IRAN: The Shah's Fight for Survival

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Iran's economy was already beginning to show signs of deterioration. Construction work had come to a standstill, real estate prices had fallen, all credit had been stopped. There was a rush to buy foreign exchange. Since September, an estimated $3 billion in bank deposits has been transferred by wealthy Iranians to accounts abroad. Rumors that the government will limit the flow of money—a move that it probably should have taken months ago—only served to spur the panic flight of capital, which last week was said to be running at the rate of $50 million a day. Meanwhile, inflation, already one of the major sources of discontent, is expected to spiral upward another 10% to 20% in the next six months as a result of wage increases and mounting production costs.

The primary concern in the West about the Shah's newest crisis was the potential threat to Iran's control over the Persian Gulf, the funnel for much of the oil destined for Japan, Europe, Israel and the U.S. Iraq, which got the Shah to stop Iranian support for a rebellion of its Kurdish separatists in 1975, feared the revival of ethnic and tribal tensions in the region. Fearful that a successful move to topple the Shah would unsettle other monarchies in the area, Saudi Arabia's King Khalid called on Arab nations to give the Shah all possible support.

Were the Russians behind it all? Some observers in Tehran thought so, citing the fact that the Soviets have made contact with radical Shi'ite mullahs. Peking, predictably, blamed Moscow's "hegemony," a code word for expansionism, in its comments on the crisis.

In turn, the Russian news agency Tass lashed out at the U.S. after CIA Director Stansfield Turner remarked that though events in Iran stemmed from "genuine dissent," he was "sure there is some Soviet influence" at work in the country. Retorted Tass: "A downright lie. It is the U.S. that has inundated Iran with military experts, advisers and consultants, whose subversive activities were until recently guided by [Richard] Helms, one of Turner's predecessors in the post of CIA director."

In fact, Western analysts in Moscow believe that Soviet leaders probably prefer the Shah to any Iranian government that would be likely to follow him. The Kremlin, they point out, would hardly benefit from a military dictatorship, a right-wing Islamic government or a prolonged period of instability. Moreover, the Shah has developed a good working relationship with Moscow over the years, including a large number of joint economic projects and the sale of Iranian natural gas to the Soviets. One of the opposition's complaints is that Tehran's sale of gas to Moscow enables the Soviets to sell their own natural gas to Europe at premium prices.