A Talk with the Shah of Iran

Mohammed Reza Pahlavi, the Shah of Shahs, inheritor of Persia 's ancient throne, recently was interviewed by Time Inc.'s Editor in Chief Medley Donovan and Chief of Correspondents Murray Gart. Their meeting took place over tea in his enormous second-floor office, a cruciform chamber in green and silver, in the Niavaran Palace, the royal residence in Teheran. The highly active 54-year-old monarch sighed frequently as he talked, his voice sometimes dropping to a whisper, as though betraying the burden he feels as the absolute ruler of Iran's 34 million people. For more than a decade he has concentrated on using his country's vast oil riches to turn Iran into a modern state. With arms purchased primarily from the U.S., the Shah's country now constitutes the most powerful force in the Persian Gulf. Yet the Shah worries about war. Iraq has been a troubling neighbor, and the forces of the two countries have clashed repeatedly in border skirmishes in the past two months. The Shah's views:

ON IRAN'S FOREIGN POLICY. We have positive points. One is that we now have warm relations with the Indians, which was not the case before. We have excellent relations with the Egyptians, which was not the case before. We are going to have excellent relations with the Sudanese. Most of the African countries are running here because they know that our help will be completely without strings. China is behaving in a very friendly way.

In the long run, all of these are very peaceful points. In the short term, they will not have any influence on the potential threats to my country because none of them are going to restrain the Iraqis.

ON OIL. If the oil of this part of the world is denied to the so-called Western world or the free world, you are dead. I have to go back a little. In 1947 the posted price for a barrel of oil in the Persian Gulf was $2.17. Then it was brought down to $1.79, and that lasted until 1969. So there were 22 years of cheap fuel that made Europe what it is, that made Japan what it is. Then the price of wheat jumped 300%, vegetables the same, and sugar in the past six years increased by 16 times. Can you imagine? So we charged experts to study what prices we should put on oil. Do you know that from oil you have today 70,000 derivatives? When we empty our wells, then you will be denied what I call this noble product. It will take you $8 to extract your shale or tarsands. So I said let us start with the bottom price of $7; that is the government intake. Suddenly everybody started to shout foul. Why don't you use coal and shale for electricity or to heat houses, and keep this precious petrol for the petrochemicals for another 300 years to come?

ON IRAN'S FOREIGN AID PROGRAM. Ten years ago, UNCTAD [United Nations Conference on Trade and Development] started to speak about the gap between the haves and the havenots. During all these ten years, not a single resolution was adopted to go to the help of the poor countries. Never. Even the U.S., this country with your fantastic humanitarian action, even you slowed your aid to the developing countries. So the gap between the haves and the have-nots widened. At the same time, I realize that $40 billion or $50 billion were coming to the oil-producing countries. So I came up with this idea of volunteering not less than $1 billion this year in loans to the International Monetary Fund and to the International Bank to take care of the balance of payments deficit in the advanced countries of the world and also in the developing countries, and to create a new institution to make soft-term loans of 2.5% over 15 years, something like that, for projects in the developing countries. That is why World Bank President [Robert] McNamara called it a new Marshall Plan, but obviously with a much bigger scope because it concerns the whole world. This should really strike the imaginations of people because Europe was saved by the Marshall Plan.

I understand that the Arabs want to create their own thing.

They say we will help [only] those we choose, our friends, and this and that. What are they going to do with the excess of their oil profit? Buy buildings? It is their right. They are sovereign countries. My job, my responsibility was to propose what I did.

The rest will depend on the world, and I think other countries should support this proposal because it is the only workable solution yet proposed.

ON CONFLICT WITH IRAQ. The first time [the Iraqis attacked], obviously we were taken by surprise. Tanks showed up and fired pointblank, but they did not really move on. Only the sacrifice of our boys saved the situation, and then we launched not a very heavy counterattack and they fled. [The Iraqis want] to keep their people busy; so they are always creating an imaginary enemy--how do you say?--a bogeyman? The second time they opened up with artillery, and they suffered very heavily when we counterattacked.

I get irritated when our good friends ask me, "Why do you arm so much?" What we fear is that the Iraqis will start some kind of adventure in the Persian Gulf, and if the countries there do not ask for my assistance, I will be very embarrassed about what to do. That is why I propose some kind of regional defensive agreement. So far, except for Oman, we have no reply.

The small states in the region know very well that we don't want anything. It is the same with Kuwait.

We would hate to see Kuwait fall into the wrong hands because of its potential wealth. The Iraqis have tried to take Kuwait. They aggressed.

They stopped--God knows why.

They could have crossed the whole country before midday. But their subversive activity is going on everywhere.

ON THE SUCCESSION. We have provisions that the Empress will be regent until the Crown Prince [Reza, 13] comes of age when he is 20. She will rule with the help of a council. That is voted, accepted. It is legal. But I also have my political will [which has been] written, signed and sent to the people [in order to] try to keep what permitted us to be what we are--that is, to continue along our present course until the country is really developed and illiteracy does not exist any more.

ON THE FUTURE OF IRAN. We now have a program in which the factories are offering 49% of their shares to the workers. So the workers and the small landholders are in the forefront of our revolutionary movement and are with the regime. De Gaulle tried to do the same in France. He could not. I can, because of the very special relationship that exists between the King and the people in this country. I hope that this leadership will continue until everybody is not only literate but has a good life. A lot is at stake in the preservation of this country as an independent, sovereign, happy, progressive state.

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