On August 19th, 1953, the government of Mohammed Mossadegh, a nationalist,
was ousted in a US-sponsored coup in Iran. The overthrow of Mossadegh was
typical of American covert operations in the Cold War, eliminating a nationalist
government which challenged US corporate interests by claiming it was communist.
The overthrow of the nationalist Jacobo Arbenz government in Guatemala, which was attempting to nationalize large tracts of land owned by the American-based United Fruit Company, came less than a year after a similar operation in Iran, where the CIA helped oust another nationalist administration, led by Prime Minister Mohammed Mossadegh, which ran afoul of American corporate interests, particularly oil companies. In the aftermath of World War II, U.S. companies had gained a large stake in the oil fields of the region, producing about 50 percent of Middle Eastern oil, which provided Europe with almost 90 percent of its petroleum. In Iran, the largest oil firm was the Anglo-Iranian Oil Company [AIOC], which was owned by the British.
To nationalist Iranians, the AIOC was a symbol of western imperialism and political groups on the right and left saw it as their largest barrier to sovereignty and prosperity, and in 1949 Mossadegh, a member of the majlis at the time, was the driving force behind the creation of an anti-AIOC coalition called the National Front. The Front demanded a new arrangement between the Iranians and the British-owned oil company because it was exploiting Iranian resources and taking huge profits out of the country. In 1950, the AIOC earned profits in the range of 200 million pounds but Iran received only about 8 percent of that total in royalties. Indeed, the company''s profits in that year alone exceeded the profits paid to Iran over the previous fifty years. Iran, in fact, received less in royalties than they had to pay the British in taxes. In 1948, 1949, and 1950 the Iran received 9, 13.5, and 16 million pounds in royalties, but paid 28, 23, and 50.5 million pounds in taxes. The British corporation did not even allow Iranian officials to examine their financial books and unilaterally determined the amounts of payments. In late 1949, the British made some minor concessions to Iran, in the so-called Supplemental Agreement, to raise royalty payments from 22 to 33 cents per barrel, but the Iranians were not impressed, particularly since the United States just after that came to an arrangement with Saudi Arabia to provide for a fifty-fifty split on its oil.
In November 1950, amid a rash of political assassinations and failed
attempts, Mossadegh''s committee called for the nationalization of the
AIOC. British attempts to compromise at that point were too late and in
March 1951 the majlis nationalized the AIOC and the next month elected
Mossadegh to the Prime Minister''s position.
Mossadegh had come from one of the more prominent families in Iranian politics and was an ""old-fashioned liberal"" who was opposed to both foreign interference in Iran and to communism. He was also considered by western politicians and media to be eccentric, and they made constant reference to the fact that he wore pajamas to meet with diplomats or that he frequently wept in public.
The real problem, however, was that he wanted to nationalize oil, not that dressed unusually, and the British and Americans were determined to remove him from power. Since the 1946 showdown with the USSR, the Americans had considered Iran to be a vital interest in the Mid-East, both to contain the Soviet Union and because of oil. In 1949, the NSC had put Iran within the containment policy, citing its resources, strategic location, proximity to the USSR, and ""exposure to political subversion,"" meaning the presence of radicals and communists in the majlis to assert its importance to the west.
By the early 1950s, as the oil nationalization crusade in Iran picked up steam, the Americans became more involved. In late 1951, the AIOC had approached the British Secret Intelligence Service [SIS] about ousting the Mossadegh government, and the SIS began to lobby the CIA for support of a coup. The AIOC also took measures of its own, preventing Iran from selling its own oil on the world market and causing its export earnings to drop from $400 million to just $2 million between 1951 and 1953. Still, the Iranians continued to weather the storm, and Mossadegh broke off diplomatic relations with London in October 1952, leaving the Americans with responsibility for the situation there.
Mossadegh was under increasing pressure, from the British, the Americans,
and at home. In January, the Prime Minister wrote to Eisenhower asking
the United States to stop opposing his government, and accusing Washington
of having ""given financial aid to the British Government while withholding
it from Iran and it seems to us it has given at least some degree of support
to the endeavors of the British to strangle Iran with a financial and economic
blockade."" Iran, therefore, ""had no choice"" but to nationalize oil and
remove the AIOC operating there.
Inside Iran, Mossadegh was under heavy pressure from various political forces and he began to rely more heavily for support upon the Tudeh Party, home to many communists and radicals. In the United States, Eisenhower told the NSC that the United States had to take action in Iran, but he cited the Soviet threat, which was virtually non-existent, as the justification. "" If I had $500,000,000 of money to spend in secret,"" the president observed, ""I would get $100,000,000 of it to Iran right now."" Then, just after Eisenhower was inaugurated the CIA began a destabilization campaign in Iran, paying opposing groups to demonstrate against Mossadegh. By summer 1953, the pressure against the government was mounting, and the CIA, using psychological operations similar to those it would use in Guatemala, successfully isolating Mossadegh.
On August 19th, Mossadegh was overthrown; rather than call out troops
to suppress the uprising against him and harm Iranians, he left office.
The Shah of Iran was then placed in power and the monarchy restored. Over
the years, with significant amounts of American money and a U.S.-backed
security apparatus, the Shah would repress his own people and create a
favorable climate for American corporate interests. In Iran and Guatemala
both, nationalist governments learned hard lessons about challenging the
U.S. role in the world political economy.
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