The Military Is in Charge

But discontent lingers, despite a show of strength and loyalty

Hundreds of tanks and armored cars thundered through the streets of Tehran last week, as U.S.-made Phantom jets screamed through the skies overhead. In a powerful show of force, the Iranian armed forces rolled out their heaviest armament and their flashiest regiments for the annual armed forces day parade. Traditionally, the festivities are an occasion for full-dress reviews and elegant tea parties for officers and their wives. This time, however, it was a day for showing strength and loyalty to Shah Mohammed Reza Pahlavi. Two weeks ago, in a desperate effort to counter rising opposition to his autocratic rule, the Shah formed a military government headed by General Gholam Reza Azhari, chief of staff of the armed forces.

Hunkered down in a new determination to preserve his throne (see box), the Shah was inexplicably absent from the ceremonies and failed to take the customary salute. Nonetheless, for the first time in the past two months, the capital appeared to have recovered a semblance of normality. Sporadic violence and protest demonstrations persisted in some outlying provinces; in the northeastern city of Mashhad, three people by official account --13 according to anti-Shah sources --were killed when troops fired on demonstrators. But most of the country's striking workers went back to their jobs, including employees of Iran Air, as well as transportation, communications, customs and steel personnel. So did most of Iran's striking oilworkers, who were given an ultimatum: Return to work or lose your jobs. Although slowdowns in some refineries and rigs continued, oil production at week's end had rebounded to 3.2 million bbl. per day, more than half the prestrike output. Officials of the National Iranian Oil Co. hoped to have production back to normal within two weeks.

The return-to-work movement was far from enthusiastic, and the country's 10 million students and 400,000 teachers, as well as newspaper reporters in Tehran, were still out on strike in support of their demands for political reforms and an end to martial law and press censorship. Tehran's normally thriving bazaar was still locked up tight. The merchants had shuttered their shops three months ago out of respect for Ayatullah Khomeini, the exiled leader of Iran's 34 million Shi'ite Muslims and the spearhead of anti-Shah dissent. At his headquarters outside Paris, Khomeini repeated his do-or-die demands that the Shah must go.

The restoration of calm in Tehran gave rise to some optimism, especially in Washington, that the Shah had weathered the most tempestuous period of his 37-year reign. "The most immediate danger has passed," observed an Administration policymaker. "What didn't happen may be most important: a call for a general strike was unsuccessful and new industrial protests did not take place." But the problem of keeping people on their jobs is far from resolved. As a Western diplomat observed last week, "What do you do, post a soldier with a bayonet over every worker?"

The Shah's next test is expected to come during the month-long Islamic observance of Muharram that begins Dec. 2. One of the holiest holidays in the Shi'ite calendar, it marks the martyrdom of Imam Husain, the grandson of Muhammad, and is traditionally a time of deep mourning. Repeatedly this year similar observances have erupted into violent confrontations between police and protesters grieving for victims of demonstrations. "If the Shah gets through that, he will have gained important ground," says a professor of Islamic studies in Tehran. "Right now we are in a period of calm, but don't be deceived. Soon another avalanche will be thundering down upon us."

Fulfilling its promise to crack down on corruption, Premier Azhari's government issued warrants for the arrest of ten multimillionaires, including Senator Ali Rezaei, a steel industry mogul. The government was also trying to put Iran's lurching economy back into high gear. Since the oil wells were shut down three weeks ago, more than $1 billion has been lost in revenues. As a result, Iran's international credit standing is in a shambles. Last month the country could obtain Eurocurrency credits on highly favorable terms. "Today," observed an American banker in London, "the Shah could not raise money on international currency markets for any period, any amount or at any price. Iran is shut out at least until the oil flow is back to normal and the political situation is cleared up."

The political crisis could prove awkward for hundreds of Western companies that have Iranian contracts to build everything from new airports to railroads and a nationwide grid of telephone exchanges.

To the dissenters, foreign (meaning mostly American) firms are as much the enemy as the Shah. Last week, after paratroopers and commandos opened fire on a crowd that was threatening to wreck sophisticated pumping equipment at a large oilfield, the car of an American Exxon executive was fire bombed; no one was injured. In another ugly incident, 200 Americans working in Tehran on a ten-year, $16 billion project to install a modern telecommunications system were shoved and threatened by their Iranian coworkers. Although such incidents were still relatively rare, some 3,000 Americans have left the country in recent weeks; a few companies were releasing others from their contracts if they wanted to go. Meanwhile, reported TIME Correspondent Dean Brelis, Iranians and foreign visitors alike coped as best they could. "At Polytechnic University in the center of Tehran," cabled Brelis, "3,000 striking students are refusing to attend classes, even though their $50-a-month stipends have been cut off, along with the heat and hot water. But the cafeteria is open, morale is high, and students play chess, strum guitars and talk about the days when 'there are no crooks and we can write and say what we want and are not afraid of being pulled into jail and tortured

"In the downtown area, barricades have gone up around the ravages of burned-out cinemas and bars, and steel plates have replaced broken windows. Not many Iranian women venture out into the streets any more; those who do shroud themselves in the chador, the long black veil that has become a sort of silent symbol of solidarity with the protest movement.

"Because everyone has to get home before the 9 p.m. curfew, the cocktail hour begins and ends earlier. Conversation, in more fashionable circles, tends to center on the shortage of butane gas for cooking and whether to stay and support the Shah or get out. Then everyone says their thanks and farewells and leaves, only to become snarled in a huge traffic jam on their way home. Promptly at 9 the shrill of the traffic gives way to silence and a long low rumble: the Shah's tanks are once again rolling into position."

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