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WEEKLY NEWSLETTER
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Iran
Index
From 1949 on, sentiment for nationalization of Iran's oil
industry grew. In 1949 the Majlis approved the First Development
Plan (1948-55), which called for comprehensive agricultural and
industrial development of the country
(see
The Beginnings of Modernization: The Post-1925 Period
, ch. 3). The Plan Organization
was established to administer the program, which was to be financed
in large part from oil revenues. Politically conscious Iranians
were aware, however, that the British government derived more
revenue from taxing the concessionaire, the Anglo-Iranian Oil
Company (AIOC--formerly the Anglo-Persian Oil Company), than the
Iranian government derived from royalties. The oil issue figured
prominently in elections for the Majlis in 1949, and nationalists
in the new Majlis were determined to renegotiate the AIOC
agreement. In November 1950, the Majlis committee concerned with
oil matters, headed by Mossadeq, rejected a draft agreement in
which the AIOC had offered the government slightly improved terms.
These terms did not include the fifty-fifty profit-sharing
provision that was part of other new Persian Gulf oil concessions.
Subsequent negotiations with the AIOC were unsuccessful, partly
because General Ali Razmara, who became prime minister in June
1950, failed to persuade the oil company of the strength of
nationalist feeling in the country and in the Majlis. When the AIOC
finally offered fifty-fifty profit-sharing in February 1951,
sentiment for nationalization of the oil industry had become
widespread. Razmara advised against nationalization on technical
grounds and was assassinated in March 1951 by Khalil Tahmasebi, a
member of the militant Fadayan-e Islam. On March 15, the Majlis
voted to nationalize the oil industry. In April the shah yielded to
Majlis pressure and demonstrations in the streets by naming
Mossadeq prime minister.
Oil production came to a virtual standstill as British
technicians left the country, and Britain imposed a worldwide
embargo on the purchase of Iranian oil. In September 1951, Britain
froze Iran's sterling assets and banned export of goods to Iran. It
challenged the legality of the oil nationalization and took its
case against Iran to the International Court of Justice at The
Hague. The court found in Iran's favor, but the dispute between
Iran and the AIOC remained unsettled. Under United States pressure,
the AIOC improved its offer to Iran. The excitement generated by
the nationalization issue, anti-British feeling, agitation by
radical elements, and the conviction among Mossadeq's advisers that
Iran's maximum demands would, in the end, be met, however, led the
government to reject all offers. The economy began to suffer from
the loss of foreign exchange and oil revenues.
Meanwhile, Mossadeq's growing popularity and power led to
political chaos and eventual United States intervention. Mossadeq
had come to office on the strength of support from the National
Front and other parties in the Majlis and as a result of his great
popularity. His popularity, growing power, and intransigence on the
oil issue were creating friction between the prime minister and the
shah. In the summer of 1952, the shah refused the prime minister's
demand for the power to appoint the minister of war (and, by
implication, to control the armed forces). Mossadeq resigned, three
days of pro-Mossadeq rioting followed, and the shah was forced to
reappoint Mossadeq to head the government.
As domestic conditions deteriorated, however, Mossadeq's
populist style grew more autocratic. In August 1952, the Majlis
acceded to his demand for full powers in all affairs of government
for a six-month period. These special powers were subsequently
extended for a further six-month term. He also obtained approval
for a law to reduce, from six years to two years, the term of the
Senate (established in 1950 as the upper house of the Majlis), and
thus brought about the dissolution of that body. Mossadeq's support
in the lower house of the Majlis (also called the Majlis) was
dwindling, however, so on August 3, 1953, the prime minister
organized a plebiscite for the dissolution of the Majlis, claimed
a massive vote in favor of the proposal, and dissolved the
legislative body.
The administration of President Harry S Truman initially had
been sympathetic to Iran's nationalist aspirations. Under the
administration of President Dwight D. Eisenhower, however, the
United States came to accept the view of the British government
that no reasonable compromise with Mossadeq was possible and that,
by working with the Tudeh, Mossadeq was making probable a
communist-inspired takeover. Mossadeq's intransigence and
inclination to accept Tudeh support, the Cold War atmosphere, and
the fear of Soviet influence in Iran also shaped United States
thinking. In June 1953, the Eisenhower administration approved a
British proposal for a joint Anglo-American operation, code-named
Operation Ajax, to overthrow Mossadeq. Kermit Roosevelt of the
United States Central Intelligence Agency (CIA) traveled secretly
to Iran to coordinate plans with the shah and the Iranian military,
which was led by General Fazlollah Zahedi.
In accord with the plan, on August 13 the shah appointed Zahedi
prime minister to replace Mossadeq. Mossadeq refused to step down
and arrested the shah's emissary. This triggered the second stage
of Operation Ajax, which called for a military coup. The plan
initially seemed to have failed, the shah fled the country, and
Zahedi went into hiding. After four days of rioting, however, the
tide turned. On August 19, pro-shah army units and street crowds
defeated Mossadeq's forces. The shah returned to the country.
Mossadeq was sentenced to three years' imprisonment for trying to
overthrow the monarchy, but he was subsequently allowed to remain
under house arrest in his village outside Tehran until his death in
1967. His minister of foreign affairs, Hosain Fatemi, was sentenced
to death and executed. Hundreds of National Front leaders, Tudeh
Party officers, and political activists were arrested; several
Tudeh army officers were also sentenced to death.
Data as of December 1987
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