Created: 9/20/1950

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Current Iranian Problems

The Iranian Government ta finding it increasingly difficult to adhere firmly to ita pro-Testern policy. In aligning itaelf with the vfeet, Iran had hoped to receive aid .comparable to that given Greece and Turkey. Having failed to receive auch aid, the Iranians are skeptical of VJestern intentions and tuestlon the wisdom ofng their pro-Western alignment. They are, Instead, inclined tc listen to theoviet protestations which characterize the current attitude of the USSR toward Iran. Tills attitude is manifest in the Soviot release of captured Iranian soldiers and in the wish to negotiate such important mattersrade agreement, frontier disputes, and the return of Iranian gold and dollars held in Moscow. The USSR thus appears eager to make arrangements which would sharply point up Soviet willingness to help Iran,the Iranians feeluitable response to the Soviet approach aay lessen'the likelihood of direct Intervention by the USSR. Minister Razmara, who strongly favors alignment with the West, la facedilemma. Hs is keenly aware of tha dangersIn dealing with tho USSR and doubtless realizes that current Soviet "friendliness" may be little morelind to obscure the real designs of the USSH, particularly since soviet, raoio propaganda continues to attack the Shah and the government, calls on the Kurds and the Azerbaijanla to revolt, and encourages the illegal Tudeh Party. Nevertheless, In the abaence of prompt and adequate US aid, Razmara fears that if he falls to consider the Soviet proposals, popular dissatisfaction and economic distress may make his position untenable.

Although Razmara Is undoubtedly the man most competent to deal with Iron's basic problems, he has been able to make only United progress since assuming the premierahip in June in halting theeconomic decline which began in Iran at the end of World War II.

Motej This paper was undertaken in response to an NSRB request for

a concise reappraisals of the highlights of tha currentin Iran.

It has not been coordinated with the intelligence organizations of tba Departmenta of State, Army, Kavy, and the Air Force.



ooro to have tho resourceo noooaoary to put itn house in ordur,noceosion of uoalc covcmuantcorvasivo sonse of frustri'tlcii in tho country at largo have effoctlvoly nil ita tod against rccovory Today Iranfco financial ncana are insufficient to cover both tho nonel budgot and tlie sorely neodod oconoric ond 3octal inrrv/aicnts provided for inC*-aillion Sovon loor Dcvolopnont Progrart.

Rasunro has boon unablo to obtain nore favoroblo tome fron theOil Company in rogard to tho zupplcccntary agroorant nogotictodand hence ia unoilling to present the ogroccont foralthcugli ratification uould greatly increaseavailable to Iran. aa nado drastic ohan^oo in the Gove.Organisationll further delay irxlccontntion of tho txrvt Consideration of an Ii^xjrt-Uxport Dnnlc loan of ndllicn uidInternational Donjt loanis being hold up by

convertibilityelating to amortization and in to rest paynonto.

Lonrahilo, there are eerious otlgM of ocoJmoso in the Iranian ocono:nr: stagnant inctustry and trade; tprouingoavily unfavorvhlc Ottlonoo of trade; and increasinglyanco of paynonto. although those ills aro not easily eurod, steps to inplcrcnt tho ocononic development program ahould in tine alleviate each ono of then. .iti. profit foreign assistance, progress on the development progran uill jrocaed*nnoistance, Lan's economic difficulties uill grow in negnitude, interrnl Instability uill increase, and the opportunities for Gov lot exploitation uill rultiply. If tho iJazrara Cabinet should fall, the na; government oould al'joot certainly' be loss capable of dealing nith intonial problem3 ablo to resist Soviot pressure.

Original document.

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