Memorandum, State Department Summary of Telegrams

156 OFFICE OF THE SECRETARY OF STATE DECLASSIFIED WASHINGTON E.O. 12065, Sec. 3-402 State Dept. Guidelines, March 6, 1982 January 18, 1951 By DEB NTT, Date 9-4-85 SUMMARY OF TELEGRAMS IRAN Ambassador Grady in Tehran reports that Prime Minister Rasmara, who has been seeking a way to arrange a loan from the Eximbank without going to the Parliament for ratification of a loan agreement, has now been informed by a technical commission that it believes a loan cannot be arranged under existing legislation which established the seven-year plan organization for the development of the country. The Prime Minister has reportedly said that he would go to the Parliament only if seriously pressed by the Embassy, that he was certain of failure, and that this would further damage the already "very bad" US position in Iran. The Prime Minis- - ter indicated he would rather "wash out" the loan proposal quietly unless the US could find some way of making promptly a showing of aid in the form of goods by methods not requiring internal measures which are impossible of achievement now. A member of the cabinet has explained that this position is due to long delays, technicalities, and apparent lack of faith of the Eximbank toward Iran. Grady comments that he believes the Prime Minister is sincere and agrees with Rasmara's estimate of the emotional Parlia- - ment reaction even if the loan agreement was presented now in a most simplified form. He adds there is no question whatever of the low esteem with which the US is held in Iran as a result of the failure to provide realistic, acceptable and prompt assistance. The Ambassador points out that rejection of the loan by the Parliament would have unhappy results to the US position, but so would the failure of the Prime Minister to present the loan to the Parliament which could not be done without pub. lic knowledge and reaction. The Ambassador recommends that the whole question of aid to Iran be reviewed promptly in Washington on the highest levels and asks that it be recognized that an Eximbank loan is not an easily applied formula for Iran. He adds that in this situation we are losing not only our own prestige, but also Iran's desire to develop themselves. We have informed Ambassador Grady that the matter is being given urgent consideration and we have requested him to exert every effort to impress upon Rasmara the great difficulties encountered in endeavoring to meet Iran's needs. I P S I I