The relationship between private sector development and economic growth in Uzbekistan

Abstract

This study provides a comprehensive assessment of the relationship between private sector development and economic growth in Uzbekistan based on official statistical data for the period 2010-2025. The study proposes the concept of the “private sector paradox” in the Uzbek economy: a decline in the relative share of small businesses in GDP does not necessarily indicate an absolute decline in the economic role of the private sector. Rather, it may occur alongside structural transformation of the economy, the expansion of large capital-intensive industries, and the qualitative transformation of private businesses. The study employs descriptive statistics, dynamic and comparative analysis, regional comparison, and correlation analysis. Particular attention is paid to the methodological limitations of measuring the contribution of the private sector solely through its share in GDP. The findings suggest that the contribution of the private sector to economic growth should be examined through multiple channels, including investment, exports, employment, labor productivity, competition, access to finance, and innovation. The analysis demonstrates that the declining relative share of small businesses in GDP has occurred simultaneously with increasing export activity, a persistently high contribution to employment, growing investment, and an expansion of services. This indicates that the transformation of the private sector should be assessed not only in quantitative terms but also in terms of productivity, competitiveness, technological upgrading, and integration into international markets.