Iran's Oil Nationalization and Mossadegh's Involvement with the World Bank

The first encounter between the World Bank and Iran over Iran's oil dispute with Great Britain took place in Washington, DC. The World Bank's Vice President, Robert Garner, met with Iranian Prime Minister Dr. Mohammad Mossadegh, who was in the United States to address a British resolution pending before the United Nations Security Council. In three Bank missions to Iran between January and March 1952, several features of the Bank's proposed temporary management of the recently nationalized Iranian oil company were discussed. The Iranian government refused to approve the employment of British nationals under the Bank's operation of the nationalized oil company. The Bank, meanwhile, prevented by its Articles of Agreement from excluding employment of personnel from one of its members, could not agree to undertake the temporary operation of Iran's nationalized oil company. After a few months' break in contact between Iran and the Bank, the Iranian government sent a representative to the Bank to reopen the discussions — but unaccompanied by a controversial international adviser Mossadegh had requested. Consequently, when the oil talks reopened, the Iranian representative was unprepared to fully articulate a new Iranian proposal that would allow the reengagement of British personnel. Unfortunately, the Bank team did not follow up on this meeting and did not support the Iranian representative in refining the new proposal. Less than a year later, Mossadegh was deposed, and an international consortium took over operation of the Iranian oil company. The fall of Mossadegh demolished the hope for national sovereignty and full democracy in Iran — with far-reaching consequences for the Iranian people and the international community.