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THE WORLD

U.S. may have had role in shah's fall

Records suggest Nixon, Ford aimed to weaken Iran's ruler. Islamic takeover was a result.

October 17, 2008|Borzou Daragahi | Times Staff Writer

But U.S. officials, especially Simon, had been working with Saudi officials behind the shah's back to seek help on oil prices in exchange for political and military support for the Arab kingdom. The Saudis stunned OPEC by announcing at a December summit in Doha, Qatar, that they would boost production to 11.6 million barrels a day from 8.6 million barrels, driving down prices.

"We should get credit for what happened at OPEC," Kissinger told Ford. "I have said all along the Saudis were the key. . . . Our great diplomacy is what did it."

But it would prove to be a Pyrrhic victory in terms of one American ally. Iran was cash-strapped, having spent much of its reserves on American weapons and the shah's Great Civilization programs, which spurred inflation by flooding the country with money.

The shah was broke. Declining oil revenue amid continued inflation forced him to abandon ambitious plans to modernize his country.

"The collapse of the Doha summit, and the Saudi decision to undercut the price of crude and boost its output to try to flood the market, rushed the Iranian economy to the precipice," Cooper writes in his report.

The shah's government, shaken by the loss of oil revenue, imposed a harsh austerity budget that threw thousands out of work, collapsed investor confidence and panicked middle-class Iranians. Economic chaos and unemployment quickly spread.

Within a year of the Doha summit, the first mass demonstrations that grew into revolution broke out on the streets of the Iranian capital.

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daragahi@latimes.com

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