RICH INCOME FOR PERSIA

Press, Volume XC, Issue 27471, 4 October 1954, Page 16

RICH INCOME FOR PERSIA

Revenue From Sale Of Oil TEMPORARY LACK OF FUNDS (From a Reuter Correspondent) TEHERAN. Although Persia’s new oil agreement with the West will make her one of the richest oil states in the Middle East, the Government is at present hard pressed to pay Government salaries. It will be some time before revenues from the sale of Persian oil to world markets reach the Treasury in Teheran. A member of the Western Oil Consortium—a group of eight major oil companies—said that he thought it unlikely that Iran would start to benefit from revenues before February or March next year. When revenues do start to flow, they will increase to impressive sums within a few years. At the end of the first three years* operation, Persia is due to get a minimum of £ 150.000,000 apart from related sources of income, such as customs duties on goods needed by foreign oil workers. In the meantime, after three years , of oil-less economy, the Persian Government has to face a rapidly emptying Treasury while at the same time fighting a high level of inflation combined with popular discontent at high prices. The crucial month will be October.

Some time during October, the remnants of previous dollar aid are due to be exhausted. Then, without some financial assistance from outside. Persia would go bankrupt, in spite of the goldmine represented by her vast underground oil deposits. Persia proposes to bridge the next few penniless months, as she has done in the past, applying for direct dollar aid from the United States. Already President Eisenhower has granted the present government under General Fazlollah Zahedi, the sum of 60,000,000 dollars since Dr. Mohammed Mussadiq’s overthrow in September, 1953.

To keep the country on an even keel until oil revenues take effect, a further 20.000.000 to 30,000.000 dollars is required at the present rate of expenditure. United States dollar aid to Persia has averaged 5.000.000 dollars a month over the last year. This sum is sufficient to pay Government salaries and help maintain the army and public services such as health, education and transport.

The United States, which has sunk so much money in the economy of Persia to strengthen it against Communist penetration and ■to pave the way to an oil agreement with the West, is not thought likely to abandon its protege on the last lap. There is, therefore, considerable optimism in government circles in Teheran about the likelihood of further direct grants of dollar aid from Washington in the near future. These sums are given without condition and with no thought of repayment Persia’s only serious doubt is how much she will receive. Government leaders have this month spoken frequently of 50,000.000 dollars to 70.000.000 dollars. United States officials here, while unable to forecast the extent of the President’s bounty, put the figure of probable aid to Persia at about half this sum. They think a grant of 20,000,000 dollars or 30,000.000 dollars is more probable than a higher sum. They also say that any such loan may be made over a period in a series of smaller payments. A sum of between 20,000,000 dollars and 30.000,000 dollars would keep Persia solvent until mid-January or Mid-March next year, at the rate of 5,000,000 dollars a month.