5 - The Petrochemical Paradise

Summary

Flush with American aid and rising oil revenues, in the late 1950s the shah’s government embarked upon a new and ambitious development program, the Second Seven-Year Plan. Directed by Abolhassan Ebtehaj, the plan drew in a large number of American developmentalists. Chief among them were David E. Lilienthal and Gordon R. Clapp, former directors of the Tennessee Valley Authority. Lilienthal, Clapp, and Ebtehaj launched a special project to develop Khuzestan, Iran’s oil-province, into a petrochemical paradise where oil, water, and soil would be transformed together, raising living standards and burnishing the prestige of the newly re-empowered shah. The costly project revealed the extravagances of the Second Plan and eventually fell to the political whims of the shah, who turned against the Americans and the plan itself in the early 1960s, using Ebtehaj and Lilienthal as scapegoats for his government’s broader economic and political failures.