The Silk Roads: A New History of the World

by Frankopan, Peter

  Times were changing. And in this sense Mossadegh was the most articulate of those setting out the vision of a new era, one that involved the recoil of the west from the centre of Asia. Although the precise circumstances of his demise were kept hidden for decades by the intelligence agencies, who stayed alert to the ‘damaging consequences’ declassification of material would bring, few had any illusions that the removal of Mossadegh had been orchestrated by western powers for their own ends.87 As such, Mossadegh was the spiritual father of a great many heirs across this region. For while the methods, aims and ambitions of a group as diverse as Ayatollah Khomeini, Saddam Hussein, Osama bin Laden and the Taliban varied widely, all were united by a core tenet that the west was duplicitous and malign and that liberation for local populations meant liberation from outside influences. There were different ways of attempting to achieve this; but as the case of Mossadegh showed, those who presented a problem for the west were liable to face the consequences.

  Psychologically, then, the coup was a pivotal moment. The Shah drew all the wrong conclusions, and convinced himself that the people of Iran adored him. In fact, there was ambivalence at best for the Shah, whose cavalry officer father had taken the throne only thirty years earlier. His flight to Rome demonstrated a worrying lack of backbone. His conviction that he was the man to modernise the country depended on his ability to read the prevailing political winds and to stand independently of western, above all American, intervention. This was a lot to ask of a vain man whose roving eye and love of the finer things in life provided ammunition for his rivals and left little time for good judgement.

  More than anything, though, the CIA-backed coup of 1953 marked a watershed for America’s role in the Middle East. Here was a ‘second chance’ to save Iran, reasoned John Foster Dulles, the new Secretary of State, a chance to make sure it did not slip out of the west’s orbit.88 Given that a ‘democratic independent Iran [did not appear] to be possible in the circumstances’, the US ambassador to Teheran told the Shah, there were two choices: a free ‘undemocratic independent Iran’ or a ‘permanently . . . undemocratic independent Iran, behind the iron curtain’.89 It was the direct antithesis of the loud and public message that the west was advocating in its struggle with Communism about freedom and about democracy.

  It was the point where the United States stepped into the breach; it was the point where the United States came into serious contact with the region criss-crossed for centuries by the Silk Roads – and set about trying to control it. But there were dangers ahead. Posturing about democracy on the one hand while being prepared to sanction and even orchestrate regime change on the other made for uncomfortable bedfellows. It could be dangerous to play both sides – not least because in due course there would inevitably be a breakdown in trust and a collapse of credibility. As Britain’s star continued to fade, much depended on what lessons America would learn from what had happened in 1953.

  22

  The American Silk Road

  By taking the lead in the Middle East, the United States was stepping into a new world – one where there were obvious tensions between the goal of promoting national interests on the one hand and supporting unsavoury regimes and rulers on the other. Within weeks of Mossadegh being toppled, the State Department set about lining up American oil companies to take over Anglo-Iranian’s oilwells and infrastructure. Few were keen to do so, preferring to steer well clear of the uncertainties that seemed likely to follow the Shah’s return: the fact that the latter was contemplating having his former Prime Minister executed as a means of calming the situation was hardly a promising sign.

  It did not help that oil production elsewhere was rising, or that there were new opportunities that promised to be the foundation of great fortunes, which were indeed to prove far greater than that made by Knox D’Arcy. Weeks before Mossadegh’s fall, a company controlled by J. Paul Getty made a huge strike – described as ‘somewhere between colossal and history-making’ – in the Neutral Zone between Saudi Arabia and Kuwait. By comparison, becoming involved in the poisonous politics of Teheran was understandably unattractive to a corporation. For the US government, on the other hand, it was not just a priority but a necessity: Iran had all but stopped exporting oil during the crisis of the early 1950s. If it did not resume production soon, the country’s economy would crumple, which would likely open the door to subversive factions that might tip the country towards the Soviet Union. The drying up of supplies and the rising prices would also have an unwelcome impact on Europe as it tried to rebuild in the post-war period. The State Department therefore began a sustained campaign to encourage the major US producers to form a consortium to take over Anglo-Iranian’s interests, intimating darkly that their concessions in Kuwait, Iraq and Saudi would be in jeopardy if no action were taken.

  The US government now played ringmaster as it cajoled American corporations to co-operate. As one senior oil executive put it, ‘from a strictly commercial point of view, our Company has no particular interest’ in getting involved in the Iranian oil industry; ‘but we are very conscious of the large national security interests involved. We are therefore prepared to make all reasonable efforts’ to help. We would never have got entangled in Iran, said another oilman, if the government ‘hadn’t really beat us on the head’.1

  The efforts to step into Anglo-Iranian’s position and to keep Iran stable were complicated by the fact that the very oil companies being asked to act as a tool of US foreign policy were being prosecuted for breaking antitrust laws by the Department of Justice. Just as the message of preaching democracy had been revealed to be a flexible one, so too did that of ensuring that American laws were upheld: formal undertakings were therefore given by the Attorney-General at the request of the National Security Council that ‘the enforcement of the Antitrust laws of the United States against the [oil companies forming the consortium] may be deemed secondary to the national security interest’. In the spring of 1954, therefore, the oil companies received formal guarantees of immunity from prosecution. So important was control over Iran that the US government was prepared to put its own legal code to one side.2

  Encouraging the participation of American oil companies was just one part of a wider plan to prop up Iran and keep it out of the grasp of the Soviet Union. Concerted efforts went into social development projects, particularly in the countryside. Around three-quarters of the population were peasants, owning no land and with minimal incomes. They were trapped in a world where landowners were opposed to agrarian reform, and where options were limited: typical rates of credit on offer to small farmers ranged from 30 to 75 per cent – levels that were all but guaranteed to strangle social mobility.3

  Substantial funds were invested to address some of these issues. Micro-finance schemes for small farm-holders were set up by the Ford Foundation, the largest philanthropic organisation in America. Support for the creation of co-operatives enabled them to go from inefficient trading of their cotton harvests at local markets to selling them at considerably better prices to brokers in Europe. Pressure was heaped on the Shah and his ministers to engage properly with the concept of rural development, albeit with limited effect and to the despair of those trying to convince senior politicians that failure to engage with illiteracy and inequality in the countryside would have long-term consequences.4

  Direct aid from the US government rose sharply too, rising from an annual average of $27 million in the years before the removal of Mossadegh to a figure nearly five times higher in the years that followed.5 The US also provided grants and loans to help bankroll a massive dam on the Karaj river, around forty miles north-east of Teheran, that was intended substantially to upgrade the electricity and water supply to the capital city – as well as to serve as a symbol of Iran’s modernisation and progress.6

  Efforts like these were part of a systematic approach to strengthening other parts of the region. Although Iran’s oil wealth made it particularly significant to the west, neighbouring countries were also ris
ing in importance because of their position along the Soviet Union’s southern flank at a time when the Cold War was beginning to heat up.

  The result was the construction of a belt of states between the Mediterranean and the Himalayas with pro-western governments that received considerable economic, political and military support from the US. This slab of countries – christened the Northern Tier by the austere Secretary of State John Foster Dulles – served three aims: to act as a bulwark against the expansion of Soviet interests; to keep the resource-rich Gulf secure and continuing to pump oil to the west that would stimulate the recovery of Europe while at the same time providing revenues that were important for local stability; and to provide a series of listening posts and military bases in case tensions with the Soviet bloc spilled into open conflict.

  In 1949, for example, a report prepared for the Joint Chiefs of Staff on South Asia noted that Pakistan ‘might be required as a base for air operations against [the] central USSR and as a staging area for forces engaged in the defense or recapture of Middle East oil areas’ – while also pointing out that it was an obvious outpost from which to conduct covert operations against the Soviet Union.7 It was vital therefore to provide assistance to Pakistan, as well as to other countries in the Northern Tier, or there was a chance that the region as a whole would take a neutral line with the west, ‘or, at worst . . . might fall into the Soviet orbit’.8

  These anxieties shaped US and western policy for much of Asia in the decade after the Second World War. In 1955, the swathe of countries running from Turkey in the west through Iraq and Iran to Pakistan in the east were tied together in a single agreement that replaced a web of alliances with each other or with Britain – and became signatories of what was soon known as the Baghdad Pact. Although the stated aim of the treaty was ‘the maintenance of peace and security in the Middle East’ under which mutual guarantees were exchanged, the reality was that it was designed to enable the west to influence a region that was of vital strategic and economic importance.9

  Despite the careful consideration that had been given to ensuring that local governments would act favourably, mistakes in Washington created opportunities for the Soviets. At the end of 1954, for example, a discreet approach by the Afghan leadership to the US requesting assistance and arms was dismissed by the State Department. Instead of asking for arms, Prince Naim, brother of the Prime Minister, was told, Afghanistan should focus on matters closer to home – such as resolving border disputes with Pakistan. The clumsy response, intended to show support for a regime in Karachi that had recently been described by one military attaché as of ‘strategic worldwide importance’, backfired immediately.10

  The news had barely reached Kabul before the Soviets stepped in to say they were willing to provide military hardware and development funds – an offer that was quickly accepted. An initial grant of $100 million was followed by further awards that enabled bridges to be built, telecommunications to be modernised and the road system expanded, including the highway between Kandahar and Herat. Money and expertise from Moscow were also responsible for constructing the 1.7-mile Salang Tunnel along a major road leading north to connect with Soviet Central Asia. This route, a symbol of Soviet–Afghan friendship, was the primary supply artery during the 1980s following the invasion of Afghanistan. Ironically, it also proved to be a vital part of the supply route bringing US and Allied convoys into the country in the early twenty-first century: a highway built to strengthen Afghanistan against the west became central to the efforts of the latter to build the former in its own image.11

  Being outmanoeuvred so emphatically was a sobering experience – especially when the same thing happened again a few months later, this time with more dramatic results. At the end of 1955, the revolutionary Gamal abdel Nasser, who had played an instrumental role in the coup three years earlier that toppled Egypt’s King Farouk with CIA support, also approached Moscow for arms. Caught by surprise, the US responded by offering to help fund a project to build a huge dam at Aswan in conjunction with Britain and the World Bank – a mirror project of the Karaj dam in Iran. There were high-level discussions between London and Washington about how else to mollify Nasser, resulting in the promise of arms and pressure being applied to Israel to agree a treaty with Egypt, in the hope of improving the increasingly tetchy relations between the two countries.12

  Nasser had been riled by the Baghdad Pact, which he saw as an impediment to Arab unity and a western tool to preserve influence across the heart of Asia. Had the money and support been forthcoming, he might perhaps have been pacified – at least in the short term. As it was, the funding promises were withdrawn following concerns from US congressmen that construction of a dam would lead to a surge in cotton production and a drop in prices that would affect American farmers.13 This self-interest proved fatal; it was the final straw.

  An expert in political brinkmanship, Nasser – described by the British Prime Minister Anthony Eden as being determined ‘to become the Napoleon of the Arabs’ – now escalated the situation.14 He pointedly responded to the British Foreign Secretary’s pompous comment in the spring of 1956 that the Suez canal was ‘an integral part of the Middle East oil complex’ and vital to Britain’s interests with the retort that if that was the case, then Egypt should share in the profits of the canal – just as oil-producing states shared in oil revenues.15 He realised all too well that the west would stop at nothing to retain its assets, but calculated that nationalising the canal would provide leverage which would in the long run only benefit Egypt.

  As American planners set about calculating the possible impact of the closure of the canal on oil prices, leading figures in Britain slumped into a fog of doom and gloom. ‘The truth is that we are caught in a terrible dilemma,’ wrote Harold Macmillan, the highly regarded and well-connected Chancellor of the Exchequer. ‘If we take strong action against Egypt and as a result the canal is closed, the pipelines to the Levant are cut, the Persian gulf revolts and oil production is stopped – then the UK and Western Europe have “had it”.’16 If nothing was done, on the other hand, Nasser would win hands down, and there would be catastrophic consequences elsewhere: all the countries of the Middle East would simply follow his lead and nationalise their oil industries.

  Nasser was taking up where Mossadegh had left off. Western diplomats, politicians and intelligence operatives began to think about applying a similar solution to the problem of a leader whose policies were opposed to western interests. It did not take long before the British were looking at ‘ways and means of bringing down the regime’.17 As one senior diplomat in London put it, ‘we may have to get rid of Nasser’; the Prime Minister, Anthony Eden, did not just want to remove him; he wanted Nasser dead.18 After rounds of diplomatic shuttling had come to nothing, Britain and France concluded that a sustained demonstration of power was needed to impress leaders across the Middle East that direct action would be taken against anyone who dared stand up against western aims.

  At the end of October 1956, military action began against Egypt, with British and French forces moving to secure the canal zone, while their Israeli allies launched a strike deep into the Sinai peninsula to help secure Suez and maximise pressure on Nasser. The invasion soon turned into a fiasco. The Suez canal was closed after the Egyptians had scuttled ships, barges and maintenance vessels in and near navigation channels, while the movable rail bridge at El Fridan north of Ismaila was dropped into the water. The effect of the estimated forty-nine obstructions went beyond a shut-down of the canal; it produced what one report from this time called ‘a serious dislocation of normal commodity movements’. Shipments of petroleum to western Europe were sharply reduced.

  Further consequences were to be expected, concluded the CIA: the prices of ‘many basic commodities in world commerce’ would be bound to rise, and there was likely to be ‘considerable unemployment in the countries of the Free World’ whose economies were dependent on shipments coming through Suez. The impact would be felt on the Soviet U
nion too, whose vessels trading with the Far East faced a 7,000-mile diversion round Africa to reach their home ports in the Black Sea because of the closure of Suez. The Americans watched carefully as Moscow diverted essential cargo on to trans-Asian railway routes, whose importance rose quickly.19

  Although more than aware of the rising tensions over Egypt, the Eisenhower administration was taken by surprise at the outbreak of military action, having not been consulted on the invasion plans. The President was incandescent, delivering a stinging rebuke to the British Prime Minister in person. The use of force in the canal zone was a propaganda disaster for the self-proclaimed guardians of the ‘free world’, coming just as Soviet tanks rolled through the streets of Budapest to put down a popular uprising in Hungary. Ultimately, though, the action in Suez forced a different issue: it marked the moment when the US had to choose between the western powers whose mantle it had inherited in the twentieth century and the oil-rich world of the Middle East. It chose the latter.

  It was essential, reasoned President Eisenhower, that ‘the Arabs [not get] sore at all of us’. If they did, oil supplies from the Middle East might collapse altogether, both because of the canal’s closure and because production might be stopped or embargoes introduced in countries in a region naturally sympathetic to Egypt when it was being so brazenly bullied. As one senior British diplomat had already conceded, any reduction of supply would have its own devastating consequences. ‘If Middle East oil is denied to [Britain] for a year or two, our gold reserves will disappear. If our gold reserves disappear the sterling area disintegrates. If the sterling area disintegrates and we have no reserves . . . I doubt whether we shall be able to pay for the bare minimum necessary for our defence. And a country that cannot provide for its defence is finished.’20 This was very much a worst-case scenario, laced with doom. Even so, as Eisenhower himself recognised privately, it was hard to be ‘indifferent to the fuel and financial plight of Western Europe’. Nevertheless, as he wrote to Lord Ismay, the first secretary-general of the mutual defence alliance NATO (North Atlantic Treaty Organisation), it was vital not to ‘antagonize the Arab world’.21