trd anounts of money to spend, and (3) the need to $wtlfy refusals to most of the growlng nmbar of supplfcants for Iranlm ald. but the main reason was slmply the necesstty of aclulal.d01 the mallttcs of ronanlc development problem and tho llbly d%ys whtch were be- mlng dally more apparent. trm though ~ccunplis~ntsallrast certainly wlll fall short of rrunlres,the CXII deserves credit for the steps taken during 1974 to rke education both free md universal and to provide nationrl rcHl tl~tare. The renova1 of wst school fms gave thr ml incanes ef kuch of the hard pmssed urban mlddle class a grnuim boost. ( 'her serlous efforts to cam to grips with the incar distribution la and to bring substantial uounts of real benefits of th. t"nnim econmic bWn to the poomr clasm include the announced pIen8 for corporate and incow tax refm (Tehm A-131) md tha whma to broaden ownership of Iranian industry to bowfit workers. femrs and the general public (Tehrm 6942 and A-163). These plans wlll k difffcult to Implenient, but thy seam baml to haw ram pnvimly be~reflcidleffects and lllustnte the leedershlp's do- (rruinrtlon to spread the banefits of ronolllc prosperity. Mny problecus reimin for the Irantm economy, but mst of thea sem vnrgeable over the long tam. It must k rms&emd that few Free Wid countries have fully logical and coherent rcorrrmic dwelop- mmt plans and ~olicies. The nature of tho mixed ec~pmludes rapletuly rigid p'lanning. The country's &~tocrrtlcsystem of 1I rrnnwnt, the large size of tha eublic secty. and the close 8lness/goverm1ent nlatlonshlp ( Irm. Inc. - T~NIIA-73) give tha WI some advantages over other less tl(lht1y controlled rocieties lo guide the econoqy. On the other hand, ths talents of the managers rf the country's econauy almdy @reseven19 streinad, and tthrre I#m even lmre sorlars shortr at the nid+tana@ment end tachni- ul level of those who should Cpl-t ecanrmic plans. \ 4t this stage of the gaar, all of this seeas to wJd up to eclwmtwl olddle power econanlc st~tusfor Im. Thls country by tho end of tk Wntieth Century should catch up with southern Europe in stand- rrd of living and could easily ham surpanred all but the largest turopran nations in WP. but it wlll not k aimg th War won- mic powm. rnal Econanlc Relations - lications fw tho U. S.: The wst mars hve browht o*or~?immr In Iran's in the world ronky. It is om-of the most i*nt mahrs ind a pilac nwer in u* most financially successful art01 of all tifa. It moved mpidly Emu being a upltal 1 rtlng nation to a upitrl exptsr ef row importance. *ran st11tT classifid am the kvrtoptng -tries. and will ruinso fw years. but% has IOV~tra b~iwanng the kttor off to *~ng"tXImst afflwnt of Third World Page 5 of 11 Encl.70. 1 CONFIMInIAL Tehran A- 170 In tern of U. S. and other oil inporting countries' Interests. Irarifan support of the oil price hike Is the nost rl!jnlficant factor In Its changed econanlc klationship wlth the rest of the world. Thls actlon has been unlver~allypopular throughout Iran. Virtually no Iranian will discuss the subject along any lines other than cciiplete justlficatlon of the 601's policy on oil pricing. It Is of couno arguable that hi prices wy not be a bad thtng for the rest of the wor!?inz%ng run beuuu of serious ecological/enviromaental problm and the finite supply of fossil fwls, but the sudden junp In oil prices cm hardly be Interpreted in any wy Other thn detrimental tit U. S. and other ena deficit countrlp? short ten lnte ts. During 1974, wlth $2 b#ion in oil impor& from Iran. thcountry f?r the first tlnu befm one of the major ~uppli~rsof pet~alnwntt :he U. S. Like the pricc of oil, the second lnosl lnportmt factor In U. S. relations with Iran--suppl of rilltr~yequipment--also Iws strong both economic and polltica~overtones here the situation is funda- mentally different In that we &M by far ttn most lwportant trading partner. The Iranians do not publish trade date which includes Ira- port of military equtpmnt, but blmfe of paylacnts statistics sug- gest that nearly one-half of rane $10 billion spent on iiaports dur- ing the Iranian year ending on lllrch iO want for mllltrry imports. Our own military sales data suggest ttlt about half of this noney was spent on U.S.-innde equlplwmt. Accurate data m lacking because mhof Iranian mtlltary expenditure 13 buried elsewhrre In the budget, but current estlnvtes for thla year put total Iranian vllt- tory spending at inom than $10 billion or pcrhaps one-thlrd of total I GO1 outlay. Thls enomus sm I8 1es1 of a drain on the country's fimnciel resources than might ram apmront bruuse the absorptive b-'b:dC'lj. &,,,capacity of other rectors of the wnow alrrdy Is nclr Its limit. ..i IL.~,,.. More serious dmnge probably is king lone to tho civilim econqy I by thr lncalcuable loss fran la e MIM~of trained personnel end , :I.. j eucutive talent remaining In u%orn. On the other hand, this loss 1.- is balanced to sane extont by the ove'all benefits to the econw fmn the training received by draftee1 ~ndrecruits in the military mnlce nho return to clvlllan life aft~ronly a Caw years. After oil-and military equlpmt. thr i11116 nost knportant category in U.S./Iran trade In 1974 war rchincr! and transport qulpnent. but foodgrains m e very elm fourth t~darcc rising In Importance. Iran pmbrbly looks at umlsas thr NAN irqmrtant thing It buys fmo the USA after militery quipnont. luch uf the machinery and transport qulpmnt could k purchased elwuht~m. but no other country hs the massive amounts of foodgrtins md mny other agrlcul- bra1 PKNJUC~Sfor sale on world aur(lets irelltble fm the U.S. Page &of 11 Encl. No. 1 UNIFIDENTIAL Tehran k 1 70 YIU rlrlng Incanes. Iranians expect to eat mom and a lrlder mrlrty of foodstuffs. At the smtim, as noted above, the lmlan rgrlcultural swtor lags, and the prospect of rwchlng wlf aufftclency seats to be much farther thn was the case only k or three year ago. Iran Is 1Ikoly to become our tenth largest wkat for agrlcultural products thls year. and sales of foodgralns -Id total about $660 mlllloll. M 1.1 w A t:t-n*r.c ra wH&blu.dmta either In Tehran or Nashlngton hr U. S. Investment In frm. The Wassy cumntly estimates abut S4OD.SSM) mllllon. Thls Is a llttle less Uun the total three pm ago befom the dlssolutlon of the old all consortlu, but It 1 Is ex& In only bro othrr'Allm countries--Japan and mlflppfnes. ~urnntpmpacts fir Joint vmtum, ul\y of *Ich rlm are in the plannfng stagas, pplnt to good prorpacta tr tha leaof U.5. Investment In Iran to IncmaBa by three or hmr tlum by 1980. Tk climate for foreign Investment In thls amtry Is expected to remain favorable. but thr 801 w beccrnn even rrr relrctlve and strlctar about Irl fmlgn investors to )try tho gaw only acmlng to ~m%n A. ~hrFogul-nt ..ltlomd above that all private ~lu,Mthrr or not partly (Ccllgn-ownmi, divest thmsalves of 49 perant of tholr shares to rrLm, famars, and the genaral publlc wlthln flw yum of tholr UWllsImant Is a exnnple of th. 601's d.tmml~tlonthat lvau cc*lpanles u%?teka part In what ISbllwes to be socially &flclrl poltcles. Fonfgn prlvate Investors should not axpact my klnl of spaclal treatment except Wn Wx. custw, or other tcmtlves are offered as part of the orlgl~lcontract In order to rttnct an Industry clHaad lqmrunt to mating d.veloplent objec- Itm or to lum a new Industry to a backrnrd arw of tho country. much of the equfty lnvutmnt end technology for jolnt van- and other Iranlan Industry, r wch ctour U.S./Imfan con- We mlatlonshlp semn Inavltable. Tbls will occur wlth or wlth- wt dfIclal encouragmt frm thr two govnnwnts. Fawllzatlon of the bwgeonlnq mnalc mlatlonshlp occurnd vlth tho utabllsh- rtof the Jolnt bRllulen for Eea#lc bopmtlon In February d thls year. Thr Jolnt eartoton my In ronr rms un closw wqmratlon md a nuturlly non sprdr and bamflclal transfer of utm and sewlm, but It Is not m umlmd blmslng. Ouroaucratlc Irt~lonInto arrangamnts whlch Mo prlvab sector of om or both CaCIDEWtUL Page 7 of 11 Eml.7Jo. 1 Tehran A- 1 , cbdnbrta.h i~iayb.? able to make better on Its am should be avoided. r:mt ot the $15 billion plus in U.S, OOWfDEWnAL CONFIDENTIAL What dm outslde obsemr. of courm, hop.) for In Iran Is p~lltlcrl evolutlon rather than molutlon uhlch wlthln r nuorvble parlod of tinu! would brlng the count t6Wnethlng rumbling r mdm constltutionrl monarchy. 1n3m who Ihave dtrc- this subject nlll agree In Wry. but tlny am totally -Id of ldro u to how this evolutlon mlght k brought about. Fan swto sw r vlrble altematlw to the Shah. kd. rlu, history pmvldrr dls- cour Ing pracedmts about the cksllnlng n of rutocnts. Ian -8 no example of an absolut. ruler wtGngly loorming the mtns of power. The recent establlshmt of tha on-party lyrtan rcmovsd oven the facade of the oxlstonsr of llayrl opporltlon to HIS fbjeslry's Qvennent. It cra be argued that nothlng substmtlve mlly changed wlth Chs rrtablls~of tha RIsurvmeo Party, but the portents nevertheless rm hardly aourrglng for tha wmtual creatlon of a mom danncratlc wtan of govmmt In Iran. Ylth tho educrtrd allto semnlng to comtltuk for thr most part a posctiu, nan+oliriil- body of Indlvldurls prlrrlly cmcenwd ulth rklng their wny wlthln the pmwnt lystm and unable or un(1llng to pro- vide the cmservrtlve lsrbnhlp fhm which peaaful chnga Ideally mould cam, one annot help but frrr that they am aMIcatl In favor of tlw radlcr s. Them rm r mlrtlvely or11 end dl8olnted gmup, but thalr ab1 llZy to parpotrato nnda acts of t.rrorlra In mont months agrlnst both Iranlrn rnd krlcan offlclrls Is mot I dlstrerslng. Deinocrrtlc rnd much bettor organlud and mom stable sodetlu than Iran haw k*l unable to stmp out terrorlr, but In 1 this country only tht dlrerm rnd not Its root wur 1s klng 4 attacked. HOW l:?W+sf4Iatf~*and other act8 of tormrla seam llbly. Ulth all of the country's developrnt problem, the rconanlc outlook for Iran seerur nuJ, brlphtor than t)w polltlal progn0lls. Un the other hand. the country s very ~sfulwnmlc porfotmance prob- ably lessons the drngm of roslrl uphoavrl. k gsnulno prorperlty becams mm wldespmd throughout tha country, nore Irrnlrns have r vested Interest In tho praurvatlon of samthlng mambllng thr status quo. The chances of r m3rtjhiy.prraful aodrrnlution up.rleu also rm onkmd the basic stability of Penlm roclety and culture rnd Ita tradltlonrl msprct for ruthorlty. In Splto of tha myriad futum polltlal problm rppurlng In the Iranian crystal ball , tho most obvlout of &I&1s hou It will makr tha transltlon on tha I~trbl~dmp8rtun d tha Shoh fron the rcm. tho country's cham of aroldlng ndlal chaqp and ldobll- Itating extended pcrlod of Jwr rtlll rw felrly good. Pa.Wf1 l l rnFIOENTIrU. Tehm A- (70 f rU. S. Lever -Qnwohop.tourrtluchlnflwocrover u ure course o events In Iran? Parkrpa. kt r pmbrbly wlll not. Dn the surface It would appssr ttkt lrrn mads us ore than m nool thlr county. k notad abovm, we hrvr rssler accoss to tltrmrtlve sources of our oil +.port lwsQ thrn do t4 Irealans (O tho rophistlcated U. S. ollltwy quipant they hr lbrcor wcurtomed to and want to tsrp pmluslng or to thr rrsslve food- vfnImports they will nerd over th nxt hu, yurr to met rlslng -tic dwd. Iran also wnts fm us wn par1 ~;lprtlon In Jofnt ventures in thls an ond prefers U.S. hhsw tho safnt #Ira to keep its fomi#n mrvoa In shcvr tom deposits. ))*wld we choose to try to we my of our apparent laverage to tnflwca Irmlrn pollclw. our first rlu probably would bo to try Cl torce s mo~moderrto InnIan sition on the prlce of 011. But In thlr or any othor area In uhic/?tm mlght t to sway Irrntm CIIC~~S r am limited by our ~iutionto L m mht-mi,. wlw an unlikely radtal chow In krlanpollclas. w probably rm not going to InteMoro wlth the trinsfer of technology or wlth cb 1t.l ~mvw~tsIn either dlrectlon or tho ule of foodgralns, el! of whld am austly mnsged by tho prlvatr roctor on th U.S. otC. Only mtlltary sales-to Iran mwin, and In this ever tho rchmfsal already rxlsts for exsrclsl USQ contml. A ralavant -t agalnst restricting rals of glltrry equlpnrnt In th past habeen that Iran easlly could find another suppllrr fra mmg H ca~petltom. Thls nar Is only prrtly trw. To cltr om ox- ryle. no other country at present unsupply r fighter emparable C tlm F-14. We would be wlu. however, to attrapt to pressure lrm by forblddlng sale of sone typos of mllitrry squlpmt untll w had addrtns.6 th. broader questton of kac u mlght pwslbly In- tlwnw other OPEC mdw8. Since Iran does not act alone 11 dotennlnlng the world price of 011, pressure on thts country prob- cbly would be Insufflclent to brl results. YI also would have to ranrldar ntrtrlctlom on Irmlan alltry pHchrsn Cn li#t of our MNII Perslan GulfjIndlan Oeean pollcy. In rw cars, puttlng our r*ar energy houw in ordrr -bly over lk long tern Is more llkely 0 succd In armsting the u rrds tmb In 011 prices, 1f not actually brlnglng tkvn dorm. anem Cllrttns OPEC rmben. 61vm the rrri llrblllty of 011 1 rt- 13 nettons thus far to act IIIcmcert,&c rrtnrs wl'll not% *prrsred by anything short of u llrh*\ts In dmloplng rltolnatlve sources o~ mrgy -h to mduco noticeably wrlf domsnd for 011. Pano 11 of 11 rnci .-5,. 1 Tehran R- ( i: Ctlter than Its starld un 011 prices. Iran seem ut~llkelyto takr positions seriously hamful to vital, U.S. Interests, unless there Is a radfcdl change in Its wstw of governant. Thc U,S. a11~1lran will twain natural allies against ti,@USSR. Our 11)- terests In the Perslan Gulf and lndlm Ocean rcgt likely to renbain very similar for a long tlw to cane. And Iran's ambitious davelop- rmt plans are based on the continuing prosperity of the world financfal system In which the U.S. 1s tha bast Important nat;lonal entity. Iran will not autanatlcally folla the U.S. lead. but it will not openly opposa most of our pollcies simply beauso our basic interests still ram to c011ciJa. -.. 0 Ollor no. .I .I I.,. III,1IOI, , . .... , 3.4 c,,<,,b: $7." )PHI 1 r.1) W'/,'l l:S GOVI'.IX.IXiGNT DK~:April 27, l!J76 Irnnian Attitudes Toward Foreigners in Iran Am you know, we have been talking with Iranians of various g-roups and social levels rc'garding their attitude toward the citrrunt and projected foreign presence in Iran. I have reviewed the 26 lnterviews to date and offer some generalizations and thoughts on the exercise. I believe this memo and the interview r2ports thouelvos would be of interest to other selected officers in tho Mission and at our Consulates, parlicularly since thore Hro a number of surprising findings, and I plan to make copies available to them. I. The Sample. The number of those interviewed (26) is quite small, and of Lho~e,a significant majority are members of Iran's middle or uppor level elite. These individuals are far more sophisticated than most Iranians; conversely, their-views are al-o more im- portant than those of the laan-in-the-street, since they tend to bo opinion leaders. It is worthwhile noting that the concoins oxpressed by these more sophisticated Iranians are almost wholly rl~rentfrom the replies of those who could be conbidered repre- ncntotivc of a far greater wrcentage of Iran's population. Cloarly, tho "foreign presence problem" affects largoly those who have at $east a reasonable amount of contact with forc~gncrs. Many of thoso interviewed are concerned in a general way rbout the pl'esence of forcigners in Iran, but not specifically Americans. Remarkably, two-thirds of the group mentj onctl ICkistanis, Iadians, and "East Asianst'--Filipinos and South Koreans--as groups which had grown the most (and by inferonce 1110 groups which had affected them most). Only ono-third of Ole sample said the American presence had grown over the past two or three years. Estimates of tho number of Awricrrns 111 h~l~ranranged from a low of 4,000 to a high of 40,000, with a vldlan reply of between 10,000 and 15,000. Only eight of the mrmplu described Ihemselves as more conscious oi foreignei.s' . Iwctlence than they were two years ago. Several of thoao inlcr- vlowod have !lad e~tensiveeducation abroad or are marrjctl to It~reignwives, but this is not uncommon among middle and upper 4 labs Iranians. C0??1.'[DmTI~II~/NOi'ORN ---.-.--- \ Seven respondents said tile currcnt number 01 f orel ,>~IC.J.Sh:td little or no effoct on them. 'me rest eather disagreed 01. by inferenco suggestcd that foreigners'did affect thcm. Scvoral referred to the por:itive aspects of the forcigll presence-- increased tochaological skills, rnorc trained manpower. Over half of the sample said they and their friends considercd Americans and other Europeans responsible for the st iff I ncredse in rents over the past two years. Seven cited groblems ai'ising from forcign drivers. Surprisingly, only eight ~nontiollctlunfav- orable incidents, and most of them had to do with "lowcr class" Americans drinking and brawling in public. There was a surprising lack of ltnowledge about special facilities for foreigners. The ovel'uhclming ma.jority oi the sample accepted and favored the presence of AFRTS; many who watch or listen do not even consider it a foreign facility. Only two suggested it should be brought under Iranian control, though onc other warned that should tensions between 11-nians and foreigncis increase at some time in the future, AFIlTS would be a logical target for attack. Only five people mentioned special racilitles for Americans (Commissai'y and Gulf District), and only tw~of those suggested there was any envy'r%gartling these facilities. Three suggested that such facilities could become targets of discontent if relations between Iranians and Americans become worse. 3. =to Living Versus Assimilation. Not one individual sup1)orted the idua of special oot~ui~nnitics fsr forc.igners, although two suggested it would be all riglit in special cnses (Soviet Bloc nationals and for others in pl'ovin- cia1 ~olciiswhere new facilities must be built). Well OVPJ. half the sample (from every level) thought it was as valuablc lor the foreigners as for themselves to have foreign residcuces spread out in the community. Only three people suggestt~cl;my problel~lswith tho integrated living, all in ternis of pocjsil~le security threats posed by Pakistanis and Indians gathering topthcr. Only tllree individuals thought ir doubling or triplil~gof the Anler.i~a~onlmullitywould pose problems, and two of.l.liose .. related such growth to the lack of adequate huusing uncl rhop- ping fac.il.ities. Fivc rcspondcnts thought Iran would f:i~lll positivo aclvantazcs from having Inore Al~rericans, crspeci :I].] y in the tcchnio:tl ;rrcli:t. (:~IIC(~I.IIover tllf illcreasiill: foreign presenco ssemr-; 1.0 IN+ #l'uwln~nl i ghtly among perceptive Iranians, but there arc 110 0orlotlx il~u~~ediatepx'oblems. Several respondents noted t1i:rt the .~panaion of the fol.eign community is concurrent with otller M l lonnl (.'rowth. 'I'liu increased frustrations of urban livi~g altoat b~tbf orcip;ners and Iranians. If occasionally tho for- .Innor Js blamed for these frustrations, it is not always his rrult, and many Iranians recognize that fact. Those 111ustaffected by foreigners are those ill the middle et 010 1r:lnian socio/economic spectrum. They dcal extel~sively wlllt furc~l;iierson a daily basis and their professional nl~d prmonnl success is bound up with the projects for whom for- eIgnors m.c hired. The very top elite are less exposed to foroi~nors. Lower class Iranians care little about the American monco but fear and dislike the Indians and Asians who have to Iran in response to the Persian economic boom. In a law specific cases, such as in university admlnistratlon, I hcw~u with European academic training do resent American ways, II #lot tile American presence, because their American-tralned w~llna~ttcs(and coml~titorson the career ladder) are bclcining 8o tonch commanding positions in the Iranian establishniont. The outla ens oY tho Amerxcan--rained Iranian thus provokes ienr and envy ill solno quart~rswhich is occasionally directed nlol'o 1?.110tnl1y against tho American community. Whill: Ccars of rising widespread anti-Americanism scum rnr~~tlnded,the concorns expressed by our intervic?wces desui-ve Llclltionnl thought. Perhaps the most iuiportalll: observation is @ha1 in n period of increasing urban frustrations and rising tnmlgn presence, it is more than ever necessary that wc send eb l l ursl I y sensitive and mature Americans here. Four or five I*mln~ndor~l.sspecifically urged U.S. companies to selecl: their prnollncl with more regard to Iranian sensitivities. This, of W~II.UO, wc~uld apply to the U.S'. Government as well as tu l>rivste Imlllmtry. Hlncc urban life in Iran is becoming more difficult for .r*r y ono , and particularly since there is a reasonable prospect rl all ocollo~uicslowdown, it would appear highly desir:~l~le Id* ~ltrwh:~t we can to hold down the number of Am.:rUicans comi~~g. -*,a*. Ili~vingsaid that, it in worth noting th::L: probably rest 1111, I)ojnts of criticism would have been nron.t:ioncd if llio ~*-I.I~.!III prcserrcc had been only 1,000 instead of 25,000. Tlle attitudes <'spl'cssed in t!lj.s survey should L;hus be ro::nrdcc! :is a bcncll not as a definitive .description of Irnninn i.llil1.1i- ing. DISTRIBUTION: AlB/DCM US IS OR ECON POL (3) NEA/IRN INR/RNA DEFREP ARMISH/MAAG Amconsul SHIRAZ Amconsul TAImIZ Amconsul ISYAHAN CHRON CONFIDENTIAL ly!lVtV OF IRANIAN ATTITUDES TOWARDS INCREASING FOREIGN PRESENCE IN IRAN Irt!~v~Ir-iJsry10, cith Dr. Kcyvan Saleh in office of Cordon t!~i- Or, klch began to comnent on the interview itself by stating that he felt tho1 this was long overdue and he was very pleased to learn that the Embassy mb meklng information with a view to some positive action. O. kleh said that he was definitely aware that there are more foreigners In lrtn now than there were two or three years ago, and that the bulk of tkto are All~ricans. He said all foreigners, unless otherwise identified, at, looked upon as Americans. Or, Srleh yuersed that there were about 30,000 Americans living in Tehran OUwas surl~risedwhen he was told that the actual number was about half ef ttut. Hr noted that the American comnuni ty was growing steadily and Id that ht understood there will be some 50,000 additional families in rtan in the r.ext three years. lie and his friends believe these will be mtlly In southern parts of the country. Or. Saleh said he doubts that blr frlends could be specific in providing a figure such as 50,000, but (kr rll feel that it will be a very large amount. He said it is his mderstandiny that Bell Helicopter will double the number of people it Wb In Iran. He added that Pak Dairy would also approximately double it:;. krlcan coniplement. @, Saleh said tildt he can always tell a foreigner, and particularly an can. !?e said this is particularly true when he sees an American from tlw rsfr. Yoti can tell by the hair-cut and you can teTl by the cut of his Wnlc, he said. He explained that an American's pants look loose and (~OIIII~ In t112 seat because they don't wear them high enough. He also told he and his friends find American apparel very unattractive, particularly Ilw loud clott~ingmany Americans effect, sucli as bright green shirts, re$ w11, white shoes and red socks. He termed American attire "grotesque. I* 5alch seemed to distinguish Americans between high-level company *e YL.n .lS.kcd if the presence of foreigners has any effect on his life and tho 1Ives of his family and friends, he said that this was very definitely Ih caw dnd that it was a constant source of embarrassment to him. He rln. ,,It is important to n hause I am,,deeply invo?,ved with Americans. r hu~t: me if they are not professiwal. He said, I am deeply troub.led I hear An~ericans who have not been properly oriented about Iran dnd l*rt {\ thc case with sost." He said they often will sit in meetir~yband r CONFIDENTIAL CONFIOCNTIAL. make staten~entsthat reveal a shameful lack of understanding of this cou~itl-y. He said that lost Americans, he and his friends feel, react nci(:,;tively ta Iran dll:i sii~iplydo not assin,ila'ie well. "lhey arc 11e1.e for t110I&tjt L~ii.." "What troubles us," he said, "is that so marly Americans are gettinq embar- rassingly large salaries like $50.000 a,year and talk about this in front of Iranians. Educated Iranians react negatively to this and feel that these clumsy and bumptious people with n~!nimal professional standing can't possibly be worth what they are getting. One of the problems, Dr. Saleh said, is that many of his friends trave) to the United States often and the Americans they meet in the U.S. are bastly diPferent from those that come here and are considerably less professional. He said: "They're not rounded-out people. " He said it is obvious to himself, his wife and his friends that they have psychological problems, the wives are not secure, there is a great deal of bitching, there is a great deal of drinking, the wives are obviously unhappy. He went on to point out that the Tehran American school is known anlong his friends as an "Army brat" school that provides a less than effective education. He said it is felt that most of the U.S. children in the school are moved around the world constantly and that they are rootless and lack social values. Bot.11 Iran Zamin and Cornunity Schools have c~uch higher reputations. t Regardinq special facilities and organizations for foreigners ir~Tehran, Dr. Salch mentioned the American Women's Club, Pars America Club and Gulf District. (He bus a bit confused about Gulf District and referred to it j as "the Csstle." After a while, he identified the fact that he thinks Gulf District gets the nickname from the castle on its emblem.) I asked him if he had any fec~lingabout Gulf District. He said that he did not, but that he did have the feeling that there were an awful lot 1 of hippy-looking kids near Gulf District, including girls thumbing rides. I This just isn't done in Persian society, he pointed out. He said he and hi: friends had the feeling that the AWC is a clique. "We don't see American women integrated at larties; they don't seem to mix ' well. They are comfortable in the AWC, Dr. Saleh explained. Ile said 1 this is not true of Italians. Swedes, Germans and other Europea~ls, nlost of whom mix well and speak good Persian. This is never true of the An~ricdns. He said he seldonl sees Americans at really high-level social i events in this country, but he does see English, French, Belgians and others at these affairs. CONFIDENTIAL Regarding radio and TV, he said he is crazy about the new international broadcasting of NIRTV and builds his schedule around certain pro((rams. (He does feel that the two American moderators are useless and often embarrassing.) He said the Enqlish news is much better than the Farsi news. He said it would hc no loss to him if Pn~ericantelevision \:euL off the air. Yowever, he strongly feels that American Armed Forces Radio shol~ldcontinue "except the Dkie-type music which everybody nates." He said all of his friends listen to the hnerlcan Radio Broadcasting and ltke it. He noted that it is an easy vehicle to help middle-class people learn the language. In connection with disagreeable incidents between foreigners and Iranians, Dr. Saleh is not aware of anything specifically but he launched into a very strong diatribe about American drl*~rs.He said Iranians realize that they tnemselves break all of the rules in,,the book wten they get on the htghtays and the streets of Tehran. "But, he said, thls !s our rountry. He said many Americans, after they're here a while, drive worse than we do. They go through stop lights, they cross dividing lines and thetr driving gives us a very strong feeling that they just consider us as peasants." In many cafes, Dr. Saleh said, my friends have pulled down the window and yelled, look, this is my country; you can't drive that way and cut llle off that way. "' Dr. Saleh is convinced that there will be yny street fights precipitate! by roguish American driving manners. The basic feeling," he said, is that this American son-of-a-bitch is " dolng well and living well in my country and not bringing anything to the country and now he's driving all over me. American drivers seem to come at you on purpose. Further on driving, he said that forelgn women are terribly aggrersivc hehirid the vhcel . He noted that all of this driving problem seems to have occurrc:l in the past nine to 12 months; prior to that foreigners were not driving agyr~ssivelyand manners were excellent. He said the proble~~ for Antertcans in this whole situation is that all foreigners seem to be driving this way but that "all foreigners $re considered Rnericans. The lrasic reaction that Iranians have to this, Dr. Saleh said, is tjlat kuericans simply have no respect for us. They think we are dirt. 1 Wr got further into this matter and he expressed the feeling that his ; friends have a strong sense that Americans are here not to help this I country bur slr~tplyto make a fast buck. He more and nmre hears the i question, I,ll~ilthavethey done for us?" He noted that there is a strong i yovernment push today against the use of any Anglicized Farsi words. I Ire went on to say that five years ago the American way was the most respected way. hrlcan systems were the most desirable systems, wllether or not it was in manufacturing or education or management or medicine. liy now there has been such a significant bulldup of antagonism because' CONFIDEIITIAL CONFIDENTIAL tf the presence of the Americans,,that more and more Iranians are saying We don't want the American way. Ironically, Dr. Saleh pointed out. American cars, rrachincry and oti, He said it would be a terrible mistake for Americans to be herded into strictly American comnunfties. He noted that even when you drive through the typically foreign 01- Aoerican neighborhoods you do see American and Persian kids playing together in the street. -He termed this a heartening factor because there is some visible interaction. He does not feel. however, that placing the American military cadre in a comnunity by itsel would create a particular problem. He said he thought it might be useful to get them off the street. His general feeling about them seemed to. be negative; he had the erroneous Impression that the grzater bulk of them were enlisted men "driving down the street in a jeep. He was surprised CONFIDENTIAL CONFIDENTIAL when I told him of the high percentage of officers a~md very well-educated officers who are in ARMISH/~$J~G.He noted "In one sentence you have cleared up a problem for me. In conl~cc'iion ~ithtf,c military, he said that he is co~ivi~lccdthat the p-esence of the large An~ericanI\.ir Force planes on the tarnlack at llehrabad co.:stitute a public relations problem. He and his friends are very conscious of their presence and there is considerable conversation and discussion of the huge amounts of food and other excellent goods and products which pour off of thesq, planes "for the American community." Dr. Saleh continually cam back to the matter of lack of American interest in Iran. I asked him how he felt about the ads on American TV for trips to Persepolis or ShuZnor Golestan Palace, I observed that this certainly, indicated an interest in local culture on the part of the Anlericanz. Dr. Saleh denied this and said it,,is loerely siyhtseeiny: "They will go once and then they will forget it. He contrasted this to Europeans who, he said, "when they visit places like this, have ;very deep and abiding Interest and qet into the subject very deeply. At that point I asked him whether or not he was aware, or his friends 1 were aware, that an An~ericanuniversity student had a much wider oppor- tunity in American schools to ledrn about Persia and Persian history than *did st~dentsof any other country. He said that he was aware of this, but he doubted if many other Iranians were. He noted that a particularly important problem area was the Imperial Country Club. He said Americans are now joining in great numbers acd swarming all over the place. They seem to join basically for the golf and the nov vies and, in recent months, old-line Iranian members flave been unable to get S(!i.ts in the movies because the Americans are "sprawled all over the place." I asked him why the membership committee at the Imperial Club didn't keep the Americans out; they certainly didn't ~lec~i their money. He had no answer. Dr. Saleh concluded by saying that he and his friends dre very concerned about the future. They feel that there will be many more problec~s coming to Iran with the increasing number of Americans. "We find it stifling as we look dhead, because we see more of the same kinds of Americans coming in, the quasi-professional who has no feeling at all for the country, quickly establishes a,,neyative attitude, wants to cake his money in a hurry and then get out. --CONFIDENTIAL LIIITED OFFICIAL USE --.-Studc%lt Intorviows. - Two lraniai~:;tudents in my class at HCD College (wl~ichin- cludos Iraniitl~s,Pakistanis and Turks), saw an increase in I Asiaits in Tollran. They did not feel there had been much of an increase jn other foreign groups and found it difficult 1 to distingui?;l~Americans from other Western Europeans and Scandinavians. Their principal concern about the effect of 1 foreigners was whother they would take places in universities ] that Imnia~~students might fill. Neither was aware of any special facilities for foi'eigners, other than Hindu tenlples and somo Christian churches. Bot;i,thought it was bettor not to segregate foreigners in one area. Both students appeared uninformed and uninterested in the American presence in Irnn. A 24-Year Old. Iranian in Business. Reza sells traffic equipment and other civil engineering gear for a sm:tll Tehran company. A graduate of Pahlavi University, Shiraz, he has lived in Tehran four years and has noted a slight increase in foreigners. By category !there are JlJnny more Indians and Pakistanis in Tehran now ho- 'cause "1rani:rns used to go to the Persian Gulf Emirates to work but now the whole sub-contii~cnt is flocking to Tehran to take adva~ltageof our oi.1 money.,''. Reza believes there are slightly Jllore Americans in Tehran than there used to be but is unalvarc of special facilities for foreigners (althou[:I~ I know this i:ldividual and his wife occasionally watch AFKTS telovisio~r,i!.!ha never mentioned it, despite attempts to dm:!, him out). );(:zn believes foreigners should not he segregatatl by ghetto beciruso in 'tho case of Arabs and other sub-continc~l-La1 individuals, this migill: create security problems for the Govcrlllnent of Iran. Ile thought spocial housing pi.ojocts in provincial cities were all right, as long as thc contrast with local life was not too glaring. --LIMITED OPPICIAL USE ...,."A. ...,."A. 1'1"" UI. (. -. I". ...,T,O* =~*=TJmOFFICIAL USE Q.,,_.,., ,,to,.,,. UNITED srxres GOVBRNMW Memorandum m : Political Section Mm: February 19, 1076 J/. /h ko~: Econ/C - Lange ~cherme'r'9& W:*.cr: Political Special Project - Irahian's Views on the American Presence in Iran A comment from a prominent Iranian woman on American presence in Iran may be of us@P reparing your report. Mrs. Farhang bhr, wife of the Chancellor of the" university in Shirae, turned to me in a group conver- sation last night and said Shiraz is becoming full of Americans mentioning in particular a recent influx of ~mericincitizens under contract to Westinghouse. She asked "Why doesn't the company choose a better type of person? The children all run wild", and proceeded to cite some examples of youthful behavior which irritated Iranian neighbors of the American families, including 10-11 year olds smoking and drinking beer in public. &a. Uehr said she had personally gone to one set of parents and asked them to monitor their children's behavior and if they were unable to do so suggested they move to another aroa. She said the 1a;ily has now left (whether out of the country or to another apartment and whether at her instigation was not clear), --COMNENT: Untortunately, many employees are not carefully screened with regard to personal life style and therc is some question whether companies would believe that they should exercise such screening even pK if the general principle of well-behaved, easily adaptag American elnployoes is deemed desirable. If plans for development in Isfahnn and Shiraz proceed as ha6 been widclv discussed. there will be a much greater influx of ~naericansand-presumably conurente similar to Mrs. Yahr's will be increasinaly prevalent unless serious orientation and screening efiorts are undertaken by r~cruitingcompanies with or without sore form of USG assistance. y'$ LIMITED OFFICIAL US4 \ LA."OOS,* &y U.S.Savi#&.t Bonds I(rglil& an rbc Prjrdl S.ruitry Plan LIMITED OFFICIAL USE SURVEY OF IIrlYJAN ATTITUDES TObIRROS INCREASING FOREIGN PRESENCE IN ~ntervi~~-~~I~~~,~_~~;i.i_tleravi , rircrican-educated Political Sci{!t~>-j::t: and now seconded to Razi U~~i~crsity as Vice Chdr~~~llor.lriterviea was at lunch in a restaurant. Professor Herdvi said that he is not now more conscious of the presence of foreigners in Iran than he was two or three years ago, but he is more cons- cious of thci r presence than he was ten years ago. He estimated that there were about C,000 Americans currently in Tehran. He says that he can usually identify an An,erican from other foreigners but is not sure how he is able to do this. tie feels that it is based on his own extensive experience in the United States. Dr. Heravi, interestingly enough, comnented that he and his friends are increasingly aadre of the presence of Russians in Iran. He said this is particularly true, of course, of his friends in Isfahan. Some of them seem to feel that the Russians have taken over that city. However, he personally also senses a considerable growth in the Russian population in Tehran and is very much aware of increasing activity on the part of the Russian Embassy, both socially and in other ways. When asked if the presence of foreigners has any effect on his life. pro-' fessor lleravi said, "Yes, I enjoy their presence here. I like being wit+ them." He did say that there is no question that people feel that prices are up conslterably and that all of the criticism is levelled at the Au~ericans. You are getting 100% credit for the increase in housir~gprict!~." Heravi said. He pointed out that he knows of one instance where an Aurtritlian moved into a Ilouse and got it because he bid the price up double and whcn people heard about this, they referred to the Australian as "that American who got the price of that house up." Professor Heravi feels this may very well date back to the Point Four days when An~ericariswould come in and re~:t , a houst that normally went for about $100 for as high as $175-$200. He said. Those kinds of prices were nothing in your own country in thosc days but they were terribly high for us, and the [eputation of Americans running up prices may very well date to that period. Ithen asked if he could identify certain special facilities for forciqners, he listed Gulf District, the Tehran Amrican School and the American liospital. He has no particular feelings about any of these places and he sdid that thc only comnent he could make regarding Gulf District is that he has the serlsc that more Iranians would like to go there and use the facilirie-. However, he fcl t that this would not be a usefu?, idea because the mingling in the bpr would lead to "all kinds of rouble. LIMITED OFFICIAL USE 5 4 LIMITED OFFICIAl USE Dr. Heravi said that he never watches television "either American or Iranian." Ilokrever, he said lie listens to the American radio stati~nregularly in his car because, "1 atti ~lloreai hone with this broadcastiny thin I am with the lranian broadcasting. The quality is, to be sure, not as good as it is in the United States but I like it more than th~Farsi broadcasting because I do not feel it has the same falsification. HP went on to say thdt credibility is the principal p*cblcrlr. of National Iranian Television, although he did add that a number >f his friends have \poken positively about the new internati$.lal broadc7-ting on Iranian tele- vision. tie said many younger people like to listen .o the American radio $tation becau5e the music is mre up to date and wo 'idly than that of the lranian station. On the other hand he said that it is true that a number of students, part- icularly the left-wingers, feel that the presence of the American television \tation is a means "of colonizing" the country. He said that a nut~iberof his students have mentioned this to him. When I asked him ifhe thought it would be wise.from the standpoint of Iranian-American relations to eventually eliminate this broadcasting, he thought for a nmnt and said, "Well. if you eliminate It. then these young 5tudents will silrtply find something else to complain about and refer,,to as hnerican inlperialisn~, such as your magazine or your Cultural Center. Ilc could recall, when asked about disagreeable incidents, the "unfortunate knifing of tt~eAmerican boy in the bar in Saltanatabad" and an altercation in the hotel lohhy involving an Iranian who felt that a foreigner was ,.taring at his wi:c. However, Professor Heravi was not sure whether or not the foreig11i.r i~asan American. He said he supposed that there was an Increasing ncmber of incidents with the increasing presence of foreigners In Iran--but he was rather vague on this. IIP personally is not conscious of the presence of the American milltary hut the more leftish and liberal students are definitely conscious of it.,, "Tl~eyounger generation feels the presence of the American mi 1itary here. I1r8 said, and added that he has heard a number of comnents on this from +.tudents. llr. Heravi, when asked about driving, said th$t it is certainly true that Alllericans are "beginning to drive like we do, and many Iranians are iolmnenting on this. He said that the general feeling is that "the pricans 11ick up our bad habits too fast and do not pick up our good hablts. He (!Id seem to feel that some Iranians, even though they recognize that they t t~ernselves colinlit the same traffic infractions, will accept it from other' Iranians but get rather uptight when they see the infractions comnitted by hricans. LIMITED OFFICIAL US1 --LIMITED OFFICIAL USE Professor Heravi does not feel that there is a problem ahout the way Americans dress s~:tl"as a matter of fact., our kids try to dress in the S~HIIC way." lie ?,..'-A tli,~~tliiii docs, to a degree, bother solsic o: the oldiir and nwre traditl1:11-minded Iranians who, when they see their Lids in blue jeans and with loiig I~air,tell thee. "You only pick up the bad habits of the An~ricans." I as.ked Professor tleravi tihat were some of the good habits.2f Iranians that Americans fail to pick up. He seemed to be rather hard-pressed to respond to this I;ut finally said, "#ell, yr overpoliteness." tle mentioned that when tea is served in offices and in other locations, the host expects the guest to accept the first cup but at the same time anticipates that the guest will ask the host to take the first cup. There is this tarouf business in any kind of personal interchange. Dr. Heravi said, adin the tea situation the host often erl~sctsa "little dialogue." Dr. Heravi a1 so pointed out that a number of Iranians have mentioned to him the very unattractive habit which Americans have of putting their feet on I tables. This is strictly prohibited in Iranian culture. 1 When asked about A~oericans living in speciff$ compounds, Dr. Heravi said he would be co~~ipletelyagainst this. I pursued the matter son~ewhat and asked him how he wo~~ldfeel about the relatively small military contingent in Tehran being ~iiovedInto a compound of its own. He said he thought this would be a terrible mistal:e. He said the nii,l.itary is now spread around in the nort11e1-n Kart of the city and nobody really is terribly'dare of it or notices it. If you put then1 off into a conununity by themselves. they will hecoc~eeasily itl?::tifiablc and people will be continuously awdre of their presence. This WI!~ furtl~crremind people of the Iranian military buildup alid the amourit of i,,L:ney that is being spent on it. It would be a very serious niistake," Ile said. He added that people would probably be enviolis of what would obviously be an attractive American community. This led into a discussion of the An~ericancommissary. Professor Heravi said there is drfinite envy of the Americans because they can get a variety of ~ilerchandisetrliich is better than is available to Iranians on the markct here. He said tl~dl.tl:e Irdnians who were nost e~lviousof this are those who have been 'educated in the United States. He said he was under the impression that anyone with an American passport had access to the com~issary. I explained to Ci~atthis was not the case. Generally, Dr. H:,ravi does not feel that there is a significant presence problem for Americans today. When we talked about the possibility of a considerable increase in the American presence, he said that he ftlt that it was important that they be dispersed throughout the,country. If thiP large a group is going to be concentrated in one ~~lctropflitanarea, even one as large as Tehran, there is potential for trouble. -LII4ITED OFFICIAL USE+ LlMITED OFFICIAL USE 4 tlc added that tlinre is onc qroup today which is very conscious of the k ericdn pt ~ser~ccand c, I ~~alc~ il ii,,,~id 'tudents gclvrolly. It is voy ccl ,I, to hear them sldt~,that "all these A~~cricansare just here to make a lct of nloney and they are not doing anything for us." There seems to be an dwnre- ness that a nu~nhprof them are retired military who get good pay and do nothing. There also is a feeling among th'e students that a very high percentage of thr. Americans are CIA. ---LIMITED OFFICIAL USE LIMITED OFFICIAL USE SURVEY OF IRA!IN ATTITUDES TOWARDS INCREASING FOREIGN PRESENCE IN IRAN ----.--Interview with Juurr~alistShaul eakhash on February 22 at lunch in? restaurant Mr. Bakhash said he felt it was a very gobd idea for the Embassy to begin probing this subject. He said, in response to the question as to whether or not he is cot~sciousof the presence of foreigners, that he definitely is, particularly in shops, restaurants, on the ski slopes and other public places. He is particularly aware of them because he lives near Mirdamad and Jordan Avenues where a lot of foreigners are moving in. However, as Hr. Bakhash answered the questions. it occurred to both him and to me that neither he nor most of the people to whom we are addressing these questiclns are the best possible interviewees. These individuals. Bakhash suggcrted, are ones who have had considerable experience in Europe and the United States and therefore the impact--positive or negative--of foreigners on them would be much less dramatic than on Iranians who have never had an overseas experience. When asked how niany Americans he thought lived in Tehran. he guessed 20,000. He said he can usually tell if a foreigner is an American by his accent or mannerism. When asked if the foreigners had an effect on his life, he suggested that there was one positive effect. A grocery store in his neighborhood is now a supermarket which caters to foreigners. It has a large number of items that would not ordinarily be available. In this way Bakhash's life ;s somewhat enriched. He comnented at this point that he has heard the Prime Minister say that he much prefers the traditional Iranian shops to the supernlarkets because the supermarkets have such a wide assortnicnt of goods that they are Increasing the expectations of the population and he, the PM, hopes the government will continue to be able to meet these expectations. In discussing reactions to the foreigners. Bakhash said that he felt that the most negative had to do with rents. He said the escalation in rents is bldmed completely on the foreigners and it is now almost out of sight for most Iranians. tle says hc occasionally hears negative comments about foreigners and cited the long waiting lines for the tows at the ski slopes as one place where Iranians are saying such things as "I!onlt go to the Alps; why do they have to come here and clog up our tows? He also noted that the presence of foreigners has accentuated the servant problem and there is a general crowding of facilities which are ordinarily patronized by the upper classes. As far as special facilities for foreigners, he mentioned the U.S. ~umnissary several clubs and Gulf District. However, he does not feel that the 58 LIMITED OFFICIAL US^ LIMITED OFFICIAL USE kresence of these facilities are as negatively looked upon today as they were some years ago. Then most Iranians were envious of the special itelris which could be obtained in these places. Today such Items, foods, etc. are available for 1110s.t p:ople. Far and away the niost serious concerns have to do wlth the feeling that foreigners are paid much more than Irantans for the same kind of work and for the sane ktnd of qualifications. He Laid you hear this very often. He cited cases of consultants bringing in staff members from abroad-- Europe as well as the United States--who replace Iranlans with the same qualtfications, and in some instances. who attended the same universities. This Is an alnlost universal complaint, Bakhash said, among qualified and educated Iranians. Bakhash also noted that there ts increasing dlfferentlatton by Iranians of types of foreigners. He saldthat he frequents the Tehran Club which 4s Engllsh-oriented and he notices that the bar today Is full of Englishmen of less education and with poorer accents than the Engltsh who used to be there. He said these are simply technocrats who come here to make money quickly. He said the same situation prevalls wlth Anericans. As far as radio and television are concerned, he personally doesn't watch or listen. (He Is loyal to the printed word.) However, he said that many .af his friends do see American television. At this time he does not feel that there is necessarily a problem about "cultural 1 eriallsm" in having r foreign broadcasting operation on Iranian soil, butmRe did suggest that If other strains and problems do occur, eitfier on a people-to-people or r government-to-governcnt level, the potential problem of the presence of the Armed For~esBroadcasting sp~dlocould be exacerbated. llakliash also offered the followtng positive point. He said he had a talk wIth Houshang t,lehr Ayln, the Editor of Ka han International, following khr Ayin's recent visit to the Iran hZsociety whtch resulted in the very positive editorial. Mehr Ayin comnented to Bakhash that "because I l)rlieve so strongly In democracy, I want things like the Iran America Soctety In this country. Establishments like that help to preserve human dignity and are In a scnse a protection for us." llakhash was not aware of any disagreeable incidents between Iranians and Anlericans. He was sensitive to the way krlcans are driving In traffic these days and did feel that American aggressive driving could possibly lead to some problems. But he does not feel this strongly. When asked about putting members of the foreign conmunity, or perhaps a wgment such as the Anierlcan mllltary, tn a separate comnity, he said IICwould be :tisolutely against this. *Thts is the worst thing you could- ~)ossiblydo. He potnted out that he Is not aware of any mllltary presence In Iran and hc said this wo:ld be the best way to identtfy it and call attention to it. He said. You would not only be doing that but you would - LIMITED OFFICIAL USE LIMITED OFFICIAL USE obviously be creating jealousies ammg many Iranians hecause the American conmunity would ur,*'oubtcdly have all types of facilities and accoi~n~odatic~~ When asked how he would feel about a tripling of the size of the America11 comnunity. Bakhash looked glum and said that we ought to be very. very careful about this. He again repeated that we are wise to be looking at this now and noted that Americans really are noticeable and aggressive peoplc and that there could seriously be problems. "You should try to 111, the size of the ovcrall Anierican conmunity." he said. He added that the community today has not reached a saturation point and that ke could not guess what the saturation point might.be, "but there is one. The level of the saturation poilt would depend on govermnent-to-government relatioil: or changes in them. If certain high-ley1 strains continue, this can affect the level of the saturation point. He also noted that if internal tensions grow, if the economy becms less buoyant, if shortages develop, there could be probless. He noted specifically that if an uneniploynsnt situation arises among the Iranian people, this could cause serious tonsic as the American cu~munitygrows because people would assume that the Americans were taking their jobs. "This could be the mst serious situatl of all," he said. He also made the point that no matter how cosmpolltan Iran becomes, the Iranian mentality is basically provincial. He said, for example, if an Iranian goes to Erngland or the United States, the citizens of those countries really are not concerned whethepar not the Iraniar has an under standing and an appreciation of En lish or American culture and history. Here it Is different. Here there !s a self-consciousness and a concern that people undcr~tandthis country and have a respect for it. He felt, therefore, that dny efforts that can be n~adetowards orienting newcomers to the culture a~itltraditions of this country must be inade. But he continuously gut bdck to his concerns about an Ai,erican con~nunitythree times the size of the present one and said steps should be taken to do something,,about it and "niy government should be as concerned about this as yours. LIMITED OFFICIAL USE MEMORANDUM TO 'THE FILES UNCLASSIFIED February 24, 1976 FROM: POL - Archie M. Bolster SUBJECT: U.S. Presence in Iran--Sharim Chubin As an Iranian educated abroad (including a Ph.D. in Intern tional Relations from Col unbia). Chubin is not.necessarily an unbtased observer. When he returned to Iran to join the staff of the Institute fc. International Political and Economic Studies. Chubin could speak sane Persian but could not read or write it. Thus, he niay be more sy~apatheticto the problems foreigners have living in Iran. Chubin observed that Iranians are generally tolerant of foreigners and have grown useito seeing many of them in Iran. Europeans and Americans are more obvious than other foreigners, and particular attention is paid to the Americans because more Iranians realize that the U.S. has the greatest influence on events in Iran. A major resentment brhich professional people in Iran have against Americans Is that the salaries paid American experts are often far larger than those paid to Iranians, even when many have been educated in some of the same universities. Another complaint leveled specifically at Americans is that more and more, the people who arrive have been poorly briefed on Iran. They are "mrcenaries" who are here solely to make money and do not make any attempt to understand Iranian views. Chubin did not feel that the specjal facilities for Americans were particularly noticeable ,n Tehran. Both Shari~nChubin and another colleague from the Institute who was present durfnq part of this conversation (Fereidun Fesharaki ) thought thd~Iran's dependence on foreign advisors would continue to grow. This was true particularly in the context of Iran's purchase of complex weapons systems which are beyond the capacity of Iranian technicians to maintain. Both men saw this development as a serious problem in Iran-U.S. relations, because Iranians had generally expected their dependence on foreigners to decrease gradually over the years. If this did not in fact take place, it would lead to serious frustration and then to increased xenophobia focused particularly on the U. S. POL :AMBol ster:inp UNCLASSIFIED DnlO..L .,?*IU1,p Y.. Ill, LI.lll.* V...,"" 1.8 cr*) *,.,I.. UNI'I'EU SI'ATES GOVERNMENT Menzorandumrrnmro OFFICIAL usr svqem: Iranian Attitudes Towdrds US Presence: 1ntervic.v: rrith Uarry Chubin of NlOC The subject respontled to the questionnaire as follows: 1. He is not more conscious of the presence of the foreigners in Iran now that he was two or three years ago, except for the greatly increased num- ber of visitors. The nationalities he notices most are English. A~i~erican and French. tlt. thought about four thousand Americans lived in Tehran, but when questioned further, indicated that it had not occurred to Iri111to think of dependents. but only the number actually employed. Ile had no im;~ressic~n as to how many dependents tlierc r~right!e. He said he could definitely tell when a foreignrr was American because I greu up with tnem. I know how they ridlk, talk, dress and sci on." 2. He said he was not at all avare that the presence of foreigners has l~adany partirular efft~cton his life or those $f his falllily and friends. In genc.t*dl it'l'18~;. 11th said, he finds foreigttetr a pleasant addition" to the Tehtqon SL t lte. 3. He salt1 tlir special facilities for foreigners of which he is aware art? Gulf UisLrict n,~;.lthe Co~~~t~issary. He said he Is glad such spc.dal racilities @rv ;.:..ti'li;ble to the foreigners arld only wishes at ti;~.es that he could h*r;-5kc.,~s. He insisted, however, that Ire felt no rcsentment at all about tile existence of the facilities. Ile sald virtudlly the only rddio and TV programs he listells to are those broadcast especially for Atserichns and he ~~ustdafinitely thinks such broadcasts should contir~ue. tle said he hatl heard of disagreeable incidents between Iranians and foreigners, but uith one exception could remember no details of any par- ticular story. Ihti~er,he had a general imprcsslon of having llezrd a certain nu~r~barof t~~lesof drunken fights. The one exception rclbted to two visiting Ain!iricans who variously identified then~selves as rorki~ig for the Iludsc~r Inhtitute. ABC, and a Japal~eseGovernnlc~rt agency. SOI~I? tii~~eaqo IJSIS stant a cable to blashington about this incident, ill r:hicl~ tlie two visitors tuld I4r. Chubin in h.ls office that because of hiqh oil prices "You riray look out this uindotr one day and see thc sky fillcd wit11 airplanes and pilots. This irlcident has rrmained vivid in MI.. Cllubin's nrcmory. As to fovciyners living in Iran, however. Mr. Chubin said his . i~rpressior~was that he had heard fewer co~!d~ientson dlsagrceable incidents LIHITED OFFICIAI. USE LIMITED OFFICIAL USE tharl he had a few years ago. He admitted, however, tl?at he !!lay be hearing less because of sonle change in Ills awareness or patter11 of living. 4. He fcols that it. is definitely better for both forlril~nursarid Iranians .to have thc foreigners live on the economy rdil:~~'thar. in separate co~~~pountls.The co~i~poundapproach seemed to lri141a kind of "self osti-aism" at~dadded that "if you draw a borderline around an identifiable groop, ti~cybeconie a focus of attention and possibly of rescntiec~.it." lie said his answer would not be diticrent in tile case of 1;lrgc groups of forei gnc?rs betng settled in provi ncia1 towns. His reaction, if he heard that the r~ul~iberof for:lgners in 1l;an ~i~iyhtdoublu or triple in the next few years is no prob- lem. Like all t.11~Iranians I know. Chubln does assign a large share of blame to rurcigners for the vild bidding up of rents. He we1 1 undersisrl~!:; that the underlying problem is one of su!~ply, but though r?co!;r~izing tile practical difficulties of such arl approach, expressed the wish that all foreign conunu~~itiesrrould get together and agree on guidelines for niaximum rents they would pay. He also shares the a l18:os t universal view that Iranian landlords discrimi- ndte agairist potential Iranian tenants (out of fear that the Iranian tmants will remain indefinitely in a house 01- apartmel~t) in favor of forc!igncrs. ,,'-- Cl~ubillspeaks fro~:~J rather special persolla1 and philoso(ihica1 I!,ck- grotlnd. ilo i.i,!p:iasiscd, for cxai!iplc, thbt he believes very sttn11gl:f that For dtrfe~.l'rtgqroups Lo triingle and becane acquainted wlllr escl~ other is noi .E~s:P~an11 hc:irltliy. Cllubin, however, has been educaied in England cr~d.i.hc lliiited Stttes nd in fact lived wost of his lifl? in thosc ::.lo cc~!!itvios. 111s Erlghs nntive and is, ir~fact. so~nctili~ttbcttrr tll,~nhis Persi;:!~. Uhile his case is ext.rnnc. it seems to Ice that: r:an,y of the people on the list of potential intcr- viewces t~i~rlto Lr his sort of person. If this is true. I fail to see tile ~t-tliof this exercisc. I remain convirrced that no st of this Sc~ci.+tyrcin::ins highly treditional. rather deeply religious, and so!ii3i.:;,;.t x~~iopl~ot)ic. I.~I~ITELIOi'Tli.ldL USE OCIDH.6 .OR* *0. 4. I I"*,SW F.(11710" Csl rlll.8 6rll 101-11.6 UNITED STATES GOVERNMENT Memorondurn LIMITED OFFICIAL USE TO : ECO~~C- David E. Westley DA=: Mnrcli 15, 1976 ~ohr: Econ/C - Lynne amd dirt rvsjlicr: Iranian Attitudes Toward U.S. Pre'sence: Interview with Mr. Rahimi Nedjadi of TTT Shipping Services Subject response to questionnaire as follows: 1. He is more conscious of the presence of foreigners in Iran than he was two to three years ago. However, he believes that the presence of foreigners is beneficial, since they provide necessary technology for Iranian developmental programs as well as skilled labor, which is in short supply, particularly in the construction sector. He believes the presence of foreigners who have previouhly lived abroad in other countries is more bene- ficial than the "off the ranch" variety, and he feels those foreigners (unfortunately too few) who particpate in local events and H'I~o adopt a few Iranian customs have a better tour in Iran and are appreciated more by Iranians. He believes that Americans and South Koreans constit* the predominant forcign resident conununity and he believes about 10,000 Americans live in Tehran. He claims he can identify an American ilnrnediately by his appearance, dress and demeanor. Be can also identify northern Europeans versus southern Europeans, but is unable to tell the precise country of origin. 2. The presencc of foreigners does not have any special effect on his life orthelives of his family or friends. The only spccial facility just for foreigners that he is aware of is the American commissary, about which he has no opinion. He listens frequently to American radio and tele- vision progranis, hopes they continue, and wishes they would improve in content. Mr. Nedjadi's children attend Community School and listen to American broadcasts to improve their English. He is aware oi disagreeable incidents between Iranians and foreignerfi. Ha claims that most of the incidents have involved "low class" Aracricans who tend to drink in ercesa which results in aggrsssive behavior toward remians. Such incidents have increased over recent years, but involve a small minority of Americans rebldent in Iran. f-+4 4 1 LIMITED OFFICIAL USE j;:!( ,-. &., U.S. Savings BdRtgulady r th P.&l SmiW 9 8,. 7LIMITED OFFICIAL USE -2- 3. Mr. Nedj:~ili.believes that foreigners should as:;ilnilate with the 1or:nl popul:ltion, becriuse both have mucll Lo learl~ trom the culiural ha11its of the other. 11e believes that spearate conl[iounds would create a 'cultural problerll and would eliminate the benefits of international exchnnge. His attitude toward separate compounds is the saule for 'Tehran, Shirilz and otlier provincial areas, lie ~~~ould wolcome a largo foreign community in the next five years particularly if it is a cominunity which can train Iranians in necessary skills end can assWtthe Iranian development I'rogram. IIe would urge that a greater degree of cultural orientation l~egiven to newcomers and that only those foreigners vllo are really interested in internatlorla1 living nnd learninl:. about Iran be selected for assignments here. JAIMITED OFPICIAL USE O,"lU".L .on* "0 ID ,"L. ,,,A '#>,,,ON *.A I",.*4.1 C,", 1.8 9,. UNITED STATES GOVERNMENT LIMITED OFFICIAL USE Memorazdum . POL - Mr. John ?tempel DATE: March 15, 1976 THRU : E/C-Mr.Odv,dE.Westley pllo~ SClATT - Albert S. Chapman ' i/l' SUnJRCC: lnfonnal Survey of Iranian Attitudes Toward Increasing Foreign Presence in Iran MR. BEHRDY. StlhHANDEH Answers t the questions were as follows: 1. Yes, he wds more conscious of the presence of foreigners in Iran now than 2-3 years ago. Obviously, hricans, but he has noticed also Genuans and recently East Asians. He estimates that there are about 10,000 Americans in Tehran. Yes, he can usually tell if a foreigner is American or not, by his appearance (clothes -- color of his sllirt), mannerisms and voice. 2. No, the presence of foreigners does not have a direct effect upon his life or the 1ives of his family.and friends. Indirectly, how- ever, the presence of foreigners does affect Iranians, most specif~cdllyit produces a housing shortage. It Is his impression that whr~~Iirge forelgn cor~orationswere establishing themselves in Teh.,,*t 111 recent years, they aggressively sought housing and transpotl~iLion, driving the costs of these quite high. Many Iranian Idndlords prefer to rent to foreigners because they can repossess thcir properties soon again when the foreiynrrs leave. The only sl~~c~alfacility exclusively for foreigners that he know> of is Gulf District. He is indifferent to its presence, but he feels it lirlps to isolate herlcans. He feels that such facilities tend to produce reactions from the Iranian people. He frequently listens to Anerican radio and TV programs. Of necessity he spends considet~l~letime in his car and always has the radio tuned to tlie bnerican ttdtion, presumably for the music. He also likes to watc.11 Ililerlcdn vlorts and movies on the TV. (Mr. Shahandeh spent many years in 611c U.S.) He Is aware of disagreeable incidents between the irani~nsdnd foreigners, most particularly the problens arislny out of apartment living - loudness, misunderstandings duo to the language bdrrier. He mentioned the British In particular. but he. feels all foreigners have these problems, andmore frequently duri~~g their sp~clalnatiunal days. He believes these incidents have incredscd because he hears more canplaints. :f < 1 IMITCD OFFICIAL USL J r 1,- , 11 < \ $11 1p, 1, ,,, is L~<~L/,IIIYotj P,ij*LoJ! Sd.,~ngs I'/CIJ 16- -- LIMITED OFFICIAS Memorandum - Informal Survey Page 2 3. He doesn't like segregatfon of foreigners fnto compounds where they would live, work and play. He believes this creates aninloslty OII hoth sides, althouqh it might initially reduce friction. Such co~npound1 lving indicates that ncilher the foreigners nor the Iranians accept the other people. Iflarge groups of foreigners were to be settled in provinctal towns, he would not object, just so long as there were not great numbers of them. He belleves foreigners are losing the natural welconle which Iranians used to give theill, because they are exceedfn'g the ability of exfst- tng facilities to care for thefr needs, most parttcularly housing. If the nuntbcr of foreigners were to double or triple during the next five years, he would not llke tt. Fadlitles for them are already tight, producfng tensions Wfth the local fnhabftants. SC1ATT:ASChnlnt1an:ej 3/15/76 LIFIITED OFFICIAL USE U.1W.L h!,.* Wh I" U"" ,,*I1"ITIU rsr rru*la re,,) 101.11.. UNITY33 STATES GOVERNMm Memoyandurz LIMITED oirIcInr urt TO : POL - Mr. John St$:npil DATE: 11;;:- 15, 19 Tliitli : CCOd - i,ir. 1j1-ti,'it~ FROM : SCIAIT - A. S. subjfim: Sampling lral~ianAttitudes Towards US Presence: Interview with Ali Ghazi, Head, Rer~nteSensing and Data Divisicn, Plan and l:ucl!lrt ~ryariifation Covcl^i~r:entof Iran 1. Hr. Ghazi said that he was mre conscious of the presence of foreignt.rs in Iran now than he was two or three years ago and was i!lost aurarc of fi1npt-i- cans, but that he was conscious that there a1.e fair nun~b~rsof Eurupeans here. He WOU'I~! judge there are more than seven thousand Americans living in Tehran. He said he could usually tell whether a foreigner was an A!!lerlcbn or riot by his accent, his height and his dress. 2. Ho, generally the presence of foreigners has not had an appreciable effect upuli his life or the lives of his family and friends. lle qualified this, hov~evcr, by saying that he worked closely with an kserican fine ai~d their far1:ilies visit e~cilother socially. Generally, houever. Americans tend to clove ii~tlicir n:n circles. tie was .!]so aware that thcre are spe- cial facilitfr.s for foreigners in Tehran. I know, for Instance," hc said, "that thew ir an A~hericiinClub up near Darkrc;us"(but he did not know the na:ne of tl~eclut, id he was not aware that Pcrsians could also be 1~1e118Llers of the club). I tlo not feel that these clubs have the rigit to be exclu- sively fcrtlicj:~. This would not be allowed in your country. He said Ile often listcns fa the Alserican radio because both Ile and his rlife like pop music. "Ho~rever, r;je do not lisl.rn to the Atserfcan TV because it requires a special antenna. :.Illen asked if he thought the American radio and TV should be allotted to continue, he hesitated and then said he thought they should be untlcr the sulrervislon of NIRT. Men asked about disagreeable incidents h2tv:cen Ai~sricansand foreigners living here, he sald he h3d heard of a lot of sucl~incidents. He explained that he generally thil~ks of two brud cdtegories of Americans in Tehran: The wzll educated oii@s do not prescnt anv great problei;~, but in sme instances laborinn closc karicar~sand GI's arc unable to talk reasonably (logically) with Iraninns and sonleti~llas the tone of their conversation is unpleasant. He was nut aware that foreignclrs other than Anarfcans were Involved in disagreeable incidents, but he presuned that there were problem also with other foreigners. lie felt that such incidents had d~creaseda lot fn recet~tyears. 9' *y LIIiITEG OFFICIAL USE ::;) * ti8 LIMITED OFFICIAL USE increasi~~qfrictivi~. Ile continued to advoc~te'dispersion even if large groups of foretgners www settled in provincial towns for the sal:le rea- sons. He even pwfcrred dispersion of foreigners If the numbers doubled or tripled In the next five years' or so because he feels that Iran requires nodern tndrwlogy from th! Ynt and foreigners must come to 1&n to get nlodern entc!rprises going. Effective transfer of niodern techno14 ogy to Iran can only ha done if the foretgncrs llve in hanmny with the Iranians and coml~oundliving irould not pro~~~otethe kind of contact needed for this." LIMITED OFFICIAL USE Mr. YeIi:~bi,,- -. -- s1;rer:l:-. .. .. --- clenncr who works just)e~of-N;!fi This inclivi.2~~1was bctwocr: 55 and 70 and has \.rorltcd lor about 25 yearn at his prosont job: His somewhat unique views do not roally fit the intellectual framework of aur survey, but as they my I.m reprevantative of a great many "average" lower class urban Iranians, I am including thcm: Mehabi thought there were probably more foreigners in Tehran now, though it was hard to tell, since thero wore so many mro poople generally. Everybody was messier, too; cspcially tho young Iranians who threw stuff out of cars. At le.lst the foreigners ("khoragee") did not mess up the streets. No, foreigner& did not bother him very 1nuc11; they were not nenr ly as bad as somo officials he knew, irnd he wi~l~edsome Amerlc.tnn would movr 2nto hts district, since his friends from Abbasabatl aid tllcy tipped pretty well. "Who carcs where foreignorfi llve? I've got problems of my own." (Tills last sentenco wns sirid in a tone of voice which suggested that thc- intcrr~ie\~c~i.nust be slid~tlycrazy, if otheraj se harmloss, so we parted OII friendly term.) ACADEMIC CENTER JW a>V THE IRAN-AMERICA SOCIETY 78 VESALE SHIRAZI AM., TEHRAN dd JL-8 311U *A Vb ul.r Inforn,al Survey of 1rurib Attitudes Toward lrrcreasina Forei~nPres~nce in Iran The Director of ~oursesil~terviewed an Iranian .art-tine teacher of Fr~zlishfollowing the format su&est~d by the outline supplied. The person interviewed was most cooperative and apseared extremely pleased to have Q criance to expxeas hilaself on the subject. 1. Nc aid he a38 definitely nore conscious of tne yrcaence of :orei,r.ers in Iren than he was two or three yeds eto. - 11nericaris - 10,030 - ..o 2. :Ic st?.tsJ ttat the 1;resonce of foreigners does hava an effbc: o:? ;,is life and the lives of his farcily unci frieliz::. - ::e erirl his friends can't firrd apartments et a reesonubii. pric?. kindlords prefer foreigners because the; in! the high rents and vacate the apartments within a ll~i.itc~! time. - .hen arcups of Iranians attend nightclubs, etc., fortsign u~nlesfrecluontly ask tho girls to dance. ::e ::.t?t~.d thnt tlhie is comgletely unnccegtablo ts lreni,.? 11:zles. :ie cited an instance at the hilton ::otel 'her. this occurred with his group end said that they rere all secretly indignent, but did not react violer.tly. - Yes. iie stated thnt he did know of facilities just'for forci:ne!:e in Tehran. He nnced the ziin iiotul as on= :iuch a~;o ::::ici that one section of thc hotel use:i oilly doll.,:,.: . .: the currency. .:e also nan.ed the ..ov!lirl, I., -- z::;otl?er ouch fa,cility which c!ler~cd 1rani:;r.: hn ch;. ..:i? fee and didn'tcsknrge fcroi:.r?ers. 'illis, AL :;:-j;: ?I-!- cSsr,:cd with' price control. - ,;e cx; resscd a stron; resentment against such ,ractice' , sayin, that he "hates the idea." - -/ - r ri>c4 li-i ,I to t e zndio and iV Iro, r?l ., br~"~t esl.ci liy 1,1r' xaerlcL:,lr. ;.e did not e>.,resu r.e;-tlve fecllr, r. :ihc~,t AFRTJ, but said that he and his fri~:li.n quc. I I u? thc idea of the proeran~in Ln:lisll on 1rati.011rl lra1.1.4n Television. They also resent the fact chat thlevision kroparns in En~lishrun later than pro;rnlvr ifi Farzi. ro 3150 tr,entioned thc fact thilt ~ithonlb .o,.e FI stztion in '.ahran, too much cn~lish~ro~reaini 1s use<. - ~e ro.~ideredthe constant complainin& of foreigners about the trlffic an exaniijle of disagreeable incidents a1.d snid "all t%y do io complain about the traffic and hou::in,, makc lot of money and depart from Iren rmch riciier." - Fortsi -riers involved =re not from any particular country. (I tjjnk he aeant Arericans, however, since most of his forc~=nassociates appear to be Americen) - !:e tninks incidents have increased and predicts that. tney will increase. 3. - Yes, :le thinks it ia better,.$o have the foreigners live and vrork with Iranians - very definitely. - Lo !,is unswer would r40t be different if lnrze croups of forci-:.ers were to be settled in provicial towns. - :e $se> Corments I received the impression that the man interviewed was happy, to have the chance to express his views and that i~eresents the irlcre-~si:~:number of foreigners, He mentioned also thd L accordin;: to hid friends, foreigners recetve ~uchhigher salaritar; than Irdniana for the some work. lie emphasized thzt lrznians look western in dress, rtc., but that this is a superficial resemblar~ce only. Ll"lO*.L .om" "0. I" ,",II.,, LOITIO* L_.* *rum 1.1 C."I IO8.ll.Y UNITED STATVS GOVERNMENT LIMITED OFFICIAI~USE Memorandum -7 TO: WL - John Stenlpel DAY%: Parch 16, 197F .YOU : ECON/C - David E. ~estley@( luDjEm: Iranian Attltudes Toward U.S. Presence: Inteiview with Mr. Mike Pishvaian, Diesel Auto Parts Business Executive Mr. Pishvaian reported that he was currenily more conscious of the presence of foreigners in Iran and was most aware of Americans. He estimated that some 40,000 Americans live in Tehran. lie asserted that he could easily spot an American by his clothes, speech and actions (for example, an American's eating habits-method of handling his silverware and the fact that if he wished to skip a restaurant course he would proceed to the next course without waiting for his eating companions 40 finish). Mr. Pishvaian indicated a belief that the presence of foreigners had an effect in hoping to introduce new and useful ideas and raise living standards through such things as the introduction of new foods.. In the latter respect, he cited the impact of new dietary habits introduced by Americalls on the health and size of the pomt-World..War.II Japanese. Pishvaian was aware both of the commissary and USAFOOM and Peykan Clubs and that they were restricted to Americans. He felt no resentment for himself or the Iranians-Americans were entitled to thom if they wanted them-but felt strongly that they unfairly discriminated among Americans themselves. He said thanks to- tho Commissary he could purchase almost any American product on the local'market at 2-3 times the intended price. He said that in his home (his wife is American) one heard only the American radio and TV. His children watched the Iranian cl~annelonly when viewing a U.S. film with the aid of an FM radio to hear the origiial version. Ile thought it was useful in teaching the children English. He saw no reuson why both should not continue even if the Iranian station increased its English content. L IMI'I'EII OFFICIAL USE ---mm--- nrty U.S. Sar~ijr~sBd Rcy11ady ra tbr Paynll S~viug~1'Ian LIMITED OFFICIAL USE Pishvaian asserted that he rsonally was unaware of any disagreeable incidcl1t:j 1 llvn~.2roioricansand Irnniirnx, although he had witnessed some between Americans. Accord- ingly, he had no c0mmer.t on whether incidel~tshad increased or decreased. Pishvaian believed the present situation of foreigners being located in several areas of Tehran was preferable to a com- pound existence, but noted that Apjhricans (and other foreigners) did ncvertheless tend to cluster in certain areas. He noted that Iranians were hasicampitable people. lie felt he would feel the same as regards the prove~ialcities and/or if the number of foreigners would double. He added a post- script, however, to the effect that while he believed the influx of foreigners was good-and here he said that in his opinion Iran and Israel were the two developing countries that had made great strides in large part owing to tho influx of foreign influences, including intermarriage, & would not be happy to see an influx of Pakistanis, etc. in contrast to Americans, British, Germans, etc. Comment: Pishvaian speaks from a special point of view. He isican(Iowa) educated having spent ten years in the United States, has an American wife and a green card and probably will immigrate one of these days. He aIbo works for a company having many U.S. lines, most notablx Allis- Chalmers. Although I pressed Pishvaian to he as nasty" as he wished, some reservations concerning his candor might be in order. ECON/C:DEWestley:jt LIMITED OFFICIAL USE LIMITED OFFICIAL USE Iran.~ohsci~ Darbani, Parsonnol Manager, Otis Elevator Corp. of Darbani was SLaff Aide to Minister of Intorior Amouzegar for five years until early last Deceuiber; he knows a great deal about the actual foreign presencesin Iran and is probably the most knowledgeable source I intorviewed. Darbani says the number of foreigners in Iran has signifi- cantly increased over the past four years. There aye now many more Pakistanis, Indians, Filipinos, and South Koreans. plus a modest increase in "Europo;ms"--including Americans. Principal problems are being created by the Filipinos and South Koreans, who fill jobs which Iranians could fjll. (COMMEXT: While those two foreign groups are supposed to be skilled construction workers, truck drivers, etc., Darbani says Iranians perceive them as unskilled laborers, particu- larly along the Persian Gulf.) Iranians do not understand why they should accept and work with (often) illiterntc Asians instead of thelnselves being trained in the needed skills. Most Iranians do not resent Americans or Germans because they know that these foreigners bring "skills which take a long time to learn," hence a general deference to Europeans and Americans. Darbani sees real problems with the influx of Asians, but notmuch with the greater numbers of Europeans, since their lives do not impinge much on the average citizen. Ile thought no special fazilities were being provided for foreigners (Darbani, as with many other interviewed, seems to consider the U.S. Armed Forces radio and TV stations as part of the local scenery, i.e., for Iranians as well as foreigners.) It makes little dif fercnce where Americans and Europe:ins live, because comparcd to others, they do not "threaten" Iranians the way Pakistanis and other Asians do. Darbani personally thought ghetto-style housing was bad, since it inhibited cultural adjustments, "which Americans seem more willing to makc than others," but he thought compound living was bene- ficial to the government in tho case of Asians, since it t3nabl~dthe GO1 to handle security aspects of these foyeign comiunities better. LIMITED OFFICIAL USE SURVE'; OF IRANIAN ATTITUDES TOWARDS INCREASING FOREIGN PRESLHCE IN IRAN Marilyn f~lcJqfe~_lr~terviewwith Mahnaz Afkhami, Minister of State for WO&!I's ------Affairs, at TP~------office on fiarch 1. Mahnaz stressed throughout our talk that she probably was not the rigl~t,, person to talk with in that her life was now so busy as to be insular. She explained thdt she works until at least 8 P.M.. rarely gets home before 9 P.M., and is so tired that she wants to go sfraight to bed. On the one or two nights a week that she accepts invitations, the functions are usually fol-11id1and there is little opportunity to really talk with people. She also said that she was so sympathetic to America and Americans--"I grew up there. It's my second country1'--that she was likely to he uncritical to the point of not noticing what others, less sympathetic might notice. Her husband, for example, she said, went to the U.S. after high school and she suggested that he might see things differently. Our conversation did, however, elicit some interesting points: The NITV International program is very resented, even by those who watch and enjoy it. Why should prime time be given to an English-language broadcast? AFTV is accepted. It's handled by Americans. What bothers people is Iranian TV doing an English-language brobdcast. Mahnaz thought there were probably 50-60,000 foreigners in Iran. She didn't know hotr many Americans. She was sure there were more now, but again referring to her "insular" life, said that she was not aware of the increase. She said that she heard more negative reaction several years ago, but thought it was because her life was less constricted then. She didn't seem alarmed about a potential increase, but wondered how the city might be able to absorb it physically (e.g. housing). c She thought that a :ompound for Americans would not be beneficial--even if it were for some and not all Americans. While it might solve some of the problems, she thought that it would be most unfortunate. Americans wouldn't learn anything about the culture. They might as well be living in the U.S. She also thought, from the viewpoint of her concern for Iranian women, that the impact of foreign women was beneficial. Mahnaz said that her exposure was primarily to lower class Iranians through her IWG work, and to Government officials. She thought that thp riiiddle.. class,' particularly upper middle class, would be the group(s) affected the most and the group(s) most likely to react. On the lov~erclass--she spends hours discussing their problems with thciil. Th~yliavc enornods 131-oble~nsincluding rents, but there is no co~~~i.;ctior: with foreigners. 1 hey, are not concerned with forcigtlers. On gove~-nl:~:!~~tofficials/decision-makers--there is increasing rese~~I.~!lent nf import~:d c~ulturct. ":!::r bk.?,c~t.yis always talking about it." "l.oca1 \trlution$ for local PI-oblerns. Government officials resent a great deal the kind of press notice received In the U.S. It is personally and deeply'resented. Iranian officials are Increasingly sensitive pcause Iran is increasingly under attack. "It's extraordinarily unfair. Perhaps yovernment officials are hypersensitive--perhaps they don't understand the nature of the Anierican press, but they are extremely rensitive to it a:d resentful of it. And this resentment translates Itself locally. Take the Marion davits story. If It had bgen Iraq Instead of Iran it wouldn'$ have been played the way it was. The mood of th~country is not now pro-foreign. It is very "pro- nrtionalistic. Even foreign wives of Iranians are now having a worse time of it. The novelty is gone. They used to be received more r~armly rr being interesting--as having something special to offer. Not now. lhcy are forgiven less. Now they are expected to know a1 1 the nuances of lranial~ culture and behave accordingly. Mistakes are no longer "cute." MILLS SURVEY - DR. ZIAI *cuead of Hajles Yoreip lblations Co:mllttc 1. More conscious of foreigners, but not in sense of crowding. 6-8 nlonths ago d!~ring big boom it was vexing because all trying to get contracts and soak up money being thrown around. That wave has ' passed. Now he doesn It sense resentment. Reasonable people know foreign experts are essential to get Job done and are willing to ' pay for and put up with. With laborers, must regulate flow of entry so as not to get into trouble like European countries. Some leftist young people resent, but few. Thinks 2,000-4.000 Americans a live Tehran! Can't usually tell U.S. from other Western but if he frequented bars, hotels 1ike U.S. he might feel differently. Someti~nes U.S. are more outspoken than others (he means pushy.) 2. No effect. He knows of PX and Uclubst' but people don't resent. They think U.S. medical care is better and resent that (Idisabused him of that). Yyth that Americans come with pockets full of money still lives but is changing. &S He watches,,TV, listens to news when driving. Likes. People don't object. Has heard disagreeable things about rent incidents recently. Nothing more. In past GI fights, etc. troublesome. 3. tikes mixing of foreigners with Iranians. Isolation creates problems 1ike with Brlts before which still resented. If large numbers go to provinces at once, might temporarily keep apart 'ti1 get used to each other, but if can phase in gradually there is no need to isolate. Keep them part of general life of comnut~ity. 'On reactions to news of trip1ing-complex , would resent more Muss ian, Inciians and Paks less desirable because of large fa~i~ilics. large numbers of then1 might slow down Iranian learning of skills. Westerners not resented because of benefits they bring; businessman. lr~vestors, technicians OK, but keep ski1led and semi -ski 1led workers to minimum. CONFIDENTIAL -.--SURVEY OF Tlll T!IATi KPTITIIDES TOWARDS INCEUSING FORLIGN ----Gordon Wir~klcrInte~.view with Khodadad F'nr_nanfarmairrn, Chairmnr~, Ind~,?irI PI B~III>. of' 7~7-5htarch 16, 1976. ~i~trrvic~cd : Tran --Amcrlcr :- .LX. - I explained to Khodsdud what thr intersview was all about and he requested that he be permitted to Dmke an opening statement before we got into the individual questions. In his ol,ctiinp, corncents Khodadad said he felt that it wus very useful for the Embassy to be looking into the matter but he wanted to admoniotr us not to make an8issue oi t. He is very concerr.ed lest our om concerr. about this potent3 a1 problem dramatize it for Iranians. He said he was glad we were only talking to 25 or 30 people cu~dnoted that any of those people could possibly mentior1 to the Primc b:inister or some other high rankine offici,al that "the American b~bas~yis concerned about this problem and therefore we should b~ rc ncerned nbout it." 1Ie said he could easily see the PM bringing np thz matter in a meeting of the Council or Ministers or with other high ranking officials. Khodadad snid that 15 to 18 years ago Amrricans hcre were, in hit; Judgment, a mucll bin~erproblem than they nre today because Iran has chanpeil vcry frist. A decade and a helf wo this was a terribly provlnc~dlcoaltry. Todw more people are sophisticated, they have television ,nd they have become internationalized. "Our eyes are gtttin~nzt-d to you" Wodadad said. lie wuo elti ,)r~.l~~hi(:Ii in his praise for thc atmosphere which Ambrrcsa,iri- e'ris: ha6 created since he took over his responsibilitic.0 here. He :~ltthat the Ambassador keeps a very low profile, "is no* running arourtd the country makin6 speechcn," and "even seems to try to keep hil pictures out of the papers." He said it is apparent that USIS arid other elements of the American Mission also are very conscious of maintaining a low profile under the Ambasstidor's stim Khodadad a.ijd it is important that we guard against trying to dcdon strate any kind of special relationships between the two countricn. He repeated in a number of ways hie admiration for the way Aml~hb~nd Helms has hzndled himself in the paat three years in Iran. When sskcd wn~t!~erlie is conscious of the presence of more foreicne in Iran now than two years ago, Khodadad nuawered, "in total yes." noted that the oil revenue jump has brought many Americans and nationals of other countries, particularly businearnen, to Tehran.. CONYlDrnUL lie is very t~~uchaware of the fast buck operators and apparently 1s p1n::ued lrj 3 181 (' ' of peoy'i 7rh.o have b~en give^, hi> rrA1.r LI,,~ insist on seeing him, "Just so thry can say that they have done LC, when they r~portback to their bosses.'' He said he felt thc sudden inflow of ni?v business in Tehran, while beneficial, could cre:rte suspicions "especially when viewed against the backgrom~dof such events RS the Lackheed expose." IIe said he very d;finitely can tell Americans from other foreigners. "All you have to do is look at their shoes.'' He explained that hlericans wear shoe3 with thicker soles than do Europeans. He addcd that he has had so much experience with Englieblspeaking people that he can, of course, spot an American by his accent. Again, diseu:jsing business and foreienern coming into the country, Khodndad noted tlirht it is chcaper to brilia British, Germu~s,or other Eul-opef~nsthan Americans. "You simply pay them less." He said there *re, to be sure, jealousies on the part of some 1raniar.r; as to what b:ericans get paid but he noted that at the hj.&her levels Persia's top experts me getting approxi11l:ttely epual remuneration as Americans. Ile pointed our, tl~atthere are sw.e phony "experts" cotning into the rountry, but "we now csn select butter; we are better jowelers and cm tell ~1~::sfrom dinmonds." Ile also explained that more of the experts are contin& inLo the country under the aegis of the privcte sector an8 "you c&n't fool the private secttr very long." When asked tr t,tfmnLe the number of Americms in Tah?an, Khodnilnri guessed 1\,000 to 5,000. He was somewhat uurprised wt'en I told hi111 the totd w5s approxii~~ately16.000, but he was not troubled by this When asked if the presence of foreigners had any effect on his life and the lives of his family, he said that there was no eff-ct in terms of the use of resources such as food, taxis or public. facilitie~ He acknowledged th~tin the case of certain types of housing, the rents may hove been affected by foreigners. lie went on to say that he felt that certain activities by forcip,nc-r s 1;1ich as the British Council, the Coethe Institute and the Ir2n hcric~~nSociety wcre totally salutary no Par as Iraniena were concerned and benefited bilateral relations between the countries. hen asked if he could name any apecial facilities for foreigners he mentioned the fact that, he thought there were some clubs, but he had never been to thc:n. When I mentioned Gulf Didtrict he clearly reca1lt.d its presence rind its purpose, but ho has no problems bbout it; nor docs III? f'ecl. unyone else has. CONFIDENTIAL On the question of radio/television, he anid that he listened to chunnel 7 "all or ~1.etrn~e" uiu would hate to see it abtmaoned. tle said that he also feels that NIRT International is worthwhile but that it is healthy to have two broadcasting operation8 in English. Khodndnd was u~~ableto identify any disagreeable incidents between Irmian8 and 'orei~ners and very vaguely recalled the "olaying of two Americans in Aearbayjan a couple of years ngo." He discussed Americans in traffic and said that "all foreigners are becoming just like us," but he felt that most Iranians do not perceive overly aggressive or clumsy behavior by American motorists because they do not perceive it among themselves." They do not feel it is wrong to cut someone else off ," he noted. Khodadad responded most definitely and vociferously when asked his i opinion of the possibility of Americans or other foreigners living and workiiig in separate conpounds with their own shops and recreational facilities. >Ic responded to this suggestion with a resounding "NO." Iie said that fol-cigriers "must live and work mong us so that they are not distinguished from ufl." Ile said any effort to ceparate any individunl segment of a foreign community .-- and in this case he volunteered the thought of separating the Americ~mmj1.itui.y -- 'kould be a very serious mistake:" He said this would irlentify individual segments of the foreign population, cull attc1itic.n t.o them, build up envy and jt!t~lousics and be totally counterprcrlllct. :v..-. When askcrl yl~~tl~~~.01. not thia nimt be considc~-cdin a smaller community such ns Isfahm (nnd here I pointed out that it was happening in Isfahtin to a deercc with the new foreign villqe being conetructcd nol.ttr d the city). Khodadad used the term "ghrtto" but fiuid that he undezslood that the problems wcre somewhat different in the provincial nreao. "But even so I am very much opposed to the idea." He said ill?t if forced to do sometliing like thin there should not be onc single foreign village within a provincial city but s:?verul mall oneb Lcatttred amongbt the Iraniun population. In sum, this whol- idea of 'separation of foreign populstions of any sort was totally repugnant to Khoddad. I When asked about the effect of a possible trippling of the number of Americans in Iran, Khodadad did not seem to be seriously bothered. He: did ecknowle2ge that as the population of Americans or other forcigncro increases in the'eountry, there is. "of courne, an increasing potential for problems. But it is very difficult to predict just where the problem liue wou!d be." hljodndrrd cc.r~rliu'r1 1,p -:tyinc that hr had noted thnt all of lhr, Afnr r'icans with vhan he hni; come ill contact with 1x1.Tetlrun tb;c different than they wwc? previously. He said that America~ls urr "more interntttionalizad" and most of those who live here have lived In many parts of the world. (Thie, of 'course, leads one to the tl~oughtthat IChcdadad'o contacts with Americans and other foreigners t,rive been djstinctly limited to the upper social, economic nnd I ducation lelt.1 ,) CONFIDENTIAL C_- LIMITED OFFICIAL USE SJBJECT: Views of !It-. KOHAMI.lFD TAIIERI on Ir~creasingForeiqn Presence in I! BACKGROUIiD: Mr. TAIIERI is the I!anaqing Director of the Philver Company and seems to be definitely on his way up. We Is in his early 401s, articulate and socially prominent. He has been asked to take a leading role in the up-coming US/Iran Join$ Business Council meeting. He spent 10 years in the U.S. at various unlverstties receiving a Ph. D. in engineering. / Mr. TAHERI said that a1 though he has noticed, of course, the rising numbers of foreiqncrs in Iran, such had not caused him any problems nor did he think that the Iranian business cormunity (and by this he seemed to mean the upper echelons) was troubled by .this Influx. In response to my question, he estimated the number of Americans in Tehran to bc between 10,000 and 15.000. He said that bb usually can tell if a foreigner is an herlciin or not --- Americans scem to be more informal in their lifestyle, particularly in their dress, than other foreigners. He did not say this in a pejorative sense, merely noting tl~istrait. He went on to say that he finds Americans to be substantially more "c1annish"than other groups of foreigners. The vast majority seem to live In the Saltalb~tabadarea, perhaps understandably since this is where Armish/Maag is. Earlier in the conversation he seemed to imply that this Wb-J clannishness was perhaps denying to the Americans thenbenefits which a, - fuller integration into Iranian society would provide. For example, if he ware all Irani'rn in France, he would be trying to buy French products and do his best ht intcgratc into FI-ench society. He has been told that . I.II.lITED OFFICIAL USE ----- : '\ 84 LIMITED OFFICIAL USE -2- --TAHtKI there are 13.000 Gernuns in Tehran, a fact that one would be surprised at learning since the Germans 'are substantially more dispersed, qeo- graphically ally,:,iy, t,~rougl~outTcliran. Somc\rhat in contradictior~to this, he noted that this clannishness seems to be an American trait whibh he does not find disagreeable in aiy way. He understands that there are special facilities for Americans. The American Embassy seems to be in closer contact with its citizens, dnd does more for them then do other Embassies vis-a-vis their citizens. Still, this is the Embassy's duty, he said. He conceded that the "lower socio-economic levels" in Iranian society may t~dve"Problems" with the foreign comnunity. For example, conservative Iranians might find certain American dress styles "odd." and might even be offended by these. Again, he emphasized that he doubted if Iranians in his own socio-economic circle would find any of thfs objectionable. He has not heard of any disagreeable Incidents between Iranians and foreigners but agreed, in response to my observations. that there probably had been incidents, for example, with taxicab drivers and landlords. On the other hand, Iranians have these same problems. He really had not thought much about the possibility of "incidents" between foreigners and Iranians and doubted if there was anthing really significdnt in this regard. A doubtlng or trebling of the nunrbcr of foreigners in Iran over the next 5 years or so would probably cause no problems for the Iranian buslness comnunity, certainly not for tttose in the upper 'echelons. Again, the problems. if any, would be at the "lower 'levels." fCOtI:RCOri?win:dfg 2117176 ----LIMITCU -OFFICIAL USE Subject: The A:.i~~'i~;i:iIPrcsence ill Irrm 1 discussed the g tr~cralsubject with a n'eighbor, Satid Kokabi, on !.larch 6. Kokabi is a studer~t,about I'{, one of three. sons and u daughter of a ba%:l;ir merchant. Tile Icokilbi:~,mvcd up to ;)arrous from near the Lamar borne ciel~t years ago, aid ti>,>lied ~f th~f;i;.lily atill &es two round trips t,o thu b:+x::o~ each day. The Xok;,Ws are a. tyglcirUy corr3ervativo family, but tha sons Iiavu adopted jeurls, love ruiclc music, and are ~rottymuch "with it' by today's Iranian stnnriards. Sa'id Kohabi l'c1.t that the presence of foroi~nerein Irair, such a:: the nmiy Gcr;:~~gi~s:mo live in our arcil bocaulie oJ' the :~eil).LyGerman SCIICY~and 8 Cols;n.?ri Cilurcir, is vcry ~.l~rch~leellcd bccauw Lhcy hhvc cxpertiuc IXI~availablj in tho colu~t~.y. :iiucation in Tran has not progress~:d enougl~to t?;lin Iixa~ri:!ria in tcchr:ical subjucls. Satid has a brothcr who has lenrnctl ~~~~~~~~~pj and viorked for n ti~~aiiear Isfahari. He now lmrks for an /~mcriciinfirm just WI;~L of Tehr.al~. A, r~or... distant relative (unidaltified) iu~eli:joviet l.?:tiuricidno uurkilri url a silo c~>i!mplcxsomewhere in southr.rn Iran. Tho Sovicts, .dilo ricrc in Iron without their fa.nilies, lived in an apnrt~nontcoaglex and hsd wry little contict wit.h 1r;qians outsi.le of their work. Sa'id tholy:!lt tinis vmc o ?r<~yb;,l ,~rc:;cderit to follow. :Ihi.n I asked what he tho&;l~t of forei,:nol,s g_!tnfa-.ilicu livin!: j.n b co.x;?211~1; he ar(:ued agairlst s11ch a po!ic:;. fie thou .IIL i.,~.ci,;r.im?. ought to live anong the Iranian ,??auld, to Sear11 :.'sr:;i fromn tl;c:i.~,~i,ci l,o Loech ti~uirlraniw~ nuic~lbors iCni:li.eh, Gcrxdn, Trench, c.r \rhcrt,evrr. 5 b March 25, 1n6 Ilrmoran2i~~~_~pthe Files 1'1.0~: POL - !.rchie 1I. U~rlstor I discusscd t.he general uubject with nly'luighbor, &. Parsa, on >t+I;c116. He is em>loj-ecl by the ~iifilutryof Education ;old w~rkson Secondary d~tucation matters. 11,: :;ixaks cor.~: 3nglip.h aid very good YI .nch, iu~dsends hi:; t~w young so110 tu Qcee Hasi. \Jc dhscusscd the ~ubj~ctin 1:arsi. 1 i1i.d rrrot approach tniu subject an a public opinion poll, h;b ratlar worked the oubjact into a general conversation. lihen I asked ?arm how many Americans he thought there were in Iran he cuessed 20,000, a figura cutonishingly close to the 3abnssyls estir;latu. He thought tt~erewere. even more Japmcse than Ptnericans (?!), and r;uuosed that the G.~r.s.~noand 1,'rench were not far behind the hlericans in nu1.1bcr. Parsa noted tnat Iranians have normally been tolerant of and friendly toward fot~ci,:ners, and that tho contribution foreigners iv~deto Ira11 bias great Lccauoe of thcir conscientious work habits. He adritted that this tolcranco was prhaps more eviuent clinong educated Iranialls, who val.ucd foreign contacts, but said the "man in the street" had very little cohtaat with forci,;ners and therefore no particular opinion about thcir prcroscnce.. He sarr no bdd side effects of having so .znjr foreigncrs in Iran. Thc 11i~1: rcnt proSI~:~erms not sanething you could bbne on foreigners, he c 'aid, because it was the rapacious landlords who overcharged evcrjrone, wilether Iranian 01. forei~ner. Ije thought landlords actually set higher rents for foreigners ii!lc-l~ they could get awajr with it. Having tr;>vt?lledto Cennilny last year, Parea tnentioned how ir~pressrilhe was with the orilcrly traffic. He contrasted this with Iran, !there his cow~tr'yc~en have territlo mnrrcrs it1 public despite tlreir cldn to traditional ;>,.,l:~tnrs.'. lie repeated this several times, noting such emiiplea as pr.ople horlkin~at the car in front stoppf~dfor a traffic light to get him to 20 even 11efor.e the light changed to Green. .LIMITED OFFICIAL USE Mr. Sll~bi,rm!l?".cil of n ci~olokebabrcstnuritlrl at Ilnsllt 'Cercl. (About 40 milcs west of Tehran). Shabi, about 26, speaks virtually' no English and has run his own chelokebahoe for the past two yoars after graduating from high school and aorking for his family for a time. He did not think there had been much of an increase in for- eigners in Iran, though he supposed there were more in Tehran now than when he had lived there.ss a very young man ten years ago. Foreigners do not affect his life much, except that they seem to prefer his restaurant to his two competitors in Hasht Gerd ever since he painted up the place and got new tables and chairs about a year ago (exactly our reason for selecting the place). Foreigners tip better-an Iranians. Neither he nor his three waiters can tell whnt country they come from, though he thinks most of his foreign customers are Europeans. Where foreigners live could not interest Shabi less; the very iew near Hasht Gerd live in nice houses and do not have much to do in the city. He personally would not mind some more foreigners moving in, especially if,they like to eat out..... LIMITED OFFICIAL USE LIMITED OFFICLAL USE c. i'Y1.11s' Elal~i, Proi:C_Ssor of Economics at National Universi ty l:l1111i, vho dcparleo for six weeks in the U.S. the clay altor tl~lsdiscussCon, is an American-trained social scientist with good connections in Iranian politics but no admitted political ambitions of his own. . llnhi said the nlunher of Poreigners in Iran has obviously Ll~creased. Principal expanded groups are "~rientalsU-- dofined to include Indians--and "western Europeanst'--including Auricans. Elahi has been thinking about the problems of loruigners in Iran, particularly their prc.lenls of adjustment. low that the citios, especially Tehran, are growing so big, foreigners experience not only noru~rtlcultdre shock but ill addition, tihe satno sorts of frustrittions that have increased urban violence generally in Iran ovcr the past two-thrco years. Tho only special facility for forei~~~ersmentioned was tho lousing Bureau (curious, since Elahl lisi-ens to AFTV at least wcasionally). Elnhi thought the GO1 ought to do more to oliminato ghetto-style accorunodations, "except for the aursians; they can't communicate anyway, so they might as -11 live where security men can keep an eye on them." Elah*. rotices a slight upswing of hostility toward foroigne~*sgen- ernlly. When asked if this was directed at any national aroup, he replied that different classes are "bugged" by dlffcrenl groups--lower class Iranians greatly dislike lhe It~tluxof P3lristanis and Indians, while some upper class Iranians, cspcially those with Frcnch or continental lul'opcan cdi~cationalbackgrounds, are anti-American. Elahi rct~lcd thcre is a rcal struggle between American-educated I rn~riansand European, particularly French-etlucated Iranians, It~rpower within tllo university estnblishment, "and you can e8lurt to take yonr lurnl~sfrom the Europhiles, but don't tako it too seriously; the 'American' Persians are winning." LIMITE1) OFF ICIAI. USE -LIMITED OFFICIAL USR Kambiz said he is deiinitoly conocious of the presence of more forc;i,?lers in Iran now than he was two or three years ago. But when asked to citt nationalities he mentioned Koreans, Pakistanis, Indians and Filipinos. He said thet previously the foreign population of Iran seemed to LC 1111 Americw~sbut in the last couple of years there has been a veiy suh- stantial i~~i'luxof Asians and he and his friends are more aware of thcru. ' He noted that there is an unterstanding that there are in excess of 3,000 Indian physicians working in the provinces. IIe went on to comment that there is a concern about the beh~viorof these doctor3 in the villages. " 1Ie said that some Iranians feel that becauee a medical doctor has substantinl. impact on an individual whoa! he treats, there could be a :cultural impact associated with this. He said that sone pcople are %orrcerned thut as villagers begin to learn English they will he speakin& Englioh like Indiuzis, or Pakistanis. Kambiz estinbted that there were about 50,000 Americans in Iran mld was Surprihed to learn that the total was approximately half of thtlt. He ssid that he could definitely distinguish a foreigner from an Iranian' but he could n~tnecessarily distinguish Americans from British, CunrrfiiuIrB Germans, or Frcrich. ' He said that the presetlce of foreigners hao no particular effect, on tiis life, but there is no question &bout the fact that people Peel that foreigners have driven rents up and have made it lauch more difficult to find domestic oervants. However, he said the onus of this does not necessarily focus on Americans. He said this was true some tinle &.go when people had the feeling that the fundomcntal foreign presence ULS American, but today Irnnians are blaming the increased rents on forcignerrr generically as well as on the increasing numbers of Iranians who will pay anything for housillg. When asked about special facilities for foreigners, Kambiz immediately mentioned the German Club (this is only natural in viw of the fact that the Club io directly across the atreet frcm his office), and he ha? a vague knowledge of the Pars America Club. He did.aot seem to be .ware at dl of the presence of Gulf District. 90 LIMITED OFFICIAL USE LIMITIZD OFFIClAL USE 2 Wl~cn we dit;r:u:;!:i:d rb:lio-TV progrtucs, Kunbiz, said that 11~.?t.trlly ,:(%I.. rlo kickback frum Ira~ianrrecardinp, the presence of AFRTS and that tht? l~asiccompl.nirrts or criticisms thut he has heard have coine from l'urks, I'nkistanis and othw mrl'o officials who visit Iron. Ile says he h&s lrlso hcard r:uesLioi~s u3out the presence of AFHTS from visiting hierici~n l~rocldenstj.~~::ol'l'icinls . Kwnbiz could not recall any disagreecible in~identsbetween Traniirl:. and I'oreigners living here, althou~lilie saic thcy have had a Tew cpir,uclt.s with the fort.ig11 employees of NIRT. For cxnuple, he soid, they ha: to discharge .In I Kiunbiz went crl to notc that there were ini.i,:e problems sone years aco. Ilc suid thet he won sax thijt there were ccver as niany An~cricans ir~Ihc vountry as chere ore now, but when the U.8. Agency for International +)cvelopment. be~airitlirir programming here, they brought in hundreds of ijcople. lie conz~nlrnti.d that many of them were "sloppy" and not educnI.t~d. Ilc said that thcy I;F,\E a very bad impressicn and negativc repu~r.t,icn to Americans, i nll there WL-rea number of incidrtlts involving knerican department llcads with Jrmian enlployees. llc said this nec,.tive imagc continued for n couple of yews after Liic AID pro[:r;ur. crl hl~mbizwould be derd set ag~instcrriy thouglit of a ieperirtc: conmunit..< Xoi. nny group of hmericbns or other foreigners ill Iran. lie suid thal: ail 18:'tifically created ccmunity would only make matters worw and lntsk.c? tile Ijl'csence of foreigners much more cvident. lie said "you waiild be crrt;'.ir:;: 11 target for criticism and you must understrtnd that our cullure rc!lkil.cs I lie alingliii& of people ." lic noted also thxt -trhdcsmen would be up in u~msaboul the develo~,:,!il;t *,F a colmi~unity. lie said that "even thoudl you have your commi:ibrii-y 1164, the tradc;mt:n do h.rve the feeling that thej are getting !iome bur~j~lcor: oirt of the forei~ncon~munity. If you compressed a foreign group witlrin II private co!;muiity which included shops, the tradesnicn wuld i'ecil tlral;., Llrcy were 1c::inc cvrisiderable business opportunities." - .---- .---- LIMITED OFFICIAL IlSX 91 LIMITED OWICIAL USE 3 1.ihri1 u::lccd i I' I.,. woill~i1.~~1. thc :;i~.~creactiorl in connect.iun with ~IIIU.LJ(.I. towns, he ai~:,w~,red,"dcfinitcly ." When discussine the potential for a doub,ling or a triplin~of the American or foreign comnunitiee in Iran, Kambiz said that he obviously could not predict what thc reaction would be. "IIowevcr,'if this is going to happen I feel it would be very important for you to take certain steps that, will case the entry into 1ran:for these individuals." He said that soule rrpproach to seriow orientation about Iran will be absolutt essential. To this end, Kaabiz recallcd for mc that NIW is in the process of making nine f~ln~son Iran; five of then (on geography, peoplc, women, pre-Islamic cul lure, post-Islamic culture until 1800) have been completed and four morc should be finished by the end of the suuuner. These are being prepnicd essentially for use in the 18 colleges and universities in thc Unitrrl btates that teach Iranian studies and/or thc Persian language. As a result of earlier corrversatione that he and I have hh3 on this subjcct, Kanbic, said that lie tan directed the producers of these fi1w.s to contuct ttc U.S. Information Agency in Washineton as soon as they are completed and provide prints of the film6 $0 the Agency for potential use in orjf111 tio on. He said that several of the completed films have been tested with different types of audiences in America nnd they are quite succcr!;ful He suid that even though they are prepared with a university I. .ce in mind, particularly a ernduate level audience, tl~cydo keel ;!,- dLtention of less educated ycople. Yfi.:!I'ECT.PAN'I'S: M. Henri F!ar.<:hol., Direcec:r, French C.dLrural C~nter,'Zabriz . David C. PlcGiffey, American Consul, Isfahon I),i'it 4 PTLACE: Febru21.y 23, 1.978 - Consulate Residence SUI1~JECT , TaLriz Riots of Varch 18, 1978 1 Introduction: M. Marchal, a friend from Tabriz days, visiLrd me while in Isfahan for a conference of French Cultural Ceilccr Directors. Over lunch, he described his picture of the 'Tubriz riots. PI. Merchhl staLed that the authnritles took prrca,lcions r ninst disturbances, but were unprepared for the extent and vqolancc of the action. They had stationed extza police at tnc University and around police stations and hzd po11.cercerr with walkie-talkies at most intersections. Their control ac tile Ur~ivcrsitywas heavy enough that it remait~ed€?~brntF~ll~ quiet the whole day. However, when the disturbances started, coniuoion reigned. 'The trouble started with a large demonstration i.n front of tt:~ Aria hotel, near the ,enter.of the town. An initially quiet crowd grew rowdy and be an to throw stones at the nrarby hiwernmcnc "youth palaceK . Reports are that a woman witkvur; ct~sdriwas dragged from her car and has disappenrad, rumo:-cd 11, lrave been burned. The police attacked the crcwd, wii?yl\ dJ spersrti. ~hehsmall grouya, which he ~t~aracterircd?L ueir:g III-rvor;;.anizcd, sprang up all over town. Branches of the Snclerat batik were a prime target, with the riocers braaltic~; ~II,de:itroyi.ng furnj.shir.gs and records, ,and setting fire t:o i ttc da.br.is, t!ut he sta tcs that..chcre :are no reports of tl~rft of Incncy. 11. is said in Tabriz that this Lank was attzcko~l I):scausc of ito close connect:l.on to the Royal family. 144 Marc!hsl rates t.har almost all the destruction of buildiiigs-.-bariks, tile youth paliize, Fastokhiz Party affi.ces and the penels comnianl- ~~ratingthe Shah-People Reyolutitni.ia~~frontof the main post: f~i:ice--wos c:ompletcd within two hours. and that he thollz'nt ' presu1r:ably mzny rnore kill ed or wounded. His estirnatr? frorn Tabrizi doctors of the ~.i;~ierkilled is around 90-100 with up to I00 wounded sever el;^ enough to go to _a hospital with many more treatcd privately. He states that more Lhan twenty girls at the Parvin school, a soacwhat progressive girls' school, were severely beaten when :.hey atter,,pi.ed to ieave the school and that authoritie called parents to come with automobiles and chadours to pic up che remainder. Fe heard reports that the slogans being shouted were basica anti-Shah and pro-Islam with several reports that at least one group was shouting pro-Turkish slogans (but whether referring to the country, or the local Azerbaijani Tlirki populationllang~iagelculturewas unclear). HE said that no specifically anti-foreign, anti-American activity was repor but that rioters made determined but unsuccessful attempts to attack the residencel~uesthouse of the many foreign workers on IDRO projects and pointed out that only the Iran America Society of any of tt.e foreign cultural centers suffered any damage. He stated that it is assumed in Tabri that the Governor-General and the chiefs of Police of Savak and of the army base will all be sacked and that the "experiment" of assigning senior officials with close Azerbaijani contacts to posts in Tabriz will be ended. He speculated that the organizers got willing volunteers because of widespread and deep resentment among a largely agricilltural population against the Government s policies affecting agricultural product pri-es. However, he says that none of his contacts in Tabriz believe that'the rioter8 were "foreign-controlled elements" for, while organized, their targets were "obvious" ones for Azerbaijani mal.conten Instead, they belteve that there were local (or at most, Non-P.zerbaijani. Iranian) instigat~rs~whoorganized the local malcontents and made them effective in their destruction. Embassy Tehran Comment: While figures on casualties seem out of line with more reliable estimates, flavor of conversation seems to ring true, if somewhat dramatic. P.O. TARRIZ:DMCG%$?!~-I-~~ .ti ACTION DFPARTXIENT OF STATE a< m RGP D.c.naoll..d Fl1.n. &a@@~&~Ollginml I- b. F1I.d ln FILE CZ-'DESIGNATION CONFIDENTIAL A-04 "0. : DEPARTMENT OF STATE ,H INFO : AMCONSUL ISFAHAN AMCONSUL SHIRAZ AMEMBASSY TEHRAN 1-1 E.0. 11652: GDS TAGS : SHUM, PINS, IR EOI VR. INI .-. AMCONSUL TABRIZ DATE: February 23, 1978 A"mlFRoM ,A" SUBJECT : RIOTING AND CIVIL INSURRECTION IN TABRIZ: AN INITIAL ANALYSIS .,i*EM" *A"" 0.0 REF : TABRIZ 004 ..,A N.. CIA 1 'BEGIN SUMMARY: On Saturday, February 18, 1978, crowds estimated in the low thousands spent a full day rioting and fighting police and army forces. Damage to govern- ,,,GccrrEoo,rrR,sur,eu ment and private property was extensive, and injuries and fatalities were estimated to be in the hundreds. As of February 21, the city streets are still under military control, and the effects of the disturbance are expected to be long-lasting. END SUM.MSiRY. 'L I Beginning shortly before 10 a.m. on Saturday, February 18, -7crowds of mainly young men began to form in the bazaar and central shopping district of the city, and after some attempt by local police to break up the gatllerinq mobs, fighting broke out in earnest, cpreading rapidly and violently to other city areos. Despite hefact that Saturcay was an official work day, printed leaflet:. had been in circulation since the preceding week-orderin3 city shops to remain shut on Saturday in commemoration of the 40th day anniversary of the deaths in the religious center of Ghom, and the bazaar area, as well as the vast majority of the city shops were closed. All government offices, government shops and banks were open, however, and as the rioting began, these places were attacked by mobs. As the rioting continued during the course of the day, it becane more and more evident that the attacks on various buildings had been well planned, and that the mobs had specific targets in mind. ,101- CONFIDENTIAL rr D..~.~,US. *I= IDRY ,0.6,DS.323 c 1. owt rn ~(d. n Olmllm. D.l.> Phen. Ne I Cqn..nll CI..sillr.tia AW*..d Wi " oi rd b" FABR1Z:MJMetrlnko:nbt 2/21/78 C0NSUL:MJMetrinko < /<" *"l*. D-IZW C0NGEN:LPGoelz 9OL:JDStempel - - 9 TABRIZ A-04 CONFIDENTIAL )espite the widespread reports that shops would be closed in lemory of the deaths at Ghom, city police officials seemed to )e singularly unprepared for the explosion of violence that )ccurred, and apparently little or no advance planning had been nade. After first attempting to dissuade the crowds, and then Eiring over their heads, local police forces rapidly lost :ontrol and retreated as more mobs sprang up in other parts of the city. It was not until the early afternoon that infantry sssistance was brought to the scene (reportedly from army bases in the nearby cities of Marand, a 45-minute drive from Tabriz, and from Maraghe, about 2 hours away). By the time that these reinforcements arrived, and shooting into the crowds began in earnest, the rioting had spread out over an area 12 kilometers in length, from Azarabadegan University in the east to the railway terminal in the west, and some 4 kilometers in width, from the Rastakhiz (Resurgence) Party Headquarters in the north to within two blocks of the American Consulate in the south. The arrival of the military, and especially the eventual advent of Chieftain tanks (the use of which in riot control is causing some concern to the British Embassy) to patrol the city, marked the beginning of the decline in the mob offensive, and the majority of local casualties are being attributed to these infantry forces. While government response to the rioting seems to have been unplanned and ineffective for several hours, the tactics of the mob bore every indication of good preparation. The rioters had specific targets in mind, and the appearance of different group in different parts of the city -- groups well-supplied with flammable materials to start fires in very selective locations presupposes a core of instigators who knew very well what they wanted to accomplish. The burning of such buildings several miles apart from each other with such a fairly short time span would preclude the possibility that the mobs were haphazard groups. While mob weapons were, in general, limited to stones, clubs and knives (reports of rioters and snipers with guns have been circulated, but these now appear to have been exceptional occurrences), even these primitive weapons could not have been picked up at random by the rioters. So much damage was done t buildings that there had to have been a pre-supply of these items, especially in the commercial areas which bore the brunt of the destruction. The day's casualties have been officially estimated at 125 wounded and 6 dead, with several of the wounded being police and security officials, but other sources give much higher figures. In one hospital alone, more than 150 people were reportedly treated, and one foreign observer whose apartment overlooks the heavily-damaged bazaar area claims that seven small pick-up trucks there were loaded with dead bodies. Info CONFIDENTIAL TABRIZ A-04 CONFIDENTIAL Page 3. estimates run as high as 200 dead, but given the government propensity to downplay such figures and the normal popular reaction to exaggerate, it will be almost impossible to learn the real casualty toll. Far more apparent is the extensive physical damage, with the hardest hit being bank buildings throughout the city. Over 70 bank branches had windows smashed, and at least 10 have been totally gutted. Bank receipts and files were littered all ovec the city, and the task of morting out the financial affairs of thousanJs of customers will be a major one. Government buildings also suffered severe damage, with mobs attacking two Municipality branches, the Education Department, the Endowments Department, the city Court, the Tax Office, a Telephone/Telegraph office building, two branches of the Rural Cooperative stores, several police kiosks, the Social Insurance building, and most prominently, the Rastakhiz (Resurgence) Party Headquarters, which was set on fire. Cultural institutions were also targeted, with the most important being the Iran-America Society, which had extensive window breakage; the Teachers' Club; and the government-sponsored "Youth Palace", which was badly damaged by fire. In the private sector several shops and at least one cinema were gutted; the local Pepsi-Cola plant was heabily damaged, as was one city hotel; and several other hotels, virtually all the city's movie houses, and selected shops had their windows smashed. The buildings burned or attacked seem to fall into definite categories, with either government or bank affiliation, or as in the case of the Pepsi-Cola plant and some of the burned-'out sho?s, affiliation with the local Bahai community. The most common resson being given for the attacks on the.cinemas is that they were plrces where women could be seen on the screen, or in the case of the Youth Palace, the Iran-America Society, the Teachers' Club and the hotels, places where the sexes mix freely and are thus anat3ema to the pious Moslem. What was very apparent in the physical destruction wab that the mobs knew very well which buildings to attack, going out of their way (as in the case of the Iran-America Society) for some, and leaving homes and shops adjacent to their targets completely untouched. There was little damage done to ordinary buildings in the course of the rioting, and the mob organizers must have had firm control of their groups to prevent such destruction. The rioters thensslves did little or no looting, and such small-scale looting as did occur seems to have been done by people (including some women) who followed in the wake of the mobs. CONFIDENTIAL TABRIZ A-04 CONFIDENTIAL Page 4. The rioters themselves seem to have been mainly young men, with the lowest age limit being given as early teens. Despite the official pronou ement that the mobs were "Islamic Marxists," the local, un&icial view is that the term has no meaning in the context #f what happened in Tabriz. The general consensus is that th~rioters were from among the unemployed and the lowest of the working classes, the disaffected and very volatile strata of the pie Populace who have nothing to lose by rioting and who are easll~led by instigators. While such a group can be called "Moslkm," it Seems paradoxical to also put the tag "Marxist" on them. Like Other large cities in Iran, Tabriz has seen a heavy insurge of young villagers trying to find work, adding an ever-increasing burden to the already overly-large lowest social class- Attempting to live in the very conservative and very closed society which exists in Tabriz, most of them illiterate or only semi-literate; young, male, often apart from their families and thus without the family support so necessary to the Iranian psychology; being given the lowest manual labor, if they can find jobs at all; and not being able to afford any normal recreation to release their energy (sports activities and movies require leisure time and money, and any real contact with the opposite sex is forbidden), it should come as no sur- prise that they are a volatile group. Given the pervasive and grim religious environment,with its emphasis on the restricted role of women and condemnation of such mundane pleasures as the cinema and places where women "expose" themselves to men -- i.e- organization~such as social clubs, hotels, the Youth Palace and the ran-~merica Society, all places which are, in effect, accessible only to the middle and upper classes because of the expense involved in mere attendance -- it is no wonder that such a group can be led into emotional and violent action. Religion is one of the few remaining constants to this class of people, and their limited conception of Islam and veneration of the Shi'ite hierarchy are among the few thin98 they can retain in a society in which they feel abandoned and threatened. The decision by the religious leaders to close the bazaar and to shut down the city in commemoration of the deaths at Ghom can be seen as a direct challenge to the authority of the government, but in another sense, it can be viewed as a religious duty by people who deeply believz that the dead at Ghom were martyrs to their faith. The very real power of the clergy over a segment of the populace was clearly displayed, and the cries of "Down with the Shah" and calls for Khomeini (the now-exiled Shi'ite religious leader) to return to Iran can be seen as expressions of both political discontent and religious faith. Whefher the Primary intention of the mob organizers was purely polltlcal, purely religious, or a combination of both with interference by other political instigators to embarrass the regime will Perhaps never be clearly known. What is clear is 98 CONFIDENTIAL TABRIZ A-04 CONFIDENTIAL Page 5. that the mob (as such in Iran) and the whole disaffected class of people from whom the mob sprung have once again become a potent weapon to use against the regime. Whether the people who planned the rioting were clergy intent on proving their in~ensityof faith and devotion to an Islam they see as threatened by the government, or whether they were indeed "Marxist instigators,'' the serious challenge posed to the regime by the attack on so many institutions will have far reaching effects. In the short run the city's social and economic life will be strongly affected as the damaged institutions start to return to normal business, and presumably there will be a serious ~hake-upin the local government hierarchy for its failure to foresee and prevent the rioting. Many of the easy-going and 8omewhat placid city and province officials will undoubtedly be replaced by a more strict and repressive group, and one can predict that the regime will react by cancelling development and social projects in the area. In the longer run, and far more importantly, the Tabriz insurrection has shown that the actual control of the regime over the provinces can be seriously threatened by religious and social forces long ignored by Tehran, and now far too powerful to be dismissed or easily placated. METRINKO CONFIDENTIAL UNITED STA GOVERNMENT mres S March 1978 memorc~idurn I-r TO m*orz B/C - Clyde D. Tayl wue-: Qom and.Tabriz Unrest TO: POL - Dr. John Stempel Mr. Bakhtian told me this morning that his cousin, a physician, had visited over the weekend and reported on events in Qom. His cousin operates a clinic in Qom and firstly, said that the number of dead in the Qom riots was around 400. He said that government spokesmen brought the message to the ayatollah in Qom after the Tabriz riots that His Majesty had not slept for five straight days, to which the Qom ayatollah replied that "you tell him,,that we haven't slept here for the last fifty years. One reason given by this phyrician-cousin for the Qom riots follows the argument that the Iraq a atollah, who is in exile in Iraq, is completing tXe maximum fifteen years that he can be exiled, and that questions con- cerning his return are at the root of some o£. the riots. Of immediate interest was Mr. Bakhtian's comment that the morning radio announced that the road to Qom was closed because of observances in Qon. He asked me if I was aware of more closings of bazaars and shops in Iranian cities on the weekend. I said I was not. CC: RCB/RF E/C:CDTaylor:wh CONFIDENTIAL Buy U.S. Savings Bonds Rcoularly on the Payroll Savings Plan ,,,,,, ,,, ImN. 7-7.) 0.' I OUIBY"UIVlil.I-II.. I)IU,I CONFIDENTIAL XGDS-3 MEMORANDUM OF CONVERSATION AMEMBASSY TEHRAN Place: Home of General Hassan Pakravan, Niavaran, Tehran Date: April 19, 1978 Participant.: General Hassan Pakravan Clyde D. Taylor, First Secretary Subject: General Pakravan's Desire for ~reaterU.S? Advisory Role to the Shah Distribution: AMB/DCM NEA/IRN POL INR OR INWDDRLWA US ICA INR/DDC/OIL ECON-5 SBIRAZ INTRODUCTION: The occasion was a dinner which mixed friends of General (Rotired General, Ex-Deputy Prime Minister and Chief Of Savak, etc.1 and Mrs. Pakravan and those of his son, Dr. Karin Pakravan (Professor of Economics at the Free university of Iran and Energy Consultant of the Plan and ~udgetorganization) and his wife. In the course of the evening General Pakravan kept returning to me and continuing the conversation reported, which all told involved at leaat one hour. . General Pakravan prefaced his co-nts saying he no l~ngerexercised access to the Shah but some of his friends (general younger) do. But from his years of direct acceas.he believes h&ows him like a book'and he can still accurately s culate on and judge the Shah's thinking concerning events and the fkz% fle said he was sharing his thoughts with me as a concerned patriot. The Ganeral began by asking me for a candid comentary concerning Iran',. present economy and its prospects. his I gave him and he agreed in full. He then asked what the u.S. view toward Iran Was. I responded along the lines I had heard Ambassador Sullivan take On numerous occasions with visitors, i.0. that the U.S.'s interest Iran transcended its value to us as an oil or gas producer and was more based on geopolitical considerations. CONFIDENTIAL XGDS-3 CONFI TEITIAL 7G&i The General said that he knew that the Shdh was grc'itly conccrli~d over present qconomic and political conditlo~rsin Irdn (I,y thi. he was not only referring to the economlc lmbaldncrs, thc. over- extended economy and the frustrations that have built clue to L11e underachievement of Iran's Fifth Plan goals, which we had just discussed, but the increasing dissidence of a political, social and religious nature in Iran). He said that he is anxious ovcr the fact that the Shah is increasingly Isolated and that he has few if anyone to his knowledge who out of a real concern for the welfare of Iran is giving him honest information. He, himself, is very pessimistic that Iran can achieve its stated economic goals; there- fore, it.. qoals must be lowered if a long-term viable cconomy is to be bullt and without highly adverse socio-political consequences. I asked if it were not true, as I had repeatedly heard, that tlrr Shah maintained access with a select group of businessmen in orclcr to maintain a touch with the business world. The Gcneral said that unfortunately those businessmen who used to have access to the shah either do not now or arc not candid with him. 1le admitted that the Shah has perhaps become so wedded to his ow11 goals that hc is more suspicious than in years past of people who are giving him "bad news". On the official side, he said that unfortunately his Ministers as well as leaders of foreign commerce and Bcads of State "act likc Iranians," i.e. they approach thc Shah with hopes of what they can get from him and Iran. The point of his entire djscussion was his plea that I convey thc need for the USG or respected American non-government 1c:aders (11o mentioncd David Rockefeller) to actively pursue an advisory role with the Shah. Ilc said he assumeil, as in years past., this was to some extent done by the U.S., by the President and the An~bessdcior, but he believed it must now be a role more earnestly pursued, of course in a spirit of sincere concern for Iran and in the most diplomatic way. He warned that the Shah "might get angry and shout," as is his nature, over what he hears, but hc needs to I)c told before the present trends are even less reversible. Conccrninq Iran's domestic political problems, he said that thcy are best left alone by outsiders but that the Shah from the early 60's (at which time the General was Head of Savak and would have bern in extrcmely,close contact with the Shah) accepted the fact that he must. set in train the democratization of Iran. Ile said he was hoping I would convey his suggestion to the Ambassador becat~se he felt that the U.S. was in the best position to give statesman- like advice to the Shah which would be well received. Ae said CONFIDENTIAL XGDS- 3 t hcre should bc some others, such as the leaders of Gcrnijny, 111 ltain, Francc and perhaps Japan who could obtain the S: rh's L,,I ~ndbe willing Lo speak honr-stly and with a sincere con~:~,n for J tan's future viability, and well being, subordinaLing their conunerc ,I interests in Ira. / (:I:NERALFIASSAN PhhRAVAN - born in 1914,was Deputy Chicf of Sat. l:/C (j:CDTay lor: dd CONFIDENTIAL XGDS-3 DATE: 4/27/78 Over the last several months the post has attempted to sound out a numbar of individuals in southern Irun re- garding their views of the Amouzegar government's per- formance since taking office last summer. Responses from many, particularly jovernment officials and those with political ubitions, have been standard incantation about Iran's continuing march toward the Great Civiliza- tion. However, the franker comments have indicated a fairly widespread sense of disappointment. This disap- pointment seems to have resulted less from tangihle nir- takes the government has made than from a commonly held perception that it has not done much of anything. Among possible reasons for this perce~tion are: For years the Iranian people have been conditioned hy official rhetoric to look to the central govertlaent for answers to all manner of roblems. Amouzepar hirn- elf has sometimes stressed tgat magic solutions do ot exist in every instance, something most imnartial bservers would view as a healthy dose of realism. owever, even the Prime Minister has not been completely ree from the politician's passion for grandiosc claims. he consequence has been that his audience has heen re- eiving confusing signals: one day it is told to lower. ts expectations, and the next that it has never had P0L:GBLambrak~e v.1-818 104 Shiraz A-12 CONFIDENTIAL 2 Amouzegar came into office with a reputation for managerial competence. Many people looked to him to bring order to ti~c social and economic.disruptions that seemed to be hallmarls of the final months of the Hoveyda administration. Ninc months later, hokever, the same kinds of frustrations--infla- tion, high prices. shortages, economic inequities, bureau- cratic rcd tape--thatpreoccupied many Iranians before Anloll zegar succeeded Hoveyda are still very much in evidence. The economic downt~rnof the over-heated economy which has accompanied Amouzegar's term of office -.:s also contrlhuted to the negative pcrception many of the post's contacts, es- pecially those in the private sector, ,ave of his govern- ment. While rapid economic expansion 1 s directly to hlarne for a number of the imbalances that rccently these same in- dividuals complained about so vociferr.~sly,and a period of pause, may provide an opportunity for badly needed consoli- dation, a sense of nostalgia for the heady days of 1974 and 1975 has become increasingly evident in the last few months. For many, the government's policy toward civil unrest epito- mizes what is frequently viewed as its inability to deal purposefully with pressing issues. Individual attitudes toward the unrest itself are quite complex, presumably due to the extreme reluctance of many amo* the modernized elements of Iranian society to come to grips with its sourccs and implications, but there is widespread puzzlement in the face of what often appears to be governmentvaci3lation be- tween tolerance for dissenting views and oppression. No mat- ter that ambivalence not infrequently characterizes the cri- tics themselves, they find it an enigma in their governlncnt. In sum, to a certain extent the Amouzegar government has becn the victim of circumstances. It has been found wanting for its inability to deal with conditions frequently not subject to easy manipulation. Modesty and realism in dealing with complcx problems have often been interpreted as weakness. Nonetheless, it would appear that the government has indeed failed to provide a sense of leadership which no doubt ac- counts for much of the disappointment in its performance as it is viewed from southern Iran. TCMSETH .,.. ,:,,: 1 i, .", , l : Or':,i;rtncrt c? Statc :~.h I :,::I1 FR(;?I : AmConsul. ISIAHAN i6 gam f,fi'cz: xcy 5, l';:.'l -..- status for tlkrfe days biifure the cm:lemo.~.atlvcdrte. Initially, tile Incideuth vhich did occur on k,:-ct. 28 -- -CQPP1DENTit.L --.----. CL*S,,FIC .?iC* .. - ---- . -.. - -- . .-. L,,~I.,CZ :,. L T-Tjij%BAI<~*.:>::c*T E:,:*TCI.TS AND CLI~I.~.C*TIUI. 8~:.IJV~:, OV: . .-~~>,-~sr:.;,~~- -:-A I--~_L:F~Y~~.D_c~~:Y~~~LEx .-,:&',.4, . . I.S:rr.t:c croi.2~qiliciily ~etucnrd+Cu.normd1, as did 'rur:loycc sttcuilance sod rhc nu:,il>rr of pol ice at traific posts. Il.~wzve~,two days l~t:cr,and t11.w al~llostrvery day .iF~ertl~ot lor (L VIW!,, t11~ri:-~.~,rt.-f ur~I1c~r. simtler il?~ide~lts.i1.1~~~1ving a Svw lacr!;o,is, in a ~,,ror:'t>.~ inotorcycl~s, SWOLIB~II~ rl$ui~ 011 rtngunrdr>d jaci1iLil.r; ibanb:;, lnuvle theatres, liqu~xatores, inor or ):i;v.:rrml~?nt c>:- As these il~cidcrttsct~ntinued, always occurring whcrev .r police were al)scnt, and wi.LIt police ir~vestigationsyielding ir~ithrr inforlnstio~~nor arrests, the newspapers began to feature increarinp,ly hor!~lr condemnat ion of "anti-stn~e elfmcnl-s" who must be stopped by "loyal Iranian popul.ar org;inizatio;;s", culminaring in the i~~~nouncementof the establishment in Ssfahan of Civil Dcfcnse Organization (CDO) "Action Squads1',* who, unlike the police, had immediate success in confronting and capturing "suspected disruptionists" and turning them over to the police.. Incrcasi~~::ly,in Isfahnn, this pattern became suspect, until an apparcnc lnajority of the population of Isfahan has come to believe tlrnt the 11it-and-run vandalisin wes in fact Govc*rnn~ent of Iran (COI) dircctcd, at at minimum inspired and colluded with. The presumed GO1 purpose being to generate an excuse for the creation of "goon squads" of apparent popular origin, though actually GO1 military ot security agents. These CUO Action Squads could then be used for illegal or semi-legal action agal~istGO1 oppunoitn, which the GO1 could not take dtrectly because of world-wide (and particularly U.S.) concerr. about huinan rights and goverlllnent oppression. This would put the GO1 in tlic position of publicly endorsing grcatcr freedom nnd rights, while gently deploring the "understandable excesses" of these "concer.rl~?d private citizen groups" vhich could brutally suppress any opposition figures. As evidenco of this collu~ion,Isfahanie point out the total lark of rontact between the vandals end police, in an alert and heavily patrolled city, which argues either: ~nbeliev~~hlygood intelligence about police movements; auch total popular antipathy that vaildals appear wherever there are no police; or collusion. CONFT DENTS AL *lJoli?: These "Acti.on Squads" are referred to in Emba!;sy r=>;-ti.ng by the terq) used by tihe GCJI, "Resistance Col.1 Units. They are the same thing. 107 1,:. , ' i i st cl.?it:; not ::qLpr'e with the priniit.i~rt.i:ess n+- tho v;,riJ,l i:,,~,, ,:i!,i : ',t: :,,,c:o~!d i*, kc1 iL,~l 1,:; I lie aj)pfab-?~~cea ,l S~ILI!I~!I: LICCC:S,. mf I I!1 I ! , 2,1 J::I t I.I:if:~hi~,:i b ,,1 . i ),t,!,. c,cir: ~.t,~t.,,,.8:!:: I>c L,t.,.ts ~'ceCLI!,,,I,,>~I, npp.~L(.i~~ly"..I, .I..u:c .II~rr~, a bc~ic,bof II,~J,~,,,LI~:;~(II~,:;,.?? )rations cog~j>lctewiLi~ j>il,Iurec :II~ nalne.5 oi pre:;uri+ $i 'T.:l:riz vii Lirns wds held on >larch 20-31 at thli Un ;\,<,:-:.i tv of I::l.~li:~n, iij con In angl-y rcactioi? to the Hnsseinahad incident, about 5110 studcnts asscii~hledat the U!~iversftyof Isfahan campus on Tuesday, AprLl 18, proce~~led:o s~~..~slrwindr!w:; of campus buildi~~gsand cars p:~ricud an i,aq;iis. tht n in:~rclied off campus throwing rocks at a nesrhy hotel and d t)1a11cl1of Bank Sadarat. and finally attacked the Pepsi-Cola plant ou a lndjor aveciue near the campus. Police poured into the area, shots were fired, and at least two studcnts were arrested. (Eyewitnesses report l;sg-. ri~h,ii~~-~soi stud; 4ts wert carried off by police but later released, claiminz they Weqe beaten during questioning.) On Sunday, Lpril 23, an estimated 2000 students left canpus, blocked a major traffjc circle, pulling some motorists from their cars, and retreated to a nearby mosque when ar.tGcked by police. Upwards of 20 were later arrested at the nosc;uz. Meanwhile, on campus, an estimated 10 percent of the students st-iged daily den~onstrationsof a reactionary reljgious nature, verbally abusing female students not wearing chador (the Plusllm veil) and attempting to forre studencs to ahandcn classes at prayer-time. The majority of students, involved with exams, continued to attend classes, but increasingly large numbers attended scheduled meetings with Deans and other administratifin members, where they demanded the University adopt strict Iluc;lim practices (women must be velled, separate esting facifitles for women, classes suspended for prayer, as much as 30 percent of the faculty suspended for "non-lslcmic 1ea.nings"). An estimated 3000 attended a meeting on April 29 to present these denlands to the University Chancellor. The Charicellor appeared at the meeting, rejected all demands, a.~d ordered the students to return to classes or be expelled. After his departure, the angry crowd was dispersed by fire hoses. Rumors, Rumors, and Reaction_ During a11 of th? above, the city, a112 particularly the American Conununity, has been filled with rumors. Initially it appeared no more than the usual exaggeration and distortion from within the co~rmunityitself, but sll?rtly a new and disturhing type of rumor appeared. I was cailed f.'rom several sources nb<:ut the kidnapping of an American child, an acid attack on two hirerican women, student bodies on the street near American residznces, attacks on American School buses, and numerous break-ins. ascaults, and rapes. The Elementary School saw a sharp drop in attendance after rumors of an attack and serious vandalism at the sci,~ool. Nme of these rumors had any basis in fact, and those that were traceable always came from Iranian (unidentifiable) sources. It appeared that some- one was,deliberately attempting to panic the Americans with these runors. Finally, the security officer at one company reccivcd a call he took to be from SAVAK informing him that two American women had been pulled from their car, stripped naked, and photo- graphed, and instructing him to issue a security bulletin to his ernpluyees talling all women to stay indoors. He did thj.s, without checking the story, and this official bulletin was enough to make several American families flee from Isfnhan, and many more request irnnediate transfers from the area. One University 109 CONFIDENTIAL ~CCUI'TPF'TTAI‘ 5 sodrce reported that a pamphlet passed nmmg students had ' comnended their success in frightening hericans, and urged them to continue to spread rurtu>-;., but this is not confirmed. Additionally, another co~~pzr,~received both a written and a phoned threat ?>=ssage,and Gendarmarie ofcicial- report a number of Iranian co7;aliies have 3150 received phoned threats. Finally, I have one reprrt th?t tLr iullah at the liusseinabsd Mosque, aild at least four other mu1 lac, have begun inserting is~flarnmntory anti-foreign and ar'ti-Arce-.~-dn rhctoric into already anti-Shah sermons. and c!,at they aid thcir stvdent supporrers are forming "self-defense Fv~.res" against CX~J~?P~C~attacks oy the "CDO Actlon Squads". Analysis 1 believe that GO1 forces in Isfahan have handled the situation in Isfahan badly. Whether or not ti,r G3I colluded in the hit-and- run vandalism (unlikely, but impossible to prove or disprove) their sharply different tactics againet those and the student/ conservative demonstrat,:r?, plus the formation of the CDO Action Squads, have made the srbdents and the majority of the population belleve they did. The strength and growing violence of' the conservative demonstrations is a reactroll to a perceived mldrrcover GO1 threat. As It grows in strength, there is an incrcaasing danger that additional targets will be added to the anti-government actions: Isfahan's Jewish, Armenian, and Bahai comninnities are increasingly fearful, and Americans are on the verge of panic. An open clash between CD0,squads and conservative self-defense forces could build to widespread riots. The general popul~tioa,while unhappy with the situation, is largely sympathetic to the conservative reaction. While only a small minority of students, for.example, ace truly reactionary, the campus protest meeting with the Chancellor drew almost 45% of the student body, and dispersal by fire hoses probably gained the extremists some additional adherents. Security officials are now beginning to issue warnings to Americans, after weeks of assurances that t'lerc was nothing to fear. I currently see no direct threat in thin to Americans or ~mericdn interest here. A short period of calm will be sufficient to ease the frers of American residents, but any esca1a:ion will of necessity endanger the personal security of Americrln residents, and the U.S. projects and personnel here could easily be a major hecondary target of widespread protest. In this growing spirit of controutation, it appears that only some ou~sideinfluence can prevent further escalation of violence. In fact. that outside event may have occurred. The Communjst-led 110 CONFIDENTIAL coup-d'etat in neighbsrln~Xiyfinnlstd~l,~ i+$ here to have oeen initiated under cover of conservative, religious protest, has had a sobering effect. Thrre have been no demonstrations for three days. If the conser?atives are persuaded that their protest will in' fact assist Communist aims, they m3y well mute their voices. Hor~ever, even if 1sfahn.l calms down for now, it has been demonstrated that reactionary religious elements are able both to enlist the sympathy of large numbers and attract significant cro'trds to dcmonstrations; and (while basically peaceful) these demonstrators do not shrink from confrontation and violence. This is a reflection of a general malaise, not a response to a specific event, and will continue as a smouldering threat to stability even if this series of protests quiets down. CfiL MC GAFFEY CONFIDENTIAL , . . , . . . i"...... ',. .;li.i!: .; -9,-m-.w their governnient and aspects of the mode~ni~ationpro- cess in their country. Assessing the underlving cause5 of unrest, hoi\,ever, is complicated by the fact that t1,el.e have becn seemingly trio distinct groups in-:olvcd in demonstrations and 1'10 lence--~nodernistelem-ixts, represented for the most part by university students, and the forces of Islamic dccnservatism. Demands for greater political liberali- -- -- -~-- D".r7su b" ...... - -. r L \,iLS ,'or., OI.13 , .. ,, 112 Shiraz :i-15 I-ured by the a~ai:ivr;ler?cc 3f many of the so-called inoclern- .t clon~ents.Oi tr:i, 1-11ce j.lldividu::.~::: seen (ji:ite prepared '11 igncye the ir:-cionci1;:l~LC contradictions of the not1cr:i- ,, .-. ,-- .,,- ! c,;i %>T"'.'.. ' , -..,.- t,.i :.IJ<: -.I.>;<, (11 i2.?.::,.6j.c f~iii:L~:,~~~~t~li.~~~!~CX- ':ill>. r:ij>ousc< cc;n?e?.,-;~tive critics of tile regime. The .ilitarianisi:l L;C Islaliiic philosophy, it seecis, provides cnc itionale for an citheri-iisc bizaxre alliance- -it allows mod- liiists to find c..oi?irrlcn cause with obricurantjst muslims more "i~cernedwith thc effects of .modernization oil the form of !~<.irreiigion as ir is popul.arly prncticei. than uith ils ;I i losophic spirit. iin - :?.an has loilg had kings, the rivcl trediiion :ni~:.rsnlis::: l~n:; perhaps faci1itatc.d the moc'crn- ,,-.,. , i.uuti:,e :illiance jri opposition to tile regime. Tlie ~~tellcc-tuallyhonest are often troubled by the incongruiry I model.nization in an environment of monarchical absolut- ,111. Even those rvilliilg to give the Shah credit: for his ob- lous political skills arc openly contelilptuous of imperial I I rs and the milldless toadying too frequently charactcris- ic of those aroun~lthe monarch. They are skeptical cE the ; i>position of royal omniscience in an incre:isirigly complex ..c>, and find in the concept of the Islamir brotherhood of ,111 both an alternative system and an incentive for partner- 11 ip with the conservatives. clllle modernists openly admit that the partnership is orie of l~ive~~icnce,and others anong thein -certainly includirlg irxlst elements- have no doubt attempted to exploit con- ~vat~veanti-reg7me sentinlent to further ends of hhich t> conservatives would not approve. ilowevcr, at least in ~~thcrnIran, it increasingly appears that rilotlernist par- ~ilpantsin anti-regime activitjcs are the tail of a has- rlly conservative dog. Katlier tliL7n cvnprls lng the van- I 11-d of the movement, the modernisrs are being slcept along a co~:servative tide. A number of factors aeem to be In- Iveii: tirst, despite dramatic changes durl~lgthe last two I '~des, Iran (nt least outside Tehran) renains for the t part a pre-modern society. Even large elements anlong rapidly grovlng populations of urban cen:ers llke Slli- Ah{$az , Abadan/Khorrari~shnhr, Kerman and Uandar Abhas only recent1y I emoved from tsad i tional sm*l to\>n or ngc environ,r~ents. Second, among the moder-lj zed seccor . ,7 ,. hp~n -7 :tin 1~11 I +'(PI.T 4, - Shiraz A-IS , , . t ;':,out tile i r 6o;lls; Il~cy'cJ:~:, ?,!)at tl~cyare b[:aj list, 1)ut r tic,:,, ::i.i I'l.c.quc!tt ly ~,i!:!:,~ ;~l>u:;twh'at thcv arc fr?. I:in,~ll'y , ti::. ciaii.,r;,~~~ti~c:ilL',b.. tl,,*".~rrcngtI~of at: 1e;rsr illinkin:; t11iy I.t~o,.c+ir:!? i!:,.; ;;:;c~t- - n :;oi.ictv free fro111 "~i.~:~-lslar!:- IC" t;~i.ir,i.t 'file i11111os:;j1,~ l i ty I, r the colr:;crvatives ' objective- -an in - tlr~striulPI-onolny ~IIthe nrjcl.;t of a socicty otl~erwiseir~ ~listir~::~~~::1~~~11lc ~I.c,I., r,ic~li t,,s' vc i le~lKO:,< I! and c:~t;~o:.ccinc~ltof t!~e sh:~, ria-- i:; a ' '1; I.t lc consequence to thc practical problem of .'coverr:ill,: it1 Iran. l'hc 1)riniril.y reality is tl1.1t ~iicregi~~~e 1s coni~o~~ted hi tli " uiclcsl)rc:~tl di.ssatisf:1ctio11virh many inevitable conscqtlerl- ccs of tl~c~sodcrni:.:ct ion procr,:;s :ilnong the large pre-nioder sector of tl,e Irani:r~~po~i~~lation. It is alrllost i~iconceiv- able that the coi:ln~irircent to ~ilodernizntjonwill 1,: reversed b~~tas thv ;)rocc:;s ]irocci.~lsill~rcst is likely to i~:crc:i::c ailtonfi tlLusc o!)poscJ to or troubled by Inally cf its ~clani- festations. Ihile tlict conservatives probab3 y do nnt have tl;c- power t.o tr1t.11 11:1cl, the clock, tl~eyperhaps c: ;[I retar~l its progrc!;:;. l'o cor~r~~licat-en~attcrs, the politically activ at the otllcr cnd oL thc social spectrri~narc illroatly imp,]- t i cnt wil-11 1,:11.7t they rcgarrl 31; ani~~lirur:i sms, ali~liui I1 tiii - doubted Ly continuc to push for greater politi c;il 1 illcral i ., zi~tion,allyin&: with tile lorccs of reaction when they st.c it to their advnl~tagcto Jo so. Cn~rcltt bclhrecn t!) i:; pcili tical Scylla and Clla~)~l,tli s, t.hr rB &:irne 1niiy bc5 ten~pted to exploit an emerging bachl;l:;h al~toilc thct ~iroderlrist but hr~.ctoforeapolitical clements of Irani socicty. 3'h(:sc pcol)lc--civil servants, tecllnocrar s. mi 1 i- tary officers, bu.':incssmen (as opposed to the I):]. 1:iri t.!.~ \qllo gcncr;~llymust he countcd among thc tr;~,litlb;~.ti~<~s) - have bcfbn intercsti:il primarily .in pursuing thci~.i.arcc;.s i111d 1)ersonal affairs. They arc now finding, hovc\.cr, cn~?p unrcst and the disruption of conunercc in commen~orationor tile fallun hc~rocsof one city or another an iqcrcasing ir ]..itation ill their lives. They would.thvs seem prodisposeil to a Fascist solutjon to the violence ~fhichhas affected ninny titles. Periodic calls for vigilante action ggainst I:oolik:;ins and ant i-~tateelerrtents suggest that the rcgi~r 11.1s corisi~:o~.edthis optlon and perhaps has not yet reject 14 CONFlDENTIAL 11 . .? r.irvcrr.?l of thc ;,~ilil;): of J fl)erali.zation whictt tins :I) Ir~'b,cti d~s~:ri.~~~tl~dilt;im~erit< in Jrnn to express tl~cmsclvr~ r~ii:.lit 1111t ;IT? ,-:.rl tn r::il~ii<.r:anifr?tntio~!a of the 5acinl t~~l.:::cjj1 t11nt 1 i:,! i..i,:ii'ri! i r;l: ICIL III.OCCSS has engendc:ri:d, but it is dvuI?t:!rl t!.2t i L !:auld aficcr its root causes in any 111aitrr way. ht'rcr nl-I, jo yetrospect it is clear that hcforc it has JcciLLcJ to Icl ii IlunJred flowers hloorn, rvpression alld ccnhorshil, were illcrfoctive in preventing the social unrcast norv orlt in ~llcopen. TOMSETH CONFIDENTIAL SECRET/NOFORN UNITED STATES GOVERN LIMITED OFF IAL USE WITIIOUT ATTACHMENTS DATE. June 7, 1978 memorandu lr,LYATTN TOOF: E/C - Clyde D. TaylG SYULCT: Iran's Military Imports and Petroleum Exports 10 The Ambassador THRU : DCM - Mr. Charles Na E/C - Mr. Roger Brew@ REF : A. Tehran A-70 (1977 Foreign Trade Report) B. Your Undated Request for Subject Data C. My Memorandum of May 24 to Messrs. Bash and Martin, same subject Attached are tables representing collections of data and estimates concerning Iran's military imports and oil exports placed within data covering all Iranian foreign trade (goods and services) and with the United States. A covering state- ment addresses the difficulties in arriving at these data and cautions concerning their reliability. I have been seized with the lack of inclusive Iranian trade data since my arrival and know my predecessors likewise wrestled with the issue. Mr. Gary flufbauer, Deputy Assistant secretary of Treasury for International Trade and Investment, and I discussed this issue thoroughly early this year. He kindly worked on it and provided information collected from four U.S. offices. His comment after his efforts and.concerning the data was, "It does not fit together to makea very neat report." I am enclosing a copy of his letter and data sheet for your information. In addition to Mr. Haufbauer, I acknowledge the contribution of Mr. Bash to this effort. Attachments: 1. Haufbauer to Taylor letter dated March 13, 1978 w/attachmen (several) 2. "'ran's Foreign Trade and Current Account Balances Worldwid. and with the United States w/Tables I, I1 and I11 cc: NEA/IRN Commerce/CAGNE ~reasury/O~SI~-Mr.~ufbauer/Mr. Maslin CIA/OER RCB/RF SECRET/NOFORN LIMITED OFFICIAL USE WITHOUT ATTACHMENTS Buy U.S. Savings Bonds Regularly on the Payroll Savtngs Plan ,FT,,,.A,romMNo, ,,, ,REV 7.76, 4rAFPMI tllCFeI 100-IS 10,0.111 IRAN'S FOREIGN TRADE AND CURRENT ACCOUNT BALANCES WORLDWIDE AND WITH THE UNITED STATES 1976 AND 1977 The Problems and Caveats Concerning Attached Data Complete data of Iran's foreign trade are not published or, to my knowledgc, maintained by the Government of Iran. Merchandise trade statistics exclude oil from exports and goods imported by the military, not all of which are "military" goods. Current account invisible flows--tourism, medical, transfers, interest, transport, etc.--are recorded as a "basket" grouping only in the balance of payments presentation and no country breakdown is available. Those wishing data concerning Iran's oil exports by value and destination must estimate, use intelligence sources or collect data from recipient countries. The latter, of course, introduces problems of "leads and lags" as well as basis of valuation, e.g. FAS, CIF, FOB. Data concerning Iran's military imports are more difficult to develop. As a rule of thumb, it was assumed that it was the dif- ference between the value of non-military imports, as reported by the Customs Department (Ministry of Economic Affairs and Finance) and the total payments for merchandise imports reported by the Central Bank on the foreign exchange balance of payments. Thus, as reflected on Table 11, military imports in recent years should have been (U.S. $ millions). 1975-$5,298, 1976-$3,309, 1977-$zr50. The validity of this assumption depended mostly on a close correla- tion of imports and payments, since it relates two distinct trade concepts, customs (based on documents of goods received) and cash flow balance of payments. This should have been ttie case until about March 1976. Since that time, particularly Iran's public sector imported goods on a credit basis rather than cash. This altered payment terms for non-military imports much more than military, the bulk of the latter presumed to be under U.S. Foreign Military Sales (FMS) terms. This would result in an understatement of imports balance of payments basis relative to customs (actual) basis and an understatement of presumed military imports. Another weakness in the assumption, resulting in an overstatement of imports, balance of payments basis, is the prepayment of imports, (i.e. higher cash payments than would be supported by customs goods received, infla- ting the presumed military import figure) which would affect the 1975 data and to a lesser extent those of 1976. (See lines VI and VII of Table 11). Data of military shipments to Iran obtained from unclassified (USDOD for FMS) and classified (Secret for other countries and from the CIA) sources aggregates to figures in 1975 and 1976 considerably below the assumed levels (line VII, Table 11) and raises doubt con~erni~~gthe ~nclusivityof these data. It also confuses U.S. fiscal yea'-s with Gregori n years, dates (in case of FMS) shipment IElil/PlnFORN LIMITED OrFIClAL USE dITHOUT ATTACHMENTS SECRET/NOFORN LIMITED OFFICIAL USE WITHOUT ATTACHMENTS 2 by transfer of tltle and leaves unclear the valuation bases. Data for Iran's oil exports likewise must be reflned and estimated. Public raw data from the NIOC are not provided by country of destination, much less country of ultimate destination, and are never monetized. As noted on Tables I and 111, the Embassy has calculated values and identified and/or estimated destinations for crude and refined oil using data obtained through contacts; thus, they are controlled L.O.U. Non-merchandise imports and Iranian exports of invisibles are obtained from the Central Bank's balance of payments and those attributed to the U.S. are estimated as noted on Table 11. Invisib flows estimates to the U.S. may be on the conservative side. Data on Iran's service exports to the U.S. are neither available nor con sidered meaningful in magnitude. The total and balances developed on Tables I and I1 are considered reasonably accurate with regard to the U.S./Iran trade in goods and services but shaky concerning aggregates. Attachments: Tables I, I1 and I11 E/C:(i- Tay1or:dd 6/7/78 s~cw~/~,.oirn.trs~~ LIMITED OFFICIAL US? VITHOUT ATTACHMENTS --SECRET NOFORN TABLE I IRAN'S FOREIGN TRADE (S MILLIONS) I!,t a1 Exports-Goods and Services I:oods -.- 011 A_/ Crude Product Gas g/ Other C/ services 1t,ta1 Imports-Goods 18.100 4,688 21,531.6 6,036.0 and Services g/ (20,151) (22,173) 5x7 on-Military C/ Military g/ SC < vices 3,843.4 1,358 E/ 5,565.6 2.014E/ :ources A/~S~~calculatio; using OSCO/NI(X: data for wld, rmbassy esthtes for U.S. ,FOB. I!/ Central Bank of Iran foreign exchange balance of payments data constructed for Gregorian year. ('/ Embassy "Foreign Trade statistics of Iran", Ministry of Economic Affairs and Finance, FOB exports and CIF imports. I>/ USDOC (for Munitions Control), USWD (for FMS) and CIA (for non-US), FOB basis r/ Embassy estimates including USDOD/FMS Services. 'converted at Rials 70.5 to U.S. $1.00. 1 /C:CDTaylor:dd 1,/6/78 SECRET NOFORN SECRETrnIhi MFKTWISE MILITNPI IMPORIS OF IRAN TABLE I1 $ MllllonS Percent Percent of Tota1/1975 of lbta1/1976 I. Fmn U.S. A. Mmltions controlled 1t- %' 118.5 106.5 B. Forelgn Mllltary Sdles g/ 755.7 1,073.2 c. mtal U.S. C/ rao.1) 874.2 (78.4)1,179.7 D. (Forelgn Mlltary Sales Support (157.6) (393.5) ServlceS) (Total Incl. "C") (1,031.8) (1,573.2) 11. Fmother countries D/ A. USSR 84 62 B. Western (non-US) 133 263 Total (19.9) 217 (21.6) 325 (14.4) 306 111. Total (100)1,091.2 (100)1,504.7 (10012,127.9 IV. Ilnport Payments (Balance of Payments Basls) 15,602 16,061 V. mrts (CIF, 1ranlan ust tans) 3' 10,304 12,752 VI. Asdm133 Mllltary Imprts (IV-V) 5,298 3.309 VII. bklltary JiIp3rt.s (FOB Pomt of origm, Item 111) 1,091 1,'05 VIII . Unexplained Gap (VI-VII) 4,207 1,804 IX. Sum~lyUS Rece~ptsfran Iran Mllltary (Fran 1.B) 756 1.073 0th- (Custnn Wlreau, Incl. 1.A) 3,242 2,776 mtal MMse (3,998) (3.849) FcS Services (TOSS, fran 1.D) 158 394 Estumted Gther Services 626 964 mtal services (884) (1.358) Total .E?celpg -4,882 -5.207 A/ Source: M tions Control Office, Dept. of State, Bureau of Census, Calendar Year. B/ US Blscal Year (1977 mcl. 5 qtrs.), at tmtltle passes to Iran c/ Excludes wrts of non-ltlons control ltans by camerclal (non-rn) SuppllerS D/ Dfliverles, not agreements; source: CIA, calendar year F/ mcludes nonrmlitary oomrdlties lmp~rtedby ElI.nlstJ3 of War -F/ BJsed on 30% of private payments and 20% of publlc payments: Central Bank of Iran Foreign Ikchange &lance of Payments data contructed for Greqorlan Years E/C:CDTaylor wh 5/28/78 Contributor Treasury/OASIA/DAS/GHufbaUer SZCRET/NOFORN 120 LIMITED OFFICIAL USE TABLE I11 IRANIAN PETROLEUM EXPORTS AND ESTIMATED REVENUE: 1976 AND 1977 1976 Estimated Estimated Quantity Govt. Take: Govt. Revenue: (MMBblS) Per Bbl. FOB(!lillions of$ I. Crude: Japan 359.6 ( 18.8%) Caribbean, lncludrng Vlrgln Islands* 153.4 ( 8.0%) U.K. 282.0 ( 14.7%) Holland 164.0 ( 8.6%) Glbralter (for order) 133.8 ( 7.0%) U.S. 77.7 ( 4.1%) south Afrlca 91.3 ( 4.8%) 1taly 66.1 ( 3.5%) France 106.8 ( 5.6%) Others --477.5 ( 25.0%) Total Crude 1,912.3 (100.0%) 11. Refined Products 77.4 (All Destinations) T'i~rhaps70% of the crude 011 exported by Iran to the "Caribbean, including Vlrgln Islands" 1s refined and re-exported as products to the U.S. Iherefore, U.S. petroleum Imports, dlrect and Indirect, from Iran rn 1976 were probably about 185.1 MMBbls. wlth a FOB value of about $2.1 blllion. LIMITED OFFICIAL USE LIMITED OFFICIAL USE Page 2 TABLE 111 (Continued Estimated Estimated Quantity Govt. Take: Govt. Revenue: (MMBbls) Per ~bl.FOB(Mllll0nS of$) I. Crude: Japan 297.2 ( 16.6%) $12.32 $ 3,661.5 Caribbean. incl. 231.7 ( 13.2%) 12.32 2,854.5 Virain-- > 1slands' U.K. 170.5 ( 9.5%) Holland 146.1 ( 8.2%) Gibralter, for orders 128.5 ( 7.2%) U.S. 121.5 ( 6.8%) South Africa 102.3 ( 5.7%) ----.Italv 87.1 1 4.99) France Others Total Crude 1,786.8 (100.0%) $12.32 $22,013.4 11. Refined Products 83.0 (All Destinations) 111. Total Petroleum 1,869.8 23,154.7 "Perhaps 70% of the crude oil export by Iran to the "Caribbean, including Virgin Islandsn is refined and re-exported as products to the U.S. Therefore, U.S. petroleum imports, direct and indirect, from Iran in 1977 were probably about 283.7 MfQbls. with a FOB value of about $3.5 billion. LIMITED OFFICIAL USE ,LI I-. NO PO'- TCr1 DISrl' ' ::'Tics. DEPARTMCNT OF THE 7 REASURY WASIiINGTON D C 20220 Mr. Ck@@ %yl@ Pimny:iaiL 'OhFLce* EciWiOiTiLc SeQ't.%* AmeKicdn Zmbassy ~ehtah,fran Dear Cllyde, YW ha$ asked if we would pmvl@emhrs oZ *cat amus shtpnents tb PFen. a4s hatWqel~2-d u'6 to s&k @eta 6mhut wrces: (1) the @e&nw kpattmeht, (43 the Office of Nunltisnrr Control, De@tt*rpht aE Steke (3) khe !&pertmeat af F~tee,an$ (4) the Cattail tnteiii'gefire Agency. We haw centacted tPvese !&Uk 6gehcle4 and hdW gathered the data *lch are available; but It does not fit together to -kc? a mrg neat wprit. ?Sire W .S. kpat-tment 8t Dekhace hs detalleh daka &I ntvl to Tran uhlch it aalntein8 oi! d u.S. 'fiscal year E:kr have attaekd d ro y oC cbir computer riMtaut m order to preuLde as ~h %~hnMttma8 proa8fbfe Fo-r m, "dellvery of mcatericrlH meal$ that title bapeised to tho rehavli WW2-t '* BR& t~,??i@klytitle paEkQS ~ithgthe U% . at the whet@ the wterieb ib reedy fop shi-t (and thus ebertly ppi~k0 wtud1 the bf export from the U.S.). 1 have dso ineluded the BOD t-int- out on their sares agreements ~Lth%ran, as it will *!low you ta coiqxire dekiwrke8 ~lthBales o&et-a, The Office sf NunfthrIi CoAtrel ha provided inE6m- tion on the export of ntaterie1 whlCh is contkolled under the authority of the hta%wttioaaL Praffic in ~nns~egu1.a- tims (ITM) (Title a&, CFR 121-138) as Eollows: LLL.B U,S, Bllars 1975 $116,496,219 106,5L0,107 :::: (Transitional Qtr) 2'0,106,769 1977 119,124,106 These exports are based an Bureau & Censuti $at& hith reflects actual shipments £tarn the U.S. t have not in- cluded information on autherizatitms issued for ekpot-ts to Iran as they would be heaningleea tiguces, Natty expert licenses are never used. SECRET ras SECRET NO FOREIGN PISS~II~IAIATIWI - 2 - We have contacted the Department of Commerce to obtain data oq commercial exports other than the items included in the ITAR and coqtrolled by the Office of I$unitions Control. These are non-military items, aqd items of dual commercial and military application, such as construction equipment, tentage, persqnal clothi g and equipmeqt, aircraft engines, etc., which could %e purchased from commercial sources in the United States. Commerce is able to rovide data on total trade with Iran by iqdividuql commod!ty, but unfortunately cpnnot routde a breakout by epd-user; therefoye, it cannot identffy Traniw milita~y uychaqer). Thus, we haue tq say that ye are awarg Q* tRis catsgory of exports but are unab e t~ pbfain the relevant $nformation. The deugce usuali y used in reports of this qqtpre is to say Fh@t "ex orts of nop-munitipns control items by cpmerc~alsupp!iers qre eqcluded from thgs reRRrt." The CIA has pyovided dapa oq military deliveries to f~qqfrom countries other than the U.S. This informat$oq s prq~idedon a ~f+le~da&-year basis. The column marked h~~yeemcnrs" ref ects comatments by Trqn ts purchase and ttpet$yr$estl9ppfies to rpkeipfs .$th+!l Irm. This F@Bsrt inc I.I gs agremepts iari y~$+BB de$gupr$es eincc spmg CQU~- trjpa have copcluded ~FP)@8gremeRto bup Ppe not yet appareqtly scarp d deliveries, qr 4~ ieqst tfp hq~eno reR@rpOR the @pfiver$es $4 egfhcy f?v*nF it w+ll gt~r yqu snme ideq nf pofeatfal delgyeries. copy pf tFp CIA t86le is qtfq~hed. This is the beqp ipforntion ~p hsye been able t;o assemble, and I hope it cap serve your purpose. If ye cq~wsist filythey, ~1pi)~cJet me bow. 2 Encls. 1. DQD rintouts (qncl.) a. GT~$qb$e [Secret-wnfsr~) ..-. . --i. ,:.lL 10 SECHET FDRElCN rullOr:,xs =rang nilitary Aid Aqr-nts and mllvuie. qrtescnts BllveriMi 3r-nt.4 mllvaia hvrccnmrtr Dald.t, Tor& -1,016 -217 1.))1- -315 -5% -3- Cc.mwmi~TaM !!%& -84 -544 -62 -.. ?E' Soviet 84 544 k2 .. 3E east- EU~OPO 4i .. -2 -1 .. -. Chl~ ...... , .. AUEtrati. .. 71 2%- 51 Cemn, Rd, RC. UP- India. .. 10 9 2 1 6+ ...... i , ,?7*, 5ue=:e,~~i~:;~------5.1.0.1 11 115.?11 ., . , , , 28. . -. 1 -...... * .,.SL :a,...... 1,* .a,, 1<1 2..*,.11, 1.1. (4....., n... I." ..... 1d. I,.. W..., 0.. - '4 -.1 - - ,".l,** "ill...... a ...... I'. I - - - ~ .... -- . I .- _r.c<'. ">.S"C "L"C"I ALL 'f - c.:e ?b."L?, 1°C *c" . - __ -' vv 7, ccvr FV ,>-?I Cchl -.- --. .-- - - - ...... +- -. - irr