The west was easily gulled by the promise of a new era of progress and prosperity under the Shah.
An agreement settling the long-standing Iranian oil dispute has been initialed between the Iranian government and a consortium — cartel is not a very respectable word — of eight oil companies. Congratulatory notes have criss-crossed among the President of the United States, the Shah, Mr. Eden, and the various ambassadors, ministers, and oil company officials concerned, not to speak of Herbert Hoover, Jr. who seems to have been rewarded with something more concrete than congratulations. The New York Times called the agreement “a diplomatic victory for the West.” The Iranians have been told that they are now embarked on a new era of national progress and prosperity. And the Shah and his ministers, renewing their “two years of treason” campaign against the former Mossadegh regime, are exhorting the Iranian parliament to ratify the agreement or else.
These widespread expressions of optimism are based on a number of misconceptions which have been sedulously propagated internationally ever since Iran nationalized its oil in 1949. For instance it has been widely publicized that Iran’s general economy, as well as the government’s revenues, are dependent upon the continued flow of black gold. This is a shockingly false picture. Let us examine the allegation in the light of four criteria: the oil industry’s contribution to the national budget, its contribution to the national income, its contribution to employment, and, finally, its role in the life of the Iranian people.
The National Budget. The highest annual net money return to the Iranian government by the oil industry was in 1948-49 and amounted to $30,000,000. The national budget that year was approximately $300,000,000. Thus the oil revenue amounted to about 10 per cent of the national budget. It is true that since most of the oil revenue was in foreign exchange, its value was greater than the figures indicate. But by no stretch of the imagi-nation can the revenue be calculated as forming the “major share” of the national budget.
The National Income. Iran is a large country (over 600,000 square miles), sparsely populated (about 18 to 20 millions), predominantly agricultural, and sadly lacking in statistics. Any estimate of its national income is bound to be hardly more than a reasonable guess. The latest such guess appears in the U.N. Statistical Year Book for 1952, which puts the figure at about $1,800,000,000 annually during recent years. Experts will affirm that the figure is more likely to be an under- than an overestimate.
How much did the oil industry contribute to the national income? First, there are the cash revenues which accrue directly to the government, second, the wages and salaries earned by Iranians in the industry, third, the goods and services purchased by the in-dustry in Iran. Even at the peak of its operation, the industry employed fewer than 100,000, mostly unskilled labor. Assuming an average income for these workers of $500 a year (an optimistic guess, about six times greater than the national average), this amounts to $50,000,000. The industry’s purchases in Iran are limited, for its technical equipment, and the nontechnical goods and services for its non-Iranian employees, are purchased abroad. If we put the figure at $20,000,000 a year we are probably overesti-mating.