The White Revolution

Near Isfahan, surveyors were setting the final location for a $286 million steel mill that the Russians will construct for Iran. Other crews tramped across the desert and through mountain passes driving stakes to mark the route for a $450 million pipeline that will carry natural gas 800 miles north from Iran's southern oilfields to the Russian border. At Bandar Shahpur, still others staked out the site for a $100 million petrochemical plant, owned jointly by Iran and the U.S.'s Allied Chemical Corp. Around the clock, workmen were building two new ports on the Persian Gulf ($300 million), a state-owned refinery outside Teheran ($133 million) and, nearby, the giant Latyan Dam ($100 million), which they hope to complete early in 1967.

Achieving the Symbol. The intense activity represents the latest stage in Mohammed Reza Shah Pahlevi's three-year-old "White Revolution" (so called because it has been bloodless), a grand design that is intended to wrest Iran from the middle ages into modern industrialized society. Having laid the groundwork through extensive land reforms and a massive literacy drive and aided by annual oil royalties worth more than $500 million and an influx of $2 billion in foreign investment capital, the Shah has launched his country headlong into what is far and away the Middle East's fastest-moving, most ambitious development program. From broad, modern boulevards in Teheran to the effusion of makeshift classrooms in the hinterlands, it has already begun to change the life and look of Iran.

The Russians have also agreed to build a $20 million plant to turn out heavy boilers, bridge girders and cranes. Czechoslovakia has promised a $15 million precision-tool factory. On a smaller scale, the U.S. Government last week agreed to provide $245,000 for the planning of a nationwide power grid to integrate the electricity that seven new hydroelectric dams will provide by 1967. In recent months, the U.S.'s American Motors, Britain's Rootes, France's Citroen and West Germany's Volkswagen have all signed deals to begin assembling cars in Iran, thus giving the country that ultimate symbol of industrialization, an auto industry.

Losing the Largesse. Such has been the progress of the Shah's program that the U.S. Government slashed aid to Iran from $22 million to $2,900,000 last year. And, last December, President Johnson's Cabinet Committee on Balance of Payments--which sets guidelines for the "voluntary" program limiting direct U.S. investment abroad --declared that Iran was now a "developed nation." Far from feeling complimented, the Shah and Amir Abass Hoveida, his Prime Minister and chief economic planner, took the declaration as an affront; it made Iran for the first time subject to the guidelines.

Iranians see the U.S. action as a threat to the continued influx of dollars, to the completion of their development plan, and to their foreign-exchange position. "Balance of payments simply isn't that important," says Hoveida. "For a very small capital saving, the U.S. is badly damaging Iran's chances to develop." U.S. officials have privately explained to the irate Iranians that the move was aimed at big-spending American oil companies. Other U.S. firms, they point out, are being encouraged to go ahead with plans for investment in Iran.

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