Iran on the brink
Why Iranβs economic crisis could finally break the Islamic Republic.
"Checkmate" originates from the Persian phrase "ShΔh MΔt" (Ψ΄Ψ§Ω Ω Ψ§Ψͺ) translating to "the king is helpless". In modern parlance, the term has become synonymous with an irrefutable and strategic victory. Fourteen centuries later, it may be an apt metaphor for where the West stands following almost fifty years of conflict with Persia's modern-day descendants.
The Persian Empire, where chess first flourished, has since been self-styled as the Islamic Republic of Iran. It now faces its gravest existential crisis since its founding from the ashes of the 1979 Islamic revolution. A minority ruling class of insulated Shia clerics abandoned the iron laws of science and economics in favour of captive idealism and theocracy. Decades of rampant corruption, mismanagement, geopolitical instability and structural rot has hollowed out a once proud and cultured civilisation. The subsequent social decay has been slow and unrelenting. A highly educated and developing nation slid slowly back into the dark ages.
Despite this descent into the abyss, the ruling regime has endured. The economy limped along. Dissent was mercilessly quashed. An abundance of oil and gas was exported to energise a booming global economy despite the growing list of sanctions. The resulting petrodollars filled the regime's war chest and have been quietly siphoned off to foreign militias, missile programs and a nuclear project that refused to die.
Over the past decade the economy deteriorated steadily before collapsing into a full-blown depression in late 2025. Weak oil prices collided with Trump's harsher sanctions and rising geopolitical pressure. Inflation hit 49 per cent in October and is expected to rise further. Roughly half the population now lives below the poverty line and at least that many suffer some level of malnourishment. Its capital, Tehran, choking under mismanagement and climate stress, is staring down severe water shortages that threaten to force tens of millions of people to evacuate as soon as this year.
In March of 2025, US Treasury Secretary Scott Bessent offered a sobering piece of advice: "If I were an Iranian, I would get all my money out of the rial now". For many it was already too late. A decade earlier in 2015, 100 million rials β about the average monthly salary β could buy around $3,000 US dollars on the free market (Bonbast). By the time of Bessent's remark, that had shrunk to just $107. It's now below $70 and falling by the day β a loss of value of almost 98 per cent in 10 years.
