DAMAGE done to Persia’s economy and her relations with Western nations by the misguided Mossadeq campaign against the Anglo-Iranian Company is to be repaired at last. The Persian Finance Minister [Ali Amini] says his Government has reached agreement in principle with a consortium of international companies on the marketing of Persia’s oil.

The consortium has been negotiating with the Persians for three months, on the basis that it will set up a world organisation to market the oil, provided it is given an effective voice in management of the industry, and the Anglo-Iranian Company is paid compensation.

If the agreement goes through without any hitch both sides will have good reason for satisfaction. The important fact is not that Persia is to pay compensation, nor that Persian fields will be producing again, for their output is no longer needed and may be an embarrassment until it can be absorbed. Everyone is concerned first and foremost with restoring the flow of revenue from oil into Persia’s needy treasury.

Political rather than commercial motives actuated the Western nations. They know that economic strength is essential to keep Persia out of Communist hands.

Western negotiators have been careful not to jeopardise the Zahedi Government’s position by making heavy demands. [Fazlollah Zahedi] The Persian people are bitterly hostile towards foreigners, and found Dr. Mossadeq’s brand of nationalism heady wine, but satisfying. His successor must avoid as far as possible the appearance of making concessions.

It is fortunate that Russia has chosen this time to divert Persian attention. The country is greatly angered by a Soviet protest against Persia’s foreign policy, especially her apparent interest in a Western defence alliance. Gen. Zahedi has increased his popularity by telling Russia, in effect, to mind her own business. While he is in high favour for snubbing one great Power, he is in less danger of being accused of betraying Persia to another.