CONFIDENTIAL
MEMORANDUM OF CONVERSATION
| SUBJECT: | Political and Economic Situation in Iran |
| PLACE: | Caspian Hotel Restaurant |
| PARTICIPANTS: | Dr. Fereydun MAHDAVI, Industrial and Mining Development Bank; National Front Leader Theodore L. Eliot Jr., First Secretary of Embassy |
1. Political Situation
Dr Mahadavi was more pessimistic about the political situation than I have observed in the past, in the sense that he feels that the situation of the opposition to the regime is bleaker than it has ever been. The security forces are in control and have let it be known that the slightest sign of opposition will be crushed. The Shah has let it be known that any opposition to the government is opposition to him personally and will not be tolerated. As a result, nobody in the opposition dares raise his voice; even AMINI and his group are quiet.
The National Front has, Dr. Mahdavi has observed, been put out of commission by the recent arrests of many of its secondary leaders and of Khalil MALEKI. He believes the arrests resulted from SAVAK's desire to thwart recent attempts to reorganize and reconstitute the National Front. The recent London Economist article on the opposition precipitated the arrests. MATIN-DAFTARY was singled out because of his contact with MOSADEQ. Dr. Mahdavi does not think that the arrests were connected with General NASSIRI's effort to consolidate his control of SAVAK.
The Outlook for the opposition is bleak for the foreseeable future, Mahdavi believes, because the two main props of the regime, the financial situation and the army, appear to be solid props. He no longer thinks (hopes) that an economic crisis will soon precipitate a political crisis. He has a vague notion that if the Shah moves too close to the Soviets, some military leaders may become disenchanted with him, but he is not very hopeful that that would happen.
GROUP 3
Downgraded at 12-year intervals,
not automatically declassified.
CONFIDENTIAL
