Obituary: Abol Hassan Ebtehaj

ABOL HASSAN EBTEHAJ pioneered the concept of economic planning in Iran. He has been described by Eugene Black, a former president of the World Bank, as "one of the most significant Iranians of the post-World War II period . . . an outstanding pioneer in Third World development, a nationalist utterly committed to the promotion of his country's interests".

Ebtehaj was born in 1899 in Rasht, capital of the Caspian province of Gilan, where his father was a well-to-do customs official. When only 11 he was sent with his elder brother for schooling in Paris, Beirut and Tehran and became fluent in French and English.

On his return home in 1918 he was employed for a time as an interpreter with British forces 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 Ebtehaj joined the staff of the British-owned Imperial Bank of Persia, then the country's principal bank.

There he rose rapidly but resigned in 1936 on realising that there was no chance of him or any other Iranian ever achieving management status. He joined the Ministry of Finance and served in a number of important posts, culminating in the governorship of the Bank Melli (National Bank) from 1942 to 1950. During these years he successfully challenged the supremacy of the Imperial Bank and asserted that of the Bank Melli, which became in all but name the country's central bank.

Quick-tempered and intolerant of interference, corruption and fools, Ebtehaj made enemies and was abruptly dismissed in July 1950. He spent the next four years in virtual exile, first as ambassador to France, then as director of the IMF'S Middle East department in Washington, DC, where the reputation and friends he made were to stand him in good stead when he was recalled to Tehran in 1954 to head his country's Plan Organisation.

There, assisted by able young Western-trained Iranians together with advisers and loans from the World Bank, he launched an impressive development programme of dam and road building, the base for Iran's economic achievements in the 1960s and 1970s. In resisting political interference and the diversion of oil revenues to the military he made enemies once again and lost the all-important support of the Shah. He resigned in February 1959 and was not to see the Shah again for 18 years.

In November 1961 Ebtehaj 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, whom he had married in 1956, founded his own Iranians Bank. A shrewd businesswoman, she managed the bank during his imprisonment. In 1974 Ebtehaj 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, Ebtehaj 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, he moved with his family to London where he busied himself with writing his memoirs, helped by his step-son, Alireza Arouzi (a former Deputy Minister of Commerce) and other researchers.

They, to Ebtehaj's surprise and delight, found papers at the Public Record Office demonstrating the high opinion we 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."

Abol Hassan Ebtehaj, banker, economist and diplomat: born 29 November 1899; twice married (one son, one daughter, one stepson, one stepdaughter); died London 25 February 1999.