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I



                                           The Formation of the Federation

          preparing lo assume the role of the major military power in the Gulf,
          it was ready to make this sacrifice for the sake of stability and of good
          relations with Arab neighbours. But having climbed down once, it
          would have been very difficult for Iran lo renounce its claim over the
          islands Abu Musa and the two Tunbs.9
            Bahrain had been the test case for Britain’s ability lo settle any
          outstanding disputes within the area before vacating and leaving the
          governments and people lo their own devices. Thus after summer
          1970 the outlook was brighter and the various parties gained
          confidence while preparing themselves for the future after December
          1971. The replacement of the oppressive and unco-operative Sa’Id
          bin Taimur, Sultan of Muscat and Oman, by his son Qabus also
          contributed lo the air of optimism.

          Speculation that the Conservatives might reverse
          policy
          If the establishment of the federation combining the small Gulf
          States into an internationally-recognised politically viable entity was
          being delayed, this was again largely due to domestic politics in
          Britain. The Labour decision to withdraw from east of Suez was
          strongly criticised by most Conservatives. Withdrawal from the Gulf
          in particular was portrayed by many leading opposition politicians
          as an error in all respects: military, economic, and political. It was
          seen as an invitation to the Soviet Union to extend its influence to the
          waters of the Gulf. In Parliament and elsewhere the decision to
          withdraw from the Gulf in unseemly haste was described as a stab in
          the back of the pro-western governments who, it was feared, would
          fall prey to Cairo-orientated left-wing propaganda. Many Conserva­
          tives also pointed out that the argument that Britain could not afford
           the cost of maintaining troops in the Gulf was not valid. The cost to
          Britain of maintaining its military, naval and air presence in the Gulf
          was then some £16 million, while British investment in the area,
          particularly by petroleum companies, was many times that figure.
          Also in 1966 Britain imported almost half its requirements of oil from
           the Gulf. The Deputy Leader of the Opposition, Mr Reginald
          Maudling, visited the area early in February 1968. Other Conserva­
          tives followed and in April Mr Edward Heath himself held talks with
          Arab and Iranian leaders. This activity left the impression that the
          Conservatives were so deeply opposed to the withdrawal that they
          would reverse the decision if and when they came to power.
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