PRC: IMPACT OF IRAN ON THE PERSIAN GULF THURSDAY 22 FEBRUARY 1979 1600 HOURS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP81B00401R002000090001-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 23
• Document Creation Date: January 4, 2017
• Document Release Date: March 10, 2006
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• Content Type: AG

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PRC: Impact of Iran on the Persian Gulf
Thursday, 22 February, 1600
Agenda
State Discussion Paper (with CIA input from Tabs A, F, G, and H)
A Implications of Iran for Middle East Peace Negotiations
B Implications of Iran for Saudi Arabia
C Implications of Iran for Iraq
D Regional Impact of Iranian Revolution; the Smaller Gulf States
E Effect of Events in Iran on Turkey + Draft Paper: A Look Ahead
F Implications of Iran for India
G Implications of Iran for the Soviet Role in the Persian Gulf
H Implications of Iran for Afghanistan
I Implications of Iran for Pakistan + Selected Background
DOS and NSC review(s) completed.
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Next 1 Page(s) In Document Denied
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NATIONAL SECURITY COUNCIL
WAa*4 .GT0N. D.C. 20308
February 20, 1979
MEMORANDUM FORS .= ' T1 '.VICE PRESIDENT
THE SECRETARY OF STATE
THE. SECRETARY OF THE TREASURY
TS
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_...,- .CHcZ3IfiMAN, JOINT C!l:E= = JF STAFF
........w ._ ...o. DIRECTOR- OF CENTRAL INTELLIGENCE -
Agenda for PRC Meeting : Regional.Policy
Relating to Events in Iran
February 22 1979 - 4:00 pm
White House Situation Room (C)
Following.. agenda will be- the basis of discussion at this
meeting. Additional background papers will be sent directly
by the State Department:,' (C)
SAUDI ARABIA, GULF, EGYPT, JORDAN, ISRAEL
Review of Harold Brown's Trip
{ y j~
Preparation FA NP / vte" "
Assessment of Oman Minister of State's Visit
Christopher Trip to India and Pakistan (including
specifically review of what should be said on
economic and military assistance to Pakistan and
linkage with nuclear problem, reaffirmation of
US-Pak 1959 agreement, and what can be said on
debt rescheduling for Pakistan)
Afghanistan (question of cutback on assistance).,
t _. t
) l.&M f r' .xo
Christine Dcdson
Staff Secretary.,-
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February 20, 1979
LIMITED OFFICIAL USE
S/S 7903212
thru
7903217
MEMORANDUM FOR: THE VICE PRESIDENT
SECRETARY QF THE TREASURY
SECRETARY OF DEFENSE
NATIONAL SECURITY ADVISER
CHAIRMAN OF THE JOINT CHIEFS OF STAFF
DIRECTOR OF CENTRAL INTELLIGENCE AGENCYG-""
The attached-paper is provided with NSC approval
for the February 22.?SCC meeting on Iran. it was prepared
jointly by State/INR and CIX .
Peter TarnoO,
Executive Secretary
LIMITED OFFICIAL USE
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u yrv a..+
Regional Implications of Events in Iran
The collapse of the Shah's regime and the current
-uncertain situation in Iran are arousing serious concern
among neighboring states. Moreover, the Iranian situa-
tion is having an impact on the peace negotiations,
regional stability, and relations of various states with
the US. Finally, the Soviets are likely to view the fluid
situation in Iran as an opportunity for advancing their
interests.
Middle East Peace
As a result of events in Iran, Egypt and Israel
appear. to be adopting more-rigid positions on unresolved
issues in the peace-negotiations.
Although the,upheaval'in Iran has directly affected
only one issue--Israel's desire to secure oil supplies from-
Egyptian fields in 'the Sinai--i.t has.caused both sides to
reconsider their:approaches to negotiations in light of.
broader concerns, which include:..
--the diminution c? US influence in the region;
--the inspiration that religious' revolutionaries in..
Iran have given right and left-wing extremists
elsewhere; and .
--the ccnsequetit"potential for greater instability
in the area.
We do not believe these concerns have eroded either
side's fundamental commitment to continuing the peace
effort. Nevertheless, both countries have been shaken by
the fall of the Shah. They seem more determined than ever
to protect their own equities and less inclined toward the
kind of flexibility necessary to hasten the conclusion of
a treaty.
Concern over US losses in Iran and the perception
that Washington was either unable or unwilling to act in
ways to protect its interests there seem to be at the
heart of Egypt's greater caution and to have ren#pced
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GDS 2/20/85
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longstanding Israeli suspicions about the value of great
power security commitments.
--Sadat's decision to embark on a high-risk pursuit
of a peace settlement was based on a calculation
of US power in the region and a belief that the
US would be able to use those strengths to engineer
a comprehensive settlement and to stand as its
guarantor.
--Israel, although much less inclined to depend on
the benefits of superpower guarantees, neverthe-
less has integrated its special relationship with
the US into the basic assumptions underlying its
peace moves. Although both sides have expressed
some appreciation of our difficulties in dealing
with rapidly unfolding events in Iran, confidence
in US power and reliability has clearly been shaken.
We have detected an attitude emerging in Israel and
Egypt of stricter self-reliance which contains the seeds
of an uncertainty whether a treaty-can be concluded which
could withstand new shifts in the power balance and polit-
ical currents in the region.
The tide of Islamic fervor in-Iran, Khomeini's
explicit endorsement of the Palestinians, and the collapse
of the de facto security,system?in'the Persian Gulf region
have added significant pressure on Sadat to demand from'
Israel amore explicit commitment to a comprehensive settle-
ment and respect for Egypt's sovereignty and pan-Arab
obligations. Even.before the crisis in Iran, the Egyptians
were deeply disturbed by the force of Arab rejection of
-their independent dealings with Israel .and particularly by
Saudi Arabia's endox:O.ement bf the anti-Egyptian resolutions
by the Baghdad summit. Now the Egyptians face:'
--a coalition of Arabs spearheaded by Syria and Iraq,
which has added reason in the wake of events in Iran
to maintain an alliance;
--a Saudi leadership deeply worried about its
increased vulnerability and seemingly less willing
to risk taking positions unacceptable to the
Palestinians and other Arabs;
--an emboldened Palestinian movement which is exploit-
ing its relationship with Iranian revolutionaries in
 ?
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lives Sadat and minimizes as much-as pos.sible the need for
US security guarantees. The Israelis have not substantively
changed their negotiating positions, but they have in recent
months dug in their heels more deeply over a number of
issues they ccnsider vital, including:
--guaranteed access to quantities of Egyptian oil
equal to those Israel currently obtains from.its-
operations in the Gulf of Suez; .
--US commitments to provide generous financial'
assistance and advisory. support- to facilitate
Israeli military relocation from the Sinai to
the Negev;
--ironclad language in the treaty minimizing if not
neutralizing Egypt's options to intervene on the
Arab side in future Arab-Israeli conflicts.
The Israeli leadership believes that one effect of the
Iranian crisis has been to deepen Egypt's reluctance to
depart from Arab consensus attitudes. Dayan and others in
the leadership anticipate that Sadat, in an effort to
reaffirm his solidarity with Arab interests, had;,_taken.a
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order to enhance its image as a force to be
reckoned with; and
--early signs of greater assertiveness among Egypt's
25X6
own Muslim conservatives on such sensitive issues
as Egypt's relations with the US, Israel's designs
on Arab territory, and inequities
in
25X6
Egypt's political and social system.
Sadat has countered these pressures with the argument
that regional stability depends more than ever on a just
Middle East peace settlement. Implicit in this argument,
however, is a notice to the US and Israel that a stable
peace must include greater satisfaction of Arab demands
and greater assistance to Egypt and other moderate Arab
governments. In addition, Egypt's perception that it is
the best choice to replace Iran as the area's policeman
appears to have led Cairo to conclude it'has more leverage
with Washington.
Israeli perceptions of the Iranian crisis seem to have
reinforced their determination to nail down specific language
a peace treaty with Egypt out-
and commitments ensuring that
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tougher position on major negotiation issues still at
impasse. This assessment has probably contributed to the
stiffening of Israel's oven negotiating posture.
Regional Stability
Iran's neighbors are deeply worried about the impact
of the collapse of the Shah's regime on regional stability.
They are particularly fearful that recent events in Iran
will give the Soviets an opportunity for inroads and for
spreading radicalism.
These concerns are increased by a perception that the
US is not able or willing to Took after American interests
in the region and those of its friends as well.
Saudi Arabia
Events in Iran raise the question whether Saudi Arabia
will face internal disturbances over the next few years
that' could destroy its social 'and political 'system. The
similarities between Iran and Saud!-Arabia include:
--a monarchy with virtually absolute power;
--a pervasive Islamic. culture; and
--an expanding, development-oriented economy ,fueled
by high prices for crude oil and accompanied by
inflation, mismanagement, housing.shortages, and
corruption.
One of the most obvious differences between -Iran and ?
Saudi Arabia is'the nature 'of the Saudi monarchy. In con-
trast to the Shah's one man rule, Saudi Arabia is ruled by
a royal committee headed de jure by King-Khalid and de facto
by Crown Prince Fahd ? Devo of thLd pomp that surrounded
the Shah, the House of Saud follows the much simpler tradi-
tions of the Arabian Peninsula that emphasize accessibility
to its citizenry.
Moreover, the Saudi dynasty, unlike the Pahlavis, is
widely regarded as legitimate. This legitimacy derives
from the al-Sauds' historical role as unifiers of much of
the peninsula, from their leadership of a purifying Islamic
movement, and from their kinship with influential families
and tribes.
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The position of religion in Saudi Arabia is very dif-
ferent from that in Iran. While Shi'ism considers the
rulers at best the temporal stand-in for the messiah and
at worst a usurper, the ruler in Saudi Arabia is viewed as
the leader of the community of the faithful, whose commands
are to be obeyed so long as they conform to Islamic law.
The Saudi ruling family, therefore, has carefully avoided
actions that might antagonize the religious establishment.
This cautious policy contrasts vividly with the per-
formance of the Shah, who paid scant heed to the religious
sensitivities of his subjects. and who regarded the,religions
establishment as an obstacle to his reform program.
A remarkable degree of political, religious, and social
consensus exists in Saudi Arabia.. Few Saudis seriously
question traditional values, and the Kingdom actively sup-
ports the reinvigoration of Islam elsewhere. This consensus
obviates many of the tensions that have long plagued -Iran.
The continuation of this consensus., however, depends on the
success of the Saudi leadership in.achieving.modernization
without violating traditional values.. .
There is also-in Saudi Arabia a high degree of economic
satisfaction, even among students returning from abroad.:
There are economic and social inequalities, but the govern-
ment is using its ample income to deal with these problems
before they generate serious resentment.: Iran, on the
other hand, with much larger population,. less money, and
heavier military spending, was unabl.e.to build a Saudi-
style welfare state. This created popular frustration and.
responsiveness.to the revolutionary messages of the reli-
gious-leadership and the opposition politicians.
Another important difference is the role of students.
In contrast with Iran, Saudi students generally are.polit-.
ically inactive. Graduates returning from abroad are
coopted by the assurance of employment and-good chance of
becoming reasonably wealthy.
What happened in Iran is unlikely to happen in Saudi
Arabia within the next few years. Beyond that period, how-
ever, the outlook for Saudi Arabia is uncertain. By then,
economic deterioration and social unrest stemming from the.
impact of rapid change may have become a serious problems.
Although the US and Saudi Arabia continue to share a
strong mr..-ualti.ty of interests, the US-Saudi relationship
is going :hrc?'t:h its most difficult period since- -the
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imposition of the Arab oil embargo in 1973. The collapse
of the Shah's regime and the inability of the US to effect
the situation in Iran are contributing factors.
The Saudis have particular difficulty discerning a
strong'sense of direction in US policies most directly
affecting them--Free World security, energy, and the Arab-
Israel problem. They think that US "isolationism" in the
wake of Vietnam has gone on long enough and that it is time
for the US to face up to its responsbilities as the pro-
tector of the Free World.
In the field of energy, the Saudis feel under US
pressure to adopt production policies inimical to their own
economic interests and to keep oil. prices down with no com-
mensurate sacrifices by the US. They note the absence of a
comprehensive Us energy policy, coupled with considerable
public criticism if they fail to meet US requests on oil
price rises.
It is over the Arab-Israeli peace process, however,
that the strains have been 'greatest. The-Saudis were dis-
appointed with-US peace efforts prior.to November 1977 but
have-been ygreatly'upset by events since the Sadat initiative.
Though temporarily euphoric over the F-15 sale last spring,
their distress had returned by the summer when they became
convinced that the US was unwilling?to apply sufficient
pressure on Israel to produce significant progress.
Their reaction to the Camp David'accords was even more
negative. From the Saudi?perspective, the. accords did not,
contain enough. Israeli concessions to produce'a just peace,'
and they failed to reflect a strong US commitment to deal-
ing effectively with what?the?Saudis consider the heart of
the question:
--Palestinian self-determination, and
--the return to the Arab side of Gaza and the West
Bank, including Jerusalem.
The Gulf States
The five smaller Persian Gulf states (Kuwait, Bahrain,
Qatar, the United Arab Emirates (UAE), and Oman) are deeply
concerned about the events in Iran which brought the issue
of regional security in the Arabian Peninsula into sharp
focus. Kuwait, traditionally the leader in advancing the
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idea of Peninsula cooperation, dispatched its Crown
Prince and Prime Minister on a tour of neighboring states
in December. The Bahraini Foreign Minister said recently
that he is proposing "top level" meetings to discuss
regional security. The Federal Council of the UAE called
an extraordinary session to discuss the problems of the
,area.
The Gulf states see potential for trouble in several
areas:
--The Yemen Arab Republic (YAR) and Oman are
vulnerable to PDRY-based hostility.
--Conservative Shia nationalism could bring unrest
to the small sheikhdoms on;the western shore of
the Gulf and to Saudi Arabia's eastern province.
--The large foreign populations in Kuwait; the UAE,
and Qatar could'be the source of civil unrest.
So long as tbe.fears for `regional security continue
can expect. Peninsula.states .(.except PDRY) to:
--pay more :attention to -internal problems which
threaten stability, such As?the Omani-UAE border
dispute, ownersh..p..of Hawar ? Islands,' and. the
quarreling within the.UAE federation;-
--look to Egypt as a source of ntilitary assistance.
(in-the case of Oman and the YAR);
--keep closer-watch on dissident nationals and
foreign residents; and
-:-attempt to spread the benefits of oil income more
widely to eliminate the dangerous economic gaps
which now exist between the elite and some segments
of native and foreign populations.
The image of the US standing by helplessly while nations
fall to radicalism and communism is growing in the Peninsula.
Nevertheless, these countries still look to the US for a
large measure of political, psychological and military sup-
port to help each maintain its status quo.
They will seek US support but probably not a US
presence. (The US, the UY._ and other Western,states are
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already heavily represented in the Peninsula.) Iran
provides a lesson to the Peninsula states: a massive US
presence does not guarantee stability.
A large US or Western presence could:
--give ammunition to critics of the Gulf regimes
who charge that they are pawns of the West; and
--create problems for these countries in dealing
with their more conservative Islamic communities.
Iraq
Events in Iran that have upset Arab moderates are no
less unsettling to the Iraqi leadership. Although-the col-
lapse of the Shah's regime gives Baghdad an opportunity to
acquire more influence in the Persian Gulf, this is a
relatively long term-possibility. In the meantime, the
Iranian situation poses several problems for the Iraqis:
--Iraqis Shia-population (55 percent of-the total)'
may be emboldened by the' events in Iran;
--Iraq had good relations with the Shah. in the almost
four years since Iraqi-Iranian relations began to
improve. The Iraqis-now-face the prospect of deal-
ing with Khomeini,, the man whom they forced out of
the country last` year.
--The possibility that the Soviets will take advantage
of.uncertainty in the area or, anarchy in Iran to
extend their influence. .
--The possibil?i.ty that' Saudi Arabia and. the Persian
Gulf states will side more closely with Egypt and
the US, putting self preservation over their commit-
ment to Arab goals.
To deal with the possibility of trouble from their Shia
population, the Iraqis are resorting to their traditional
approach of-patronizing Shia religious activities while
cracking down on expressions of political diversity. In
addition, the regime is diverting economic resources from
showy industrial projects to such basic needs as health,
education, and housing. Much of this is intended for poorer
Shias. Gambling has been curtailed, and Christian religious
activities with evangelical overtones are being suppressed.
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The Iraqis will approach Khomeini and his associates
gingerly. They will look for signs of hostility to Baghdad
and evidence of activities among Khomeini's former contacts
in Iraq. A recent Iraqi newspaper editorial may be a
signal of Iraq's plans to solve this problem. The editorial
said that the Iraqis had asked Khomeini to leave because of
their policy of non-interference in the domestic affairs of
other nations; not because they had acceded to the Shah's
demands.
The Iraqi campaign against local Communists--and against
the possibility of their use as a'Soviet tool--has ranged
from harassment to arrest and execution. The effects of this
campaign were felt?acutely after the coup in Afghanistan in
which a government friendly to Iraq was overthrown by a
Soviet-guided communist cadre.
In its external relations, Iraq will probably try to
build on its image of what Baghdad calls "a?
closet moderate." Talks with the Syrians continue. Although
some progress has been made toward. better relations, events.
to be moving more slowly than Iraq wishes. Iraq's?dip
seem
loniatic initiatives have?been?welcomed cautiously by the
Arabian Peninsula states., They are happy to see Baghdad
using diplomacy rather than intimidation to accomplish its
political goals.
The Iraqis are upset that the effects of the.Baghdad
Summit--which was the principal vehicle for Baghdad's-move-
ment toward the Arab- mainstream--are weakening. So far,
Iraq is-the only country that has paid its share of-the'
subsi_,dies and has been: trying to get other states assurance.
.that they will not support Egypt if it.sianz a treaty with
Israel, another 'comi::..itment ''from the summit.
The Iraqis are also fearful- of events in Iran because
of possible reaction'by the great-powers. They fear that:
--the demise of the Shah will bring an extension
of US influence and an increase in US presence in
the Arabian Peninsula; and
--a greater US presence will prompt the Soviets to
respond.
An increased US military presence in Saudi Arabia would
probably bring a sharp Iraqi reaction. Despite=.Iraq's
interest in improving relations with the Saudis,.;=the Baath
Party's daily newspaper condemned the F-15 visit. The Iraqi
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reaction is not easy to predict, but stronger links with
Syria would be a likely objective. Syria would not necessar-
ily share this view, however.
This attitude toward a US presence stems from the Iraqi
emphasis on freedom from foreign domination--an important
tenet of Baathi ideology. The Iraqis will want the Saudis
and other states of the region to hew to non-alignment and
unified Arab opposition to Israel.
Turkey
Although they are concerned about the destabilizing
potential of events in Iran, the Turks now see developments
there more as an opportunity for obtaining the assistance
they need than as a threat to Turkey. Contrasted to their
Soviet and Arab neighbors,-and now to Iran, the.Turks regard
their nation as an island of democratic,'Western-oriented
stability in a sea of hostility and potential chaos. They
believe Anatolia's historic strategic importance has been
reconfirmed and that the value of Turkish strength and
friendship to the West has increased accordingly. This has
heightened expectations of substantial'amounts of-economic
and military aid. -
At the same time, Ecevit's government has avoided moves
that might antagonize the eventual winners of Iran's domestic'
conflict. Turkey did not derive any special security or
economic benefit from the Shah's regime, bilaterally.or
through CENTO. But the border did not require the military'
assets devoted to Turkey's other frontiers. ?Ecevit?hopes
for friendly, or at least correct, relations?with any ?
.strong central government in Tehran. ??
An "Islamic Republic" next-door-may cause some unease
among Turkey's doctrinaire secular elite.* -But the conserva-
tive religious element in Turkey which might emulate the
Iranian experience is Sunni. Its partisans feel no affinity,
and probably a touch of hostility, for their Shia neighbors.
Theocratic excesses in Iran will only add to'Turkish faith
in the superiority of the secular system Ataturk created.
over 50 years ago.
The Turks perceive that the most worrisome aspect of
the current situation in Iran would be a breakdown of central
authority that could lead to Azerbaijani or Kurdish mini-
states. Most Turks fear this could encourage separatism
among Turkey's Kurdish population. Turkish militA.y :forces
along the border have been reinforced to
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border tribal movements and gunrunners taking advantage of
the collapse of the Iranian security forces. So far, how-
ever, there is no evidence that the urban violence in Turkey
has been encouraged directly, or by example, by any of the
competing factions in Iran.
A possibility that may cause Turkish military planners
more concern is that of a pro-Soviet government emerging in
Tehran. The Turks are confident that they can handle any
internal or external threat in their region except one from
the Soviet Union. They will argue that the Iranian situation
makes all the more important the acquisition of modern
military equipment to meet their NATO force goals.
Events in Iran seem to have had little impact on Turkish
confidence in the US as an ally. The Turks would not be
unduly alarmed by.Iran's withdrawal from CENTO. ..They have
never regarded CENTO as a valid defense alliance and look to
NATO and the US for the assistance they need against a Soviet
threat. Indeed, a stronger-US role in?support of the Shah
might have fanned latent, but widespread, fears of US inter-
vention in Turkish affairs. The Turks-believe that neither
US nor the Soviets had significant-influence over the
the
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events of'the past-year in Iran. They-hope this remains:.
true in the future. .
Afghanistan
The leftist Afghan regime probably views the events in
Iran as a mixed blessing. On the one hand, the pro-Soviet
People's Democratic Party of Afghanistan would welcome the
demise of CENTO, a weakening in Tehran's ties'-with the West,
and the eventual installation of a leftist government in
Iran. Afghan leaders believe that the Shah's' government was
involved with insurgent groups inside Afghanistan,-and have
been unhappy that Iran has not.implemented. massive aid
programs discussed several years ago.
On the other hand, the toppling of a government in Iran?
by Muslim conservatives is hardly an encouraging sign for
the increasingly unpopular Afghan regime. Khomeini has been
outspoken in his criticism of the "godless, communist" Taraki
government. Since seizing power last April, the PDPA has
been challenged by Muslim dissidents who believe the regime
is Communist, and therefore athiest. The Muslim Brotherhood
claimed responsibility for several assassinations and acts
of sabotage last year. The regime arrested approximately
150 Muslim leaders earlier this month. The victor:--of
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Khomeini may well be seen in Kabul as likely to encourage
further Muslim opposition to authority on the Afghan side
of the border.
Should the new government in Tehran be unable to estab-
lish its authority quickly throughout Iran, the present
government in Afghanistan might be tempted to meddle in
Iranian affairs. One of its most obvious targets would be
the Baluchi minority in Iran, which has long resented con-
trol from Tehran; fellow tribesmen constitute a large minor-
ity in southern Afghanistan. The border between the two
nations is long and regarded as porous to infiltration.
Strong countervailing pressure against intervention in Iran
at this time, however, comes from the Afghan government's
internal problems--in particular,.its inability thus far to
eliminate armed opposition within. the eastern provinces.
The heavy reliance.of the present Afghan government on
the Soviet Union is firmly.established. It is probable,
therefore, that Kabul, in its relations with Iran, will con-
tinue to be guided by advice from Moscow; in any case the
Afghan. attitude toward the-Khomeini regime, is unlikely to
deviate greatly from the attitude of the USSR.
Pakistan
The turmoil in Iran is very unsettling to Pakistan
leaders. Pakistanis are concerned about the?loss'of the
strong support the Shah gave Islamabad-in economic aid, in
Pakistani's regional disputes, and in'controlling rebellious
tribesmen in Baluchistan.' ?
The Shah maintained a_strongly pronounced "pro-Pakistan
tilt," especially toward Afghanistan and India. -The Shah
resented the Indians as his main rivals for influence in
South Asia, quarreled-with the Afghans over smuggling,
borders, and development, and distrusted them both for their
close ties to the USSR. His consequent backing for Pakistan,
where fear of Afghanistan and India is almost paranoid,
therefore came naturally.
Pakistan depended on Iran for moral support and finan-
cial aid. President Zia visited Tehran to consult his ally
no fewer than four times after he took over in July 1977.-
Iran deferred $260 million of Pakistan's debt in a sym-
pathetic gesture, while other donor countries were refusing
to reschedule. The Shah made unequivocal statements after
the 1971 Indo-Pak war that he would come to Islamabad's aid
if any country attempted to dismember Pakistan (he` would
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0 have wanted to insure Iranian hegemony over Baluchistan).
This reassurance that the Shah would physically aid Pakistan
in a conflict against India was highly valued in Islamabad.
Under a Khomeini-backed regime, the Pakistanis can no
longer expect such aid. The close support of Pakistan by
Iran, while not likely to turn into enmity, probably will
become less pronounced for several reasons:
--The Shah's "Forward Policy" of extending Iranian
influence in the region has vanished; as such,
Pakistan can expect less attention from Iran on all
fronts--political, economic, and military.
--The Indians have been quick to establish good
relations with the Khomeini faction; they sent
emissaries to Paris early in the game to propound
their point of view.
?--Zia has publicly supported the Shah, but two
religious. parties in Pakistan made statements
supporting Khomeini.
--Khomeini's attitude toward Pakistan has not been
made crystal-clear, but he has made at least-one
reference to the Zia government as "corrupt."
Nevertheless, Islamabad believes it can. get along with
nearly any leadership in' Iran, except a strongly leftist
one. Pakistan. has certain bridges.to.Iran:
--Afghanistan's belligerent posture and perceived
designs on the Baluch and other tribal groups-worry
'.both countries; . ?
--the Islamic policies of both governments, despite
Khomeini's comments;
--both governments share an interest in a pan-Islamic
movement; and
--both-distrust communism and the Soviets.
While the uprising in Iran probably will not directly
affect the internal situation in Pakistan, Islamabad will
view it as damaging to regional security. Already feeling
isolated, Pakistan will become even more anxious and hence
probably more determined to obtain a nuclear weapon
"equalizer."
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The Shah's downfall will lower the level of Pakistan's
confidence in the West and the US. Islamabad already feels
that the US abandoned it by failing to supply arms or to
support Pakistan in the last two wars with India. The
Pakistanis have been talking for years of getting out of
CENTO and will probably make this move now that Tehran
announced its intention of leaving.
This is not to say, however, that Islamabad will move
toward to the Russians. Even if it wanted to, Moscow has
too much invested with India and Afghanistan to risk a
serious flirtation with Pakistan. For its part, Islamabad's
trump card since the late 60's has been its close ties to
Peking, something it does not wish to weaken. While both
the USSR and Pakistan may make motions toward closer ties,
they will be careful to avoid alienating present friends.*
New Delhi's swift recognition-of the,Bazargan.govern-
ment on February 12 is an attempt to get off on the right
footing with the new Iranian regime which Indian officials
fear will be less favorably disposed toward India. than was
the Shah, particularly during-the.-last 5 years of. his rule.
In recent months, India has-been concerned that the
surge of Muslim fundamentalism will promote instability in
the Persian Gulf region,` decrease prospects for better
relations betw'~een predominantly Hindu India and its Muslim
adversary, Pakistan, and foil India's ambition to .play a
more influential role in the Indian-Ocean/Persian Gulf
region. .
Although religious affinity linking India with.the
Muslim world is absEtt, New Delhi was making progress,
after the onset of the oil crisis in 19.73, toward improving
relations with Pakistan and its Muslim neighbors in the Gulf.
Indian overtures toward Iran were reciprocated by the
Shah, despite his suspicion of India's close ties with the
USSR. New Delhi, for its part, was apprehensive that the
Shah's support for Pakistan could entail the transfer of
military equipment to that nation in the event of another
Indo-Pakistani war. The Indians were also wary of the
Shah's apparent determination to dominate the Gulf and
possibly to extend Iran's naval influence into the Indian
Ocean. An Iranian blue-water navy, New Delhi feared, would
be used to support Western political objectives and. thus
exacerbate super-power rivalry both in the Indian Ocean and
in the littoral states.
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Nonetheless, India's need for crude oil imports and
its recognition of the Gulf's vast trade and market poten-
tial motivated Indian diplomats and businessmen to intensify
efforts to establish closer ties with the Persian Gulf
states.
Iran has traditionally supplied India with oil and
petroleum products in return for minerals, jute, tea, and
skilled and unskilled manpower. The upswing in economic
relations since 1974, however, has involved a broader range
of Indian exports, including aluminum, steel, cement, trans-
mission towers, and power generating units.
Iranian funds for completion of the $700 million
Kudremukh iron ore project and for three other proposed
joint-venture projects in India now may be in jeopardy. New
Delhi is generally apprehensive about the prospects for
economic relations with the new Iranian?government, fearing
its first priority will-be to move closer to Islamic coun
tries. Of immediate concern to New Delhi is the interrup-
tion of Iranian oil exports--6.5 million tons were expected
to arrive.in India in 1979. (India's total crude oil
requirements for 1979 are 30 million tons, of which 16.5
were to be imported.) The UAE and Iraq have agreed it
increase their exports to India, but New Delhi claims to
still will face a Shortage of 4.5 million tons, with some
.5 million tons urgently needed within the next three
months. New Delhi has asked the'US to encourage the Gulf
States to be~more responsive to India's needs.
According to Indian estimates, several thousand of the
estimated 25,000 Indians in Iran have recently returned,
home. A massive exodus of Indian workers from Iran and
other Gulf.States, where the bulk of Indiar: expatriates are
working, would sub~.tantially reduce the flow of foreign ?
exchange into India, which, with the rise of Indian exports
to the region, has contributed to India's record foreign
exchange holdings.
New Delhi's outwardly optimistic attitude toward the
new Iranian government masks an underlying sense of regret
at the sudden turn of events. In the last several years,
India had come to view the Shah as an important force for
regional stability, partly because he has prevailed upon
Pakistan not to escalate tension with India and with
Afghanistan. Now the Indians fear that the new Tehran
government may revert to the older Iranian policy of
strongly favoring Pakistan over India. New Delhi`l s
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? particularly concerned that Iran might supply sophisticated
weapons to Pakistan and thus encourage Pakistani intran-
sigence vis-a-vis India.
The Indians are doing what they can to avoid a down-
turn in relations. In January, two Indian emissaries
visited Khomeini in France to express Prime Minister
Morarji Desai's greetings and India's desire for continued
good relations with Iran. Khomeini reportedly said nothing
to discourage the Indians and promised an even better eco-
nomic relationship between the two countries. While the
Indians welcome Khomeini's commitment to non-alignment, New
Delhi probably is more concerned at this point about the
consequences of protracted political turmoil in Iran. India
fears that a continuation of unrest in such a strategically
important state invites super-power interference. New
Delhi, moreover, is apprehensive that a?radical leftist
state might eventually emerge and such a. state would under-
mine the regional stability that India is trying to build.
Soviet Union
The Khomeini revolution offers. Moscow both?opportuni-
ties?and difficulties. The Soviets had always considered
the Shah a conservative leader who had built Iran into a?Gulf
. region power and who had worked against Soviet interests.
They attributed an anti-Soviet purpose to the Shah's
foreign policy, such as his:
--links with the US; Pakistan, and the conservative
Persian Gulf states;*
--acquisition of sophisticated military hardware and
the.increased US military presence;?
--efforts to improve ties with Iraq which were
designed to reduce Soviet influence in Baghdad;
--successful efforts to suppress the Dhofar insurgency
in Oman which the Soviets had supported;
--military assistance to Jordan and Pakistan which.
represented an effort to forestall Soviet influence
in the area; and
--sponsorship of a Persian Gulf security pact and an
Indian ocean "zone of peace" which were certainly
viewed by the Soviets in a similar context.
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The new regime will almost certainly reverse or cut
back on most of these initiatives and will embark on policies
that will be less threatening for Soviet interests in the
area. Both Khomeini and Bazargan have long advocated a
non-aligned foreign policy.
On the other hand, the new government's ideological
orientation is anti-communist and anti-Soviet. Moreover,
the Soviets are the most direct threat to Iranian indepen-
dence and the very nationalistic Khomeini regime is likely
to be very chary of any Soviet advances in the region.
In a prolonged period of change in Iran, the Soviets
would be increasingly inclined to back those forces which
they considered sympathetic to their own interests. There
are indications that the role played by the Tudeh Party and
other leftist elements is growing, and a continued state of
instability would provide an-atmosphere conducive to the
organization.and growth of such forces-. The Soviets will
probably not try to establish. direct contacts with the
terrorist groups currently operating in Iran, and both the
.USSR and the Tudeh have already criticized the use of terror
as a. tool.
? The Soviets will have to move cautiously to exploit*
these new opportunities in the Gulf area, however, because
key,Arab states already perceive..an expansion of Soviet
influence in the area. These concerns have been heightened
by.-
--the toppling of the.non-aligned Afghan-government
in April by a Soviet-trained army;
--the assassination of the North Yemeni president by
a South Yemeni, and the.coup in South Yemen in June,
that brought to power a leadership more receptive to
the Soviet leadership;
--the Soviet-Ethiopian friendship treaty in November
which will lead to closer bilateral ties and an
expanded Soviet presence in Addis; and
--the internal explosions in Iran as well as the
increase of radical leftist activity on the heels
of these other events.
The Soviets appear to realize that they must:-position
themselves carefully in order to exploit the opportunities
that stem directly from the chaos in Iran. Moscow's first
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steps to date suggest that the Soviets will resort to a
public approach designed to reassure the regional states of
the USSR's peaceful intentions.
--In late January, the Soviets sent the director of
their foreign ministry's Middle East Department to
Kuwait, Iraq, the Yemens, Jordan, and Lebanon to
stress Moscow's opposition to foreign intervention
in the "internal affairs of another state."
--An authoritative article in Literary Gazette on
January 31 encouraged Saudi Arabia to reconsider
its hostility toward the USSR and to rethink its
"special relationship" with the US.
The sensitive question of border security with countries that
.share nationality groups with the Soviets-such as. Turkey and
Iran--may be another reason for the Soviets to avoid hasty
responses to the current turmoil in the Islamic area.
Some-trends in the region will be favorable to the
Soviets even if their responses are minimal. The.US?and
West Europe are already faced with higher oil prices. Soviet
allies in*' the area--particularly the Libyans.,'the South
? Yemenis, and the Palestinians--will have high-level contacts
with the Khomeini government, and presumably serve as advocates
for. the USSR.
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