The Shah: Thoughts of a Royal Decision Maker

The Shah not only decides Iran's foreign and domestic policies, but he generally enunciates them as well. During a recent 90-minute interview at Saadabad Palace with TIME Correspondent Karsten Prager, the Shah candidly discussed a number of key issues, ranging from oil prices and Iran's ambitions in the Indian Ocean to the strength of the country's secret police, SAVAK, and his opinion of Western work ethics. Excerpts:

ON OIL PRICES: The non-Communist world either is not keen on checking inflation or is incapable of doing so. Maybe this is why it does not want to establish a relation between the price of oil and the basket price of other commodities. I think I am rendering a service in proposing this linkage, almost to force you to check your inflation.

Contrary to what certain people think, we are not hawks. We always try to be reasonable. But we also know what we are talking about. Sometimes I wonder why others want to be so generous [in attempting to lower oil prices] at our expense. These are people who say they want to bring prices down, but we have unveiled the true picture. Participation of 100% [referring to Saudi Arabia's expected takeover of Aramco] is going to increase the price of oil by at least another $ 1.10 per bbl. Nobody spoke about that until we unveiled it.

Our proposal is for one price, except for geographic location and quality of oil. That price would be $9.99, plus 12-c---the cost of production in our case. We would sell to the oil companies or, if some countries would like to buy direct, then our price would be $9.91, plus 12-c- production costs.

The advantage of a fixed price would be: no monkey business. There are so many different price systems--halfway price, buy-back price, preferential price, God knows what else. This is where figures can be manipulated, as they have been, not to mention the taxes levied after that by local governments.

ON HALTING INFLATION: You must have leadership and strong governments in the West to stop inflation. There must be an understanding that all must earn the money they take, and there must be a specific value for each type of work. HERALD-SUN If [Prime Minister Harold] Wilson succeeds in Britain, that would be a turning point. The U.S. is more responsible, I think [than Europe]. Americans are not lazy by nature.

ON HIS SUBJECTS: I believe in the maturity of my people and their terrible intelligence--I mean terrible in the sense of something good. They can learn so quickly. With their hands they are like monkeys. They are more individualistic than the Swedes. Nevertheless if they did not work together we could not have achieved what we have achieved.

ON POLITICAL LIBERTY: We don't mind freedom of speech as long as it is not in the service of foreigners. You know how the Communists are and how they can exploit people. As for participation in government, it would be very irresponsible to make people participate who have absolutely no knowledge. Our students will have every opportunity of participating in the government when they are out of the university, when they have seen the country. They will know more then.

ON CHARGES OF INTOLERANCE: Intolerant against whom? My only opponents are the Communists. Against them, the law prevails. But I have pardoned those who tried to kill me. Never has anybody who was in a plot to kill me been executed.

As for SAVAK, as long as we have subversive Communist activities in the world, that is going to remain here. If my enemies are trying to ruin this country, I will stop them. But for your information, SAVAK numbers fewer than 3,000, not 30,000 or 60,000. I would not care even if we had 100,000 but the truth is that SAVAK is not even 3,000. So you can guess at the accuracy of the rest of what the critics say.

ON CORRUPTION: I lose my temper with people who are not honest. I don't like them. That does not mean there is more corruption here than elsewhere. We are going to establish in our civilian sector the same thing that we have in the armed forces, a Committee of Five [who investigate corruption charges]. Even if you do not have absolute proof of the kind you need in [our] courts to convict someone of corruption, if you have enough information you can render a verdict outside the judiciary.

ON IRAN AND THE INDIAN OCEAN: There must be an economic arrangement, call it Common Market or Commonwealth of the Nations of the Indian Ocean. Eventually it would include Africa, but things there are not so clear today because we have the problem of Portugal and some problem with South Africa.

In order to ask the Americans and the Soviets not to be present in the Indian Ocean militarily--although economically and politically as much as they want, we must show that there is no need for them there, that we the people of the region have an understanding of security and cooperation as well as the means of assuring such security.

ON ARAB RIVALRY IN THE PERSIAN GULF: That is very funny, because without Iran [to defend them] they would be dead. Our first choice is to cooperate with all Arab countries on an equal basis. Our second choice is to go it alone if necessary.

ON IRAN'S MILITARY BUILDUP: We are not going to go nuclear. But discipline we will have, and knowledge we will have. We are working like mad training our people and enhancing their military knowledge. We are buying the best. If we make our forces mobile, then I think that with what we are planning now, in five years' time we will be among the top nonatomic armies of the world. Every day I find additional reasons to continue this policy because of the impotence of the United Nations. First of all, there is that U.N. veto. We also know that as long as detente persists between the U.S. and the Soviet Union, wherever they agree--as on the Middle East cease-fire--they only agree that their two countries will not go to war.

ON HIS OWN LIFE: The ground must be prepared for other people assuming responsibilities. I envision eventually retiring at an age when my son will be old enough--and I, not too old, to be there in his shadow. Not trying to impose myself in the decision making, but being there, just in case. It should be easier for him because of what we are preparing now.

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