The Shah Compromises

To try to save his throne, he appoints a civilian government

It was, finally, the week in which the once proud and orderly kingdom of Shah Mohammed Reza Pahlavi seemed almost beyond recall. The streets of Tehran rocked with pitched battles. More than 20 demonstrators lay dead, hundreds were wounded in battles with the Shah's soldiers. A crippling strike by oilfield workers shut off the Iranian petroleum spigot and plunged the economy into chaos. Banks, schools and stores were closed. Iran Air, the national airline, canceled all flights. Bus service halted. The nation was on its knees and, were nothing done, would soon be prostrate. His earlier attempts to establish a civilian government having failed, the embattled Shah made one more desperate effort to mollify his enemies through compromise. It might or might not succeed, but it bought a little time. After hours of intense bargaining, the Shah yielded, by asking one of his leading critics to form a civilian government that would replace the military regime that has ruled Iran for two months.

The man the Shah turned to was Shahpour Bakhtiar, 63, an outspoken opponent of the regime and a prominent member of the anti-Shah National Front. He too seemed to have compromised. Denying rumors that this was the first stage of a plan for the Shah to give up all his powers and abdicate the throne, a close confidant of the Shah declared: "There is absolutely no question of the Shah stepping aside or stepping down. His decision is to enforce the constitution."

Because the months of increasing violence have so hardened the positions of the Shah's enemies, the compromise could prove to be too little too late. The plan required him to accept the dictates of the long ignored 1906 Iranian constitution, and, in effect, begin to restore Iran to the constitutional monarchy it once was on paper. He would turn over control of the national budget to an appointed Cabinet. A panel of Shi'ite mullahs, his most vociferous critics, would be given the power to veto new laws that were not in conformity with Muslim doctrine. The Shah, however, would retain command of his 280,000-man army, and this was a condition that few Shi'ites, or few other Iranians, for that matter, would now readily accept.

In an obvious attempt to reassure his opponents, the palace announced that "it is possible that after the installation of a civil government the Shah may go with his family on his routine annual winter vacation." This was calculated as yet a further concession to skeptics, since the monarch earlier had balked at the suggestion that he take a "temporary absence" from Iran so that order could be restored. The skeptics were not impressed, since there was no way that they could be assured that the Shah would keep his word.

They could also be confident that the Shah knew that he would not be permitted to return once he had left the country.

The Shah's week of decision included, appropriately enough, a pitched battle at the funeral of a 27-year-old civil engineering professor who had been shot by soldiers during a sit-in at the Ministry of Science and Higher Education. As a procession of 7,000 people escorted the body through downtown Tehran, a unit of American-trained Iranian Rangers opened fire, scattering the mourners and leaving several wounded in the street. Some witnesses said that the troops also killed their own commander, though this was never verified. For the next hour, soldiers and demonstrators fought to the accompaniment of gunfire and exploding tear gas grenades. When it was all over, four protesters lay dead and at least 30 injured.

Like a fierce contagion, the violence broke out in other cities. Thousands of rock-throwing protesters shouting "Death to the Shah!" poured into the streets of Isfahan, Tabriz, Zanjan and Kerman, setting fire to buses, trucks and buildings. And for the first time the rioting took on a strongly anti-American tone. In Tehran, students and teachers, ignoring the decision of the military regime to reopen public schools that have been shut down since September, converged on the U.S. embassy. Marine guards fired tear gas to turn back the demonstrators, some of whom managed to scale the high stone wall surrounding the compound. A U.S. cultural center in Tabriz was fire bombed. Following the murder of American Oil Executive Paul E. Grimm on the outskirts of Ahwaz, hundreds of U.S. technicians boarded chartered evacuation flights to safe havens outside the country. The U.S. carrier Constellation, accompanied by two destroyers, steamed from the Philippines toward Singapore, a staging area from which the vessels could reach Iran's waters in seven days. U.S. officials said that the naval task force had been dispatched for a dual purpose: possible use in a rescue of the 30,000 U.S. citizens who remain in Iran and as an unmistakable signal that the U.S. would not tolerate Soviet intervention in the crisis.

The departure of the American technicians added to the Shah's main peril: the oilfield strike, which clamped a tourniquet on the nation's petroleum lifeline. In one week, production from Iran's vast fields plummeted to virtually zero from the already constricted 900,000 bbl. a day (normal daily production: 6 million bbl.). Exports to foreign customers were halted and Iran's refineries, which usually provide 910,000 bbl. of gasoline and fuel oil a day, were shut down. As temperatures dropped below the freezing point in some areas, the government invoked stringent rationing to conserve fuel. Long lines of cars formed at service stations, and customers were forced to wait for up to twelve hours to buy kerosene for cooking and heating.

The fuel shortage brought the normal flow of business and transportation to a standstill. Garbage began to pile up in the streets after collections were halted as an economy measure. The price of groceries soared. Eggs, once 4-c- apiece, tripled in price. A jar of instant coffee that sold for $3.85 a month ago rose to $5.44. Officials warned that if the oil strike continued, bakeries would have to close, leaving the country without bread. "You can escape the shooting by staying inside," said a Western diplomat, "but what happens if you can't go to work, you're freezing, and there's nothing to buy?"

So desperate was the populace that Muslim Leader Ayatullah Sharietmadari, a foe of the Shah, joined in the government's appeals to the striking workers to restore at least enough of the oil flow to supply Iran's 700,000 bbl. daily domestic needs. But the oilmen spurned that request at the urging of Mullah Ayatullah Khomeini, the leading symbol of resistance to the Shah. From his exile in Paris, the 78-year-old Shi'ite leader sent a blessing to all those participating in the general strike and "above all, those in the petroleum industry." Khomeini charged that the government had exaggerated the oil crisis to incite a public backlash against him for calling the walkout. Indeed, it was argued that if the populace were sufficiently deprived of daily needs, the Shah might reap some benefits.

The confusion in Tehran spawned a torrent of wild rumors: that Iranian air-force bombers had wiped out a village near the Afghanistan border; that Premier Gholam Reza Azhari, head of the military regime, had died of a heart attack; that a jet was standing by at Tehran's airport to whisk the Shah to safety. So intense was the gossip and speculation that when Bakhtiar was misquoted by the Iranian news agency as saying that the Shah had agreed to resign from the throne, the unconfirmed--and false--report was flashed around the world. At least a few members of the Shah's family did leave the country late last week. An Iranian air force 747 arrived at Los Angeles carrying 18 people: among them Tajomolouk Pahlavi, the Shah's ailing nonagenarian mother, several unidentified relatives and two dogs.

The Shah, it is believed, has never seriously considered leaving the country. Despite the demonstrations and street violence, he believes he still has reserves of political good will to draw upon. Although some soldiers have been reluctant to fire on the protesters, the army, for the most part, remains steadfast, and more than a match for the generally unarmed demonstrators. More important, a significant share of the Iranian population want the tumult to end, so that it can return to a normal way of life. Reported TIME Correspondent Roland Flamini from Tehran last week: "Many Iranians, especially in the large and silent middle class, want stability, and fear the turmoil that will doubtless follow the overthrow of the Shah. But they are equally adamant in their desire for political reforms and a diminution in the Shah's autocratic power. As one educated Iranian said: 'The large segment of the population is anxious to end the chaos. But they want to change conditions.' "

The Shah has been trying to exploit that lingering yearning for stability, so far without much success. Two weeks ago, he asked Gholam Hussein Sadighi, a 73-year-old former Interior Minister who has been jailed five times for his opposition to the regime, to recruit a new Cabinet of leaders untainted by prior connections with the Pahlavi dynasty. But that effort collapsed after Sadighi succumbed to threats of reprisals from the Shah's most relentless opponents. Bakhtiar, a Sorbonne-educated lawyer, is a much tougher man, who seems capable of striking a harder bargain with the Shah. Diplomatic observers in Tehran expect Bakhtiar to convince the monarch that only if he adopts a "low profile" while a new constitutional government takes power can order be restored to the nation.

Outside Iran, countries with a major stake in the outcome of the Shah's effort watched and waited uneasily. Iran is vital to the industrialized world not only because it is the second largest exporter of crude oil in the Middle East, but also because it is the "policeman" of the crucial Persian Gulf sea-lanes through which 40% of the non-Communist world's oil is shipped. The U.S. gets 8% of its imported crude from Iran: Western European countries from 20% to 40% of their supply. The impact of the dead stop in Iranian oil shipments has not yet been felt, even in South Africa (which depends on Iran for 90% of its crude) or Israel (which relies on Iran for 70%). Saudi Arabia has made up much of the slack by expanding its output from 7 million bbl. per day to a maximum capacity flow of 11 million bbl.

In addition, many companies and countries made large oil purchases during the last three months of 1978 anticipating the 14.5% price increase announced two weeks ago by the Organization of Petroleum Exporting Countries. But if the Shah were replaced by a fundamentalist Shi'ite government eager to cut back on his modernization schemes, the subsequent reduction in Iranian exports would push prices even higher, with the result, in the view of one oil expert, that "we'd all fall out of bed."

Nowhere is the anxiety about Iran greater than in Washington. Since 1972 the U.S. has pursued a policy of unremitting support for the Shah. But that kind of thinking, a veteran policymaker observed last week, caused the U.S. to "miss a chance to act. Washington proceeded on the assumption that what the Shah needed was propping up; what he really needed was to be told the facts of life." The facts: if he wanted to retain even a semblance of power, he would have to find some way to accommodate his more moderate opponents by moving toward the establishment of democratic institutions. By standing fast for so long, he united the opposition behind its most militant faction, which will settle for no less than his ouster.

The State Department last week reiterated its support for the Shah's "efforts to promote stability," but the carefully worded statement lacked the conviction that had characterized earlier pronouncements. Meanwhile, three high-level task forces settled down to plan for contingencies. Among the top priorities: preventing the sophisticated radar systems and advanced F-14 fighters that the Shah has purchased from the U.S. from falling into Communist hands.

In long-range terms, the most worrisome prospect is the deterioration of U.S. influence in what National Security Adviser Zbigniew Brzezinski has called "the Arc of Crisis," a vast region of the Middle East and Asia Minor where instability invites Soviet adventurism. Saudi Arabia, in particular, has become increasingly skeptical of America's resolve to safeguard the Arc, and, according to some unconfirmed reports, has opened discreet diplomatic channels to Moscow. There is little chance that so virulent an anti-Communist state as Saudi Arabia would seriously consider any accommodation with the Soviets, but the very fact that it is talked about at all produces understandable concern in Washington.

No matter how the Shah's latest strategy works out, the episodes in Iran last week again raised disturbing questions about the ability of the U.S. to predict developments in areas vital to its national interest and to devise effective policies for dealing with them. While the situation in Iran deteriorated, Secretary of State Cyrus Vance and his top aides were preoccupied with the Middle East peace talks and SALT negotiations with the Soviet Union. Filling the policy vacuum was Zbigniew Brzezinski, who was almost unopposed in his recommendation that the U.S. must support the Shah without reservation. Day-to-day operations, according to State Department sources, were left in the hands of low-level officials. Complained a knowledgeable observer last week: "There has been nobody but a desk officer in the department paying any attention at all to the bloody thing. Brzezinski operated high, wide and handsome."

At the same time, Washington experts agreed that U.S. Ambassador William Sullivan, like his predecessor Richard Helms, had been an uncritical fan of the Shah and had been operating without careful supervision from Washington. "He would have been happier," remarked a Washington official, "if he had received more guidance."

For all that, the Shah's dilemma is mostly one of his own making. The unrest in Iran has its roots in his failure to permit the growth of a responsible opposition to his one-man rule. His commendable effort to modernize Iran by educating its people and raising their standard of living was imperiled from the start by his refusal to allow a greater measure of political expression. Ironically, the forces that the Shah set loose continue to pose the greatest challenge to his regime.

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