The Iran war is over. But the real problem begins now. In an earlier column we likened Iran to the Spring-and-Autumn state of Chu and drew the lesson that “a strong state’s real undoing is not invasion but internal stagnation and failed reform.” So what is the internal condition of the three powers vying for leadership of the Muslim world—Iran, Saudi Arabia, and Turkey? Who, like Shang Yang, succeeds at reform, and who, like the Chu that killed Wu Qi, refuses it? We diagnose the constitutions of the three states and consult on the direction each must take, through the Chief’s lens.
– The three Muslim-world powers: Iran (Persian, Shia), Saudi Arabia (Arab, Sunni Gulf), Turkey (Ottoman successor)
– Iran: rial collapse, ~65% inflation, the largest protests since 1979 — the absence of reform amid power monopoly is the biggest risk
– Saudi Arabia: non-oil GDP past 55% under Vision 2030, yet megaprojects like NEOM scaled back — the light and shadow of “top-down reform”
– Turkey: an attempt to return to economic orthodoxy vs. deepening authoritarianism — between potential and self-sabotage
– Core lesson: internal reform, more than external threat, decides the fate of hegemony (Shang Yang’s Qin vs. Wu Qi’s Chu)
Iran — A Crumbling Interior, a Hegemon That Refuses Reform
Iran’s interior is now precarious. With oil exports blocked by the US naval blockade and sanctions, the economy has plunged. In 2026 the rial fell 15% in days to around 1.8 million per dollar, and the central bank acknowledged an annual inflation rate of 65.8%. The Supreme Leader ordered citizens to cut consumption of food, water, and fuel, and authorities rolled out a monthly food-coupon system—a measure of how deep the crisis runs.
Public anger erupted. Protests that began in late 2025 spread to more than 200 cities, recorded as the largest uprising since the 1979 Islamic Revolution, with many casualties reported during a harsh crackdown. This is weighty because it goes beyond a bread riot to challenge the very legitimacy of the system.
The crux is the absence of reform. Real power is concentrated in the Revolutionary Guards (IRGC) and the Supreme Leader, and the IRGC reigns as a vast interest group controlling not only politics but much of the economy. The system leans on the religious legitimacy of velayat-e faqih (guardianship of the jurist), but economic collapse and mass protest expose the rift between that legitimacy and reality. The succession around the aging Supreme Leader is also opaque. The Chu lesson—that internal stagnation is more fearsome than the external enemy—now cuts deepest into Iran. As long as a power-monopolizing group refuses reform, “surviving the war” is not the end of crisis but the start of a greater test.
Direction (consulting). What Iran needs is not an external transfusion but internal surgery. First, loosen the IRGC’s economic monopoly to restore vitality to the private sector and the market. Second, channel the funds coming from sanctions relief into domestic industry, jobs, and welfare rather than rebuilding proxies, to win back public trust. Third, rebuild the legitimacy of succession and governance on a national consensus. But because all of this threatens the vested interests of the current power structure, whether Iran walks the road of “the Chu that killed Wu Qi” or “the Qin that embraced Shang Yang” will decide its fate for the next decade.
Surviving a war and the survival of a regime are different matters. Iran’s real battlefield is not Hormuz but the markets and streets of Tehran—and the internal power struggle over reform.
Saudi Arabia — “Top-Down Reform,” the Light and Shadow of Vision 2030
Saudi Arabia is the fastest reformer of the three. The work of transforming an oil-dependent economy through “Vision 2030” is yielding real results. Per the 2025 annual report, the non-oil sector accounts for 55% of real GDP and the private sector contributes 51%. Of 1,290 initiatives, 225 are complete and 935 on track, with 93% of key indicators meeting interim goals. Social change—expanded women’s participation, opening tourism and entertainment—has advanced rapidly. At January’s Future Minerals Forum in Riyadh, Ma’aden unveiled a $110 billion investment plan spanning gold, phosphate, copper, lithium, and rare earths—ambition to leap from resource power to “mineral-processing and technology power.”
But the shadows are deep. Several megaprojects, most notably the $500 billion future city NEOM, have been scaled back, paused, or rescaled. The gap between dazzling blueprints and execution, and continued oil dependence, are weaknesses. That reform is concentrated in one person—Crown Prince Mohammed bin Salman (MBS)—is a double-edged sword: strong drive is an asset, but the more power gathers in one place, the greater the uncertainty over succession and policy sustainability.
Direction (consulting). Saudi Arabia’s task is not “speed” but “sustainability.” First, trim the hubris of megaprojects and rescale them realistically to prove execution. Second, broaden the jobs-and-middle-class base so that a wide public—not a small elite—feels the gains of reform. Third, build up manufacturing, technology, and mineral-processing depth not swayed by oil prices. The true test of Vision 2030 is not gleaming cities but the constitutional shift to “an economy that runs without oil.”
Turkey — Between Potential and Self-Sabotage, the Ottoman Shadow
Turkey has the most multidimensional potential of the three: a young population over 80 million, solid manufacturing and defense industries, NATO membership, and geopolitical weight decisive to Syria’s new government. Its position at the crossroads of East and West and the Ottoman legacy form the basis of “neo-Ottoman” diplomacy. It projects influence across Syria, Libya, the Caucasus, and the Sahel, walking a tightrope—one foot in NATO while sounding out BRICS membership.
The problem is “self-sabotage.” The economy paid a heavy price for years of unorthodox monetary policy. The lira has lost over 90% of its value against the dollar since 2018, and inflation once soared to 85%. It has recently pivoted to orthodoxy with rate hikes, resetting its 2026 inflation target to 24%, but trust is slow to return. Politically, President Erdogan’s deepening authoritarianism is a drag. The jailing of the Istanbul mayor—a leading opposition figure—judicial interference in the main opposition party’s leadership, and the harsh response to protests against it raise concerns of democratic backsliding.
Direction (consulting). Turkey’s assets are ample. The issue is the “policy volatility” and “institutional trust” eroding them. First, do not overturn the hard-won return to economic orthodoxy (independent monetary policy, fiscal discipline) for political logic. Second, halt opposition repression and judicial interference to restore institutional and democratic resilience, which is how it retains long-term investment and talent. Third, elevate its diplomatic balancing from “opportunism” to a “predictable strategy” to earn allies’ trust. Turkey’s enemy is not external but the internal lack of restraint that gnaws at its own potential.
The Dynamics of a Three-Way Balance — Containment and Shifting Alliances
The three states check one another in a delicate balance. Iran and Saudi Arabia are the two poles of an old rivalry—Persian vs. Arab, Shia vs. Sunni. They normalized relations under Chinese mediation in 2023, but the fundamental contest for hegemony did not vanish. Saudi Arabia and Turkey, though both Sunni, are competitors where Arab nationalism collides with neo-Ottomanism. Iran and Turkey overlap in influence in Syria and the Caucasus, oscillating between cooperation and conflict. No two fully join hands, and no one overwhelms the rest—a textbook three-way standoff.
Add the “fourth variable,” Israel, and the “outside patrons,” the US, China, and Russia, and the board grows more complex. With Iran weakened, Saudi Arabia weighs US security guarantees and its own nuclear option, while Turkey raises its price between NATO and BRICS. As with the shifting alliances of the Warring States, there are no eternal allies or eternal enemies. What matters is not the art of the tightrope but the “internal strength” that supports it—because the diplomacy of a weak-bodied state is ultimately a castle on sand.
The Fork — Whoever Walks “Shang Yang’s Road” Grasps Hegemony
Line the three up, and the direction of hegemony appears. Qin unified the realm not through a strong army but through Shang Yang’s reforms—a fundamental overhaul of internal institutions. Chu, by contrast, killed its own chance by spurning Wu Qi’s reforms. Judged by this measure, Saudi Arabia is attempting a “top-down Shang Yang,” Turkey has the potential but is tripping itself, and Iran remains stalled in power monopoly, refusing reform.
Of course, no reform is complete. Saudi Arabia’s top-down reform faces the test of succession and sustainability; Turkey carries the homework of democratic resilience; Iran stands frozen before the most fundamental structural reform. But the direction is clear. Defeating an external enemy is a single battle; reforming the interior is the long war that decides a nation’s rise and fall. The next hegemon of the Muslim world will not be the strongest country, but the one that changed itself most deeply.
The View for Korea and Investors
For Korea, these three are not abstract geopolitics but a field of practical interest. Saudi Arabia opens vast opportunities for Korean construction, plant, defense, and materials firms through Vision 2030, NEOM, and Ma’aden’s minerals push. Turkey is a partner in defense cooperation and manufacturing supply chains and a gateway linking Europe, the Middle East, and Central Asia. Iran is a potential market if sanctions lift, but carries the high risk of internal instability. The key for investment is an eye for “the sincerity and sustainability of reform”—seeing the substance of constitutional change rather than dazzling blueprints, and discerning which country actually walks “Shang Yang’s road.”
In the end, the 2,500-year-old Spring-and-Autumn lesson still holds. Survival is only a beginning; a strong power that cannot change itself ultimately yields its place to a rising rival that does. The real contest among Iran, Saudi Arabia, and Turkey is not military might or oil fields, but “who reforms the interior more deeply.” Read alongside our earlier Reading Iran Through Spring-and-Autumn Chu and Iran MoU & Middle East Outlook, this three-way structure comes into sharper focus. The broader analysis continues at Chief Briefing.
Frequently Asked Questions (FAQ)
The three regional powers vying for leadership are usually Iran (Persian, Shia), Saudi Arabia (Arab, Sunni Gulf), and Turkey (Ottoman successor, Sunni). By military power and current centrality, some add Israel for a “big four.”
Economic collapse (rial crash, ~65% inflation), public alienation shown by the largest protests since 1979, and the absence of fundamental reform within a power structure concentrated in the Revolutionary Guards and the Supreme Leader. Internal stagnation is a greater danger than external threat.
There are real results in structural transition—non-oil now about 55% of real GDP. But some megaprojects like NEOM have been scaled back, and oil dependence and concentrated power remain challenges, so “sustainability” is the key.
Saudi Arabia (construction, plant, defense, materials) and Turkey (defense, manufacturing supply chains, gateway) are big opportunities for Korea, while Iran is a potential market if sanctions lift but carries high risk. The key for investment and diplomacy is discerning the sincerity and sustainability of each country’s reform.
📚 References
- Al Jazeera / Bloomberg / Foreign Policy — Iran’s economic crisis and 2025-2026 protests (2026.1)
- Saudi Vision 2030 2025 Annual Report; Arab News — non-oil GDP and initiative progress
- The Soufan Center / GIS Reports / Middle East Institute — Turkey’s economy and foreign policy (2026)
- Chief Briefing, Reading Iran Through Spring-and-Autumn Chu / Iran MoU & Middle East Outlook (2026)