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Iran
MOSSADEQ AND OIL NATIONALIZATION
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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