In this article the life story and the works of Abolhassan Ebtehaj (AE) who pioneered the concept of economic planning in Iran will be briefly studied.
Abolhassan Ebtehaj (AE) was born on 29 November 1899 in Rasht, the capital city of the province of Gilan in north of Iran. His father, Mirza Ebrahim Ebtehajolmolk, was a well-to-do customs official and his mother, Fatemeh, belonged to a landowning family. At age 11, he was sent with his elder brother (Gholam Hossein) for schooling in Paris, Beirut and Tehran and became fluent in French and English. On his return home in 1918 AE was employed for a time as an interpreter with British forces (known as Dunsterforce) then stationed in Gilan. Chaotic post-war conditions and the murder of his father in 1920 caused his mother to flee with her family to Tehran where the 20-year-old AE joined the staff of the British-owned Imperial Bank of Iran, then the country's principal bank. The bank was widely known as Bank-e Shahi at the time.
Bank-e Shahi had been established in 1889 under a monopoly concession from Nassereddin Shah Qajar, which made it the country’s state bank with the exclusive right to issue paper currency. It had built a network of branches all over Iran, which undertook commercial banking and trade finance. Before 1914 its main competitor had been a Russian bank, but this had collapsed after the Russian Revolution, leaving the Bank-e Shahi as the only banking institution in Iran. There was, however, nothing Iranian about the bank; it was entirely British-owned. Although the bank’s chief office was in Tehran, ultimate control lay with a Board of Directors who sat in London, and the entire management cadre was British.
AE rose rapidly in his new job at Bank-e Shahi. By 1929 he was already one of the Bank’s most senior local employees. In that year he also married Maryam Nabavi, the dauther of Taghi Nabavi Moezoldowleh. However, his career took a new turn in 1936 when he resigned from the Bank, where he felt his career prospects were blighted by his Iranian nationality and there was no chance for him or any other Iranian ever achieving management status.
He joined the Ministry of Finance and served in a number of important government positions. In 1942 when Mohaamad Reza Pahlavi was Shah of Iran, he became Governor of the state-owned National Bank (in Persian: Bank-e Melli). Over the ensuing eight years, AE successfully challenged the supremacy of the Bank-e Shahi and asserted that of the National Bank, which became in all but name the country's central bank. However, his personality, which was intolerant of interference, corruption and people that he considered to be fools, made him many enemies, and he survived only through the support of the Shah with whose Court, AE’s wife Maryam had close connections. AE was abruptly dismissed in July 1950, and he was then appointed as Iran’s ambassador to France by Prime Minister Haji Ali Razmara. In 1952, AE was invited to join the International Monetary Fund as advisor to the Managing Director, and subsequently as Director of the Fund’s Middle East Department. Based in Washington, DC, the reputation and friends he made during these years proved beneficial over the following years.
The year 1954 proved an eventful one for AE. He returned to Iran in August 1954 after his IMF contract ended, and soon afterwards the Shah offered him one of two jobs. The first was to run the new Iranian National Oil Company, which he remarked had little importance as foreigners remained in control of the country’s petroleum industry. The second was to run the recently founded Plan Organization, which was in serious financial and administrative difficulties. AE, an early enthusiast of economic planning, took the latter job. Meanwhile, there were also drama in his personal life. After 25 years of marriage, he fell in love with Azarnush Sanii, a gorgeous lady who was teaching dentistry at Tehran University. In a dramatic gesture, he walked out of his family house with nothing more than his tennis racket, golf clubs and books! In 1956, having divorced Maryam, he married Azarnush, aka Azar. Although AE had no children with Maryam, he now found himself as the stepfather of Ali-Reza and Elaheh, and he and his new wife also soon had two children of their own, Shahrzad in 1958, and Davar in 1961.
At the Plan Organization, assisted by a talented group of young Western-trained Iranians, together with advisers and loans from the World Bank, AE launched an impressive development program of dam and road building. However, in resisting political interference and the diversion of oil revenues to the military, he once again made enemies, and ultimately lost the all-important support of the Shah. He resigned in February 1959, and would not to see the Shah in person again for 18 years. In November 1961 AE was arrested on trumped-up charges of acting illegally in signing a contract while head of the Plan Organisation with a well-known American firm of consultants. He spent seven months in prison before adverse publicity in the United States and the UK caused the Shah to order his release without trial.
Before this he had, with financial help from his second wife, Azar, founded his own Iranians Bank. A shrewd businesswoman, she managed the bank during his imprisonment. In 1974, AE established as a joint venture with a leading American insurance company the Iran- America International Insurance Co. Both institutions prospered.
In 1977, in what proved to be a very lucky decision, AE sold out his interest in the bank very profitably. He was in France with his family at the time of the Shah's fall and decided to remain there rather than face the uncertainties of Iran under the Ayatollah Khomeini. In 1984, unhappy with the political situation in France, AE moved with his family to London where he bought a large apartment overlooking Kensington Gardens. In London, he busied himself with writing his memoirs, helped by his step-son, Alireza Arouzi (a former Deputy Minister of Commerce) and other researchers (1, 2, 3).
The British Amnassador to Iran between 1963 and 1971, Sir Denis Wright noted that, "They (Alireza Arouzi and other researchers) to AE's surprise and delight, found papers at the Public Record Office demonstrating the high opinion we (Denis Wright and others) in the Tehran Embassy had of his integrity and key role in the modernising of Iran. Hitherto he had harboured a suspicion that the British had in some way been responsible for his imprisonment. He now wrote to tell me, It is remarkable that on the British side the late Sir Roger Stevens, you, and a number of senior Bank of England officials went out of their way to defend me - without any knowledge on my part - thus demonstrating British fair play of which I have been a strong believer"(3).
AE contributed to the Iran's banking system and to Iran's economic planning during a long period, from 1920 to 1959 (1, 2). The Persian text of the various projects on Iran's economic development carried out by AE may be also viewed online (4).
In 1989, Bostock and Jones in their book entitled as "Planning and Power in Iran, Ebtehaj and Economic Development under the Shah" noted that, "If the Shah had followed Ebtehaj's policies, the Islamic Revolution in 1979 might have been avoided" (5).
It should be also noted that his activities and efforts in regard to econmic development in Iran
have been viewed and discussed from pro and con angles (4, 6, 7).
At age 100 after an extremely long and eventful life, AE died in London on 25 February 1999.
1. AE's father, Mirza Ebrahim Ebtehajolmolk, had four sons named as Agha Khan, Gholam Hossein, Abolhassan, and Ahmad Ali (8).
2. AE was also the uncle, from the father side, to Amir Houshang Ebtehaj (AHE) who is a famous Iranian poet from Gilan, Iran (9, 10). AHE is the son of Agha Khan Ebtehaj (11).
3. The family name of Ebtehaj means joy and happiness in Persian. Abolhassan Ebtehaj lived to the age of 100; he surely enjoyed a long and an eventful life leaving a legacy of great works in planning and economic policy in Iran.
Manouchehr Saadat Noury, PhD
Originally published in October 2012