Select Committee on Foreign Affairs Appendices to the Minutes of Evidence


Memorandum submitted by Dr A M Ansari, University of Durham

Despite current difficulties in Anglo-Iranian relations, Iran remains a vitally important country for the UK. Quite apart from its economic importance, Iran retains a strategic and political significance which must be factored into any assessment of foreign policy objectives. The second largest producer in OPEC, with the fourth largest reserves of oil in the world, Iran also possesses the second largest reserves of natural gas (after Russia). Moreover, its strategic situation, lying as it does between the oil emporiums of the Persian Gulf and the Caspian Sea, provide it with an even more crucial role in terms of the security of Western oil supplies. It is a key player in Central Asia, and currently enjoys similar interests to the UK (and the West in general), in containing both Saddam Hussein, and the Taleban in Afghanistan. Its ability to project influence, and to some extent power, into both these regions is increasingly being viewed as a valuable asset by Western governments. Another crucial factor which is being increasingly recognised is the process of political reform currently taking place. While some observers are sceptical about the nature of this process, there is little doubt that the social revolution underpinning the political transformation taking place will not only have momentous consequences for the political development of Iran itself, but of the wider Islamic world. For these reasons alone, it is essential that the UK play an active role in developing constructive relations with Iran. In addition to these, it should be borne in mind that the UK has enjoyed a particularly intimate relationship with Iran over the past two hundred years, providing it with certain advantages and constraints which need to be recognised, managed and harnessed to good effect.


  Anglo-Iranian relations extend back several centuries, the first embassy having been dispatched in the early seventeenth century, but diplomatic relations began in earnest in the early nineteenth century following British involvement in the Indian sub-continent. Not only was Iran of interest to the UK in terms of trade, but there were important political ties to be fostered in light of Britain's rivalry with Tsarist Russia. Indeed from the period of the Napoleonic Wars, Iran became increasingly embroiled in Great power politics, as first France, then Britain sought to become the dominant European power in the country. The great threat to Iranian power however, came from the north and in a succession of wars, Iran lost considerable Caucasian territories to Russia and effectively lost her status as a great power. From around 1828 onwards, Iran effectively became a pawn in the imperial rivalry between Russia and Great Britain, as each side sought to manipulate politics in Tehran. Indeed, Iran arguably only managed to maintain her independence through an ability to play each power against the other, and because neither Russia nor Britain could afford to see the other dominate the country. Britain therefore played an increasingly intimate role in the politics of the country, and the British embassy, along with that of Russia, was viewed by many Iranians as the real source of power in the country. This was made apparent by Britain's central role during the Constitutional Revolution in 1906, when she initially played a vital role in ensuring the success of the revolutionaries.

  While there was undoubtedly growing resentment at the level of British interference in the politics of the country, this was to be tragically consolidated in the first half of the twentieth century when British power in Iran reached its zenith, chiefly through its control of two vital economic assets. Although by 1907, Britain and Russia agreed to separate spheres of influence, with Britain dominant in the south. British power in Iran was expressed not only through an extensive network of consulates, but through its control of the British Imperial Bank of Persia (latterly HSBC), and the Anglo-Persian Oil Company (latterly BP). The Imperial Bank grew to dominate fiscal policy and to enjoy a monopoly over the issue of notes, a monopoly it only reluctantly relinquished in a gradual battle with the Iranian government in the 1930s and 1940s, while the Anglo-Persian Oil Company, in which the British government soon bought a golden share, dominated oil production and revenues. Both these institutions, seen as extensions of the British government, generated deep resentments among Iranians developing a strong sense of national identity, not least because the British exchequer made more from oil taxes than the company paid in royalties to the Iranian government (in light of the current furore over OPEC and oil prices, this is worth noting). Economic dominance aside, there were more overtly political causes for resentment.

  In the aftermath of the First World War and following the Russian Revolution, Britain sought to consolidate its political dominance in Iran through the ratification of the Anglo-Persian Agreement (1919), which many Iranians regarded as an attempt to reduce the country to the status of a protectorate. When this failed, Britain was seen as having a crucial hand in the coup d'etat of 1921 which eventually resulted in the establishment of the Pahlavi dynasty (1925-79). Despite the often awkward relationship between British and the Pahlavis, in the eyes of many Iranian nationalists, Britain was intimately tied to, and as such tarred by its association with the Pahlavi autocracy. This resentment exploded in 1951 when the nationalist government of Dr Mohammad Mosaddeq decided to nationalise the oil industry, very much on the same lines as the post-war Labour government had nationalised many British industries. As Britain's largest overseas asset, the Anglo-Iranian Oil Company (as it was then known) was not going to be relinquished without a fight, and there was much concern that British prestige in the Middle East could be irreparably damaged if such a move were not resisted. In the end, following an embargo of Iranian oil, the British and US governments orchestrated a coup which overthrew the popular government of Dr Mohammad Mosaddeq and restored the Pahlavi autocracy. It was a seminal moment in the development of the Iranian consciousness and still rankles today. Indeed, the events of 1953, while acknowledged and regretted by the US, have yet to be officially recognised by the British government, despite the fundamental role they play in continued Iranian suspicion of British motives, and they run like a deep negative undercurrent beneath most aspects of Anglo-Iranian relations. The fatwa against Salman Rushdie for instance cannot be understood, outside this historical context of resentment and the general widespread assumption, that whatever Britain gets up to, it must be to the detriment of Iran.


  At the same time, this lengthy relationship affords Britain opportunities which other countries do not have. For all the popular resentment at political interference, there is a widespread admiration for the British practice of politics—while they may not like being the object of this, Iranians can appreciate political quality when they see it. As such, many institutions are modelled on, or aspire to be comparable to the equivalent British institutions (the BBC is a particular favourite, and it is noteworthy that despite the frequent denunciations of the BBC Persian service it remains by far the foreign radio station of choice—this "imitative" nature of Iranian politics should not be underestimated, there is considerable scrutiny of the British political process, from Blair's attack on the "forces of conservatism, to the Shayler affair)). Furthermore there are strong cultural and business links. Britain remains the destination of choice for Iranian students seeking an overseas education; while many Iranians have worked in or with British companies, and vice versa, many British executives have spent time in Iran. Political suspicion of British Machiavellianism, is therefore sometimes awkwardly parallelled by genuine social warmth between British and Iranian colleagues. Sir Denis Wright, the former British Ambassador to Iran, wrote following the diplomatic rupture in 1951-53, that Britain and Iran resembled "estranged lovers". This is an apt description of Anglo-Iranian relations in the twentieth century; it is only because the two have been so intimate that they so readily express emotions of betrayal and are not surprisingly cautious in pursuing a rapprochement. But the other side of this, is that once a determination to rebuild relations is agreed, the process will tend to be rapid, and for those unaware of the historical precedent, unusually warm.

  Given the nature of this historical relationship, and the duality of the inheritance, it is important that any policy towards Iran be handled delicately and with sensitivity. Iranians have long memories which are regularly replenished with historical anecdote, and issues which are viewed as ancient history here, are very much part of the political firmament in Iran. One pertinent example will suffice to indicate this. Last summer (1999), the conservative dominated Iranian parliament decided in some haste to debate a motion replacing the annual holiday commemorating the nationalisation of the Anglo-Iranian Oil Company with a religious holiday. Coincidentally, the British embassy issued a communique indicating Britain's willingness to invest in the Iranian oil industry, despite US objections. As so often in the past, these two disparate moves were seen by many reformists as part of a grand scheme, by which British investment would be secured at the expense of eliminating the "nationalisation" holiday. The reformist press went into overdrive berating the Parliament for its political stupidity, and handing a gift to the British government. So damaging was this charge, that the parliament was forced to reverse its decision days later. While a relatively minor event, it was an accurate reflection of popular sentiment, the very current relevance of historical events, and the perception of Britain and British power. As one diplomat has pointed out, there is some truth in this, Iran is the only country where the British Empire still exists!

  There are of course dramatic changes taking place in Iranian society and politics, and while at present the reformist cause seems to have suffered a setback, there should be no doubt that the social revolution taking place is a profound one. While its origins predates the election of Mohammad Khatami, in 1997, the process of reform has gathered considerable momentum since that time, and not unnaturally has evoked a serious reaction. There is however little doubt that the process of democratisation, which is an internal process, is gathering pace—there are sound, social, demographic, economic, political and crucially, ideological reasons, supporting this development. Few in Iran are in any doubt that such a transformation in the political fabric of the country will be easy—governments have after all on the whole been autocratic—but neither is there any doubt that this ambitious goal will be achieved, and my own fieldwork in the country, leaves me in little doubt that Reformist goals will indeed be accomplished. One aspect of this development is a review of Iran's relations with the outside world, in particular the West, and President Khatami has been explicit in his call for a more mature Iranian approach which does not see the West (Britain and the US in particular) as the font of all wickedness. Indeed, it is important to recognise that Khatami's development of detente with the West is not fundamentally driven by economic needs (though this is important) but is also regarded as an important cultural obstacle to overcome. To that extent the compromise reached on the Salman Rushdie affair was a vital bridge to cross. While some in Britain were appalled that the fatwa was not "lifted", and ambassadorial relations were nonetheless restored, this somewhat missed the point. While many people in Iran did not agree with the fatwa, they were less than enthusiastic about being seen to "submit" (yet again) to British power. This rather reckless act of rebelliousness, which was delicately and effectively brought to a conclusion by the FCO and their counterparts in the Iranian Foreign Ministry, thus ensured that nobody lost face, and that Iranians could genuinely feel satisfied at having stood up to Britain. While it did not eliminate suspicions it did calm the lingering wound, and encourage some more cynical Iranians that a new more mutually respectful relationship with Britain might be possible. In this case Britain can be said to have sacrificed short term political expediency in return for long term gain, and considerable advances in Anglo-Iranian relations have been made since 1998. Indeed, many are now arguing that Britain will regain her dominant position in the country within a few years.

  Nevertheless some serious suspicions remain, which only emphasise the importance of prudence and sensitivity in handling the development of constructive relations. In fact, they indicate that Britain must be proactive in the process. Thus despite considerable progress, I was struck by the fact that many reformists, especially students, still considered that Britain played an important role in the political life of the country, but more damagingly, that Britain as an inherently conservative and traditional country, was full square behind the "conservative" and "reactionary" forces in Iran. My protestations that Britain would in fact be sympathetic to democratic forces were greeted with polite dismissal, and "evidence" to the contrary was summarily provided. Thus, students pointed out, it was Britain who orchestrated the coup against Mosaddeq and the restoration of autocracy, and Britain has always had a congenial relationship with the clerical classes. While simplifications of the past, they nevertheless contain more than a kernel of truth. At the same time, suspicions are widespread among all political groups with respect to British (mainly parliamentary) open support for opposition groups, in particular the Mujahideen-e Khalq Organisation (MKO), and what is effectively its political wing, the National Council of Resistance. The fact that the MKO are headquartered in Iraq, does not render it either popular or effective in Iran (despite their assertions to the contrary) and many wonder, with some justification, why the organisation is tolerated in the UK despite having been designated a terrorist organisation by the US state department. Indeed there is a contradiction to be tackled here: the juxtaposition of full diplomatic relations with a foreign government, and apparent official support for an organisation that seeks the violent overthrow of this government. These perceptions need to be addressed, if Britain's public standing in the country is to improve. How exactly this is achieved is a matter for policy makers, although one route is through broader cultural and educational links.


  Summarising this rather condensed precis, the following points regarding British foreign policy towards Iran need to be borne in mind:

    —  British foreign policy towards Iran does not occur in a vacuum, but rather is located within a profound historical relationship in which Iran has normally been the weaker partner. This must be recognised and understood when developing foreign policy. Iranians have long memories and history did not begin in 1979;

    —  Britain cannot afford to ignore Iran, whose role in south west Asian security and stability, remains vital;

    —  great strides have been made in cultivating a more constructive relationship, but suspicions remain, principally around the two areas noted above, which need to be addressed and overcome; although these need to be approached gradually and incrementally. Britain must show concern about human rights without appearing to preach, but neither must it remain aloof and appear to condone illegal actions. Such behaviour will only reinforce opinions concerning Britain's "conservative" leanings;

    —  Iran is currently undergoing a social revolution with important political ramifications. This needs to be better understood and appreciated by a broader swathe of decision-makers, especially outside the FCO;

    —  there is a strong "nationalist" resurgence in the politics of Iran, epitomised by the current rehabilitation of Dr Mosaddeq. This too, must be recognised and the tendency to view all things in Iran through an "Islamic" prism, avoided;

    —  furthermore, this is an internal process for which the periodic interventions of exiled opposition groups (calling for revolution from LA, for instance), do nothing but harm. Open support for these groups, (fundraising for instance) likewise sends the wrong message. They do not have the widespread support they claim, and their proclamations to this effect only endanger the lives of many student reformers;

    —  while there is room for improvement and the development of a more proactive policy (it would certainly be better to have more Persian speakers in the diplomatic service), relations have on the whole been developing constructively over the past two years, and Britain has regained much lost ground. Much of the credit for this must go to the FCO and in particular the embassy staff in Tehran who have handled affairs with considerable sensitivity and skill. In light of the impending return of US (corporate) interests, this development, as far as British interests are concerned, would seem more vital than ever.

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Prepared 13 February 2001