The Steppe #17: Dice Rolled and Cleared for Take-off
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. In this edition, we look at these key developments:
Uzbekistan Bets Big
easyJet’s Debut in Georgia
Kazakhstan’s Big Find: 20M Tons of Rare Earth Elements
Mongolia Takes Flight
Tajikistan on the Rise
Please don’t hesitate to contact us for feedback and tips at eurasia@montfort.london
Mirziyoyev’s Big Gamble: Uzbekistan Regulates Betting
Uzbekistan’s President Shavkat Mirziyoyev has rolled the dice on legalizing lotteries, online gaming, and bookmaking, making licenses required for all operators in the game. Businesses will need to demonstrate they have a sound business reputation to participate in the newly regulated industry.
Mirziyoyev legalized gambling and bookmaking in April of last year. The National Agency for Prospective Projects (NAPP), the regulatory authority charged with overseeing the sector, backed the decision, pointing to digital technologies and electronic payments contributing to the proliferation of online gaming. The agency argued that longstanding bans have proven largely ineffective, instead pushing users toward unregulated, illegal, and foreign platforms, leading to lost capital and increased risk of gambling addiction and fraud.
“The decree was developed based on a thorough study of advanced international practices, with the aim of introducing modern technologies in the regulation of risk-based gaming and lottery activities. In preparing the decree, the experiences of countries such as Singapore, Hungary, South Korea, Georgia, and several others were examined," NAPP said in a public statement.
Licensing gambling and bookmaking is expected to shift these activities out of grey or illegal areas into a regulated environment which will allow for increased oversight and accountability among operators.
In December 2024, the Cabinet of Ministers approved the regulatory framework for gambling and bookmaking establishments, setting minimum capital requirements, thresholds for reserve funds, and procedures for player registration. Lawmakers believe the law will not only contribute to bringing order to the lottery and gambling industries but also stimulate the development of capital and insurance markets in Uzbekistan.
Licensing is a critical step toward industry transparency. All operators of lotteries, online games, and bookmaking will be required to obtain official licenses, and ensure their activities remain in line with legal and regulatory standards. These requirement standards may also serve to deter smaller or informal operators, consolidating the market towards larger, better-funded entities
REE Bonanza in Karaganda: Can Kazakhstan Challenge China’s Grip?
Kazakhstan announced an elemental find on the eve of the April 2025 EU-Central Asia Summit in Uzbekistan: a major deposit of rare earth elements (REE) in the Karaganda region. The find could reshape the REE market, where demand for technologies like smartphones, electric vehicles, and wind turbines, is booming.
Initial surveys estimate around 935,400 tons of REE - cerium, lanthanum, neodymium, and yttrium - across four zones in the country, with total reserves potentially reaching 20 million tons at a depth of 300 meters and an average concentration of 700 grams per ton.
Kazakhstan’s Ministry of Industry and Construction is optimistic about the deposit’s potential, but experts like Georgiy Freiman, chair of PONEN, caution that extensive studies, including economic viability, are needed to confirm its potential. Without this, the site remains a hopeful prospect - more raw potential than refined reality.
Should the Kazakh authorities’ assessment prove accurate, the discovery could transform the REE landscape. China currently dominates that market, holding 44 million tonnes of reserves (37% of global total) and supplying 70% of mined REE. Brazil, with 21 million tons, ranks second but lags in production. If verified, Kazakhstan’s 20 million tons would make it the third-largest holder of REE reserves.
Globally, REE demand is steadily growing, driven by green energy and tech and projected to hit 300,000 tons annually by 2030. China’s near-monopoly of REE supplies presents a supply chain risk ––and is something the EU and US would like to see diversified. Kazakhstan’s deposit, with both light REEs (cerium, lanthanum) and some heavy REEs (yttrium), could go a long way to do this, but lagging in the technology needed to process REEs means reliance on foreign investment. Development costs could go over $500 million, with production a decade away.
The announcement strengthens Kazakhstan’s strategic value to the EU, which is aiming for carbon neutrality by 2050 and needs stable REE sources. While the deposit’s size could impact pricing for neodymium and praseodymium (critical for EV motors), extraction hurdles and market volatility warrant caution. State-owned company Tau-Ken Samruk will be leading the next stage of studies.
Touchdown Tbilisi: easyJet Brings Georgia Closer to the UK
On April 1, 2025, easyJet touched down in the South Caucasus with its inaugural direct flight from London Luton to Tbilisi, Georgia, opening up the region to more international tourism. Georgia has been quietly drawing attention among adventure-seekers for some time, but still remains under the mainstream tourism radar. The new route reflects growing interest in the region and strengthens its integration with European networks.
The new route operates twice weekly – on Tuesdays and Saturdays – for the summer season. The 5.5-hour direct flight cuts hours off the typical eight-hour connecting routes, making Tbilisi’s offerings more accessible. To accommodate the increased demand, easyJet has purchased an additional Airbus A320 for its Luton base, expanding the fleet to a total of 25 aircraft.
Tbilisi has long drawn visitors with its historic Old Town, cobblestone streets, medieval churches, and sulphur baths. In more recent years, its culinary and wine making scene has made it a mecca for food lovers. For hikers and adventure seekers, Tbilisi serves as the perfect base to explore Georgia’s Caucasus mountains, UNESCO sites, and Black Sea coast. It is also the main gateway for traveling onward to Armenia and Azerbaijan. Georgia hosted 7 million visitors in 2024, up 6% from 2023, contributing $4.1 billion to the economy. Tourists spend an average of 2,426 GEL (approximately $900) per visit in Georgia on accommodation, dining, shopping, and transport – bringing cash to the country and supporting the economy. Armenia and Azerbaijan are similarly seeing steady growth but whose infrastructure lags slightly behind.
The route’s low price - fares start at £39.99 one-way - now makes Tbilisi a budget-friendly city break for UK travellers.
From Ulaanbaatar to the World: Hunnu Air Grows with New Aircraft
On April 16, 2025, Embraer's E190-E2 and E195-E2 aircraft got the official greenlight from Mongolia’s Civil Aviation Authority (MCAA) for Hunnu Air to add the new jets to its fleet. The move signals both Mongolia's growing ambitions in Asia's aviation but also opens new opportunities for the nation to connect with more destinations around the world - placing it firmly on the map.
Hunnu Air, Mongolia’s largest private airline, is preparing to welcome two E195-E2s to its fleet from April and October 2025, leased from Azorra. These new jets will replace Hunnu’s ageing E190s – both veterans of the sky at over 12 years old. With a range of 2,600 miles and room for 146 passengers, the highly fuel efficient E195-E2s will help Hunnu expand its Ulaanbaatar hub to tourist destinations such as Phu Quoc, Vietnam, and Sanya, China while keeping costs low. The move aligns with Mongolia’s concerted tourism push, which saw 650,000 visitors in 2024 – and is aiming even higher.
The E2’s certification marks a strategic win for Embraer’s Brazilian manufacturers in Asia, a region where the jets are still gaining ground. So far, only Scoot operates the E190-E2, flying travellers to destinations like Singapore and Thailand. But momentum is building: Japan’s All Nippon Airways’ recent order for 15 E190-E2s signals that these jets can hold their own against giants like Airbus and Boeing.
Mongolia’s approval of Embraer’s E195-E2 could help boost the standing of the jet in the region, and may nudge more carriers to consider it, especially with rising fuel costs. But it’s not all smooth flying ahead. Leasing the modern planes is an expensive endeavour, and Mongolia’s harsh winters mean extra effort and resources for maintenance. Still, it’s a bold leap for a small airline chasing big dreams.
Tajikistan’s Next Chapter: Growth Holds, But Reform is Key
Tajikistan’s economy is picking up steam, says The Asian Development Bank (ADB) in its April 2025 Asian Development Outlook. Long seen as a low-income nation with a significant informal economy, Tajikistan is showing encouraging signs of progress driven by energy, industry, and a developing digital sector.
The ADB projects GDP to grow by 7.4% in 2025 and 6.8% in 2026. While these numbers may be slightly down from 2024’s impressive 8.4% - one of the highest rates in Central Asia - underlying these numbers are investments in power and manufacturing, sectors that could lay a more durable foundation for long-term growth. However, to keep this momentum going, the ADB says that structural reforms are needed, particularly in digitalization and governance.
While almost every Tajik resident owns a mobile phone, the country lags behind in terms of connectivity, ranking 139th in mobile internet speed. However the digital adoption is accelerating: in 2024, 92.4 million non-cash transactions were recorded - a 61.7% increase from the year before. According to the U.S. Department of State, bank payment card ownership also rose 45.5% from 2021 to 5.1 million in 2022.
For most of the past decade, consumer price inflation has hovered under 10% - a stable track record for a region often hit by volatility. Looking ahead, inflation is likely to remain at 5.0% in 2025, rising to 5.8% in 2026. Why? This is due to growing consumer credit, bigger public sector pay checks, and increasing utility costs. Balancing these pressures while pushing forward with the needed reforms will be critical to maintaining economic stability.
Another Step Toward Privatization: Uzbekistan Plans Major IPOs for State Enterprises
Uzbekistan is continuing its long-running privatization efforts, with plans to list shares of 12 state-involved enterprises on both domestic and international stock markets between 2025 and 2028. This step, outlined in a presidential decree, is part of the country’s broader strategy to reduce state involvement in key sectors and attract international investment.
While this is not the first time that President Shavkat Mirziyoyev has committed to pursuing IPOs, the repeated announcements reflect a clear direction toward economic reform. This ongoing commitment demonstrates the government's determination to privatize key sectors, even though the pace of implementation may be gradual.
The initiative will see between 10% and 25% of shares offered through Initial Public Offerings (IPOs) and Secondary Public Offerings (SPOs). Key enterprises targeted for this privatization include Navoi Mining and Metallurgy Company, Uzbekistan Airways, and Almalyk Mining and Metallurgical Combine, alongside major infrastructure companies like Uzbekhydroenergo, Regional Electric Networks, and Uztransgaz.
This latest phase is part of President Mirziyoyev’s ongoing reforms to liberalize the economy and encourage private sector growth. While the IPOs are expected to raise significant capital, which will be reinvested into infrastructure and key economic projects, it is essential to see these moves within the broader context of gradual reform.
In addition, Franklin Templeton Asset Management LLC will assist with the management of Uzbekistan’s National Investment Fund (UzNIF), ensuring global financial standards are met and to work with the government on value-enhancing strategic projects. Alongside increasing interest from European political figures, Uzbekistan’s reform agenda is gaining more attention, signaling growing confidence in the country’s economic transformation.
The upcoming IPOs offer a promising window into Uzbekistan's economic future, positioning the country as the growth market within Central Asia. While the road to privatization is incremental, the government’s commitment to reform and modernization remains clear. As these enterprises begin to transition to the private sector, investors will have an opportunity to engage with a nation in the midst of profound economic change. However, the full impact of these efforts may take time to materialize.
Stat of the Month
12,000 tonnes: The amount of black tea imported by Azerbaijan each year. Azerbaijan is known for its rich tea culture, with black tea being particularly popular, and holding a special place in daily life.
This love for tea is reflected in the numbers. For a population of just over 10 million, Azerbaijan imports 12,000 tons of black tea annually. That is in addition to the locally produced tea, around 90% of which is produced in the nation’s southern Lankaran area bordering Iran.
In 2020, Azerbaijanis consumed 1.2 kilograms of tea each year–surpassed only by Kazakhstan in the CIS region. And revenue for tea both at home and out-of-home amounted to $184.20 million in 2025.
Local tea production peaked in the late 1980s with an estimated 34,000 tons of tea produced in the country.
What We’re Reading
Russian Won’t Be Kyrgyzstan’s Lingua Franca for Long, Haley Zehrung, Foreign Policy