Lesson

Early last week Dr. Charles Malik, Lebanon's able delegate to the U.N., said that U.S. prestige in the Middle East was at an alltime low, mainly because of U.S. support of Israel during the Palestine war. A few days after Malik spoke, the U.S. reputation in that part of the world got another body blow when Overseas Consultants, Inc. announced that it was withdrawing from Iran.

Overseas Consultants was formed by eleven of the top U.S. engineering and management firms. For the Iranian government it prepared a five-volume report for the economic regeneration of the country (TIME, Oct. 24, 1949). The Shah's government engaged O.C.I. to put the seven-year plan into effect. This plan was widely and justly acclaimed as one of the most important postwar moves of U.S. business in support of American foreign policy.

From the start, however, there was little or no coordination between business and policy. The U.S. State Department was not wholehearted or effective in backing O.C.I. The Iranians were disappointed when the O.C.I. contract failed to grease the wheels for a large loan from the World Bank. The British resented O.C.I.'s presence in Iran, and negotiations over the Anglo-Iranian Oil Co.'s payments to the Shah's government became deadlocked. Since most of the money for the seven-year plan was supposed to come from these payments, the plan never got going.

Meanwhile, most O.C.I. officials in Teheran had become disgusted with corruption and inefficiency in the Iranian government. In recent weeks a traveler who asked a Teheran taxi driver to take him to the Seven-Year-Plan Building was likely to meet the question, "You mean the Seven-Hundred-Year Plan?" O.C.I., recognizing that its experts were costing the hard-pressed Iranian government money that it could ill afford to spend, two months ago offered to end the contract. Last week the government accepted the offer.

Chief lesson for all hands involved in last week's announcement of failure: U.S. business and government can possibly afford to fight at home, but abroad they cannot afford to ignore each other.

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