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

23

The Road of Superpower Rivalry

The war of 1967 was a warning shot, a case of muscles being flexed. It was a sign of things to come. Retaining power and influence in the heart of the world was to become increasingly difficult for the west. For Britain, it became impossible. In 1968, the Prime Minister, Harold Wilson, announced that Britain would withdraw from all its defence commitments east of Suez, including from the Persian Gulf.1 It was now up to the US, itself a vestige and heir of the great age of European empire, to take on the mantle of retaining influence in the Middle East.

A complicated background of intense pressure from all sides meant that this was not easy to achieve. In Iraq in 1961, for example, large areas that were part of the concession granted three decades earlier to the consortium of western producers that made up the Iraq Petroleum Company were nationalised on the basis that they had been left unexploited. Attitudes in Baghdad stiffened further after Prime Minister Qasim had been ousted and then executed in front of television cameras ‘for the whole world to see’. The new hardline regime declared that it was leading ‘the broader struggle to free the Arab nation from the domination of Western imperialism and exploitation by oil monopolists’, and raised transit fees on the Banias pipeline overnight.2

The Soviets watched on with glee. The changes in the Middle East and the rising tide of anti-western sentiment had been followed carefully in Moscow. Since the Arab–Israeli War of 1967, one CIA report noted, the USSR ‘has followed a consistent course . . . seeking, as opportunities arose, to extend its political and military influence into a region of traditional Russian concern’.3 The Soviet Union now looked to exploit openings enthusiastically, setting about building its own network of relations stretching from the Mediterranean to the Hindu Kush, from the Caspian to the Persian Gulf.

This was partly the result of political brinkmanship between the two superpowers. Small successes were magnified into major propaganda victories, as was clear from the case of Soviet financial and technical support for the Rumaila oilfield in Iraq. The newspaper Izvestiya was ecstatic in its coverage, trumpeting a new benchmark in the positive co-operation between ‘Arab and socialist nations’, pointedly remarking on how keen the USSR was to develop ‘a national oil industry for the Arabs’. In contrast, the paper went on, western ‘plans to control the oil of the Arabs are falling apart’.4

The 1960s was a period when there was a distinct ramping up of the horizons of the superpowers – and not only in the centre of Asia. In the early 1960s, the Soviet Union’s support for revolutionary Cuba, which included a planned programme to station nuclear warheads on the island, almost resulted in war. Following a tense showdown at sea, Soviet ships were finally recalled rather than break through a perimeter set up by US Navy vessels. Confrontation that had flared up in the Far East in the Korean peninsula at the end of the Second World War broke out again, this time in Vietnam with effects spilling into Cambodia and Laos, where the US became embroiled in an ugly and costly war that appeared to many Americans to be a battle between the forces of the free world and those of totalitarian Communism. The full-blooded commitment of substantial numbers of ground troops did not convince others, and rising disillusionment with Vietnam became a rallying point for the emerging counter-culture movement.

As the situation in South-East Asia worsened, there was a flurry of activity as Moscow sought to take advantage of the growing disenchantment with the US, which was so strong that Ayatollah Khomeini could declare in 1964: ‘Let the American President know that in the eyes of the Iranian people he is the most repellent member of the human race.’5 This disenchantment was not limited to opposition figures, clerics and populist demagogues. The President of neighbouring Iraq was prepared to refer to British and American oilmen as ‘bloodsuckers’, while mainstream newspapers in Baghdad started to describe the west as imperialist, Zionist or even imperialistic-Zionist.6

Despite the hostility of such statements and the fertile ground they fell on, attitudes to the west were not all negative. In truth, the issue was not that the United States and to a lesser extent Britain were reviled for their supposed interference in the affairs of the countries sprawling from the Mediterranean eastwards and for being willing to line the pockets of a corrupt elite. Rather, the rhetoric masked the imperatives of a new reality where a region that had become peripheral over the course of several centuries was re-emerging as a result of the natural resources lying in its soil, the plentiful supply of customers willing to pay for them and rising demand. This fuelled ambitions, and in particular the demand not to be circumscribed by outside interests and influences. It was ironic, then, that a new battleground now emerged where the superpowers jostled for position as part of a new Great Game, seeking to exploit each other’s weaknesses.

Iraq, Syria and Afghanistan were delighted to be awarded soft loans to buy Soviet weapons and to have highly qualified advisers and technicians dispatched from Moscow to build installations that might prove useful to their wider strategic ambitions. These included the deep-water port at Umm Qasr on the Persian Gulf, but also six military airfields in Iraq, which US intelligence quickly realised could be used ‘to support a Soviet naval presence in the Indian Ocean’.7

This was part of Moscow’s attempt to build its own series of contacts and alliances to rival that of the Americans. Not surprisingly, then, Soviet policies were identical to those that had been pursued by Washington since the Second World War, whereby the US established a number of locations that allowed them to keep one eye on the security of the Persian Gulf and Indian Ocean and another on either monitoring Soviet activities or creating forward attack bases. This was now replicated by the USSR. Soviet warships were redeployed to the Indian Ocean at the end of the 1960s to support new revolutionary regimes that had taken power in Sudan, Yemen and Somalia following years of careful cultivation by Moscow. This gave the Soviets an enviable series of footholds in Aden, Mogadishu and Berbera.8 The USSR therefore acquired the capability to throttle access to the Suez canal, something that US policy planners had feared for years.9

The CIA watched carefully as the Soviets systematically assisted the fishing, agricultural and other industries across the Indian Ocean area, including East Africa and the Gulf. This included training fishermen, developing harbour facilities and the sale or rental of fishing vessels at highly competitive prices. Such gestures of goodwill were reciprocated with free port access in Iraq, Mauritius and Somalia, as well as in Aden and Sanaimagea.10 The Soviets also devoted considerable efforts to cultivating Iraq and India. In the case of the latter, the USSR supplied armaments that accounted for more than three-quarters of all New Delhi’s military procurement imported from abroad in the 1960s – in quantities that rose throughout the following decade.11 Sales included some of Moscow’s most sophisticated weaponry, including Atoll and Styx missiles, MiG-27 and MiG-29 fighters, and state-of-the-art destroyers, while India was also favoured with a licence to produce military aircraft that had been denied to the Chinese.12

Looking to the left and the right came naturally to peoples in this part of the world, and it continued to prove rewarding. In Afghanistan, a word was coined for the practice of seeking support from both superpowers: literally meaning ‘without sides’, bi-tarafi became a tenet of a foreign policy that sought to balance the contributions made by the USSR with those of the US. As one shrewd observer put it in a classic account published in 1973, Afghan army officers who had been sent on formal training programmes in the Soviet Union and the United States that were designed to build ties and develop relationships with future leaders would compare notes when they returned home. One thing in particular stood out for officers who had been talent-spotted: ‘neither the USA nor the USSR turned out to be the paradises painted by their respective propaganda’. Rather than evangelising new converts, then, the overwhelming response of those sent abroad was to return home convinced that Afghanistan should remain independent.13

Similar impulses were at work in Iran where the Shah was telling anyone who would listen that he was his country’s saviour. ‘My visions were miracles that saved the country,’ he told one interviewer. ‘My reign has saved the country, and it has done so because God was on my side.’ When asked why no one dared even to mention his name on the streets of Teheran, he did not seem to consider that this might be because of the terrifying apparatus of the police state that kept him in power. ‘I should suppose’, he said, that they do not talk about the Shah ‘from exaggerated respect’.14

If this was a case of self-delusion, then so too was the posturing about Communists. ‘Communism is against the law,’ the Shah told his interviewer defiantly. ‘It follows that a Communist is not a political prisoner but a common criminal . . . they’re people we must eliminate.’ In almost the next breath, however, he declared proudly that Iran enjoyed ‘good diplomatic and trade relations with the Soviet Union’.15 This said everything about the delicate balance across the spine of Asia that had to be sought during the Cold War. The Shah had learnt from experience that antagonising his powerful neighbour to the north could have serious repercussions. It was in his interests, therefore, to take support from the United States and the west while at the same time sweetening relations with Moscow. As a result, he was perfectly happy to enter into a series of agreements to buy rocket-propelled grenade launchers, anti-aircraft guns and heavy artillery from the USSR, and to allow Soviet technicians to help expand the major steelwork plant in Isfahan.

But while this was entirely understandable realpolitik, it demonstrated the difficulties of the position which the countries of this region found themselves in. Any alignment with one of the superpowers prompted a response from the other; any attempt to keep at a distance could have disastrous consequences and could easily create openings for opposition figures. In 1968, yet another coup in Iraq gave the Soviet Union the chance to strengthen ties that it had worked hard to develop over the previous decade. These now bore fruit with a fifteen-year Treaty of Friendship and Co-operation, signed in 1972, which was seen in London as being as good as a formal ‘alliance with the Soviet Union’.16

Washington’s anxiety that the USSR’s tentacles were spreading ever further was reinforced by events elsewhere in Asia. In 1971, Moscow signed a twenty-five-year treaty of peace, friendship and co-operation with India, and agreed to provide economic, technological and military support. Things looked ominous in Afghanistan where a coup propelled Muimageammad Dāwud to power in 1973 alongside a cadre of left-wing supporters. A number of high-profile Islamist leaders were either pushed out by or fled from the new regime. They found a welcome home in Pakistan, especially in the so-called tribal regions around Quetta, where they were actively supported by the government of Zulfiqar Ali Bhutto, who saw them as a tool to help destabilise the new government in Afghanistan – and as an easy way to burnish his own religious credentials at home.

The sense of turbulence and of an emerging new world order was palpable as the peoples of the belt between the Mediterranean and the Himalayas strove to take their futures into their own hands. The real moment when Iraq became independent, Saddam Hussein used to say later, was when it nationalised its oil industry – and took control of its own destiny in 1972. Gone were the days when westerners would turn up and lord it over the local population. The time of ‘foreign domination and alien exploitation’, he declared, ‘was at an end’.17

Oil was the fuel behind much of this movement to escape from the overbearing influence of outside powers, setting off a chain reaction that had profound long-term implications. The catalyst for a new round of change was a coup led by an ambitious young Libyan army officer who had been described as ‘cheerful, hard-working and conscientious’ by the British army course instructor who supervised his training in the UK.18 Muimageammar Gaddafi was certainly resourceful. At the start of 1970, shortly after seizing power, he demanded a dramatic rise in the revenues of Libyan oil – which at that time was responsible for 30 per cent of Europe’s total supply. ‘Brothers,’ he had proclaimed to his countrymen, ‘the revolution cannot let the Libyan people be poor while they own colossal oil wealth. There are people living in huts and tents while the foreigner lives in palaces.’ Other countries put men on the moon, Gaddafi went on; the Libyans are exploited to the extent that they have no electricity or water.19

The oil companies screamed with outrage at the new regime’s insistence on being paid a fair price for the oil; but they soon complied after it had been made clear that nationalisation was not an option – but that it might be. The fact that the Libyan leader could force a renegotiation was not lost on others: within weeks, OPEC was pushing to raise the contribution made to its members by western oil companies, threatening to reduce production to force agreement. It was, in the words of one Shell executive, the moment when the ‘avalanche’ began.20

The results were spectacular. The price of oil quadrupled over the course of three years, putting immense strain on the economies of Europe and the US, where demand and consumption levels galloped ever onwards. In the meantime, the oil-producing countries were flooded by unprecedented inflows of cash. The countries in the centre of Asia and the Persian Gulf had seen their returns steadily improve almost as soon as the Knox D’Arcy concession struck oil as agreements were slowly but surely renegotiated in the decades that followed with better and better terms. But what happened in the 1970s was a shift of seismic proportions. In 1972–3 alone, Iran’s oil revenues rose eight-fold. In the space of a decade, government revenues rose thirty-fold.21 In neighbouring Iraq, the rise was no less spectacular, going up fifty times between 1972 and 1980 from $575 million to $26 billion.22

It was all very well complaining about the ‘extent of dependence by western industrial countries upon oil as a source of energy’, as one senior American official did in a report prepared for the State Department in 1973.23 But there was an inevitability about the transfer of power – and money – to the countries straddling the spine of Asia; and there was an inevitability too about the strengthening sinews of the Islamic world that followed as ambitions were magnified.

The most dramatic expression of these came with a renewed effort to dislodge the totemic symbol of outside influence in the Middle East as a whole: Israel. In October 1973, Syrian and Egyptian forces launched Operation Badr, named after the battle that had opened the way to securing control of the holy city of Mecca in the time of the Prophet Muimageammad.24 The assault caught not only Israeli defences by surprise, but the superpowers as well. Hours before the attack began, a CIA report confidently stated that ‘we relate low probability to the possibility of the initiation of a military operation against Israel by the two armies’ – despite the knowledge that Egyptian and Syrian troops were gathering near the border; they were doing so either as part of a training exercise, the report concluded, or ‘in fear [of] offensive steps [that might be taken] by Israel’.25 Although some have argued that the KGB appeared to have been better informed of the plans, the expulsion of Soviet observers en masse from Egypt a year earlier shows how the strong the desire was to settle scores locally – rather than as part of the wider struggle for Cold War supremacy.26 In fact, the USSR had been actively trying to calm tensions in the Middle East and seeking ‘military relaxation’ in the region.27

The impact of the conflict shook the globe. In the US, the military-alert level was raised to DEFCON 3, indicating that the risk of a nuclear launch was considered to be imminent – and higher than at any point since the Cuban missile crisis of 1962. In the Soviet Union, the focus was on containing the situation. Pressure was put on Egypt’s President Sadat behind the scenes to agree a ceasefire, while the Soviet Foreign Minister, Andrei Gromyko – a consummate political survivor – personally pressed President Nixon and his newly appointed Secretary of State, Henry Kissinger, to act jointly to prevent a ‘real conflagration’ that might easily lead to war spreading.28

The real significance of the Yom Kippur War, so named because the attack began on the Jewish holy day, lay not in the attempts by Washington and Moscow to work together, nor even in the spectacular results which saw one of the great military reversals in history as Israel went from being within hours of extinction to shattering the invading forces and advancing on Damascus and Cairo. In fact, what was remarkable was the way the Arabic-speaking world acted together – as a caliphate in all but name. The ringleaders were the Saudis, the masters of Mecca, who not only talked openly about using oil as a weapon but actually did so. Production was cut back, which, combined with political uncertainty, led to price rises: costs per barrel tripled almost overnight.

As queues formed round petrol stations in the US, Secretary of State Henry Kissinger complained about ‘political blackmail’ that threatened the stability of the developed world. The shock was enough to prompt talk of developing new strategies that would reduce or even remove altogether dependence on Middle Eastern oil. On 7 November 1973 President Nixon gave a nationwide prime-time address on TV to announce a series of measures to address the uncomfortable fact that ‘in recent years, our energy demands have begun to exceed available supplies’. As a result, the President opined solemnly, power plants were to be converted from the use of oil to the use of coal, ‘our most abundant resource’. Fuel for aircraft was to be restricted with immediate effect; all vehicles owned by the federal government were to be prevented from travelling faster than 50mph, ‘except in emergencies’. ‘To be sure that there is enough oil to go around for the entire winter,’ Nixon went on, ‘it will be essential for all of us to live and work in lower temperatures. We must ask everyone to lower the thermostat in your home by at least 6 degrees so that we can achieve a national daytime average of 68 degrees.’ If it is any consolation, the President added, ‘my doctor tells me . . . that you really are more healthy’ living at this temperature.29

‘Now, some of you may wonder’, he went on, ‘whether we are turning back the clock to another age. Gas rationing, oil shortages, reduced speed limits – they all sound like a way of life we left behind with Glenn Miller and the war of the forties. Well, in fact, part of our current problem also stems from war – the war in the Middle East.’ What was needed in addition, Nixon announced, was ‘a national goal’, an ambitious plan to enable the US to meet its ‘own energy needs without depending on any foreign energy source’. Christened ‘Project Independence’, the proposal was to be inspired by ‘the spirit of Apollo’ (a reference to the space programme) and the Manhattan Project that had given the west nuclear weapons – and the ability to destroy the world. The US was a superpower; but it was also intensely aware of its weaknesses. It was time to find alternatives and thereby decrease dependence on – and the importance of – Middle Eastern oil.30

The volte face produced some unexpected side-effects. The general reduction of highway speed limits to 55mph, a step intended to slow consumption, led not only to a fall in consumption of over 150,000 oil barrels per day, but also to a major reduction in the number of traffic accidents nationwide. In December 1973 alone, statistics from the National Highway Traffic Safety Administration suggested a fall in fatality levels of more than 15 per cent as a direct result of lower speed limits.31 Studies conducted in Utah, Illinois, Kentucky, California and elsewhere demonstrated clearly the positive effect that lowering speed limits had on saving lives.32

The importance of reducing energy usage prompted American architects to start designing buildings that placed greater emphasis on renewable energy sources.33 It marked a watershed moment too in the development of the electrically powered car, encouraging extensive research into the stability and efficiency of a series of competing systems, including aqueous electrolyte, solid-state and molten-salt batteries which laid the basis for the hybrid cars that reached the mass market decades later.34 Energy became a high-profile political issue, with the governor of Georgia – and soon to be presidential candidate – Jimmy Carter vocal in his calls for a ‘comprehensive long-range national energy policy’.35 Congress agreed to invest heavily in solar power, while increasingly sympathetic attitudes emerged towards the nuclear industry, which was perceived as technologically reliable and as an obvious solution to energy problems.36

Rising prices now justified prospecting for oil in areas where oil production had previously been commercially unviable or prohibitively expensive – such as the North Sea and the Gulf of Mexico. Offshore platforms led to rapid technological advances in drilling in deep-water locations, and to investment in infrastructure, pipelines, rigs and manpower.

But none of these were immediate solutions. They all required research and investment and above all time. Turning down the air-conditioning in federal buildings, allowing ‘appropriate relaxation of [government] employee dress standards’ and greater use of car-sharing, as President Nixon ordered in a memorandum in June 1973, were all very well, but such measures were unlikely to resolve the problem.37 In the meantime, the oil producers in the Middle East made hay. With uncertainty about supply spooking the market and the Muslim nations of OPEC using oil as what the King of Saudi Arabia called a ‘weapon in a battle’, prices raced almost out of control. In the last six months of 1973, the posted price rose from $2.90 per barrel to $11.65.38

Even when the Yom Kippur War came to an end after three weeks of bitter fighting, things never went back to normal. Indeed, the redistribution of capital from the west simply accelerated: the collective revenues of the oil-producing countries rose from $23 billion in 1972 to $140 billion just five years later.39 Cities boomed, transformed by cash that funded the building of roads, schools, hospitals and, in the case of Baghdad, a new airport, monumental architecture and even a stadium designed by Le Corbusier. So great was the change that one Japanese architectural journal likened the transformation of the Iraqi capital to that of Paris in the late nineteenth century under the direction of Baron Haussmann.40 Naturally, this provided those in power with valuable political capital: regimes across the Persian Gulf could make grandiose statements that linked the new affluence with their personal power.

It was no coincidence, therefore, that as the streams of cash flowing into the heart of the world turned into a torrent, the ruling classes became increasingly demagogic in their outlook. The funds at their disposal were so great that, although they could be used to provide bread and circuses in the traditional method of autocratic control, there was simply too much to lose by giving others a share of the power. There was a marked slowdown in the development of pluralistic democracy and instead a tightening of control by small groups of individuals – whether related by blood to the ruler and the ruling family as in the Arabian peninsula and in Iran, or espousing common political causes as in Iraq and Syria. Dynastic rule became the norm at a time when the industrialised world was actively breaking down barriers to improve social mobility and loudly trumpeting the merits of liberal democracy.

The redistribution of capital to the oil-rich countries – most of which were located in or around the Persian Gulf – came at the expense of a chronic slump in the economies of the developed world that buckled under the weight of depression and stagnation as the coffers of OPEC states swelled. The Middle East was awash with money, just as Britain had been in its heyday in the eighteenth century when nabobs spent cash with abandon. The 1970s were a decade of opulence, when Iran Air placed orders for Concordes, and when the imports of luxury goods like stereos and televisions soared with the number of viewers rising from just over 2 million in 1970 to 15 million just four years later.41 Lavish spending knew no boundaries.

As had been the case when early medieval Europe had been hungry for fine fabrics, spices and luxuries from the east, the question was whether there were other ways to pay for the highly prized necessities. A millennium earlier, slaves had been shipped to the Muslim countries to help fund the purchases heading in the other direction. Now too there was a darker side to being able to afford the black gold: the sale of arms and the sale of nuclear technology.

National governments lobbied aggressively to sell weapons through state-owned businesses, or by supporting corporations that were major employers and taxpayers. The Middle East as a whole accounted for more than 50 per cent of global arms imports in the mid-1970s. In Iran alone, defence expenditure multiplied nearly ten-fold in six years to 1978, with US businesses taking orders worth almost $20 billion in the same period; total military expenditure in this period has been estimated at more than $54 billion – eventually rising to nearly 16 per cent of GNP.42

The Shah needed little convincing when it came to buying weapons. He was a man obsessed by planes, missiles and artillery, who on one occasion turned to the British ambassador to Iran to ask, ‘What is the sprocket horsepower of the Chieftain tank?’ – a question the diplomat struggled to answer.43 All-comers were keen to get a piece of the action, from the Soviet Union to the French, from the East Germans to the British. Armed with seemingly limitless resources, it was a question of which surface-to-air missile systems would be bought, which anti-tank devices would sell, which fighter planes would be acquired – and which middleman to trust to get deals done in a world that seemed difficult for the outsider to navigate successfully.

In Iraq, spending on military hardware reached nearly 40 per cent of the national budget, rising by more than six times between 1975 and 1980. Few worried about the consequences of what quickly developed into a regional arms race between Iran and Iraq, or whether the ever increasing resources spent on the weapons would dangerously raise the profile of the military in both countries. On the contrary, as long as there was demand – and the ability to pay – no hurdles were put in the way of countries across the Middle East and Persian Gulf acquiring large stockpiles of weapons. The more Chieftain tanks ordered by Iran, Mirage jets by Israel, MiG-21 and MiG-23 fighters by Syria, Soviet T-72 tanks by Iraq and US F-5 jets by Saudi Arabia, the better for the economies of Britain, France, the USSR and the USA.44

The same approach was taken with the issue of nuclear power. In the early twenty-first century, the very notion of states like Iran developing any form of nuclear capability became the subject of international condemnation and disbelief. The question of nuclear power has become inextricably linked with the proliferation of weapons of mass destruction. Iraq’s nuclear potential – and the inability of inspectors from the International Atomic Energy Agency to examine facilities, laboratories and centrifuges thought, reported or known to be in the country – were a fundamental part of the justification for the invasion in 2003 that toppled Saddam Hussein.

Analogous question marks over Iran’s apparent determination to develop nuclear capability and its ability to process radioactive materials have provoked similar impulses. ‘We can’t let politics and mythology cloud reality,’ Secretary of State John Kerry said in the winter of 2013. ‘[President Obama] has been willing and made it clear that he is prepared to use force with respect to Iran’s weapons, and he has deployed the forces and the weapons necessary to achieve that goal if it has to be achieved.’45 The very idea of wanting to develop nuclear energy has been seen as a danger to regional and global security. The Iranians, said Vice-President Dick Cheney in 2005, ‘are already sitting on an awful lot of oil and gas. Nobody can figure [out] why they need nuclear [power] as well to generate energy.’ ‘For a major oil producer such as Iran,’ agreed Henry Kissinger, ‘nuclear energy is a wasteful use of resources.’46

Decades earlier, both men saw things very differently – as did successive White House administrations in the post-war period. In fact, the acquisition of nuclear resources had been actively encouraged by the United States in a programme whose name and aims today seem almost comical: Atoms for Peace. Conceived by the Eisenhower administration, this was a plan designed to allow the US to participate in ‘an international atomic pool’, and ultimately involved friendly governments being given access to 40,000 kilograms of Uranium-235 for non-military research.47

For three decades, sharing nuclear technology, components and materials was a fundamental part of US foreign policy – a straight incentive for co-operation and support against the Soviet bloc. With the USSR becoming a force to be reckoned with in Asia and the Persian Gulf, the US felt keenly the need to reinforce its support for the Shah, who seemed to be the only reliable leader in the region – even though there were others who did not think the same way: one prominent Saudi warned the US ambassador to Riyadh that the Shah was ‘a megalomaniac [and] highly unstable’. If Washington did not understand this, he added, ‘there must be something wrong with [American] powers of observation’.48

Although there were some sceptics who cautioned against giving the Iranian ruler ‘everything he wants’, the extension of Soviet power in the region convinced others – notably Kissinger – that support for the Shah should be reinforced. When the latter visited Washington in the mid-1970s, therefore, the memorandum Kissinger prepared for the President drew attention to the importance of visible US support for the Shah, referring to him as ‘a man of extraordinary ability and knowledge’, though such praise glossed over the chronic levels of corruption and inefficiency being reached in Iran.49

So eager was the US to provide support for plans to destabilise neighbouring Iraq that it helped foment trouble with the Kurds. This had a tragic outcome, after a rebellion went badly wrong and heavy reprisals were taken against the Kurdish minority in the north of the country. Having encouraged revolt, the US now stood back and watched as Iran made overtures and soon reached a settlement with Iraq over long-standing territorial boundary issues, sacrificing the Kurds in the process.50 ‘Even in the context of covert action, ours was a cynical enterprise,’ concluded the Pike Committee that looked into clandestine American diplomacy in the 1970s.51 Perhaps not surprisingly, having declared that there was insufficient space in the first volume of his memoirs to discuss this event, Kissinger did not make good on his promise to deal with it in his second.52

In other respects, the Shah was also planning for the future. He realised that the oil bonanza of the early 1970s would not last for ever and that oil reserves would eventually be depleted – which would leave Iran’s own energy needs uncertain. Notwithstanding thermostats being turned down in the US, demand for oil continued to rise, leaving Iran – and other oil-rich countries – with deep pockets to prepare for the long term. Nuclear power, concluded a report specially commissioned by the Shah, was ‘the most economic source of power’ that would secure Iran’s needs. Based on the twin assumptions that oil prices would only rise and that the costs of building and maintaining nuclear power stations would reduce, developing the nuclear industry seemed an obvious step to take – especially since this prestigious project would show how modernised Iran had become.53 The Shah took personal charge, instructing Dr Akbar Etemad of the new Atomic Energy Organization of Iran to report to him directly.54

The first port of call was the Americans. In 1974, an initial agreement was reached by which the US agreed to sell two reactors, as well as enriched uranium, to Iran. The scope of the arrangement was expanded further in 1975, when a $15 billion trade deal was agreed between the two countries, which included provision for Iran to purchase eight reactors from the United States at a fixed price of $6.4 billion.55 The following year, President Ford approved a deal that allowed Iran to buy and operate a US-built system that included a reprocessing facility that could extract plutonium from nuclear reactor fuel, and therefore enable Teheran to operate a ‘nuclear fuel cycle’. President Ford’s Chief of Staff had no hesitation in approving this sale: in the 1970s, Dick Cheney did not find it difficult to ‘figure out’ what Iran’s motivations were.

The Shah’s acquisitions from the US were part of an ambitious and much wider plan that drew in technology, expertise and raw materials from other western countries. Work began on two pressurised water reactors near Bushihr on the Gulf in 1975 after contracts had been signed with West Germany’s Kraftwerk Union AG, with the latter also committing to provide an initial fuel load and reloadings as necessary for ten years. Further letters of intent were signed with Kraftwerk as well as with Brown Boveri and with Framatome of France for a further eight reactors, including terms for Iran to be supplied with enriched uranium. Stand-alone agreements were also reached for uranium to be reprocessed in France, returned to Teheran for enrichment and then either reused domestically – or resold to a third party of Iran’s choosing.56

Even though Iran was a signatory of the Nuclear Non-Proliferation Treaty of 1968, there was regular chatter in the intelligence community about the development of a clandestine nuclear weapons programme – hardly a surprise given that on occasion the Shah would declare that Iran would develop weapons capability ‘without a doubt, and sooner than one would think’.57 One CIA report written in 1974 assessing proliferation generally concluded that while Iran was at an early stage of development, it was likely that the Shah would achieve this goal in the mid-1980s – ‘if he is alive’.58

Other countries too were looking to invest in nuclear facilities with civilian uses, while at the same time developing weapons capability. In the 1970s, Iraq spent aggressively under the direction of Saddam Hussein with the specific aim of building a nuclear bomb.59 Saddam was ambitious, setting a ‘production target of six bombs a year’ according to Dr Khidir Hamza, who was placed in charge of the programme in the 1980s. Development on this scale would have given Iraq a larger arsenal than China within two decades. No expense was spared. Iraqi scientists and engineers were sent abroad in their droves for training, above all to France and Italy, while at home everything possible was done to use the civilian programme to obtain the technologies, skills and infrastructure required to create a nuclear arsenal.60

The Iraqis were determined in their approach. Having already acquired a two-megawatt research reactor from the Soviet Union that went critical in 1967, attention turned to obtaining a gas graphite reactor and a reprocessing facility for the plutonium that would be produced as a result. When requests to France were rebuffed, feelers went out to Canada in the hope of buying a reactor similar to the one that had enabled India to test a nuclear device in 1974. This prompted the French to recommence negotiations, resulting in an agreement to build an Osiris research reactor and a smaller research reactor, both of which would be powered by weapons-grade uranium. Further materials essential for dual use were bought from Italy, including hot cells as well as a separation and handling facility capable of extracting plutonium from irradiated uranium, with a capacity of producing eight kilograms a year.61

Few had doubts that there was more to this than met the eye and that energy was not the only motivation. The Israelis in particular monitored developments with considerable concern, gathering detailed intelligence about the militarisation of their neighbours – focusing on the Tammuz facility near Baghdad at al-Tuwaitha, better known as the Osirak plant. Israel also invested heavily in its own nuclear weapons programme, as well as in a missile system modified from French designs that could deliver warheads with a range of just over 200 miles.62 By the time of the Yom Kippur War of 1973, it was thought that Israel had built up an arsenal of thirteen nuclear devices.63

The west turned a blind eye as and when needed. In Iraq, for example, the British concluded in the early 1970s that ‘although repressive and singularly unattractive, the present Government seems to be well in control’. It was a regime that was stable and, as such, one the British could do business with.64 Likewise, Pakistan’s activity – building facilities deep underground in the 1970s to enable covert testing and ultimately a successful detonation – went unchecked. Five horizontal tunnels were dug deep into a mountain in the Ras Koh range in Balochistan, each designed to withstand a twenty-kiloton detonation.65 As Pakistani scientists noted ruefully, ‘the Western world was sure that an underdeveloped country like Pakistan could never master this technology’, and yet at the same time western countries made ‘hectic and persistent efforts to sell everything to us . . . they literally begged us to buy their equipment’.66 As it was, it was not hard to see how stern talk about proliferation from countries like the US, Britain and France, which refused to be subject to the inspections and rules of the International Atomic Energy Agency, grated with those that did and had to conduct their research in secret; but the real hypocrisy, in the cold light of day, lay in the enthusiasm with which the developed world rushed to earn hard cash or gain access to cheap oil.

There were half-hearted attempts to curtail the spread of nuclear materials. In 1976, Kissinger suggested that Pakistan should wind down its reprocessing project and rely instead on a US-supplied facility being built in Iran that was part of a scheme devised by none other than Dick Cheney, for the plant in Iran to serve as a hub for energy needs across the region. When the President of Pakistan turned down this offer, the US threatened to cut off the country’s aid package.67

Even Kissinger began to reconsider the wisdom of enabling foreign governments to have access to the technologies and designs underpinning nuclear power. ‘I am frankly getting tired of the Iran deal [to build nuclear reactors],’ he said at a State Department meeting in 1976, despite the central role he had played in brokering it. ‘I have endorsed it, but in any region you look at, it is a fraud . . . we are the only country which is fanatical and unrealistic enough to do things which are contrary to our national interests.’68

Sentiments like these hinted at a growing sense in Washington that the US was boxed in and was faced with limited options. This was articulated clearly by members of the National Security Council in the late 1970s, who later stated that ‘The United States had no visible strategic alternative to the close relationship with Iran,’ having burnt policy bridges elsewhere.69 Although criticism of the Shah’s regime, and particularly the brutal methods of the Savak, rose in the western media, the US government continued to give loud and consistent support. President Carter flew in to Teheran on New Year’s Eve in 1977 and was guest of honour at a dinner to mark the end of the year. ‘Iran’, said the President, ‘is an island of stability in one of the more troubled areas of the world.’ This was because of the ‘great leadership of the Shah’. The success of the country owed much to ‘Your Majesty and your leadership and to the respect and admiration and the love which your people give you’.70

This was not so much rose-tinted glasses as a denial of reality, for storm clouds were gathering and plain for all to see. In Iran, demographic growth, rapid urbanisation and lavish overspending by a repressive regime produced a toxic cocktail. Endemic corruption did not help – with hundreds of millions of dollars taken in ‘commission’ by the royal family and those close to the ruling regime, just for each reactor.71 By the late 1970s, the situation in Teheran was poisonous as crowds took to the streets in growing numbers to protest about the lack of social justice – and about the rising cost of living on the back of plunging oil prices as global supplies began to exceed demand.

Growing dissent played into the hands of Ayatollah Khomeini, by now exiled in Paris after being removed from Iraq as part of the deal struck with the Shah in 1975. Khomeini – whose elder son was probably murdered by the Savak in 1977 – seized control of the situation, providing a vision that at once diagnosed the ills in Iran and promised to cure them. He was a brilliant communicator, able to capture the mood just as Mossadegh had done three decades earlier. In a move that appealed to left-wing revolutionaries, Islamic hardliners and almost all those who were outside the golden loop of gilded rewards, Khomeini declared that the time had come for the Shah to step aside. The beneficiaries of good leadership should be the Iranian public and Islam – and not the Shah.

To allay fears that Iran would become a religious state, Khomeini promised that clerics, preachers and zealots would not rule the country directly, but would provide guidance. He set out four tenets that underpinned the future: the use of Islamic law; the eradication of corruption; the striking out of unjust laws; and the end of foreign intervention in Iran’s affairs. It was not a catchy manifesto – but it was an effective one that spoke to multiple constituencies and encapsulated the problems and difficulties not only of Iran but of the Islamic world as a whole. The argument that wealth was being diverted into the hands of the few at the expense of the many was not just powerful but incontrovertible. In the 1970s, more than 40 per cent of the country’s population were undernourished, according to World Health Organisation targets; inequality was rife, with the rich getting richer, and the position of the poor showing little improvement, if any.72 It was up to the Iranian people to demonstrate, Khomeini declared; appeal to the soldiers ‘even if they fire on you and kill you’; let tens of thousands of die. But show ‘that blood is more powerful than the sword’.73

As the situation became more and more tense, the Shah – on whom so much hope had been pinned by the United States – went to Teheran airport, where he gave a brief statement to say ‘I am feeling tired and need a rest,’ before flying out of the country for the last time.74 Whether he could have prevented what happened next is a matter of speculation. What is clearer is how some European leaders reacted to the situation. In what President Carter called ‘one of the worst days of my diplomatic life’, Chancellor Schmidt became ‘personally abusive’ during discussions about the Middle East, alleging that ‘American interference in [this region] . . . had caused problems with oil all over the world.’75

The US had pursued a policy of complete denial and read the runes far too late. At the start of 1979, Washington sent General Robert Huyser, commander-in-chief of US European command, to Teheran to demonstrate American support for the Shah and specifically to impress on the army that the US continued to back the regime. It did not take Huyser long to realise that the writing was on the wall – and that his life was potentially in danger. He saw enough to realise that the days of the Shah were over, and that Khomeini was unstoppable.76

American policy lay in tatters. Time, effort and resources had been poured into Iran as well as into neighbouring countries since the Second World War. Leaders had been courted and indulged, while those who refused to play along had been deposed or replaced. The methods used to control the interlocking parts of Asia had failed spectacularly. The western nations, to quote Sir Anthony Parsons, British ambassador to Teheran at the time, ‘were looking down the right telescope . . . but [we were] focused at the wrong target’.77 Worse, anti-American rhetoric now united almost all the countries of this region. Syria and Iraq looked towards the USSR; India was closer to Moscow than it was to Washington, while Pakistan was willing to take US support as and when it suited. Iran was a crucial piece in the puzzle, and now it too looked in danger of falling. It seemed like the end of an era, as Khomeini noted in a speech late in 1979: ‘All the problems of the east stem from those foreigners from the west, and from America at the moment,’ he said. ‘All our problems come from America.’78

The fall of the Shah prompted panic in Washington – and hope in Moscow. The collapse of Iran seemed to be a turning point that offered opportunities. It was almost comical how badly the west had misjudged the situation not only in Iran but elsewhere too – such as in Afghanistan, where the US embassy in Kabul reported in 1978 that relations were excellent.79 Indeed, to optimistic American eyes, Afghanistan looked like a major success story, just as Iran had done: the number of schools had multiplied ten-fold since 1950, with many more students turning to technical disciplines like medicine, law and science; women’s education also blossomed, as the number of girls passing through primary education rose sharply. Rumours circulated that President Dāwud, who had seized power in 1973, had been recruited by the CIA and that the progressive agendas he pursued were ideas planted by the Americans. Although the gossip was not true, the fact that it required investigation by diplomats in Washington and in Moscow shows just how intense were the pressures for the two superpowers to compete – and to play the latest version of the Great Game in Asia.80

How things settled down after a short period of turbulence was now crucial. To all intents and purposes, it looked as though the United States was badly out of position. The bet it had placed on the Shah and on Iran looked lost; there were others across the old Silk Roads that were open to offers. With Iran going through revolution and Iraq seemingly wedded to a Soviet suitor, the US had to think carefully what its next move might be. It proved to be a disaster.