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SECRE
4. Economic Stability
In the past, the foundation of Iran's economy was in agricultural produc-
tion carried on by the bulk of a population which was remote from govern-
ment authority and which made little use of imported or manufactured articles.
Recent industrial development, however, has increased Iran's dependence on
foreign trade. Moreover, thousands of Iranians, many of them former peas-
ants, have entered the ranks of labor, earned higher wages while working
for the Allies during the war, and have been organized into trade unions.
But this industrialization is not so far advanced as it is in Western
countries; consequently, Iran does not suffer the wide variations to which
highly industrialized economies are subject. Furthermore, Iran has a con-
stant source of revenue in AIOC royalties. Thus the nation is relatively
stable economically.
A very real threat to the economic stability of the country, however,
arises from the political situation vis-a-vis the USSR. Soviet interest in
the northern provinces of Azerbaijan, Gilan, Mazanderan, Gorgan, and Khorasan
will continue. If these provinces, or even Azerbaijan alone, were to be de-
tached from Iran or to come under the control of the USSR, Iran's economic
structure would be in danger of collapse because of the large concentration
of population and resources in these areas.
II-10
SECRET
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"ocrText": "SECRE\n4. Economic Stability\nIn the past, the foundation of Iran's economy was in agricultural produc-\ntion carried on by the bulk of a population which was remote from govern-\nment authority and which made little use of imported or manufactured articles.\nRecent industrial development, however, has increased Iran's dependence on\nforeign trade. Moreover, thousands of Iranians, many of them former peas-\nants, have entered the ranks of labor, earned higher wages while working\nfor the Allies during the war, and have been organized into trade unions.\nBut this industrialization is not so far advanced as it is in Western\ncountries; consequently, Iran does not suffer the wide variations to which\nhighly industrialized economies are subject. Furthermore, Iran has a con-\nstant source of revenue in AIOC royalties. Thus the nation is relatively\nstable economically.\nA very real threat to the economic stability of the country, however,\narises from the political situation vis-a-vis the USSR. Soviet interest in\nthe northern provinces of Azerbaijan, Gilan, Mazanderan, Gorgan, and Khorasan\nwill continue. If these provinces, or even Azerbaijan alone, were to be de-\ntached from Iran or to come under the control of the USSR, Iran's economic\nstructure would be in danger of collapse because of the large concentration\nof population and resources in these areas.\nII-10\nSECRET"
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