WEEKLY SUMMARY SPECIAL REPORT SHAH OF IRAN: ROYAL REVOLUTIONARY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001500050005-2
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 11
• Document Creation Date: December 16, 2016
• Document Release Date: November 26, 2004
• Sequence Number: 5
• Publication Date: January 26, 1973
• Content Type: REPORT

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Secret
DIRECTORATE OF
INTELLIGENCE
WEEKLY SUMMARY
Special Report
Shah of Iran: Royal Revolutionary
CIA
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Secret
N4 658
26 January 1973
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Shah of Iriin
ROYAL REVOLUTIONARY
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D
Five thousand representatives of Iranian organizations gathered in Tehran this
week for a national congress marking the tenth anniversary of the White Revolution,
the device by which the Shah has brought Iran into the 20th century. The
celebration is referred to locally as the sixth of Bahman, the date on the Iranian
caiendar when in 1963 the Shah's package of land reform arid other related
programs was endorsed in a referendum.
In the intervening ten years, the Shah has grown into a supremely self-con-
fident ruler, who has to his credit an impressive list of successes. Although Iran is
theoretically a constitutional monarchy, in practice all branches of the government
are dominated by the Shah, who holds absolute power and makes all decisions. The
right to form political parties and hold free elections has been narrowly circum-
scribed by the Shah, who closely controls even the most parochial of political
processes.
Conscious of his own mortality, the Shah is in a N.'rry to establish Iran
economically, politically, and militarily as the most powerful and prestigious coun-
try in the Middle East. Virtually every thing that has been achieved in Iran is directly
attributable to the Shah's dynamism and his taking "this king business" seriously.
This is both a major strength and weakness. The Shah alone supplies direction and
coherence to the government. As long as he reicns and remains flexible enough to
make necessary changes, Iran should thrive. Without him, the stability and pros-
perity he has established will become extremely vulnerable.
Ten Years of Social and Economic Progress
Mohammed Reza Shah Pahlavi was only 21
when British and Soviet forces occupied Iran in
1941 in order to open transit routes for war
materiel. This move by the wartime allies forced
his father's abdication and his own accession to
the throne. At first, the new monarch seemed a
pale reflection of his tough, aggressive parent, and
for almost 15 years his rule was in many respects
secondary to that of the old time politicians com-
peting for personal political power. Not until the
mid-1950s, following the overthrow of the erratic
nationalist Mohammed Mossadeq, did the Siva'
begin to tighten his grip on the power structure.
By the end of the decade, he had brought the
government entirely under his authority, but in
the process he suffered a sharp decrease in per-
sonal prestige. The Shah was blamed for the
persistence of near feudal economic and social
conditions. Similar regimes were collapsing else-
where in the region, and few observers believed
the Shah was capable of the reforms needed to
save the monarchy.
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That the Shah and the monarchy did survive
was due to a fortunate confluence of circum-
stances, the force of his personality, and a fair
measure of luck. Since 1963, the Shah has trans-
formed his image. The reactionary conservative
has blossomed into a royal revolutionar-' and
social reformer. The vehicle for this transforma-
tion has been his White Revolution, which began
in 1963 as a reform program designed to underc'it
his opposition and gain support from the people.
The Sh-'h recognized from the start that
major reforms would be risky, but he correctly
reasoned that the sup~iort of the traditional
aristocracy alone was of diminishing importance.
It could be replaced by a new elite that included,
in addition, the growing middle class. He saw
much to be gained from establishing a public
image as a progressive ruler both at home and
abroad, but he was also moved by a genuine
concern for the average Iranians' well-being.
Only two aspects of the program have met
active opposition: land reform-the most
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significant element of the original program-and
giving women the vote. Opposition to these
proposals culminated in riots in Tehran in June
1963, but by that time the Shah was too com-
rnitted to back down. If anything, the disorders
strengthened his resolve to press forward, though
sometimes at a pace and in a manner more
tailored to the sensibilities of those affected.
Reform and Development
In general, the White Revolution has been
more a political than an economic success, and
this is true of land reform in particular. Virtually
without bloodshed, nearly all or the 90,000
square miles of arable land formerly owned by
the Shah, the state, and landlords (constituting
about 1 percent of the population) has been
transferred to the ownership of the peasants
(about 45 percent of the population). The only
exception was a small percentage of land farmed
mostly by machinery and some orchards.
Although many problems are still to be
smoothed out, the agricultural economy did not
suffer during the transfer, and the new peasant
owners work the land more productively than
before the revolution. The annual growth rate of
agricultural output is abc'rt 3 percent, an achieve-
ment that many developing countries would envy,
but short of the 4.4-percent goal set by Iran's
plan,iers. Land reform provided very little for the
large numbers of laborers employed on the farms.
The reform movement, in general, has main-
tained its momentum even though some specific
programs have lagged. The bolder and more
imaginative programs have periodically given fresh
stimulus to the movement as they entered new
stages; and reform, for instance, has gone
through three such phases. The Literacy Corps,
the Health Corps, and the Extension and r)evelop-
ment Corps were designed to bring groups of
draft-age Iranians to the countryside to improve
education, health, and living standards. These
groups have been Tble to work effectively in a rural
environment and have benefited from the
changing landlord-peasant relationships. These
rv oara.;ns are expanding.
On 26 January 1963, the initial six points of the
Shah's program for reform and development-the
White Revolution-were approved by popular refer-
endum. They included land reform, electoral reform,
the Literacy Corps, the sae of government factories,
nationaliz, tion of forests, and workers' profit sharing.
Three more were added in 1963; the Hiea!tth Corps,
the Extension and Development Corps, ,:rid the vil-
lage court system. Two years later the list was in-
creased to 12 with the addition of a program of
administrative and educational reform, a program to
promote regional development, and the nationaliza-
tion of water resources.
Land reform and the Literacy Corps have un-
doubtedly had the most impact and have been the
most successful !:rograms. The Health end Extension
Development Corps have also enjoyed some success,
not the least of which has been the establishment of a
government presence and channels of comm.inication
ire ;emote villages usually ignored by Tehran. At least
3,500 Houses of Equity and nearly 200 Arbitration
Cour;;ils have been opened as part of the moderniza-
tion of the village court system to acce'-rate the
settlement of cases.
Other parts of the 12-point program have had
less impressive results. The nationalization of forests
and water, relatively unspectacular and implemented
fairly slowly, has made !ittle impression. The sale of
government factories did not generate much enthu-
siasm and, despite continuing government efforts to
sell off some of its uneconomical factories, it has had
little success. The workers' profit-sharing program,
still very much publicized, is unlikely to meet its
lofty goal. Election law reform has streamlined the
mechanics of holding elections, reducing to one day a
process that at times had taken more than a week,
but has not resulted in the development of any real
political contests. An./ advances under the program of
administrative reform, which is still viewed with
skepticism, have been marginal and often coinciden-
tal. The Iranian bureaucracy has an almost legendary
ability to absorb the waves of reform and the cries of
outraged citizenry while still continuing as before.
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The reform movem'nt has had its greatest
impact in rural areas. Despite the Shah's efforts to
convey the impreE;ion of a social revolution
changing both rural and urban Iranians, the
benefits accruing to the urban population, with
some exceptions, have been more the result of the
country's economic progress than of specific
reform programs. The key to that economic
progress has, of course, been the substantial in-
crease in Iran's income from oil revenues and the
skillful handling of foreign credits.
Iran has developed to the point where it has
the largest gross national product in the Middle
East, more than twice that of either Egypt or
Israel, and is growing at a faster rate than that of
any country in the region. Since 1964, Iran has
enjoyed an average annual growth in real Gross
National Product of 11 percent, a rate ap-
proached only by Israel in the Middle East. This
growth rate is the result of large-scal-i public and
private investment, supported by increasing
amounts of foreign financial and technological
assistance.
Iran's rapid economic expansion is heavily
dependent on oil revenues which, at $2 billion in
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1971 and an estimated $2.4 billion in 1972, ac-
count for 85 percent of export earnings and
about 60 percent of annual government receipts.
The importance of c'.I to Iran's economy is
demonstrated by the fact that the Shah takes
personal charge of negotiating all oil agreements.
He has repeatedly pressed the consortium-a
group of Western companies that extracts and
markets roughly 90 percent of Iran's oil-for
more rapid growth in production and for higher
revenues. Last June, after hard bargaining, the
Shah tentativMj extended the consortium's con-
cession to 1994 in exchange for its nearly
doubling production end transferring some of its
assets to the government-owned National Iranian
Oil Company. He changed his mind when
neighboring Persian Gulf countries subsequently
received what the Shah considers to be better
terms f.-im their concessionaires. He is now re-
negotiadng his earlier agreement.
Iran's economic successes have not been a.,
unmixed blessing. Rapid growth has given rise to
a number of economic and social problems.
Massive population shifts have strained urban
community services. There is unemployment and
underemployment on a wide and visible scale.
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The country's new-found wealth has been un-
evenly distributed; upper and middle income
groups have benefited enormously while some
lower income groups have benefited slightly.
Economic planners have liad to cope with infla-
tion and with shortages of trained personnel to
manage and man expanding industries. These
problems will have to be addressed if the Shah is
to sustain the image of Iran as a reforming as well
as a prospering country.
The Shah dominates Iranian political life.
His successes over the past decade, and particu-
larly the country's extraordinary economic
growth, have made him a supremely self-con-
fident ruler. He considers himself the best in-
formed man in Iran, but has a voracious appetite
for more knowledge. He surrounds himself with
loyal, educated, and politically sophisticated
advisers whose talents he uses to manipulate the
national and local bureaucracies and the legisla-
ture. To oversee the entire system and maintain
control, the Shah employs an omnipresent secu-
rity network.
The Shah usually works seven days a week,
spending from about 0900 to 1330 and from
1600 to 1930 in his office. During these hours, he
receives a steady stream of visitors, including top
officers of the Iranian Government and the armed
forces. Although most important officials see the
Shah on a fairly regular basis, there are a few that
enjoy a much readier access to the monarch-
these are the 10 to 15 most important court,
government, military, and security officials.
The Shah's work schedule is somewhat less
rigorous than in the past, but he still turns over
only the less important business to subordinates.
On routine Pahlavi Foundation matters, for
example. he is more likely now to turn to its
administrator, Senate President Sharif-Emami,
than he would have done in the past, when he
personally used to approve or disapprove appli-
cants for the 3,000 scholarships administered by
tree foundation. On more weighty matters, he has
not lost his taste for detail. He directs or at least
reviews all significant actions by the ministries, he
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personally appoints a host of civilian officials and
all military officers down to the rank of major, he
parcels out dip:omatic assignments, and he passes
on individuals running for legislative seats.
It is a taut system the Shah has established.
He delegates little, and his awesome personality
inhibits his advisers, who may tell the Shah what
they think will please him instead of what they
believe to be the truth. The Shah recognizes this
and frequently zeroes in with astute questions. In
recent years, the Empress, who has a reputation
for candor, has been used by some to reach the
Shah with unpleasant news. She is reportedly not
afraid to criticize if she feels criticism is neces-
sary.
The most prestigious position next to the
Shah is that of minister of court, who serves as
director of the Shah's executive office and may
be used by him for unofficial and unattributed
activities. The incumbent, Amir Assadollah Alam,
is especially close to the Shah and has been since
they were schoolboy chums. Alam has served the
Shah effectively in a wide variety of important
posts and was prime minister at the inception of
the White Revolution.
The current prime minister, Amir Abbas
Hrnieyda, is a close adviser to the Shah by virtue
of Isis office. He has held the post for a record
seven years. Not all prime ministers have had the
confidence of the Shah, but Hoveyda has; and the
position is, therefore, one of real influence.
Hoveyda's blend of humility, tact, and affability
has made him an important asset. Nonetheless,
Hoveyda has made it clear that he acts only at the
direction of the Shah. The prime minister knows
that he, like othar officials in the cabinet, serves
only at the monarch's pleasure, and that any
lapses any success in building a personal fol-
lowing-would cost him his job.
The Shah and the Military
The military is central to the Shah's plans
for his country. He wants to make Iran the most
powerful and prosperous Middle East country and
bring it significant influence on the world scene,
and he believes the military must play a key role
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in this endeavor. He has lavished money on his
armed forces-already stronger than any Arab
neighbor-in an effort to provide the latest, most
sophisticated weapons and the trained men to
operate this equipment. Not surprisingly, in view
of the military's historic leadership of coups in
these countries, the Shah holds this increasingly
well armed force under close control. Since much
of his own education and training was oriented
toward the military, the Shah is commander in
chief in fact as well as in name. As with the
cabinet, military officers have been arbitrarily
moved around and dismissed to keep any one
man from becoming a rival. Meanwhile, the Shah
makes certain that military pay and perquisites
are generous.
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The Shah and the Legislature
Historically, parliament in Iran is opposed to
the monarchy. The Shah, like his father, has,
therefore, found it necessary to keep both houses,
the Majlis and the Senate, under tight control.
The Shah approves all candidates for parliament,
and in sor,ie cases he specifies who is to win. The
cons-citution requires him to appoint half of the
Senate. By these means, the Shah is assured of a
legislature that will be responsive to his wishes.
He is also able to ensure that a cross section of
Iranian life, including representatives of groups
such as women, make it into parliament.
Given this tight control, it is not hard to see
why parliament's performance often lacks con-
viction. Most bills are dutifully approved by both
houses with little more than a semblance of
debate. Occasionally, there are sparks of life, for
Women were given the vote in 1963.
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instance, when the Shah's position on draft legis-
lation is not clear beforehand, but these are few
and far between. Little legislation gets that far
without the Shah's imprimatur.
Even so, the Shah does not ignore the legisla-
ture, and on occasion has mollified the Majlis by
amending some provisions of draft legislation
found by the Majlis to be offensive. In this sense,
the legislature serves as a sounding board for
proposals that might be badly received by the
populace. In 1969, for example, a land-reform bill
requiring small landlords to sell rather than lease
their land caused considerable dissatisfaction
among the large number of small landholders. The
bill was criticized in the Majlis. The Shah agreed
to allow the landholders more latitude in ex-
changing the vouchers they received for their
land, but maintained the essence of the legisla-
tion-that the land had to he sold. More fre-
quently, however, when Majlis deputies object to
proposed legislation or the way it is presented,
they will debate and delay until the clear intent
of the court is made known. Once that is done,
they quickly succumb, cease further discussion,
and approve the bill.
The Shah and the People
The Shah pays lip service to the philosophy
that Iran needs a real constitutional monarchy in
which the people participate in national affairs
through their political parties. For the present,
however, the Shah, in his paternalistic treatment
of the people and in his manipulation of the
election process, gives no sign that he plans to
move in a democratic direction. He is probably
sincere about the need for a functioning con-
stitutional monarchy in the distant future, but he
is so confident that he knows what is best for Iran
that he himself is unlikely to relinquish any of his
authority.
In fact, the Shah's relationship with his
people is a one-sided affair. He tells them what he
thinks is best for them, working through an
elaborate provincial government organization. It
is, however, a paternalistic system, one in which
the lines of authority do not always correspond
neatly to the formal organizational charts. Some
senior officials in Tehran have preserved links
with their home areas and, in some cases, the
local Savak chief wields more pc;wer than the
provincial governor-general. Occasionally, the
various councils and officials also pass back tc the
Shah the wants and needs of the people, but this
is not their primary mission.
It'hen the Iranians learn to behave like Swedes. 1 nil!
behave like the King of Sweden. The Shalt in answer
to a query as to why he did not become a constitu-
tional monarch.
Elections are a good example of the way
Tehran manipulates the people's participation in
government. Publicly, officials describe the proc-
ess as a training exercise to aid the people to
make the transition from a basically feudal soci-
ety to a modern constitutional monarchy. Pri-
vately, officials admit that a facade of democracy
has been deliberately constructed, based on a
number of elaborate laws honored only in the
breach and on a two-party system that is com-
pletely artificial. For example, in elections for
city, district, and regional educational councils in
October 1972, the vast majority of votes were
cast by messengers who collected signed blank
ballots from voters and delivered them to party
workers who marked them as instructed before
depositing them in the ballot box.
Iranian political parties, subject to the
Shah's absolute control, have the form but not
the function of Western political parties. Iran
Novin, the ruling party, owes its position to
imperial favor and continued "massive victories"
at the polls. The Mardom Party, a poor second,
has no real standing even among its own mem-
bers. Electior results, even the party breakdown
in the Majlis and in provincial councils, are all
preordained by the Shah.
I n addition to controlling the political
parties and elections, the Shah's government
maintains tight control over the media. Every
morning, representatives from the prime minis-
ter's office, the Ministry of Information, and
other ministries wait at the newspaper offices for
the first copies of the papers, which they take to
their superiors for perusal. If these officials find
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anything objectionable, they can order the presses
stopped and prevent distribution of copies al-
ready printed. Writers of material deemed of-
fensive may find their jobs in jeopardy. Two
reporters were recently suspended because of a
story that upset the Shah by depicting a terrorist
sympathetically.
The people's direct contact with the Shah is
necessarily limited. Most hear about his programs
through local bureaucrats or from the press or
radio. Although pictures of the Shah abound-
either alone or accompanied by Empress Farah or
sometimes the crown prince-relatively few
people get to see him in person. Several times a
year he will visit various parts of the country, but
these are largely ceremonial occasions and involve
mostly government officials. Prime Minister
Hoveyda and other functionaries make many trips
on the Shah's behalf, however, and, occasionally.
Empress Farah has gone into the country to
represent him.
Despite the fact that the Iranian system ai-
lows a minimum of popular participation, the
people appear reasonably satisfied. With material
conditions steadily improving, the Shah's manipu-
lation of the political process produces more
apathy than resentment. Groups that might other-
wise have reason to be unhappy, such as dis-
possessed landlords, have made money elsewhere,
and the burgeoning economy has opened up
opportunities for a new managerial elite. There is
evidence, however, of a growing hostility among
intellectuals. Sporadic acts of terrorism and
occasional student disorders attest to the exist-
ence of pockets of discontent. This could increase
if unemployment rises.
continued external financing will be necessary for
the next few years.
Although the Shah in the past decade has
concentrated his efforts and those of the govern-
ment on improving the domestic situation, he
seems now to be developing an international
policy aimed at increasing Iran's importance in
the Middle East and the world. In the last year,
the Shah has visited or been visited by the chiefs
of state of the UK, US, and USSR; in September,
the Empress paid a highly publicized visit to
China. In line with his expanding view of Iran's
defense responsibilities, the Shah has dramatically
increased his air and naval weapons procurement,
with some emphasis on developing longer range
military capabilities.
There is little chance of a coup d'etat, and
the Shah appears to be in good health. He is,
however, known to be careless of his personal
security. Should he be removed from the scene,
there is some doubt that the succession mech-
anism would work to assure the accession of
12-year-old Crown Prince Reza Cyrus Ali. More-
over, Regency is untried in modern Iran, and in
this case the regent would be the Queen--a choice
only recently sanctioned by law but long for-
bidden by Iranian custom. It is doubtful that the
Empress would be the paramount power in any
post-Shah government, however, because she can-
not count on the permanent allegiance of the
coterie that has built up around her and because
she has not so far been involved in major policy
decisions. Her present power is hers as the wife of
the Shah, not as a person of influence in her own
right; still, her challengers would have to reckon
with her wide popularity and her constitutional
position.
The prospects for Iran's continued economic
progress are good as long as the Shah remains in
power. Oil production is expected to grow con-
siderably and, whatever the details of the settle-
ment with the consortium, Iran will receive sub-
stantially more of the earnings than in the past.
These large increases will not be enough, however,
to ccver Iran's ambitious public expenditures, and
Assuming the Shah remains in power for a
good many years, and that is the likelihood, little
will change in the way the country is run. There is
always a possibility of terrorist disturbances,
though, and occasions such as the sixth of
Bahman celebrations provide a natural stage for
such activities. Nevertheless, the Shah has been
able to control dissent in the past, and he should
be able to do so in the future.
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