NOTHING SUCCEEDS LIKE A SUCCESSFUL SHAH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R00967A000400020014-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 16
• Document Creation Date: December 20, 2016
• Document Release Date: July 17, 2006
• Sequence Number: 14
• Publication Date: October 8, 1971
• Content Type: MEMO

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Confidential
MEMORANDUM
OFFICE OF
NATIONAL ESTIMATES
Nothing Succeeds Like a Successful Shah
Confidential
Copy No.
38
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CONFIDENTIAL
CENTRAL INTELLIGENCE AGENCY
OFFICE OF NATIONAL ESTIMATES
8 October 1971
MEMORANDUM
SUBJECT: Nothing Succeeds Like a Successful Shah
Reports concerning next week's festivities in honor of
Iran's 2,500 years of monarchy, including details as to the
tons of caviar, magnums of vintage champagne, and gold-laced
costumes, are appearing regularly in the press. This memo-
randum, also issued on the occasion of the gathering at Per-
sepolis, attempts to lay out the reasons for the Shah's suc-
cess. It gives him good odds for more in the 26th century of
the Persian monarchy, but it also identifies potential dangers
to his regime.
This memorandum was prepared by the Office of National
Estimates and coordinated within CIA.
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"To the people of Iran, the institution of monarchy
is not a mode of government but is rather a way of
life which has become an essential part of the nation's
very existence."
"The climax to years of uncertainty for the once
proud empire finally came in 1921. Reza Shah the
Great ... took over the government ...."
"Reza Shah was succeeded in 1941 by his son, Moham-
med Reza Pahlevi, who has revolutionized the face of
the nation. The dormant Persian genius was once again
manifest. The sons of Cyrus had come into their own --
in the 20th Century."
(The Documentation Centre, Iran)
1. The above quotes give the essence of what one might call
the Shah's philosophy of government. He is a worthy successor to
earlier monarchs, of whom some have been notable -- Cyrus, Darius,
Xerxes, Abbas to name a few. Cyrus at least will receive prominence
equal to that of the incumbent at this month's "bash of bashes"
-- Newsweek's term for the extravagant 2,500-year anniversary cele-
brations of kingship in Persia at Persepolis from October 12 to 17.
The site -- suitably removed from the tumult of Tehran where ill
wishers would have a better chance of disrupting the affair --
was chosen because it was the capital of Cyrus, founder of the
Persian empire. Tens of millions of dollars are being spent on
an airfield suitable 707s, on an air-conditioned tent city, on
gardens, on specially made china and crystal (that runs to $25 per
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glass), on food especially catered by Maxim's of Paris. Vice
President Agnew will attend on behalf of the United States. Other
nations of the world will be represented by such luminaries as:
His Imperial Majesty Haile Selassie I, Emperor of
Ethiopia
His Majesty Hussain ibn Talal., King of Jordan, and
her Royal Highness Princess Mona
His Excellency Marshal Josip Broz Tito, President
of the Socialist Federal Republic of Yugoslavia,
and Mrs. Broz
His Excellency Mr. Nicolae V. Podgorny, President of
the Presidium of the Supreme Soviet of the Union
of Soviet.Socialist Republics, and Mrs. Podgorny
His Serene Highness Prince I.T.M.B. Rainier III, Prince
of Monaco, and Her Highness Princess Grace of
Monaco
His Highness Sheikh Mohammad Ben Hamad al-Sharghi,
Ruler of Fujaira.
2. His Imperial Majesty, the Shahanshah, Mohammed Reza
Pahlevi, has much to be proud of as he stages this splendid
fete. By the conventional indications applicable to develop-
ing countries, Iran is doing very well. Since the mid-1960s,
Iran's economy has featured an annual growth rate of 10 percent,
which had led to a per capita income which reached $350 in
1971, widespread agriculture reform which has put land into many
(the Iranians say all) peasants' hands, a booming industrial
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sector growing at an annual average rate of 14 percent, and
spreading education for the masses. This represents a marked
change from the impoverished, divided, foreign-dominated Iran
of 1941 when the Shah mounted the throne. The changes may be
attributed, among other factors, to luck, to money from Iran's
massive oil production, to large foreign credits and to the
Shah himself. His personal dominance of the Iranian political
scene and his vigorous espousal of widespread reforms have
been critical to the vast changes which Iran has experienced,
especially in the 1960s.
3. Indeed, the Shah has done remarkably well for a man who
was placed on the throne by outsiders, who once fled the country
in the face of anti-monarchical disruption, and who -- but a dozen
years ago -- was judged to be too weak to govern successfully
and yet to inflexible to accommodate to pressures for change.
Even though advance has meant that the rich have grown a lot richer
before the poor began to get better clothes and a decent roof,
most people in Iran are substantially better off economically
than they were in 1960. Land reform has taken most of the hold-
ings away from wealthy landlords, but they have received generous
compensation and have been encouraged to add to their wealth
through participation in other sectors of Iran's growing economy.
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Even though the security forces are often heavy-handed in re-
pressing dissent and in maintaining law and order, the country
is relatively well governed. Even though domestic "electoral"
politics are an empty charade, educated technocrats in the
government now plan and administer the social and economic re-
forms that Iranians shouted for in the 1950s.
4. How does the Shah do it? Primarily by taking what
he once called "this king business" seriously, working hard
at it, and knowing that he can run the country better than any
other person or group. He interests himself in the substance
of land reform, of rural education, of industrial development,
of the oil industry, and of a host of other subjects. He
reserves ultimate decision-making power to himself, executing
policy through a coterie of officials, cabinet ministers, and
generals who know and do what the Shah wants -- or quickly
vanish into retirement or obscure posts in the provinces. He
takes good care of the Iranian military establishment and
security services -- new equipment, good pay, and other per-
quisites. His is a formidable personality, which he employs
skillfully to advance Iran's interests in such matters as increas-
ing oil revenue and acquiring sophisticated military equipment
from hesitant sellers.
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5. In short, the Shah has developed into a confident ruler,
who knows what he wants and how to get it. He is sure that his
way is best for Iran and that monarchical power, wisely used,
is essential to the country's well being. He is, all in all, a
popular and respected king. We might ask; are there no flies
in the ointment of Iranian success? Do not some wish him ill
and work against him? Can he continue to go onward and upward
forever?
6. There are indeed soft spots, actual and potential, in
the Iranian situation. The Shah is, despite his hard work and
his constant probing for information, an isolated figure living
in a formal court atmosphere. There is a regrettable lack of
communication upward to him. Few of his ministers or officials
are ready to express to him an opinion differing from his own;
virtually none are able to tell him he is wrong about something.
(Even foreign ambassadors cringe before the Shah's responses to
official presentations which displease him.) Consider the syco-
phancy in the following excerpts from the Iranian parliament's
reply to the 1971 speech from the throne:
"The country's great economic advance would have
been impossible without the sagacious guidance of its
great leader. Thanks to the Shahanshah's wise and un-
tiring efforts to protect the Iranian people's oil inter-
ests, a great victory was achieved over the oil companies."
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"The Shahanshah's decisive and realistic role in
international affairs has today earned our country
rare international prestige."
"The most important factor contributing to the Iran-
ian people's progress and achievements lies with the
country's stability, security, and sovereignty, to the
creation and preservation of which the Shahanshah has
devoted himself with firmness and wisdom. Everyone
has been granted every form of freedom in the country
except the freedom to commit treason."
"The Majlis and the Senate fully support the Shahan-
shah's decision to strengthen the country's defense
forces to enable them to satisfactorily safeguard and
protect the country's border and territorial integrity."
7. The Shah has rarely, in recent years, made a misstep in
dealing with domestic issues. He has made his own the reforms
which the. nationalists wanted in the 1950s. He has usefully
employed educated Iranians in the development program. Although
he has made hesitating steps toward change in such politically
touchy areas as university education and elections, these haven't
amounted to much yet. In elections, the Shah approves all can-
didates and the opposition party is unsure of how far it is per-
mitted to oppose the palace. Most people have been too busy
doing well in other spheres to fuss much about politics. But,
there are a few signs of ferment -- after a decade of political
torpor. As the Shah gets older, his unique position is, to say
the least, not likely to be any less isloated. The chances that
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he will fail to comprehend the intensity of, say, a political
protest movement are likely to grow. Hence, so will the
chances for miscalculation in dealing with it.
8. For all Iran's success, there are people who resent the
Shah's means of achieving it. Some dislike the extensive reliance
on heavy-handed police and security forces. Others want to do
some deciding as well as carrying out of orders. Still others
object to monarchy itself, particu-laxly since extensive corruption
is associated with the royal family. There is disgruntlement
within Iran, even among well-to-do businessmen, at the ostentatious
display involved in the anniversary celebrations, and, despite
extensive security precautions, some persons may succeed in
embarrassing the regime during the festivities. The past year
or so has seen a number or manifestations of discontent; troubles
at Tehran University, an attack on a rural gendarmerie post and
the assassination of an army prosecutor whose efforts resulted
in the execution of some persons in that attack, an attempt in
downtown Tehran to kidnap the Shah's nephew, and gun battles
between security police and dissidents in the capital. The manner
in which the Shah projects his royal will adds to the discon-
tent, and more incidents are likely in the future.
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9. The Shah's twin programs of forced draft economic
development and building a military establishment capable of
overawing Iran's-western and southern Arab neighbors have been
costly. The military establishment absorbs more than 10 per-
cent of GNP, and the percentage is rising. Purchase of arms
abroad has run up a debt of $380 million, four-fifths to various
Western states, the rest to the USSR. Iran has nearly a bil-
lion dollars in unutilized military credits. If the steady
growth in military expenditures continues much longer (it will
be 13 percent of GNP in 1971=1972),. Iran will not have enough
money to pay for the investment required by an ambitious develop-
ment plan while servicing its foreign debt and providing the
consumer goods that make for political tranquility.
10. We don't know just how keenly the Shah appreciates the
limits of financial elasticity. He has been enormously suc-
cessful to date in extracting additional monies from the oil com-
panies. (Oil..-revenue was $.5 billion in 1965,..$1 billion in
1970, will be nearly double that in 1972 and under present agree-
ments will hit $3.4 billion in 1975.) He will undoubtedly suc-
ceed in getting even more profitable agreements in the years
ahead. But presently planned total expenditures are far larger
than projected revenues. At some point in the next several years,
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Iran will have to make some painful choices as between mili-
tary hardware and development priorities. Decisions would not
require scaling down the military establishment so much as
restraining its growth. On past form, the Shah will only ease
off on military expenditures after several prophets of doom
have sounded Iran's economic death knell, but before disaster
has actually set in.
11. On present evidence and in the face of the Shah's
skillful control of political affairs in Iran, one must conclude
that he will continue to rule Iran for the foreseeable future.
We cannot, of course, be entirely confident of this prediction.
He has twice nearly been assassinated; he could be killed tomorrow.
Financial difficulties arising from overspending could hurt
the development program which diverts much Iranian energy from
political affaars. A dissident, anti-Shah cabal could develop
in the army, despite the care he lavishes on it and the loyalty
screening of its officers. But it must be emphasized that such
developments are possibilities, not likelihoods.
12. Iran's fundamental vulnerability lies in the unique
concentration of power in the hands of the Shah. He has over the
years deliberately cut down any leaders who have shown signs of
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acquiring an independent power base. He talks of giving in-
creased responsibility to elected representatives but shows
no sign of actual movement along these lines. He hopes to
hand the throne to his son; he may be able to do so. But
it took the Shah many years to get the grip he now has on the
levers-of power. There is no way of telling whether young
Reza Cyrus Ali (age 11) will have the ability to do the same or
even be afforded the opportunity. If the Shah were to die in
the next several years, while the Crown Prince was still a
minor, one would anticipate men of ambition trying to establish
themselves in positions of power. Struggles, even peaceful
ones,among would-be civilian and military leaders -- who are
unused to real authority -- would impede smooth governing.
13. It would be foolish to try to predict with any pre-
cision events which may not occur for 10 or 20 years. For
the present, three key points to make about Iran are:
a. The Shah lives up to his title of king of kings;
the chances are very good that he will continue to run
Iran in much the present fashion for years.
b. His demise will usher in change, perhaps involv-
ing tumult and chaos.
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c. Most Iranians venerate their king and think
that next week's extravaganza befits him. There are
those who, like much of the Western press, see it as
ostentatious and wasteful; they, are afraid to say so
out loud.
So, the festival will go on, and for a day or two at least,
Persepolis will be, as an Iranian document calls it, "the
centre of gravity of the world."
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.MEMORANDUM FOR: The Director
This memorandum, occasioned by Iran's
2500th anniversary celebration next week, also
examines some vulnerabilities of the Shah's regime.
Distribution is being made to the Vice President's
Office, NSC Staff, State Bureau, ISA1 and to
USIB agencies.
GA
Director
National Estimates
ONE Memo, dtd 8 Oct 71
"Nothing Succeeds Like a
Successful Shah"
FORM NO. I01 REPLACES FORM 10.101
1 AUG 54 WHICH MAY BE USED.
(DATE)
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