The Silk Roads: A New History of the World (2016)

22

The American Silk Road

By taking the lead in the Middle East, the United States was stepping into a new world – one where there were obvious tensions between the goal of promoting national interests on the one hand and supporting unsavoury regimes and rulers on the other. Within weeks of Mossadegh being toppled, the State Department set about lining up American oil companies to take over Anglo-Iranian’s oilwells and infrastructure. Few were keen to do so, preferring to steer well clear of the uncertainties that seemed likely to follow the Shah’s return: the fact that the latter was contemplating having his former Prime Minister executed as a means of calming the situation was hardly a promising sign.

It did not help that oil production elsewhere was rising, or that there were new opportunities that promised to be the foundation of great fortunes, which were indeed to prove far greater than that made by Knox D’Arcy. Weeks before Mossadegh’s fall, a company controlled by J. Paul Getty made a huge strike – described as ‘somewhere between colossal and history-making’ – in the Neutral Zone between Saudi Arabia and Kuwait. By comparison, becoming involved in the poisonous politics of Teheran was understandably unattractive to a corporation. For the US government, on the other hand, it was not just a priority but a necessity: Iran had all but stopped exporting oil during the crisis of the early 1950s. If it did not resume production soon, the country’s economy would crumple, which would likely open the door to subversive factions that might tip the country towards the Soviet Union. The drying up of supplies and the rising prices would also have an unwelcome impact on Europe as it tried to rebuild in the post-war period. The State Department therefore began a sustained campaign to encourage the major US producers to form a consortium to take over Anglo-Iranian’s interests, intimating darkly that their concessions in Kuwait, Iraq and Saudi would be in jeopardy if no action were taken.

The US government now played ringmaster as it cajoled American corporations to co-operate. As one senior oil executive put it, ‘from a strictly commercial point of view, our Company has no particular interest’ in getting involved in the Iranian oil industry; ‘but we are very conscious of the large national security interests involved. We are therefore prepared to make all reasonable efforts’ to help. We would never have got entangled in Iran, said another oilman, if the government ‘hadn’t really beat us on the head’.1

The efforts to step into Anglo-Iranian’s position and to keep Iran stable were complicated by the fact that the very oil companies being asked to act as a tool of US foreign policy were being prosecuted for breaking antitrust laws by the Department of Justice. Just as the message of preaching democracy had been revealed to be a flexible one, so too did that of ensuring that American laws were upheld: formal undertakings were therefore given by the Attorney-General at the request of the National Security Council that ‘the enforcement of the Antitrust laws of the United States against the [oil companies forming the consortium] may be deemed secondary to the national security interest’. In the spring of 1954, therefore, the oil companies received formal guarantees of immunity from prosecution. So important was control over Iran that the US government was prepared to put its own legal code to one side.2

Encouraging the participation of American oil companies was just one part of a wider plan to prop up Iran and keep it out of the grasp of the Soviet Union. Concerted efforts went into social development projects, particularly in the countryside. Around three-quarters of the population were peasants, owning no land and with minimal incomes. They were trapped in a world where landowners were opposed to agrarian reform, and where options were limited: typical rates of credit on offer to small farmers ranged from 30 to 75 per cent – levels that were all but guaranteed to strangle social mobility.3

Substantial funds were invested to address some of these issues. Micro-finance schemes for small farm-holders were set up by the Ford Foundation, the largest philanthropic organisation in America. Support for the creation of co-operatives enabled them to go from inefficient trading of their cotton harvests at local markets to selling them at considerably better prices to brokers in Europe. Pressure was heaped on the Shah and his ministers to engage properly with the concept of rural development, albeit with limited effect and to the despair of those trying to convince senior politicians that failure to engage with illiteracy and inequality in the countryside would have long-term consequences.4

Direct aid from the US government rose sharply too, rising from an annual average of $27 million in the years before the removal of Mossadegh to a figure nearly five times higher in the years that followed.5 The US also provided grants and loans to help bankroll a massive dam on the Karaj river, around forty miles north-east of Teheran, that was intended substantially to upgrade the electricity and water supply to the capital city – as well as to serve as a symbol of Iran’s modernisation and progress.6

Efforts like these were part of a systematic approach to strengthening other parts of the region. Although Iran’s oil wealth made it particularly significant to the west, neighbouring countries were also rising in importance because of their position along the Soviet Union’s southern flank at a time when the Cold War was beginning to heat up.

The result was the construction of a belt of states between the Mediterranean and the Himalayas with pro-western governments that received considerable economic, political and military support from the US. This slab of countries – christened the Northern Tier by the austere Secretary of State John Foster Dulles – served three aims: to act as a bulwark against the expansion of Soviet interests; to keep the resource-rich Gulf secure and continuing to pump oil to the west that would stimulate the recovery of Europe while at the same time providing revenues that were important for local stability; and to provide a series of listening posts and military bases in case tensions with the Soviet bloc spilled into open conflict.

In 1949, for example, a report prepared for the Joint Chiefs of Staff on South Asia noted that Pakistan ‘might be required as a base for air operations against [the] central USSR and as a staging area for forces engaged in the defense or recapture of Middle East oil areas’ – while also pointing out that it was an obvious outpost from which to conduct covert operations against the Soviet Union.7 It was vital therefore to provide assistance to Pakistan, as well as to other countries in the Northern Tier, or there was a chance that the region as a whole would take a neutral line with the west, ‘or, at worst . . . might fall into the Soviet orbit’.8

These anxieties shaped US and western policy for much of Asia in the decade after the Second World War. In 1955, the swathe of countries running from Turkey in the west through Iraq and Iran to Pakistan in the east were tied together in a single agreement that replaced a web of alliances with each other or with Britain – and became signatories of what was soon known as the Baghdad Pact. Although the stated aim of the treaty was ‘the maintenance of peace and security in the Middle East’ under which mutual guarantees were exchanged, the reality was that it was designed to enable the west to influence a region that was of vital strategic and economic importance.9

Despite the careful consideration that had been given to ensuring that local governments would act favourably, mistakes in Washington created opportunities for the Soviets. At the end of 1954, for example, a discreet approach by the Afghan leadership to the US requesting assistance and arms was dismissed by the State Department. Instead of asking for arms, Prince Naim, brother of the Prime Minister, was told, Afghanistan should focus on matters closer to home – such as resolving border disputes with Pakistan. The clumsy response, intended to show support for a regime in Karachi that had recently been described by one military attaché as of ‘strategic worldwide importance’, backfired immediately.10

The news had barely reached Kabul before the Soviets stepped in to say they were willing to provide military hardware and development funds – an offer that was quickly accepted. An initial grant of $100 million was followed by further awards that enabled bridges to be built, telecommunications to be modernised and the road system expanded, including the highway between Kandahar and Herat. Money and expertise from Moscow were also responsible for constructing the 1.7-mile Salang Tunnel along a major road leading north to connect with Soviet Central Asia. This route, a symbol of Soviet–Afghan friendship, was the primary supply artery during the 1980s following the invasion of Afghanistan. Ironically, it also proved to be a vital part of the supply route bringing US and Allied convoys into the country in the early twenty-first century: a highway built to strengthen Afghanistan against the west became central to the efforts of the latter to build the former in its own image.11

Being outmanoeuvred so emphatically was a sobering experience – especially when the same thing happened again a few months later, this time with more dramatic results. At the end of 1955, the revolutionary Gamal abdel Nasser, who had played an instrumental role in the coup three years earlier that toppled Egypt’s King Farouk with CIA support, also approached Moscow for arms. Caught by surprise, the US responded by offering to help fund a project to build a huge dam at Aswan in conjunction with Britain and the World Bank – a mirror project of the Karaj dam in Iran. There were high-level discussions between London and Washington about how else to mollify Nasser, resulting in the promise of arms and pressure being applied to Israel to agree a treaty with Egypt, in the hope of improving the increasingly tetchy relations between the two countries.12

Nasser had been riled by the Baghdad Pact, which he saw as an impediment to Arab unity and a western tool to preserve influence across the heart of Asia. Had the money and support been forthcoming, he might perhaps have been pacified – at least in the short term. As it was, the funding promises were withdrawn following concerns from US congressmen that construction of a dam would lead to a surge in cotton production and a drop in prices that would affect American farmers.13 This self-interest proved fatal; it was the final straw.

An expert in political brinkmanship, Nasser – described by the British Prime Minister Anthony Eden as being determined ‘to become the Napoleon of the Arabs’ – now escalated the situation.14 He pointedly responded to the British Foreign Secretary’s pompous comment in the spring of 1956 that the Suez canal was ‘an integral part of the Middle East oil complex’ and vital to Britain’s interests with the retort that if that was the case, then Egypt should share in the profits of the canal – just as oil-producing states shared in oil revenues.15 He realised all too well that the west would stop at nothing to retain its assets, but calculated that nationalising the canal would provide leverage which would in the long run only benefit Egypt.

As American planners set about calculating the possible impact of the closure of the canal on oil prices, leading figures in Britain slumped into a fog of doom and gloom. ‘The truth is that we are caught in a terrible dilemma,’ wrote Harold Macmillan, the highly regarded and well-connected Chancellor of the Exchequer. ‘If we take strong action against Egypt and as a result the canal is closed, the pipelines to the Levant are cut, the Persian gulf revolts and oil production is stopped – then the UK and Western Europe have “had it”.’16 If nothing was done, on the other hand, Nasser would win hands down, and there would be catastrophic consequences elsewhere: all the countries of the Middle East would simply follow his lead and nationalise their oil industries.

Nasser was taking up where Mossadegh had left off. Western diplomats, politicians and intelligence operatives began to think about applying a similar solution to the problem of a leader whose policies were opposed to western interests. It did not take long before the British were looking at ‘ways and means of bringing down the regime’.17 As one senior diplomat in London put it, ‘we may have to get rid of Nasser’; the Prime Minister, Anthony Eden, did not just want to remove him; he wanted Nasser dead.18 After rounds of diplomatic shuttling had come to nothing, Britain and France concluded that a sustained demonstration of power was needed to impress leaders across the Middle East that direct action would be taken against anyone who dared stand up against western aims.

At the end of October 1956, military action began against Egypt, with British and French forces moving to secure the canal zone, while their Israeli allies launched a strike deep into the Sinai peninsula to help secure Suez and maximise pressure on Nasser. The invasion soon turned into a fiasco. The Suez canal was closed after the Egyptians had scuttled ships, barges and maintenance vessels in and near navigation channels, while the movable rail bridge at El Fridan north of Ismaila was dropped into the water. The effect of the estimated forty-nine obstructions went beyond a shut-down of the canal; it produced what one report from this time called ‘a serious dislocation of normal commodity movements’. Shipments of petroleum to western Europe were sharply reduced.

Further consequences were to be expected, concluded the CIA: the prices of ‘many basic commodities in world commerce’ would be bound to rise, and there was likely to be ‘considerable unemployment in the countries of the Free World’ whose economies were dependent on shipments coming through Suez. The impact would be felt on the Soviet Union too, whose vessels trading with the Far East faced a 7,000-mile diversion round Africa to reach their home ports in the Black Sea because of the closure of Suez. The Americans watched carefully as Moscow diverted essential cargo on to trans-Asian railway routes, whose importance rose quickly.19

Although more than aware of the rising tensions over Egypt, the Eisenhower administration was taken by surprise at the outbreak of military action, having not been consulted on the invasion plans. The President was incandescent, delivering a stinging rebuke to the British Prime Minister in person. The use of force in the canal zone was a propaganda disaster for the self-proclaimed guardians of the ‘free world’, coming just as Soviet tanks rolled through the streets of Budapest to put down a popular uprising in Hungary. Ultimately, though, the action in Suez forced a different issue: it marked the moment when the US had to choose between the western powers whose mantle it had inherited in the twentieth century and the oil-rich world of the Middle East. It chose the latter.

It was essential, reasoned President Eisenhower, that ‘the Arabs [not get] sore at all of us’. If they did, oil supplies from the Middle East might collapse altogether, both because of the canal’s closure and because production might be stopped or embargoes introduced in countries in a region naturally sympathetic to Egypt when it was being so brazenly bullied. As one senior British diplomat had already conceded, any reduction of supply would have its own devastating consequences. ‘If Middle East oil is denied to [Britain] for a year or two, our gold reserves will disappear. If our gold reserves disappear the sterling area disintegrates. If the sterling area disintegrates and we have no reserves . . . I doubt whether we shall be able to pay for the bare minimum necessary for our defence. And a country that cannot provide for its defence is finished.’20 This was very much a worst-case scenario, laced with doom. Even so, as Eisenhower himself recognised privately, it was hard to be ‘indifferent to the fuel and financial plight of Western Europe’. Nevertheless, as he wrote to Lord Ismay, the first secretary-general of the mutual defence alliance NATO (North Atlantic Treaty Organisation), it was vital not to ‘antagonize the Arab world’.21

In practice, this meant forcing Britain and France into a corner. Although a plan was drawn up in Washington to ship oil from the US to western Europe, it was intentionally not put into practice in order to bring matters in Egypt to a conclusion. With confidence in the British economy collapsing and sterling’s value plummeting, London was forced to turn to the International Monetary Fund for financial assistance. In barely four decades, Britain had gone from world mastery to holding out its cap and begging for help. It was bad enough, then, that the appeal to the IMF was flatly turned down; it was positively humiliating that the troops that had been sent to Egypt to fight for one of western Europe’s most precious jewels were now withdrawn without having accomplished their mission. Their recall home, in the glare of the world’s media, was a telling sign of how the world had changed: India had been abandoned; the oilfields of Iran had been prised from Britain’s grasp; now so too had the Suez canal. The resignation of the Prime Minister, Anthony Eden, at the start of 1957 simply served as another paragraph in the final chapter of the death of an empire.22

The US, on the other hand, was acutely aware of its newfound responsibilities as a superpower when it came to the countries lying across the spine of Asia. It had to tread a careful line – as the fall-out after Suez demonstrated clearly. British prestige and influence had slumped spectacularly, raising the prospect that the southern flank acting as a bulwark to the Soviet Union might ‘completely collapse through Communist penetration and success in the Middle East’, as President Eisenhower put it at the end of 1956.23

Moreover, the fiasco over the aborted military action had served to rouse anti-western sentiments across the Middle East as a whole, with nationalist demagogues taking heart from Nasser’s success in holding his nerve and overcoming European military pressure. As the Egyptian leader’s status rose exponentially across the region, ideas of Arab nationalism began to emerge, and with it, a growing sense that the unification of all Arabs into a single entity would create a single voice that would balance that of the west on the one hand and that of the Soviet bloc on the other.

Astute observers had predicted just such an eventuality even before Nasser’s masterclass in political brinkmanship. The US ambassador to Teheran, Loy Henderson, who understood the region better than any other American, had concluded that nationalist voices would become increasingly vocal and powerful. ‘It seems almost inevitable’, he wrote in 1953, ‘that at some time in the future . . . the Middle Eastern countries . . . will come together and decide upon unified policies.’24 Nasser was the figurehead that this movement had been waiting for.

*   *   *

This prompted a significant change in posture from the US, articulated in what became known as the Eisenhower doctrine. Keenly aware that the Soviet Union was looking opportunistically at the Middle East, the President told Congress that it was essential that ‘the existing vacuum’ in the Middle East should ‘be filled by the United States before it is filled by Russia’. This was not just important for US interests, he went on; it was vital ‘to the peace of the world’.25 Congress was therefore asked to approve an ambitious budget to fund economic and military aid across the region, as well as for the authority to defend any country threatened by armed aggression. While one key purpose was to pre-empt the Soviet Union, it was also intended as an alternative to Nasser’s vision – one that was attractive to countries which could see the benefits of receiving substantial disbursements of money from Washington.26

This attempt to reposition did not convince everyone. The Israelis were unimpressed by American attempts to improve relations with the Arabs and had little truck with assurances that they too would feel the benefits of the raised profile and role played by the US.27 These misgivings were understandable given the anger swirling around Israel, especially in Saudi Arabia and Iraq in the wake of the botched intervention in Suez. It did not help, of course, that Israeli troops had taken part alongside British and French soldiers; but what was more important was that the country was fast becoming a totemic symbol of outside interference by the west in the affairs of the region – and as a prime beneficiary of it. As a result, increasingly aggressive noises were being made about US support for Israel being incompatible with assistance for Arabs.

Israel was now a focal point for Arab nationalists to rally around. Just as the Crusaders had found in the Holy Land hundreds of years earlier, the mere existence of a state supposedly made up of outsiders was a cause for disparate Arab interests to be set to one side. As the Crusaders had found too, Israelis assumed the ambiguous and unenviable role of a target that united many enemies into one.

Anti-Israeli rhetoric featured strongly as politicians in Syria threw their lot in with Nasser and the vision he was articulating for a united Arab world. At the start of 1958, a formal merger with Egypt created a new state, the United Arab Republic, a prelude to future consolidation. Washington watched anxiously as the situation unfurled. Ambassador Henderson had warned that the emergence of a single voice might bring difficulties – ‘disastrous effects’, as he called them. The US wrestled with the implications and the State Department buzzed with debate, much of it highly pessimistic. A paper produced by the Bureau of Near Eastern, South Asian and African Affairs observed anxiously that Nasser’s radical nationalism threatened to engulf the region, noting that American ‘assets’ across the Middle East had been reduced or neutralised as a result of the Egyptian leader’s success with Suez and his step forward with Syria.28 Nasser’s progress would inevitably pave the way for Communism, concluded John Foster Dulles, Secretary of State and elder brother of Allen Dulles, head of the CIA. It was time to take decisive action and put up ‘sandbags around positions we must protect’.29

The mood worsened when what looked unmistakably like the start of a chain reaction swept eastwards across Asia. First to go was Iraq. The unification of Egypt and Syria prompted much discussion among the well-educated elite in Baghdad, for whom the attractions of pan-Arabism seemed increasingly tempting as a third way between the attentions of Washington and Moscow. But things turned poisonous in the capital in the summer of 1958, sparked by a dangerous rise in pro-Nasser sympathies and rising anti-western sentiments laced with aggressive rhetoric about Israel. On 14 July, a group of high-ranking Iraqi army officers led by Abdul Karim Qasim – a man nicknamed ‘the snake charmer’ by contemporaries who attended a military course with him in Britain two decades earlier – staged a coup.30

Marching on the palace at breakfast time, the plotters rounded up leading members of the royal family, including King Faisal II, in the palace courtyard and executed them. The body of Crown Prince Abd al-Ilha, a thoughtful and rather serious man, was dragged ‘into the street like . . . a dog’, torn apart and then burnt by an angry mob. The next day, the Iraqi Prime Minister, Nuri al-Said, a veteran politician who had witnessed the transformation of the Middle East at first hand, was tracked down as he tried to flee, dressed as a woman, and shot dead. His body was mutilated and gleefully paraded through Baghdad.31

These events seemed to herald a near-certain expansion of the Soviet Union’s interests. Iran, the Russian supremo Nikita Khrushchev told President John F. Kennedy at a summit in 1961, would soon drop like a rotten fruit into Soviet hands – a prospect that seemed likely given that even the head of the Iranian secret police was known to be plotting against the Shah. After Moscow’s State Security Committee (better known as the KGB) had failed with one assassination attempt, attention was turned to preparing landing sites and munitions dumps across Iran – presumably in anticipation of the decision to escalate efforts to foment a popular uprising and bring down the monarchy.32

Things looked little better in Iraq, where a senior US policymaker wrote that the country ‘almost surely will drift into what amounts to a Communist takeover’.33 One result of this was western realignment with Nasser, who began to be viewed as the ‘lesser of two evils’. The US was at pains to build bridges with the mercurial Egyptian leader, who himself recognised that Arab nationalism could be compromised by what he reportedly referred to as the growing ‘Communist penetration of the Middle East’.34 Common cause between Washington and Cairo was underscored by the decision of the new leadership in Iraq to plot a course of its own and steer away from pan-Arabism and from Nasser; this simply raised concerns still further about the spectre of the Soviet Union.35

Plans for dealing with Baghdad were drawn up, with a committee appointed in the US to look at ‘overt or covert means’ of avoiding ‘a Communist takeover in Iraq’. Limitations in the source material make it difficult to know how much involvement, if any, the CIA had in an attempted coup to remove Qasim, the nationalist Prime Minister who had deposed the Iraqi monarchy, that was staged towards the end of 1959. One of those involved, who grazed his shin during the confusion, later used his participation to near-mythical effect to show his resolve and personal bravery. His name was Saddam Hussein.36

Whether the plotters enjoyed US support on this occasion is not certain, although records show that the American intelligence community was aware of the failed putsch before it took place.37 The fact that elaborate plans were developed to remove key figures from positions of authority – such as an unnamed Iraqi colonel who was to be sent a monogrammed handkerchief contaminated with an incapacitating agent – also shows that active steps were being taken to try to ensure that Baghdad did not slip into Moscow’s orbit.38 It was perhaps no coincidence that when Qasim was finally deposed in 1963, his overthrow came as no surprise to American observers who later stated that this had been ‘forecast in exact detail by CIA agents’.39

This deep engagement with the situation in Iraq was primarily driven by the desire to keep the Soviet Union out of the countries to its south. Building connections across the belt that spanned the Silk Roads was partly a matter of political prestige, where the US could not afford to be seen to be losing out to a rival that offered a sharply contrasting vision for the world. But there were other reasons for the intensity of this sustained interest.

In 1955, Moscow decided to locate a major testing site for long-range missiles at Tyuratam, in what is now Kazakhstan, after concluding that the steppes provided a perfect environment in which to establish a chain of guidance antennae that would allow launches to be monitored without obstruction during flight, while also being sufficiently isolated as to pose no threat to existing urban centres. The resulting centre, later named the Baikonur Kosmodrome, became the primary location for the development and testing of ballistic missiles.40 Even before the centre was established, the Soviets had launched the R5, which had a range of over 600 miles and was capable of carrying a nuclear warhead. In 1957, its successor – the R7, better known by its NATO codename SS6 ‘Sapwood’ – came into production with a range of 5,000 miles, dramatically raising the threat posed by the Soviet Union to the west.41

The launch of Sputnik, the world’s first satellite, the following year, along with the introduction of a fleet of Tupolev Tu-95 ‘Bear’ and Myasishchev 3M ‘Bison’ long-range strategic bombers, focused the minds of American military planners further still: it was vital that the US should be able to monitor missile tests, keeping an eye open for developments in ballistic capabilities as well as possible hostile launches.42 The Cold War often prompts thought of the Berlin Wall and eastern Europe as the principal arena for confrontation between the superpowers. But it was the swathe of territory within the Soviet Union’s underbelly where the real game of Cold War chess was played out.

The strategic value to the US of the countries along the USSR’s southern flank had long been recognised. Now they became vitally important. Airbases, listening stations and communication networks in Pakistan became a crucial part of US defence strategy. By the time the Soviet missile capability reached the intercontinental stage, Peshawar Air Station in the north of the country was providing vital intelligence-gathering services. It served as a departure point for U-2 spy-plane operations that undertook reconnaissance missions over Baikonur as well as over other major military installations, including the plutonium-processing plant at Chelyabinsk. It was from Peshawar that Gary Powers took off on the ill-fated mission that saw him shot down in Soviet airspace near Sverdlovsk in 1960 in one of the most gripping incidents of the Cold War.43

There was no small irony then that American political and military objectives, which were central to the defence of the free world and the democratic way of life, led to very different results. The US position in this part of the world was built on a series of strongmen, with undemocratic instincts and unsavoury methods of staying in power. In the case of Pakistan, the US were happy to deal with General Ayub Khan after he had led a coup in 1958 which he cannily billed as a ‘revolution away from Communism’ in an effort to gain American support. He was able to impose martial law without incurring the opprobrium of his western backers, justifying his actions as being ‘harsh only to those who have been destroying Pakistan’s moral fiber’.44 Lip-service was paid to the restoration of a ‘workable constitutional government’, though few had any illusions that military dictatorship was likely to be long-lasting – especially after Ayub stated that it would be ‘some decades’ before educational standards had been raised sufficiently to trust the population to vote for their leaders.45 The US was more than happy to provide weapons in large quantities to this dubious ally: Sidewinder missiles, jet fighters and B-57 tactical bombers were just some of the hardware sold with the approval of President Eisenhower.46

This had the effect of further building up the status and power of the armed forces in Pakistan, where upwards of 65 per cent of the national budget was spent on the military. It seemed the necessary price to pay to keep friends in power in this part of the world. Laying the basis for social reform was risky and time-consuming compared to the immediate gains to be made from relying on strongmen and the elites that surrounded them. But the result was the stifling of democracy and the laying down of deep-rooted problems that would fester over time.

The leadership of Afghanistan was courted equally assiduously, with the Prime Minister, Daoud Khan, for example, invited for a two-week visit to the United States at the end of the 1950s. The desire to make an impression was such that when he landed he was greeted on the tarmac by both Vice-President Nixon and Secretary of State John Foster Dulles before being cordially received by President Eisenhower, who was at pains to warn the Afghan Premier of the threat Communism posed to the Muslim countries of Asia. The US had already begun a series of ambitious development projects in Afghanistan, such as a major irrigation scheme in the Helmand valley and a bold effort to improve the education system. It now gave further commitments in order to counter-balance substantial Soviet investments, loans and infrastructure projects that were already in operation.47

The problem, of course, was that it did not take long for leaders in the countries concerned to realise that they could play the two superpowers off against each other – and extract increasingly large benefits from both as a result. Indeed, when President Eisenhower visited Kabul in person at the end of the 1950s, he was asked point-blank to match the aid that was being given to his country by Moscow.48 Refusal had consequences, but so did acquiescence.

American planners became highly agitated meanwhile about what was seen as a distinct wobble in Iran at the end of the 1950s, when Shah Reza Pahlavi demonstrated a willingness to improve relations with Moscow following a damaging campaign of radio propaganda funded by the Soviet Union, which relentlessly played on the image of the Iranian ruler as a puppet of the west and urged the workers to rise up and overthrow his despotic regime.49 It was enough to make the Shah consider abandoning what he called Iran’s ‘totally antagonistic’ relations with the USSR, and open up more conciliatory channels of communication and co-operation.50

This set off alarm bells in Washington, where strategists took an uncompromising view of Iran’s pivotal importance on the Soviet Union’s southern flank. By the start of the 1960s, as one report put it, the country’s ‘strategic location between the USSR and the Persian Gulf and its great oil reserves make it critically important to the United States that Iran’s friendship, independence and territorial integrity be maintained’.51 Considerable energy and resources went into supporting Iran’s economy and its military and to reinforcing the Shah’s control over the country.

It was considered so important to keep the Shah happy that a blind eye was turned to intolerance, and to large-scale corruption and the inevitable economic stagnation this helped to cause. Nothing was said and done about persecution of religious minorities, such as the Baha’i, who were singled out for brutal treatment in the 1950s.52 There was precious little to show, meanwhile, for the steep increase in Iran’s oil revenues, which had multiplied more than seven-fold between 1954 and 1960. The Shah’s relatives and the group informally referred to in Iran as ‘the 1,000 families’ established an iron grip on imports, making fortunes for themselves as they did so. Soft loans given by Washington simply served to line the pockets of the few at the expense of the poor, who found it difficult to keep up with the soaring cost of living – especially following a bad harvest in 1959–60.53

It did not help that some US projects that were designed to stimulate the agrarian economy were spectacular failures. Attempts to replace traditional seeds with modern hybrids were a disaster, with the new strains proving unsuitable for the terrain and lacking resistance to disease and insect devastation. A scheme designed to help both Iranian and American poultry farmers by introducing US chicks to Iran had calamitous results too, with the unavailability of suitable feed and the lack of vaccination having consequences that were all too predictable. The embarrassing failure to understand how the water table in Iran worked led to wells that drained underground reservoirs and destroyed the viability of many farms across the country.54

Counter-productive schemes such as these were hardly positive examples of the benefits of closer co-operation with the west and with the US in particular. They also provided fertile ground for critics to exploit. None was more adept at doing so than a Shīimagea scholar, Ruhollah Moosavi Khomeini, who caught the mood of a population that was increasingly disgruntled by low wages, the lack of economic progress and the conspicuous absence of social justice. ‘Your Excellency, Mr Shah, let me give you a piece of advice,’ the ayatollah declared in one particularly fiery speech in the early 1960s. ‘You miserable wretch, isn’t it time for you to think and reflect a little, and ponder where all this is leading you?. . . Mr Shah, do you want me to say that you don’t believe in Islam, and kick you out of Iran?’55 It was enough to get him arrested, upon which riots broke out in the centre of Teheran, with crowds chanting ‘Khomeini or death’. As CIA intelligence reports noted, even government employees joined demonstrations against the regime.56

Rather than heeding the warnings, the Shah responded by antagonising his critics still further. The clergy of Iran, he announced with an astonishing lack of tact on a visit to the holy city of Qom, were ‘ignorant and withered men whose minds have not been stirred in centuries’.57 Instead of offering concessions or instigating whole-hearted reforms, energy was focused on tightening controls. Khomeini was forced into exile, settling for more than a decade in Najaf in neighbouring Iraq, where his passionate denunciations of the Shah and his regime were not just welcomed but positively encouraged.58

Substantial resources were also spent building up the Savak, the Iranian secret police force, which quickly developed a fearsome reputation. Imprisonment without trial, torture and execution were used on a large scale to deal with critics of the Shah and those close to him; in a few rare cases, fortunate opponents whose high profile kept them visible – like Khomeini – were placed under house arrest and exiled to remove them from the scene.59 The use of such tactics in the Soviet Union was the subject of vocal criticism by the US, denounced as the antithesis of democracy and a tool of totalitarianism; in Iran, it was passed over in silence.

To maintain the support of the Shah and cement his position, funds continued to pour into Iran from Washington, building a 1,500-mile highway system linking the Persian Gulf with the Caspian, helping the construction of a major deep-water port at Bandar Abbas, allowing the power grid to be expanded and upgraded, and even providing capital to set up prestige projects, such as the creation of a national airline. Throughout the process, most western policymakers ignored the realities on the ground, choosing to see only what they wanted to see. To many US observers, Iran seemed to be an unmitigated triumph. The economy of ‘one of the United States’ staunchest friends in the Middle East was surging forward’, stated a report prepared for President Johnson in 1968. Iran’s GNP was rising so quickly that it was ‘one of the notable success stories’ of recent times. The same conclusion was reached even more emphatically four years later. Following the end of the Second World War, the American embassy in Teheran noted, the United States had been forced to take a gamble on Iran and shape the country after its own image. ‘That gamble has paid off handsomely – probably more so than in any other developing country which has benefited from similar US investment.’ Iran was on track, the report confidently predicted, to become ‘the most prosperous country in Asia after Japan’ – and on a par with many countries in Europe.60

Those who were more sceptical were in a distinct minority. One such was the young academic William Polk, who had been called in by the Kennedy administration to advise on foreign affairs. There would be violence and even revolution if the Shah did not reform the political process, he warned; when that unrest broke out, it would only be a matter of time before the security forces would refuse to fire on protesters. Opposition to the Shah was now uniting under ‘the powerful Islamic institution of Iran’.61

Polk was exactly right. At the time, however, it seemed more important to continue shoring up an ally against Communism than to press him to loosen his grip on power. And the Shah developed increasingly grandiose plans that made matters even worse. Vast amounts were invested in the military, with Iran’s military spending rising from $293 million in 1963 to $7.3 billion less than fifteen years later. As a result, the country’s air force and army became among the largest in the world.62 Iran funded this extraordinary escalation thanks in part to military aid and soft loans from the US (which profited in turn because much of the hardware was bought from American defence contractors). However, Iran also benefited from the continuing rise in oil revenues – and from the mechanism that had been set up by the world’s leading producers to act as a cartel, and in doing so maximise returns.

The creation of the Organisation of Petroleum Exporting Countries (OPEC) in 1960 was designed to co-ordinate the release of oil supplies on the open market. The aim was to allow the founder members – Iraq, Iran, Saudi Arabia, Kuwait and Venezuela – to combine their interests and boost their incomes by controlling supply, and therefore controlling prices.63 It was the logical next step for resource-rich countries which had an eye on wresting power away from the western corporations while receiving political and financial backing from western governments.

OPEC effectively marked a deliberate attempt to curtail the influence of the west, whose interests in providing cheap and plentiful fuel for its domestic markets were distinctly different to those of the countries that were rich in deposits of oil and gas, and who were keen for the revenues they brought in to be as high as possible. Unlikely as it seems, therefore, OPEC was the spiritual protégé of an already unlikely cast of characters made up of defiant leaders like Mossadegh, the populist demagogue Nasser, the hardliner Qasim and increasingly anti-western figures in Iran typified by the Ayatollah Khomeini. All were linked by their concerted attempts to detach their states from overpowering outside attention. OPEC was not a political movement; but aligning a range of countries and enabling them to talk and act with a single voice was a key step in the process of transferring political power away from Europe and the US to local governments.

The sheer abundance of oil in Iran, Iraq, Kuwait and Saudi combined with rising global demand meant that the mid-twentieth century was marked by a fundamental rebalancing of power. The extent of this began to become clear in 1967 when Nasser launched a surprise attack on Israel. Saudi Arabia, Iraq and Kuwait, supported by Algeria and Libya, two countries in North Africa where production was taking off, suspended shipments to Britain and the United States as a result of their perceived friendliness to Israel. With refineries being shut down and pipelines closed, a nightmare scenario loomed large, with the prospect of substantial shortfalls, sharp price rises and a threat to the global economy.

As it happened, the impact was minimal – because Nasser’s assault failed on the battlefield, but above all because it failed quickly: the ‘six-day war’ was over almost as soon it began, and Nasser and dreams of Arab nationalism were delivered a reality check. The Israeli military, backed by western technology and political support, proved to be a formidable adversary. Neither the west nor its supposed puppet state in the Middle East was ready to suffer a decisive blow just yet.64

For two centuries, the great powers of Europe had struggled and fought each other for control of the region and of the markets that linked the Mediterranean with India and China. The twentieth century saw the recoil of western Europe’s position, and the passing of the baton on to the United States. In some ways, it was entirely appropriate that it was a nation forged from the competition between Britain, France and Spain that took up the mantle of trying to maintain control over the heart of the world. It would prove to be a tough challenge – not least since a new Great Game was about to begin.