The Steppe #12: Trump 2.0, From Farm to (Global) Table, and a New Eurasian Corridor
Montfort Eurasia's newsletter covering Central Asia and the Caucasus
Hello, and welcome back to The Steppe, your newsletter bringing you the latest business- and investor-relevant happenings in the South Caucasus and Central Asia, brought to you by Montfort Eurasia.
What Trump’s Presidency Means for Central Asia and the Caucasus
Kazakhstan’s Green Gold
Kyrgyzstan’s New Trade Center
Uzbekistan's Fuel Market Makeover
Mongolia on the Move
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The Art of the Deal Returns: Trump’s Approach to Central Asia and the Caucasus
Few world leaders' elections have as much global impact as America's, and Donald Trump's potential return to the presidency could be one of the most consequential yet. As Trump prepares to assume office again, his emerging administration stands poised to reshape the world order. Let's explore what his presidency might mean for Central Asia and the Caucasus.
For Central Asia, Trump’s return likely signals a reduced prioritization of the region in U.S. foreign policy but not complete neglect. Historically, Central Asia has occupied a middle-tier position in Washington's global strategy, with attention fluctuating based on broader geopolitical concerns. However, Trump's known preference for transactional relationships may result in a narrower focus on opportunities that directly align with his administration's immediate economic or security priorities.
Central Asian states have shown growing interest in securing their economic sovereignty from Russia and China, both to diversify their partnerships and to reduce overreliance on dominant regional powers. This shift creates potential opportunities for the U.S. to expand its business presence in the region, particularly in sectors like energy, infrastructure, and technology. Such prospects are likely to resonate with Trump and his business-oriented administration, which has historically prioritised economic diplomacy and deal-making as tools for advancing U.S. interests abroad.
Central Asia's oil and gas wealth could thus become a focal point for the new Trump administration. U.S. companies, which were among the pioneers in developing and modernizing Central Asia’s energy sector in the 1990s, continue to be significant investors and are eager to expand their presence. With energy prices and energy independence featuring prominently in Trump’s campaign rhetoric, his administration is likely to take a keen interest in Central Asia’s oil and gas market as part of broader energy and foreign policy objectives.
For the Caucasus, Trump’s victory is likely to result in a notable decline in U.S. engagement. During Trump’s first term, the South Caucasus was not a priority, and U.S. involvement in Armenia-Azerbaijan peace efforts under the OSCE Minsk Group reached an unprecedented low. The Second Karabakh War broke out during this period, with Washington’s attempts to mediate proving largely symbolic and ineffectual.
There is little to suggest that Trump’s approach to the South Caucasus will change significantly in a second term. Michael Cecire, a seasoned analyst with nearly 20 years of experience in the region and a lecturer at Georgetown University’s Security Studies Program, contends that Trump’s election is unlikely to directly alter the regional balance of power. However, Cecire notes that it
“opens more vectors for Azerbaijan to engage with Washington and potentially forecloses some for Armenia,”
which had benefited from growing U.S. interest during the latter part of the Biden administration.
Cecire underscores that Trump’s limited interest in the South Caucasus is unlikely to elevate the region’s priority within U.S. foreign policy. While the South Caucasus remains materially relevant to higher-priority geopolitical theaters, it will not be seen as a priority in its own right. In this context, Cecire suggests that,
“congressional Republicans with strong feelings on the region—on both sides of the aisle—may have plenty of room for maneuver.”
For Georgia, Trump's election comes at a crucial juncture. Georgia's ruling party, Georgian Dream (GD), recently won an unprecedented fourth consecutive term in parliamentary elections. The disputed outcome has strained U.S.-Georgian relations, with the Biden administration had reduced aid, minimized political contacts, and increased diplomatic pressure on the Georgian government. Unsurprisingly, Georgian officials welcomed Trump's victory, congratulating him and viewing his return as a potential lifeline for U.S.-Georgian relations.
Michael Cecire offers additional insight:
“Georgian Dream is counting on a Trump administration to facilitate a repair of bilateral relations and create space for GD to consolidate its control over the country. It may well succeed in this, though not because of any special interest Trump or his inner circle hold in Georgia specifically.”
Cecire cautions, however, that Georgia and GD are unlikely to inspire any deeper engagement from a Trump administration, which prioritizes transactional relationships. “Georgia strategically, and GD in particular, have little to offer a more deal-oriented U.S. administration,” he concludes.
Beyond the risk of reduced engagement, Trump’s pragmatic, deal-oriented style may align more closely with the interests of Baku, which favors clear, straightforward exchanges over the value-driven frameworks often promoted by prior U.S. administrations.
Ultimately, the success of such regional efforts will depend not only on the willingness of local actors but also on the broader recalibration of U.S. foreign policy priorities under Trump’s leadership—trends that could leave the Caucasus with even less strategic visibility on Washington’s agenda.
Sowing the Seeds: Kazakhstan’s Agricultural Expansion Takes Root
Amid growing global concerns over food security and shifting trade dynamics, Kazakhstan is ramping up efforts to transform its agricultural sector into a source of economic clout. The government has expanded preferential financing for the agro-industrial complex, reformed subsidy systems, and increased the production and leasing of agricultural machinery. These initiatives are already paying off—Kazakhstan is not only reducing import reliance and meeting domestic food demand but is also increasing its agricultural exports.
With the world’s fifth-largest expanse of agricultural land—only about 30% of which is currently cultivated—Kazakhstan holds significant potential for agricultural expansion. As Central Asia’s largest grain producer and one of the top 10 grain exporters globally, Kazakhstan is well-positioned to help address disruptions in global grain markets caused by the Russia-Ukraine war. This year, Kazakhstan has recorded substantial increases in grain exports, bolstered by the development of new transportation routes. Key crops, including barley, lentils, and corn, have seen notable export growth.
According to Kazakhstan Railways (KTZh) grain exports are surging: corn exports have increased 1.5 times, while lentil exports have grown sevenfold to 80,000 tons. Rice exports rose by 47%, reaching 52,000 tons, with new markets in Azerbaijan and Belarus. Barley exports have rebounded strongly, with an eightfold increase in shipments to Iran over the past two months, contributing to a total of 710,000 tons transported this year—a 69% increase. Exports to Tajikistan rose by 38%, while shipments to Uzbekistan more than tripled. For the first time, Kazakhstan has also begun exporting corn grain to Iran.
Kazakhstan’s rise as a key agricultural supplier in regional and international markets will be gaining growing global attention. With extensive underutilized arable land, a strategic location at the crossroads of major trade routes, and government-led reforms to increase agricultural production and infrastructure, the country is well-positioned to contribute to the stabilization of global supply chains.
Kyrgyzstan’s New Trade Gateway
Construction of the Atbashy International Trade and Logistical Center in Kyrgyzstan’s At-Bashy district near the Chinese border is underway. Launched in 2019, the center is set to become a major transit hub, linking China, Central Asia, and Europe.
Kyrgyzstan's economy is experiencing notable growth, with the World Bank revising its forecast upward from 4.5 percent to 5.8 percent in October 2024, driven largely by increased cross-border trade – exactly the kind of activity the Atbashy Center aims to expand.
This development comes on the heels of the signing of an Enhanced Partnership and Cooperation Agreement (EPCA) with the EU in June 2024. The EPCA represents a major upgrade in EU-Kyrgyzstan relations, with a strong focus on trade and sustainable development. The Atbashy Center is set to enhance the implementation of the EPCA by increasing trade flows and strengthening the infrastructure needed to support the EPCA’s goals.
As part of the Naryn Free Economic Zone (FEZ), the center offers tax incentives and streamlined business conditions. The project is expected to expand the capacity of the Atbashy border checkpoint, enabling higher daily freight traffic and annual trade volumes. With bilateral trade with China already growing—rising by 30% to $19.8 billion in 2023—the Atbashy Center is well-positioned to drive further economic expansion.
The complex will feature warehouses, cargo terminals, trade and exhibition areas, and production facilities for exports to the EU and WTO member countries, alongside hotels, dining establishments, and fuel stations, making the center a potential catalyst for stronger regional economic integration and enhanced trade across the Eurasian corridor.
Follow that CARVON: Transforming Fuel Services in Uzbekistan
A new name is set to transform Uzbekistan's fuel market as CARVON, a rebranded network of gas stations, begins operations. Formerly under the Uzbekneftegaz brand, CARVON aims to modernize the industry, with a focus on energy efficiency and improved management practices.
The rebrand has sparked discussions among local commentators over the past few weeks. Economist Otabek Bakirov and Kun.uz editor Shuhrat Shokirjonov raised concerns about whether the newly rebranded company will purchase 80-mark petrol from the exchange under standard conditions or continue to receive preferential treatment, as it did under the Uzbekneftegaz brand. Bakirov also questioned whether the Competition Committee has launched an investigation into the privatization of the chain. So far, these inquiries remain unanswered.
The transformation follows the acquisition of the Uzbekneftegaz network by Petroleum Technology Group in March 2024––the same month that it acquired the country’s Chinaz Oil Refinery. The rebranding initiative aims to boost CARVON's market presence and consumer attractiveness, setting it apart from industry rivals. The renaming process will roll out in phases, accompanied by the reconstruction of existing stations and the addition of new locations.
Uzbekistan's fuel sector is evolving rapidly, with government plans announced in October 2024 to launch a mobile app that will monitor gas station operations nationwide. This initiative responds to ongoing challenges such as gas shortages and long queues, particularly during winter months when demand peaks.
But, CARVON’s overhaul extends beyond a name change, aiming to establish itself as a leading fuel supplier in Uzbekistan. Changes to be introduced include better quality control, with the reorganization of divisions to ensure more consistent monitoring of product and service quality as well as employee development with the introduction of re-certification programs and advanced training for staff.
CARVON aims to adopt modern, environmentally friendly technologies, with the gasoline sold under its brand meeting K4 and K5 unleaded motor gasoline environmental standards for reduced emissions and adherence to international quality benchmarks.
Mongolia Goes Global with Tourism and Trade Booms
Mongolia is charting an ambitious path toward economic transformation under Prime Minister Luvsannamsrai Oyun-Erdene, aiming to achieve a per capita GDP of $6,800 by 2025. Recent progress in tourism, international relations, and commerce has begun to redefine Mongolia’s image from a landlocked nation to an emerging player on the global stage.
Economic growth has been fueled by enhanced port access and a booming tourism industry. Higher-than-expected mining output has also played a key role, with coal exports rising 37.6% year-on-year in the first half of 2024. This surge in exports has significantly boosted government revenues and spurred growth in related sectors, particularly goods transportation. Additionally, stronger domestic demand, supported by moderating inflation and increased public sector wages, has further driven economic expansion.
According to the Asian Development Bank’s September Outlook, Mongolia’s GDP is projected to have grown by 5.5% in 2024, up from the 4.1% forecast in April, with GDP growth accelerating to 6% in 2025. Key drivers include continued expansions in services, mining, and industry, alongside a recovery in agriculture following earlier declines. Increased government spending is also expected to sustain economic activity in the coming year.
Inflation has eased significantly from recent highs, now within the central bank’s target range, with consumer prices expected to rise by 6.8% in 2024—slightly below earlier projections. However, the International Monetary Fund forecasts inflation to climb to 7.2% in 2025, driven by strong domestic demand and elevated government expenditure.
While Mongolia’s economic outlook remains positive, the government faces a critical opportunity to invest in future-focused, diversified growth. Building economic buffers against potential shocks and prioritizing sustainable, broad-based development will be essential to ensuring long-term resilience and prosperity.
Stat of the Month
1,000: Tajikistan's energy minister, Daler Juma, reported at the COP29 climate conference in Baku that over 1,000 glaciers have vanished in the country over the past 30 years. These glaciers, vital for food and water security in Central Asia, typically provide fresh water to rivers during dry periods. Juma emphasized that the rapid melting of glaciers due to climate change poses a significant threat to global water resources, highlighting the urgency of the issue for the entire region, including neighboring Kyrgyzstan, which faces similar challenges.
What We’re Reading
Blame the gerbils - Tom Shippey, The London Review of Books