NEW PATTERN FOR OIL
m. R. MORRISON had little fresh light to shed on the Persian situation when he spoke in the House of Commons on Tuesday. He repeated the Government's desire to settle the dispute by negotiation ; he made explicit our willingness to "consider a settlement which would involve some form of nationalisation," and, in answer to a Conservative ques- tioner, he agreed that " we have every right, and indeed the duty, to protect British lives." And he refused to accept the Persian Government's arbitrary unilateral action. These general principles are all right as far as they go, but they do not go very far. We have been complaining with justice that the Persians give no precise meaning to their phrases ; what do they mean by nationalisation, for example, or by compensation ? Nobody knows. But Mr. Morrison is hardly more precise. Does the expression " some form of nationalisation " merely concede a principle, or does it represent some precise plan which we arc prepared to bring forward at an opportune moment ? And does the determination to protect British lives imply the possible use of troops in Abadan ? If the protection of life is the Government's main concern, would not a progressive policy of evacuation be more effective ? Perhaps it is argued that no precision can be given to our policy until the hoped-for process of negotiation is begun. But it must be remembered that Mr. Morrison has already stated that we will not negotiate under duress. Are we still under duress, and, if we are not, at what precise moment did we emerge from this state ?
It is, of course, important that we should be prepared for negotiations at any time and under almost any conditions, and that our preparations should include an exact estimate of how much we are prepared to sacrifice. For sacrifices in many direc- tions will be expected from the Government and the Company —sacrifices of pride, cash, efficiency and security. These will be well worth making if they prevent a disaster, such as the disintegration of Persian economy or the drying up of Persian oil. Clearly some of the sacrifices should be easier than others ; we should be able to yield more pride than security, and more cash than efficiency. But all these sacrifices should by now have been embodied in a detailed scheme for the future conduct of the Persian oil industry, which we believe to be one that will work and that the Persians will accept. The only indication that has so far been made of the lines along which the British Government is thinking was contained in Mr. Morrison's state- ment in the House of Commons on May 1st. He then outlined a plan which had been suggested to Dr. Mossadaq's predecessor, Mr. Hussein Ala ; this plan " provided for the transfer of the Company's operations in Persia to a new British company, on the board of which the Persian Government would be repre- sented ; for a progressive increase in the already very great proportion of Persians employed by the Company throughout its operations ; and for equal sharing of the profits of these opera- tions between the Persian Government and the new company."
It was probably just as well that Mr. Hussein Ala's Govern- ment fell before these highly unimaginative proposals had attracted any attention. By suggesting that the old company should be replaced by a new one, also British, Mr. Morrison showed that the Government had missed the point of the whole dispute ; by recommending that more Persians should be employed by the Company, and that profits should be split equally, he showed an ignorance of the policy which the Oil Company is supposed to be already carrying out. Now, however, this abortive plan is presumably forgotten, and the principle of nationalisation accepted, though it was a pity that on Tuesday Mr. Morrison felt obliged to insert the meaningless qualification " some form " of nationalisation. It would have been much better if he had felt able to say : " We accept the idea of nationalisation ; we believe that it can be made -to work," and then, either publicly or privately, backed up this belief v.ith concrete proposals. For there is no escaping from the conclusion that now the British Government is no less committed to the concept of a nationalised oil industry in Persia than is the Persian Government, and that our interest in seeing that nationalisation works is therefore as great as theirs.
To the Anglo-Iranian Oil Company itself, the idea of nationalisation is presumably still heresy. But the action of the Persian Government was so precipitate that the Company, which could hardly protest, much less negotiate, while the legislation in the Mejlis was in progress, was compelled to maintain a silence which was capable of being, and has been in some quarters, misconstrued. The British Government has, it is true, taken up the cudgels on behalf of the company, but does this mean that the points of view of Government and Company are identical, and, if they are, which is setting the pace ? This is a question of more than academic interest, for the Company cannot clearly be absolved from blame for the crisis that has arisen. It has relied too heavily on the rectitude of its own intentions and made too great a virtue of efficiency ; it has failed diplomatically. It is important that when negotiations do start they should be conducted by someone who is not con- cerned to recreate the old Anglo-Iranian organisation under a new guise, but by a negotiator who has the statesmanship to realise that any new agreement under which Persian oil is extracted is likely to set the pattern for the Middle Eastern oil industry for a good many years to come.
The first signs of the new pattern for Middle East concessions that is emerging came in the announcement from Baghdad over the week-end of the revised terms agreed to by the Iraq Government and the Iraq Petroleum Company. These provide that the royalties to be drawn in future by the Iraq Government shall be more than those received by Saudi Arabia and not less than any which may be agreed to for the Persian Government. This means, in simple language, that the Iraq Government intends to get the best concession terms that are going, and that the I.P.C. (which is British-owned) recognises that this is a natural demand. The same demand for better terms will probably be heard sooner or later in every oil- produc- ing country in the Middle East, and it would be better for Britain and America to accept as hard bargaining a process which they will be tempted to denounce as blackmail.
But what, as Dr. Jowett asked of the Holy Grail, are they going to do with it when they have found it—" they " in this context being the countries of the Middle East, and " it " the increasing wealth which oil is to bring them ? It is a question which is infinitely harder to answer than is the problem of how the wealth is to be assured to them. Behind all the hyperbole and emotion of Dr. Mossadaq is the restless consciousness, to be found in all Middle Eastern countries today, that things are going wrong with them add that wealth is one of the pre- requisites of a better state of affairs. It ought not to have been a matter of particplar amusement that, at the only Press con- ference which he has held, Dr. Mossadaq should have talked, not about oil, but about the slums of Tehran, In his mind, and in the minds of most of his compatriots, the association between slums and oil is direct and vital. It is quite true that previous Persian Governments have had the money and have done nothing to remove the slums ; the seven years' plan, which the oil royalties were supposed to finance, has hardly gone beyond paper planning, and has enriched the rich rather than the poor. But the fact that corruption and inefficiency are endemic in the administration of the Middle Eastern States is not the same as saying that they are liked there or even tolerated. Some day some Prime Minister in some State of the Middle East will succeed in applying wealth to the slums—in other words, in embarking on effective social reforms. There is no doubt that such a Prime Minister would be popular ; there is equally little doubt that the Western Powers, and in particular Great Britain. could assist him enormously. But, as things are developing today, the chances arc that this not impossible Prime Minister will, in Persia at any rate, emerge from the Left and look for guidance to the North. It is because that catastrophe must be avoided at all costs that both the British Government and the Oil Company must proceed with infinite tact and patience. What is to be negotiated is not a new oil concession, but a new stage in the fragile alliance between East and West.
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