Too much, too fast
... and too many mistakes. The Shah's budget director looks back
August 3, 1998
From an introduction to Khaateraat-e Abdolmadjid Madjidi, Memoirs of Abdolmadjid Madjidi, Plan and Budget Organization directpr from 1973-1977, edited by Habib Ladjevardi. Published by Harvard University's Iranian Oral History Project, Available from Iranbooks. (Go to excerpts)
As the director of the Plan and Budget Organization during the last five years of the Shah's rule, Abdolmadjid Madjidi was one of the more significant ministers in the cabinet of Mohammad Reza Shah Pahlavi. His position put him in daily contact with the prime minister and enabled him to have frequent audiences with the Shah. He was not only an ex officio member of most of the important high councils of state, but his close friendship with Prime Minister Hoveida helped keep him informed of other events in which he was not directly a participant.
In short, Madjidi's position gave him a wide perspective and awareness of the political, economic and social events of Iran, broader than that of most of his colleagues. His recollections of the period offer us a unique perspective to events and decisions that led to the downfall of the monarchy.
Madjidi grew up in a political setting. Born in Tehran in 1928, he was the son of a lawyer who had been politically active in his early years and who had been imprisoned twice as a consequence. Although he had withdrawn from politics to protect his family, Madjidi's father nevertheless maintained his interest in public policy and influenced his children likewise.
Madjidi's teenage years also coincided with a politically turbulent period in Iran, when politics permeated the life of the people, particularly the youth. During high school he became familiar with the main political philosophies of the day, especially that of the left.
As a university student in the 1940s, he participated in political debates and mass demonstrations. In his own words, "While we studied and school was our major endeavor, we engaged in political activity both in and out of school. We attended meetings and discussion groups with our friends.
Upon receiving a bachelor's degree from the Tehran University Faculty of Law, Madjidi, then twenty-one years old, left for Paris where he continued his political activism in the Iranian Student Association and became familiar with the leftist ideologies popular in Europe.
After earning a doctorate from the University of Paris, Madjidi returned to Iran in the winter of 1953, only five months before the overthrow of Dr. Mossadegh. The coup of August 1953 made a deep impression on Madjidi who states," At that time I thought Mossadegh was doing the right thing and moving in the right direction. Today, however, I see that Mossadegh should have adopted a more long-term perspective. For example, Mossadegh was partly--in large part responsible for the rift that developed between him and the Shah. If at the time the sovereign of the country and Mossadegh, who enjoyed the support of the majority of people, had sat together and thought of the nation and its future, our country would not have fallen into its present predicament.
After a short period spent as a trainee in his father's law firm, Madjidi joined the Export Promotion Bank and when Abolhassan Ebtehaj activated the Plan Organization, he joined that institution as an assistant economist in 1956. Four years later, Madjidi was sent to Harvard University in the United States, where he earned a masters degree in public administration.
Soon after his return to Iran, Madjidi was appointed assistant to the prime minister and head of the Budget Bureau in 1965. Two years later he joined the cabinet of Amir Abbas Hoveida as minister of agricultural products and consumer goods. In 1968 he was appointed minister of labor and social services and served in this position for four and a half years. In January 1973, he returned to the Plan and Budget Organization as its director. There, he took charge of revising the Fifth Development Plan--a responsibility that grew in complexity as the problems arising from the increases in oil prices rapidly surfaced.
Inflation, decreasing oil revenues, shortages of manpower, goods and services, power blackouts, political turmoil including assassinations and executions, led to vocal public dissatisfaction with the status quo. In August 1977 the cabinet of Amir Abbas Hoveida was forced to resign, foreshadowing the Islamic Revolution. Subsequently, Madjidi was appointed director general of the Queen Farah Foundation.
On February 2, 1979, the day after the arrival of Ayatollah Khomeini in Tehran, Madjidi was arrested on the orders of Prime Minister Shapour Bakhtiar, the Shah's last prime minister, and detained for nine days. On the eve of the Revolution, when prisons were stormed, Madjidi escaped and after three and a half months of hiding made his way to Paris, where he now lives in exile.
As is evident from his memoirs, Madjidi speaks frankly of the last decade of the Shah's reign. He speaks with pride of the successes achieved, while noting the mistakes that eventually led to the demise of the government and the monarchy. Madjidi believes strongly that the Hoveida era accomplished remarkable feats. "I believe that Iran's economic miracle occurred between 1963 and 1973 -- in fact before the increase in oil revenues. We achieved extraordinary growth." According to Madjidi, Iran's annual rate of growth during this period was 11.2 percent, while inflation was only 1.25 percent.
Madjidi speaks openly both of the Shah's attributes and weaknesses. "His Majesty had a comprehensive vision for the future of Iran which he wanted to be realized at any price and at great speed ..... His Majesty wished very much for the country to be renewed, modernized, industrialized and mechanized. Projects that incorporated these features were very much favored by him and were naturally assigned the highest priority. At the same time, he attended to social issues--the basic needs of the people. But, principally he wanted Iran to become modernized quickly, for Iran to become industrialized, for everything to become mechanized and computerized."
Madjidi asserts, "his Majesty was generally a very logical decision-maker. But sometimes he tended to quickly pass over critical issues exclaiming, 'No. My decision is final.'"
Moreover, the Shah had a tendency to keep information from key people in responsible positions, resulting in chaotic and haphazard decision-making. For example, even though Madjidi was positioned at the highest level of government, he was not always given the information to make informed decisions. He describes his experience as the director of the Plan and Budget Organization, "We often worked, developed plans, and prepared budgets in the dark and with guesswork. Before we knew that oil revenues were going up, we were told to factor in large numbers of major financial commitments, such as the purchase of the Concord airplanes and military hardware. These were all decisions that had already been made. [Later on] we would be instructed to include these commitments in the budget. This was [the pattern] in the military sector. In the nonmilitary area it worked the same way, like commitments for the steel mill and the petrochemical expansion. Unfortunately, we were not involved in the decision-making [process]. These [decisions] would normally be passed down to us as orders for implementation.
In 1962 the Shah launched a six-point program of reforms referred to as the "White Revolution." During the next fifteen years additional "principles" were added the initial set. Madjidi, though minister of labor at the time, had no role or knowledge of a major initiative, the sale of stock of private industrial enterprises to the workers. When asked his opinion on the program, Madjidi responded, "Unfortunately I was not involved in that decision. I was not even consulted on the subject. When [the program] was approved, it was announced as one of the principles of the Revolution. I was, of course, involved in its implementation."
Madjidi's explanation of why he and his colleagues were not informed or involved in certain decisions relating to their duties follows: "[His Majesty] basically did not like to discuss his fundamental ideas and programs, although on other issues he had the necessary flexibility. But, on issues that were very fundamental to him, he did not allow discussion or expression of doubt. Now, how did he come up with this idea? Who was working for him? [I don't know], for example, the idea of the formation of the Rastakhiz Party. Where did such an idea suddenly come from? Who had suggested it? It is really a big question for me."
Obviously, when a cabinet minister (or any other executive] has to operate without information or participation in decisions relating to his duties, disorder ensues. Madjidi considers this question and says, "The other problem was lack of coordination at cabinet level.... If the prime minister, who was the head of the executive branch, had been allowed to coordinate among the various ministries and agencies then decisions would have been implemented in an organized manner. Instead the prime minister was prime minister in name only and in practice all critical decisions were made at a higher level [when] that higher level had no official responsibility. You see, it can't be, in other words we had a fundamental problem."
In Madjidi's view, another problem of the former regime was the way it related to the people. "You see, the problem is that you can [only] have a sensible policy and make proper, correct and logical decisions when you have the power to tell the people the truth and [to tell them that they] have no other choice than to accept [the one offered by the government]. We would neither go to the people and tell them the truth, nor did we risk putting them under pressure. All we wanted was that they be content.
Moreover, in the eyes of the people, the government grew increasingly incompatible with them culturally during the last years of the monarchy. From the perspective of many people, says Madjidi, "All of a sudden the government fell into the hands of a group that was 'Westoxicated.' [This] created a chasm that became wider each day. By the end [of the former regime], the majority of the people believed that this governing group was composed of individuals who neither understood religion, nor the people's problems. They paid no attention to the poverty of the people. Those who had come to govern over us were either usurpers, or I don't know--Western agents."
Following on the same theme, Madjidi asserts that the Islamic Revolution succeeded because people had lost faith in their government. "During the whole period, all [our] efforts were directed toward improving the material conditions and the welfare of the people. In these areas, we achieved extraordinary success from the point of view of material gains, changes in the form of living and expansion of modern education. From the perspective of welfare, people's conditions got much better. They ate better food, had a better life and better housing. However, that which was needed to unite them and give them the [sense of] obligation to support the government, defend their regime, their country and their system was not there, because they did not believe [in the system]. In other words, the middle class--which had reaped the greatest benefit from Iran's progress and should have stood firm, should have defended itself and its own interest, defended the country's interest and maintained the system--let go. They gave up and ran off, or stayed in Iran and joined the mullahs and the opposition."
On the issue of the multiparty system, Madjidi states that the establishment of a government based on political parties was impossible in Iran at the time because the demands of the people and the country''s interests were at odds. "The problem is that in Iran, political action could take place with great difficulty because if you really wanted to rely on the masses of the people, you were obliged to talk according to their sentiments and to fulfill their needs. Their needs, expectations and demands, [however,] were in total contradiction with the fundamental economic and social goals of the country. In other words, if you wished to attract more votes from the people, you had to forego much of the economic ambitions and material changes that needed to be made in the country."
Madjidi is openly critical of the arrest of his colleagues during the last months of the monarchy. On this point he states, "In that system and in that way of doing things, the group that was imprisoned was composed of the best servants. These were individuals who in all respects had done their best and with good intentions and honor. I admit that they were not all on the same level. It is possible that criticism applied to some of them. Some were at fault from the financial point of view. However, [to arrest members of the cabinet] in the way that was done was paramount to self-indictment by the regime. [This] was a very big mistake."
decisions by the Shah
* No knowledge of oil revenues
* What went wrong
* People's demands and national interests
* Formation of the Rastakhiz Party
* Heading the party's "progrssive" wing
* What went wrong
* Algerian woman calls the Shah "murderer"
* Mossadegh should have ...
* Former Tudeh activists in the government
* Slave to the government
-- Also from the Iranian Oral History Project:
* Khaterat-e Amirteymur Kalali (in Persian)
Memoirs of Mohammad Ebrahim Amirteymour Kalali
Edited by Habib Ladjevardi
* Cover stories
* Who's who