US Arms Policies Towards the Shah's Iran

Stephen McGlinchey

• Publisher: Routledge
• Year: 2014
• Print ISBN:
  9780415739214
• eBook ISBN:
  9781317697084
• Topic: Politics & International Relations
• Subtopic: Politics
• Index: Politics & International Relations

This book reconstructs and explains the arms relationship that successive U.S. administrations developed with the Shah of Iran between 1950 and 1979.

This relationship has generally been neglected in the extant literature leading to a series of omissions and distortions in the historical record. By detailing how and why Iran transitioned from a primitive military aid recipient in the 1950s to America's primary military credit customer in the late 1960s and 1970s, this book provides a detailed and original contribution to the understanding of a key Cold War episode in U.S. foreign policy. By drawing on extensive declassified documents from more than 10 archives, the investigation demonstrates not only the importance of the arms relationship but also how it reflected, and contributed to, the wider evolution of U.S.-Iranian relations from a position of Iranian client state dependency to a situation where the U.S. became heavily leveraged to the Shah for protection of the Gulf and beyond – until the policy met its disastrous end in 1979 as an antithetical regime took power in Iran.

This book will be of interest to students and scholars of Middle East studies, US Foreign Policy and Security studies and for those seeking better foundations for which to gain an understanding of U.S. foreign policy in the final decade of the Cold War, and beyond.

1 The formative years of the US–Iran arms relationship

In early 1946 the Soviet Union refused to withdraw from northern Iran, where its troops had been deployed since 1941 to keep what was a vital wartime supply line clear from enemy interference. As the war ended it became apparent that the Soviets were working with local nationalist forces to install a communist puppet regime, with success, in the Azerbaijan region of north-western Iran. Adding to the tension, 15 Soviet brigades moved into Azerbaijan on 4 March 1946, while a simultaneous deployment was marching towards Turkey through Bulgaria. As the Soviet Union was bound by a treaty to evacuate Iran by 2 March 1946, the Iranian government, backed by the British, pleaded for assistance at the newly formed United Nations Security Council. The situation quickly escalated and the Truman administration, moving doubly to support the Iranian cause and uphold the sanctity of the newly formed UN system, scored a major diplomatic victory as the Soviet troops withdrew from Iran in the spring of 1946.

In October 1946, after the resolution of the Azerbaijan crisis, the Joint Chiefs of Staff (JCS) concluded the first major US strategic appraisal of Iran. The report stated that both oil resources and its strategic location, which provided ‘a base for both defensive and counteroffensive operations against the Soviet Union, gave Iran major strategic importance’.¹ The Central Intelligence Agency (CIA) echoed the emerging importance of Iran in a 1947 report stating that the Soviets desired ‘complete domination’ over Iran, before warning:

If Iran came under the control of a hostile power, the independence of all other countries in the Middle East would be threatened, and the interests of the US would be jeopardised throughout the entire area.²

As the Iranian Constitution stood in the 1940s, the Shah’s only real power was executive control over the military. Thus, he understandably coveted a strong military to buttress his throne. This was a theme that would come to characterise his long reign. With the strategic importance of Iran established by events in 1946, the Shah sought a long-term relationship with the US to both deter the Soviets and secure his own fragile throne. In the months following the Azerbaijan crisis the Shah sent his ambassador to plead for $10 million in basic military provisions from the US government. However, the package was rejected by Truman due to there being no clear plan for dealing with foreign aid or credit at that point.³

The Shah did not give up at the first sign of defeat. During a visit to the US in 1949, he was finally able to gain the ear of the Truman administration with a presidential promise to look into Iranian security needs. The Truman administration’s answer eventually became a package of aid that would provide a foundational investment in Iran. Military aid to Iran thereby began on a very limited scale in 1950. The aid was structured as a seven-year programme of $124 million, the bulk of which was delivered between 1950 and 1954.⁴ By receiving its first notable military upgrade from the US in the 1950s, Iran’s military foundations were formed around American equipment and fostered by American training and technical personnel. Hence, from the beginning there was a sense of on-going investment, felt (at least to some extent) on both sides.

The position established by Truman towards Iran in 1950 was that military aid to Iran was intended only to build Iran’s forces up to the level where they could be effective to facilitate the internal security and viability of Iran and of the Shah’s pro-American regime. Economic inequality, underdevelopment and the prospect of political unrest were all higher up the agenda than arms issues. There were no expectations in Washington that Iran would be able to play even a minor regional security role due to the unsteady domestic situation the Shah faced. A CIA report of 1947 concluded that:

In the event that Iran should become a theatre of military operations between the great powers, no combat support could be expected from the Iranian armed forces.⁵

Yet, the Shah consistently read his position differently. He desired a military that could enable him to provide for his own defence, raise Iran’s international profile, and gradually rise to a position of prominence in the region. The Shah’s ultimate ambition was to fulfil (as he saw it) Iran’s rightful place in history as the heir to the Persian Empire rather than to be a minor client state in the emerging Cold War. Hence, from the outset of the military relationship, the perceptions in Washington and the expectations of the Shah were mismatched.

Finding a Middle East foreign policy

Whilst the Cold War had arguably begun in Iran in 1946, developing a Middle Eastern foreign policy package progressed in a somewhat piecemeal and haphazard fashion. East–West confrontation in Europe and Korea absorbed the bulk of US attention during the Truman adminsitration. Truman’s approach eventually consolidated around a quintet of policies:

1 Nurturing direct American economic interests and expanding political influence

2 Cold War containment

3 On-going support for colonial powers such as Britain and France

4 Official recognition of the newly formed State of Israel

5 Championing Arab nationalist movements.⁶

It is immediately obvious that these policies were often contradictory. Not least in championing Arab nationalism whilst at the same time recognising the newly formed state of Israel and supporting the continued presence of colonial powers. Consequently, by the time Truman left the White House in January 1953, US Middle Eastern policy was in disarray.

From Truman to Eisenhower

With the Korean armistice signed in July 1953, Western Europe stabilising economically and moving towards integration, and NATO developing as an effective and integrated military structure, Truman’s successor Dwight D. Eisenhower was able to focus on the Middle East. On 10 January 1953, ten days prior to assuming office, Eisenhower set out four key priorities for foreign policy noted in order of importance. First was a plan to recast containment policy – which would ultimately result in Eisenhower’s New Look. Second was resolving a standoff between Iran and the British over oil. Third was dealing with British disputes with Egypt over basing rights in the Suez Canal. And fourth was a solution to the Arab–Israeli dispute.⁷ Hence, Iran was high on the list of priorities.

By 1953 the Shah had become sidelined by a powerful governing coalition, the National Front. It had rallied for a revised oil concession, and eventually mandated nationalisation of the Anglo–Iranian Oil Company (AIOC) in March 1951, unilaterally snatching Britain’s largest overseas commercial asset. The British responded with a blockade and economic sanctions, which gradually ground Iranian oil exports to a halt.⁸ The event underlined the importance of Persian Gulf oil in the new Cold War era. Although the US had no commercial need itself for the oil in the region, the oil fuelled the delicate post-war economies of key allies such as Japan and the nations of Western Europe.

After a period of considering supporting the Iranian prime minister, Mohammad Mosaddegh, and seeking a diplomatic solution between 1951 and 1953, American attention turned to removing him. Falling into line with sustained persuasion from British prime minister Winston Churchill,⁹ Eisenhower became convinced that Mosaddegh would neither strike a deal to resolve the on-going oil dispute nor be trusted to contain communism.¹⁰ This thinking reflected fears that the left-leaning turn in Iranian politics could be a stepping stone to a communist takeover. As a consequence, CIA field agent Kermit Roosevelt was directed to initiate a coup to oust Mosaddegh, in tandem with the British Secret Intelligence Service, in August 1953.¹¹ This move delighted the British, who had been frustrated with Truman as he had previously demurred at the prospect of direct intervention.¹² Throughout the affair the British appeared increasingly subordinate to America and clearly lacked the power to resolve the situation. A consortium of major American oil companies attained a 40 per cent stake in Iranian oil production, replacing the former AIOC monopoly, which had to settle for an identical 40 per cent share.

The shutdown of oil exports due to the British blockade left Iran practically bankrupt by 1953.¹³ However, afterwards it emerged as an embryonic client state of America, complete with a reinvigorated monarch who owed the restoration of his throne and newly enhanced domestic power base to the American intervention. Vice President Richard Nixon visited Tehran in December 1953. He was impressed during his visit, noting that he sensed inner strength and strong leadership potential in the young monarch.¹⁴ Nixon’s positive impressions ensured that an initial package of $45 million in American grant aid that had been directed to Iran immediately following the coup would be followed up with further assistance.¹⁵ The visit also established a longstanding personal rapport between Nixon and the Shah that would shape future relations when Nixon became president in 1969.

With the Shah back in power, the ongoing British dispute with Egypt was next in line for action. Following the Second World War, the British had lost India to independence in 1947, retreated from areas of influence in Europe such as Greece, and had a reduced influence in the Far East. Their imperial role had survived better in the Middle East, with a large military and economic presence throughout the Gulf. At Suez, the British maintained a vast base that housed 70,000 troops.¹⁶ The Suez Canal held strategic significance as the only waterway linking Europe to the Middle East and Asia, short of sailing around Africa. Hence, it had been a longstanding British lifeline to its empire ‘East of Suez’. In the era of Gulf oil, the Canal’s significance was reaffirmed and Egypt became a strategic area of great potential significance, and potential rivalry, within the wider Cold War.

While the Eisenhower administration had eventually supported the British line in Iran, Egypt proved to be a different case. Domestic Egyptian politics had turned increasingly hostile towards the British presence on its soil. John Foster Dulles, US Secretary of State, visited Egypt in May 1953 in order to establish a direct line of diplomacy to assess whether Egypt was willing to play a central part in American containment plans for the region. Those plans focused on furthering a tentative British idea to create a Middle Eastern Defence Organisation (MEDO). Dulles was authorised by Eisenhower to go so far as to promise increased American pressure on the British and enhanced economic aid if Egypt was to agree to participation in MEDO.¹⁷ However, Colonel (and later President) Gamal Abdel Nasser was not receptive to the plan. Nasser distanced Egypt from the Cold War concerns of the Americans. He emphasised instead the immediate regional concerns regarding conflict with Israel and Arab nationalism in the face of British imperialism as national priorities for Egypt.¹⁸ Upon Dulles’ departure from Cairo, MEDO as it was originally conceived was dead – with the episode exposing some of the contradictions of the Middle Eastern policy package that Truman had left in place.

The Baghdad Pact

On 2 April 1954 Turkey and Pakistan signed a bilateral mutual security treaty, which rekindled American hopes for a Western-orientated defence grouping in the region. It also, due to Iran’s involvement, advanced discussions over the status of Iranian military aid. By July 1954 Eisenhower had approved NSC-5428, which outlined an American preference for a regional defence strategy based around a ‘northern tier’ of US-aligned states to contain any Soviet expansion southwards – based on an expansion of the Turkey–Pakistan pact.¹⁹ The Baghdad Pact followed in 1955. It was modelled loosely on NATO as a mutual cooperation, protection and non-intervention pact. The countries involved comprised Iran, Iraq, Pakistan, Turkey and, interestingly, Britain. The American involvement with the Baghdad Pact was a notable juncture in the attempt to fashion a Middle Eastern foreign policy to match the new geopolitical realities of the Cold War. It was the first step toward a series of policy shifts that progressively filtered Truman’s contradictory quintet of regional policies.

The US did not join the Pact due to a range of difficulties related to convincing Congress to...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• Acknowledgements
• Introduction
• 1 The formative years of the US–Iran arms relationship
• 2 A period of renewal: Arming Iran in the Kennedy years
• 3 From aid to credit sales: The Lyndon B. Johnson years
• 4 Richard Nixon’s revolution in US–Iran arms sales
• 5 Continuity in a testing climate: Gerald Ford and Iran
• 6 Jimmy Carter and the final phase of US–Iran arms sales
• Conclusion
• Bibliography
• Index