Policeman of the Persian Gulf

Stretching 500 miles southeastward from the delta of the Tigris and Euphrates rivers to a narrow strait that doglegs around the tiny tip of Oman, the Persian Gulf may be the world's most valuable and vulnerable waterway. At such desert-edge ports as Ras Tanura, Abu Dhabi, Kuwait, Dhahran and Kharg Island, scores of supertankers congregate like wallowing whales to suck up crude oil. Daily they plow through the gulfs warm waters and out through the Strait of Hormuz carrying some 20 million bbl. of oil--almost half of the non-Communist world's consumption. If the gulf were closed, the effect on the U.S., Europe and Japan would be devastating.

It was no surprise, then, that President Nixon last week accorded an especially effusive Washington welcome to the man who has pledged that the waterway will remain open to all: Mohammed Reza Pahlavi, Aryamehr, Shahanshah of Iran, scion of 2,500 years of Persian power and self-appointed (with U.S. encouragement) policeman of the Persian Gulf. He had two private sessions totaling three hours in the President's Oval Office. Then the Shah, 53, and his stunning third wife, Empress Farah, 34, were feted by the President at a state dinner in the White House (the 115 guests included a gusher of U.S. oil executives), and the Nixons attended a reciprocal dinner at the Iranian embassy. Perhaps most satisfying, though, was the morning the Shah was given with officials of the Defense Department. For more than anything else, he was in Washington to shop for weapons.*

Iran already has an awesome arsenal. Since 1965 it has spent more than $3 billion in the U.S. and Europe on mostly sophisticated arms, including 70 Phantom F-4 jet fighters, 400 tanks, a destroyer, a couple of frigates and what is probably the biggest fleet of Hovercraft (50) in the world. But the Shah, who makes the final decision on all such equipment, wants more. Currently prepared to spend $2 billion or so a year, he has on order 100 F-5E supersonic fighters, another 100 Phantoms, 700 helicopters, 750 tanks, eight destroyers and four frigates. Last week he added to his shopping list the Grumman F14, which is so expensive (at $14.8 million) that even the U.S. Navy has been forced to cut down on its original order.

Extending Influence. The Shah is also spending heavily on military installations. He plans to expand the five-year-old naval and air force base at Bandar Abbas, which overlooks the Strait of Hormuz at the mouth of the gulf. A new, even bigger base for the two services is planned for Chah Bahar, close to the Pakistan border on the Gulf of Oman, extending Iranian influence into the Indian Ocean. A complex to handle a helicopter force of 10,000 men is to be built at Isfahan, in the interior. In addition, a vast communications network and automated logistics system for the armed forces is under study. "It sounds as though your ambition is for Iran to become the strongest country in the area," a U.S. newsman told the Shah in Washington. "It is not an ambition," the ruler replied with a smile. "It is inevitable."

The prospect obviously pleases the Nixon Administration. Since Britain, the region's longtime constable, withdrew from the Persian Gulf in 1971, the U.S. has made no attempt to fill the power vacuum; its Middle East naval force based in Bahrain remains at two destroyers. But, faced with a growing shortage of energy and increased Soviet influence in the gulf area, the U.S. is eager to ensure its Middle East sources of oil. This can be achieved, Washington feels, by arming friendly Iran, as well as Saudi Arabia and Kuwait.

The Soviet Union has chosen another surrogate in the gulf. After its military advisers were ordered out of Egypt last summer, Russia revised its Middle East strategy around Iraq, which has only 35 miles of shoreline on the gulf but wants more. In return for oil, the Soviet Union agreed to provide Iraq with MIG fighter planes, other arms and technical assistance. At the same time, the Russians set about conducting covert political-military activities in the gulf area.

With Soviet acquiescence, if not encouragement, Iraq's left-wing Baathist regime has been generating border trouble with both Iran to the east and Kuwait to the south. Skirmishes between Iraqi and Iranian border guards are common. Russia (along with China) has supplied weapons to guerrillas trying to overthrow Sultan Qabus of Oman. If these rebels were successful, they could bottleneck the gulf by sinking a supertanker in the narrow channel that is now negotiated by 100 ships in the Strait of Hormuz each day. The short-range Soviet aim seems to be to keep the U.S. on edge by disrupting the calm of the gulf. But there is a long-range possibility that, by adroit maneuvering through middlemen, Russia could cut off oil supplies to the West.

Despite such tensions. Iran maintains overtly cordial relations with the Soviet Union, with whom it shares nearly 2,000 miles of common border. Indeed, Iran has even received antiaircraft guns and military vehicles, as well as economic aid. from the Soviets. But there is an edge to Prime Minister Amir Abbas Hoveida's voice when he says: "Subversion under whatever name and from whatever source will not be tolerated in the Persian Gulf."

No Croesus. Moscow has not objected publicly to Iran's military buildup, but Iraq, which broke off diplomatic relations with Teheran in 1970, has, calling it "chauvinistic, aggressive and adventuristic." Another nation disturbed by the pace of Iran's armament is India. New Delhi is worried about Iranian influence in the Indian Ocean and also fears that some of Iran's weapons will eventually end up in Pakistan.

Not that Iran can go on buying more and better arms at the current rate indefinitely. Though it is the second-largest producer of oil in the Middle East after Saudi Arabia, Iran is no Croesus looking for ways to spend excess money. The Shah is committed to shifting his country of 31 million people into a more balanced economy less dependent on oil. He boasts that within ten years Iran will be the equal of France or West Germany today. But that takes money too. Says a U.S. observer in Teheran: "At the moment, between arms and development, they're spending more than they're taking in."

Manpower is also a problem. Iran is already short of technocrats and skilled workers. Yet the Shah must somehow find--and train--the personnel to man his expanding, ultramodern armed forces. At the same time, he must be careful not to create a military elite that could dominate his country. At present, Iran is stable, and the Shah seems to have the overwhelming support of his people. He has carried out something like a social revolution from the top. He boosted the Iranian economy to an annual growth rate of 11%, among the world's highest. Rising wages, a government-mandated profit-sharing system and land reform have helped him gain the backing of the peasants, who make up 60% of the total population. (It did not do the Shah any harm, either, when he recently refused a price increase for Pepsi-Cola on the ground that it was a poor man's drink.)

But Iran has a long way to go yet to achieve the good life, let alone the "great civilization" envisaged by the Shah. Medical care and educational facilities remain inadequate; life expectancy is 45, and 50% of the population is illiterate. Says a government statement: "Iran, being one of the first of the world's ancient nations to reach the frontiers of modern industrialization, believes it can avoid the pitfalls of the Western industrial societies while escaping the hardships [imposed by] Communist regimes." The question is whether Iran can avoid those pitfalls and hardships and still afford the cost of being the top cop of the gulf?

*The Shah was not averse, however, to doing a little oil business on the side. While in Washington, he announced that Iran had obtained a 50% stake in the New York State-based refining and marketing activities of Ashland Oil Inc. In return, the U.S. company will receive a guaranteed supply of crude oil.

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