chapter  9
16 Pages

The politics of concession: reassessing the interlinkage of Persia’s finances, British intrigue and Qajar negotiation

ByROXANE FARMANFARMAIAN

It is the purpose of this chapter to retheorize the position of the Qajar monarchy and more generally, the Persian government, during the latter part of the reign of Nasser-edin Shah and those of his successors Mozzafar-edin Shah, Mohammad-Ali Shah and Ahmed Shah, as Persian officials negotiated the concessions the country awarded to foreign nationals for the purpose of exploiting the nation’s natural resources and developing services such as banking and telegraphs. First, I address the economic and financial structure of the state system administered by the Qajar Shahs to illustrate the practical constraints, particularly as relating to British dominance of the Gulf and Bushehr through the East India Company, the silver linkage of the kran and the impact of the Great Game on trade. Second, I briefly discuss the developing culture of concessionary awards as a solution to the increasingly dire financial position Persia faced. The main focus of this chapter is on the oil concession awarded to William Knox D’Arcy in 1903, but soon taken over by the British government. I argue that the award and subsequent negotiations were not, as often pictured, a case of a backward nation grappling with the standard machinery of Western sophisticated big business. Instead, I show it to have been a uniquely politicized situation with experienced actors on both sides. On the one hand was the Persian government, already skilled at the art of concessionary wrangling, and on the other, a company-government partnership designed to protect the security of the Indian – and larger British – Empire and fully aware that oil and its worldwide distribution was the crux of that security. The players on the British side, two of whom I focus on particularly – Sir Percy Cox and Sir John Cadman – moved seamlessly between Whitehall and the East India Company and between Whitehall and the Anglo-Persian Oil Company (APOC), while working closely with the Admiralty to turn the oil company into a purely British domain and instrument. Their remit was not just in southern Persia but the whole region, including northern Persia and Mesopotamia. The chapter concludes with an analysis of Persia’s aptitude in constructing the Sinclair concession in 1921 based on the lessons it had learned from the bruising experience with

APOC, and how, although that concession did not lead to a contract, it foreshadowed the nationalization process that took place 30 years later. It also examines Britain’s and Persia’s different approaches to sovereignty and national identity as reflected in the management of the concession and its territory.