The Economy: An Iranian Answers Back

One of the most visible and vocal advocates of keeping oil prices high is Jamshid Amuzegar, Iran's shrewd and dapper Interior Minister. Amuzegar was chief negotiator for the producer countries in the 1971 settlement that first humbled Western oil companies by forcing costly price and tax boosts. Since then, he has become the Shah's right-hand oil expert. In an interview in Teheran last week with TIME Correspondents Karsten Pragerand William Stewart, Amuzegar talked forcefully on a range of topics.

OIL PRICES. If we had not taken the price action, the world would have continued to misuse and plunder oil, and 50 years from now there would have been a catastrophe. I fully agree that higher oil prices have slowed down the growth rate in the industrialized countries. But in my opinion this is in the best interests of the world. For instance, per capita income in the U.S. now is about $5,000. In Iran, before the oil price increase, it was $350 to $400. If we both have a 6% annual rate of growth, it would mean a $300 increase per capita in America and $24 in Iran. The gap widens. Would that not upset peace and stability?

INFLATION. In 1973, before the oil price increases, the average inflation rate reported by the Organization for Economic Cooperation and Development [OECD] was 12%; it is now about 14%. We admit that higher oil prices account for about ½% to 2%, depending on the country. One should not put all the blame on oil. What better scapegoat is there than OPEC and oil?

BALANCE OF PAYMENTS. The estimate for Iranian oil revenues this year is about $21 billion; by year's end we will have spent $16 billion on our five-year development plan, leaving total reserves of $5.9 billion in foreign exchange. If you add up all the reserves of OPEC members at the end of 1974, you may come to $45 billion to $50 billion. By comparison, one single country, Germany, stands there with enormous reserves [$33.4 billion at the end of August, according to the West German Bundesbank]. Yet they say that it is the oil producers who are going to end up with huge reserves of dollars and other hard currency.

ON FOREIGN AID. Our total commitment this year in various forms comes to more than $2.6 billion, which is about 10% of our G.N.P. At no time did the industrialized countries, even at the height of their prosperity, ever give more than an average of .4%.

ALTERNATIVE ENERGY SOURCES. A U.S. Senator told me that the oil price increase had helped West Virginia to start coal operations again, reopen the mines and reinstate thousands of jobs. He said, "Don't ever lower oil prices below those of alternative sources of energy." I want to know, are you Americans always going to think of Exxon and Texaco? What about West Virginia?

ON ECONOMIC SANCTIONS. I don't think we are vulnerable to them. Our requirements can be bought elsewhere. The French, for example, would be tickled to death if the U.S. embargoed weapons sales to us.