The Steppe #13: Tigers, Lions, and Green Dreams
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.
Kyrgyzstan Trading East
Armenian Tech Giant Makes History
Azerbaijan's Green Bonds
Uzbekistan’s Cultural Recognition Grows
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From Moscow to Beijing: Kyrgyzstan's Changing Economic Partnerships
For the second consecutive year, China remains Kyrgyzstan's dominant economic partner, wielding unprecedented influence through investment, lending, and trade—especially in strategic sectors like transport, energy, and mining. While this has led to anxiety about China's outsized role in the country, officials have acknowledged these concerns and taken some steps to address them.
Recent data from the National Statistics Committee of Kyrgyzstan reveal the scale of the relationship: by October 2024, bilateral trade reached $4.8 billion, firmly solidifying China's position as Kyrgyzstan's primary trading partner. But, this relationship shows stark imbalances—while Chinese imports totaled $4.7 billion, Kyrgyz exports amounted to just $94 million.
The financial ties run even deeper: Kyrgyzstan's debt to China has reached $6.2 billion, with $1.7 billion owed specifically to China's Export-Import Bank. These loans primarily support infrastructure projects under China's ambitious Belt and Road Initiative (BRI), Beijing's flagship global development strategy.
This Chinese BRI investment has helped Kyrgyzstan modernize its infrastructure and integrate into global trade networks, and coincides with Russia's diminishing regional influence. While this is a significant shift for a country that has historically looked to Moscow for economic partnership, it is a pattern being repeated across the region.
According to Damirbek Bikulov of the National Investment Agency, Kyrgyzstan attracted $746 million in foreign investments during the first three quarters of 2024—a 14% year-over-year increase. China led these investments with $221 million, followed by Russia ($192 million) and Turkey ($71 million), demonstrating Beijing's growing role in shaping Kyrgyzstan's economic future.
Public anxiety about Kyrgyzstan’s growing economic dependence on China has prompted Kyrgyz officials to take some steps. In July 2022, the Cabinet of Ministers set a debt ceiling that prevents the country from owing more than 45% of its external debt to any single creditor.
While Kyrgyzstan is approaching this debt ceiling, repayments to China are expected to peak between 2025 and 2027, with full debt repayment scheduled by 2035, and the government has begun taking steps to strengthen the state budget to prepare for these repayments.
Armenian Diaspora Tech Success: ServiceTitan's Nasdaq Debut Propels Domestic Industry Growth
In a landmark moment for Armenia's emerging tech industry, ServiceTitan has become the first Armenian-founded IT company to debut on the Nasdaq stock exchange. This achievement points both to the success of the company and Armenia’s growing reputation as a tech hub.
Shares of ServiceTitan soared by 42% following its initial public offering on the Nasdaq Global Select Market on December 12, which raised around $625 million. The stock closed at over $100 per share, signaling strong investor confidence in the company’s leadership and prospects for growth.
Founded in 2007 by Ara Mahdessian and Vahe Kuzoyan, two diasporan Armenians based in California, ServiceTitan, a blue-collar software firm, has revolutionized business management software solutions for trades businesses including plumbing, electrical, and landscaping services. Its platform offers tools for managing sales leads, call recording, and job scheduling. As of January 31 2024, ServiceTitan reported serving more than 8,000 customers each with over $10,000 in annualized billings.
The Nasdaq event was also an opportunity for the founders to credit their parents, who rang the opening bell. “Our parents came to this country with no language, no money, and it was through this industry they were able to achieve the American dream,” Kuzoyan told the LA Times.
While headquartered in California, ServiceTitan maintains deep ties to Armenia. The company’s Yerevan office employs more than 270 of its 3,000 global employees. Speaking at the Nasdaq bell-ringing ceremony, Mahdessian praised the team “from LA to Armenia” for their integral role in the company’s journey.
ServiceTitan's listing is a major achievement not just for the company but for Armenia's tech ecosystem, which has seen rapid growth in recent years. The country has cultivated a vibrant startup scene with strong ties to the West, supported by the influential Armenian diaspora. Figures such as Alexis Ohanian, co-founder of Reddit, and Noubar Afeyan, co-founder of Moderna, maintain close ties to Armenia, reinforcing connections with the global tech community.
Ripples of COP29; Is the Caucasus’ oil town moving towards more green solutions?
COP29, hosted in Baku, marked a pivotal moment for Azerbaijan, a petrostate reliant on oil and gas revenues. With the eyes of the world fixed on its climate commitments, the question arises: did COP29 genuinely push Azerbaijan toward a sustainable green agenda, or was it a showcase of promises? The actions that followed suggest a tentative shift.
Azerbaijan has set targets to reduce greenhouse gas emissions by 40% by 2050 and to increase the share of renewable energy in its electricity production to 30% by 2030. The State Oil Company of Azerbaijan (SOCAR) just recently launched a $200 million "Green Bond" programme, to fund renewable energy projects through SOCAR Green LLC, a subsidiary.
The bond issuance complements other significant investments in renewable energy, including a 230-megawatt solar power plant near Baku, a floating solar pilot project on Boyukshor Lake, and expanded hydropower capacity. Additionally, international partnerships are bolstering Azerbaijan’s efforts. The International Finance Corporation (IFC) recently issued a 34 million manat ($20 million) bond to support climate financing for micro, small, and medium-sized enterprises and low-income households. Since 2020, the IFC has raised over 189 million manat ($111 million) in bonds in Azerbaijan for renewable energy projects.
Premier League and Biennale driving Uzbekistan’s cultural recognition
The national symbol of Uzbekistan is a Humo, a mythical bird that, like the phoenix, arises from the ashes to signal happiness and freedom. Humo is the name of Tashkent’s increasingly popular ice hockey team, who play in the Humo arena. The Humo is also the top of a huge sculpture in the Yangi Uzbekistan (‘New Uzbekistan’) park, towering over the stretch of road leading out of Tashkent to the mountains and to the touted ‘New Tashkent’ city, the plans for which were designed by London - based Cross Works last year.
The Humo is an apt symbol for the new lease of Uzbek freedom, across finance and society, and culture, both for native Uzbeks, and for the rest of the world. Arts and culture and – most recently – sport are combining to bring the country’s cultural exports increasingly to consciousness of the world’s curious.
The Arts and Culture Development Foundation, who have been pioneering the country’s cultural heritage, have achieved a number of cultural feats internationally. The current Silk Roads exhibition at the British Museum was opened in September to much acclaim, bringing many significant Central Asian and Uzbek artifacts to the UK for the first time. This follows a successful exhibition at The Louvre in Paris, hailed by both France’s President Macron and Uzbek President Mirziyoyev. In November. The Bukhara Biennale will host the world’s creative elite, already being trailed across the papers in America and the UK, to position the country at the heart of the Silk Road legacy.
In sports, the country’s 2024 Olympic medal haul in Judo and boxing has been matched by footballing success. This month, Manchester City, one of the leading football clubs in the English Premier League, the most watched sporting league in the world, signed 20 year old Uzbek defender Abdukodir Khusanov on a four and a half year contract. The news has hit all major news and sporting outlets globally, dominating online search results for Uzbekistan. As the EPL will gain millions of new viewers in Central Asia, so too will millions more have a consciousness of Uzbekistan.
The cultural awareness of the country is being reflected in rapid tourism growth. The numbers have tripled from 2.7m in 2017 to 7.3m in 2024, not just from Western fans of Joanna Lumley’s Silk Road adventure, but from India, China and Russia. With a country that was so closed and mysterious, the pent-up demand is significant. Regular flight routes from London, New York, Paris and Beijing have been complimented by recent routes to Budapest, Warsaw, Mumbai and Colombo, feeding accessibility for curious Uzbeks and incoming adventurers.
Before 2017, even entering Uzbekistan was a challenge for the world’s most curious travelers. Now, this country of 39 million people will be represented on mainstream television weekly, and cultural assets are accessible to discerning Western viewers. If the Humo is an example of the ‘New Uzbekistan’ embracing freedom, so too is the world increasingly aware what the country has to offer.
Stat of the Month
75%: Facebook is the dominant social media platform in Mongolia according to a recent analysis, with 75% of Mongolian social media users engaging on the platform. This far outstrips other platforms - Pinterest is a distant second with 10% market share, Instagram at just 5.7%, and YouTube at 4.2.%. Platforms including Reddit, LinkedIn and X barely get a look in.
What We’re Reading
Anger Over Kazakh Time Zones Change, Chris Rickleton, EurasiaNet