InfoHub Logo

Kazakhstan is closely watching the economic turmoil in Iran, seeking to understand what lessons can be drawn from the nation's struggles with inflation, currency devaluation, and social unrest. The key question is whether Kazakhstan's reliance on raw materials and its extensive subsidy system can shield it from similar crises.

Iran's Economic Downturn Since 2018

A pivotal year for Iran's economy was 2018. The U.S. withdrawal from the nuclear deal and the reimposition of sanctions drastically cut the country's foreign exchange earnings from oil exports. Access to international financial markets became restricted, putting immense pressure on the national currency, the rial. The economy, previously propped up by resource revenues and subsidies, lost its external support, shifting the national focus from development to mere survival.

Since then, annual inflation has consistently remained above 40%. In such an environment, money loses its value as a store of wealth, and incomes fail to keep pace with the rising cost of living.

The rial's depreciation continued relentlessly. In 2018, 100 rials were roughly equivalent to 1 Kazakhstani tenge. By February 2026, this figure had ballooned to over 2,400 rials. The widening gap between official and market exchange rates eroded confidence in the currency among both citizens and investors.

Subsidies: A Temporary Fix?

Facing currency and inflation pressures, the Iranian government implemented a broad social support system. Subsidies on fuel, electricity, and essential goods, along with direct cash payments and food coupons, became the primary tools to cushion the impact of inflation on the population. However, this model proved to be a temporary support rather than a sustainable solution.

Instead of tackling inflation or stabilizing the currency, Iran focused on mitigating its effects. In 2025, the government launched an electronic food coupon system, providing up to 5 million rials (just over $5) per person to low- and middle-income citizens. This money could only be spent on specific goods at state-set prices, primarily essential food items. By early 2026, amid escalating protests, the government promised monthly payments of around $7. While these measures aimed to reduce social tension, protests continued and were eventually suppressed at a significant human cost.

This experience holds importance for Kazakhstan, as similar subsidy mechanisms are in place. In Kazakhstan, these subsidies often target producers, agriculture, and trade networks. While subsidies themselves are not inherently problematic, they become an issue when they replace the need for structural economic reforms.

Currency Issues Are Not the Sole Cause of Crisis

Despite all support measures, real incomes in Iran declined, poverty levels rose, and the population's dependence on government transfers increased. To understand why economic tools failed and how Iran's experience compares to Kazakhstan's, experts were consulted. However, responses often highlighted regional specificities and a lack of sufficient data.

It became clear that the key to understanding the situation lay not just in economics, but also in politics. Political analyst Almas Aubakirov offered his perspective.

"The current situation in Iran is a sign of deep systemic decay within its political system. The collapse of the rial, inflation, and rising social unrest are not the root causes of these events, but rather indicators of a fundamental crisis of trust between society and the state. This is compounded by years of sanctions-induced isolation and confrontational foreign policy," Aubakirov stated.

According to Aubakirov, the currency crisis in Iran cannot be solely attributed to a weak economy or market pressure. It reflects a loss of confidence in the governing system itself.

"When the state can no longer offer its society economic growth, social cohesion, or foreign policy victories, the currency becomes an indicator of lost faith in the entire system of governance."

The politician noted that sanctions were not an accidental external factor but a direct consequence of the chosen development model.

"Iran's economy under sanctions is not merely experiencing indirect effects but is a direct result of its chosen development model, where external political maneuvering and the creation of a 'constant enemy' image serve as the primary source of the regime's legitimacy."

As this resource began to deplete, the falling rial, rising prices, and protests transformed from a temporary crisis into a situation threatening the entire system. The ruling elite was left without effective tools to stabilize the situation.

"Unlike many authoritarian systems, the Iranian regime is not adaptable institutionally. Its theocratic structure rigidly ties political decisions to religious doctrine, where any attempt at reform clashes with the very foundation of its power."

Iran's Experience: A Warning, Not a Verdict

Iran's situation should not be viewed as a universal scenario. The high degree of ideological entrenchment in its state system plays a primary role in the events unfolding there. This distinguishes Iran from many developing countries rich in natural resources.

"Iran demonstrates the limits of viability for a closed ideological system in a state of global interdependence, rather than a universal scenario for crises in developing countries. This, not currency fluctuations or isolated social protests, is the core narrative of the events," concluded Aubakirov.

The expert's mention of global economic interdependence poses risks for countries like Kazakhstan, which could be potential partners for Iran. Active trade and joint projects with Iran could lead to sanctions. This is a consideration that requires more frequent thought than usual in the current climate.

Statements by former U.S. President Donald Trump regarding a 25% tariff on countries partnering with Iran seemed like a direct threat to economies deeply integrated into global trade. For Kazakhstan, such risks far outweigh potential benefits. Official statistics support this: in January-November 2025, Kazakhstan's trade turnover with the U.S. amounted to $2.82 billion, while with Iran it was approximately $396 million – a sevenfold difference.

However, avoiding risky steps does not mean abandoning cooperation altogether. Iran remains an important partner for Kazakhstan in several areas. Notably, discussions around building a maritime hub on the Caspian Sea heavily involve Iranian transit routes and logistics to the south. Furthermore, since the late 1990s, Kazakhstan has viewed Iran as a strategic partner in the oil sector, although Iran is not listed among Kazakhstan's oil buyers in the 2025 statistics.

Nevertheless, this status necessitates a particularly cautious approach to cooperation. Despite shared interests and long-term projects, Astana demonstrates pragmatism.

Bul týraly Infohub.kz aqparat agenttigi habarlaıdy.