American Journal Of Social Sciences And Humanity Research
37
https://theusajournals.com/index.php/ajsshr
VOLUME
Vol.05 Issue04 2025
PAGE NO.
37-39
10.37547/ajsshr/Volume05Issue04-06
The Role of The Service Sector in The Socio-Economic
Development of The Republic of Uzbekistan
Nurullaeva Kuvonch Khudaiberdievna
Teacher at Urganch Innovative University, Uzbekistan
Received:
09 February 2025;
Accepted:
12 March 2025;
Published:
08 April 2025
Abstract:
This article is dedicated to the development of the service sector in the Republic of Uzbekistan in recent
years. The article analyzes the country’s service sector, its key industries (trade, tourism, transport, finance), and
their contribution to economic growth. It also examines the impact of state-reforms and political and economic
stability on the service sector. The article presents the growth rate of Uzbekistan's service sector, its contribution
to the national economy, and the prospects for future development, as we
ll as strategies for the sector’s
advancement.
Keywords:
Republic of Uzbekistan, economy, recent years, rapid development, service sector, economic growth,
international economic competitiveness, trade, tourism, transport, finance, state reforms, political stability,
analysis.
Introduction:
The economy of the Republic of
Uzbekistan has been rapidly developing in recent years,
and an inseparable part of this process is the expansion
of the service sector. The service sector not only
contributes to the country’s economic growth but also
plays a vital role in enhancing international economic
competitiveness. Uzbekistan’s service sector has
achieved significant growth across various industries,
including trade, tourism, transport, and finance. The
reforms implemented by the government, along with
political and economic stability, have had a positive
impact on the development of the service sector. This
article analyzes Uzbekistan’s service sector and the
government reforms that have influenced its growth.
In recent years, comprehensive reforms have been
implemented in the Republic of Uzbekistan aimed at
supporting and developing the service sector.
Specifically, the modernization of the service sector,
the
introduction
of
digitalization,
and
the
implementation of innovations by the government
have accelerated economic growth. This article
analyzes the key measures taken for the development
of the service sector in Uzbekistan, the positive results
achieved through these initiatives, and future
projections.
METHODOLOGY
In the research process, a systematic approach,
comprehensive
assessment,
comparative
and
comparative analysis, as well as statistical and dynamic
approaches were used to analyze the organizational
and legal foundations and economic mechanisms of the
development of the service sector. These methods
facilitated the study of processes and provided a
deeper understanding of the sector’s growth.
RESULTS
The service sector of Uzbekistan experienced
significant growth between 2016 and 2023. According
to statistical data, the volume of retail and wholesale
trade increased fourfold. Tashkent, with its central
location, high population density, and advanced
economic activities, remains the leading region for the
service sector. The city of Tashkent holds the highest
indicators in terms of service provision within the
country, and as a result of the development of the
service sector, the number of jobs has increased, and
economic stability has strengthened.
The government’s focus on the service sector has
contributed to ensuring the economic stability of this
industry. Since 2016, Uzbekistan’s service sector has
begun integrating with the global market, which has
American Journal Of Social Sciences And Humanity Research
38
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American Journal Of Social Sciences And Humanity Research (ISSN: 2771-2141)
played a crucial role in attracting foreign investments.
Additionally, sectors such as tourism, trade, and
finance have played a significant role in the growth of
the service industry. According to data from 2022, the
service sector accounted for 58% of the Gross Domestic
Product (GDP) of the country.
A series of reforms aimed at developing the service
sector in the Republic of Uzbekistan were implemented
starting in 2020. The decision "On Measures to Support
the Service Sector", adopted on June 16, 2020, had a
significant impact on the development of the service
sector in the country. Based on this decision, in 2021,
29,000 projects worth 18 trillion soms were
implemented, and the volume of services provided
increased by 20%.
The incentives and tax benefits provided by the
government have facilitated the growth of small and
medium-sized businesses, leading to the creation of
new job opportunities. Additionally, the government
has developed strategies aimed at increasing
competition in the service sector, including tax
benefits, relaxation of lending policies, and new
infrastructure projects. Through the adoption of
Decree No. PF-60 in January 2022, a comprehensive
plan was developed to reduce the tax burden on the
service sector until 2025, promote the digitalization of
the economy, and implement new technologies. These
reforms helped attract investments into the sector and
strengthened
the
global
competitiveness
of
Uzbekistan’s service sector.
The reforms implemented in the tourism sector of the
Republic of Uzbekistan have had a significant impact on
the country's high economic growth. The "Concept for
the Development of Tourism in the Republic of
Uzbekistan for 2019-2025," approved in 2019, set the
goal of increasing the number of foreign tourists to 9
million. Within the framework of this concept,
measures
were
taken
to
develop
tourism
infrastructure, create new hotels and recreation
centers, and improve the quality of tourist services.
These initiatives contributed to the enhancement of
the tourism sector and its positive impact on the
national economy. As a result, by the end of 2023,
Uzbekistan saw 6.6 million foreign tourists visit the
country, marking a 26.6% increase compared to 2022.
The growth of tourism not only contributed to
economic growth but also had a positive impact on job
creation, supporting local producers, and enhancing
social stability. Furthermore, the development of the
tourism
sector
strengthened
the
country's
international image and facilitated its deeper
integration into international trade and investment
flows.
The development of the service sector plays a crucial
role in the process of poverty reduction. Research
conducted by the International Labour Organization
indicates that a 1% growth in the service sector leads to
a 1.5% reduction in poverty. This highlights the
significant impact that the expansion of the service
sector can have on improving living standards and
addressing socio-economic challenges. In Uzbekistan,
the impact of government support for small and
medium-sized businesses through the development of
the service sector is increasing. The growth of
employment opportunities in the service sector and the
establishment of new entrepreneurial entities have
contributed to poverty reduction. This support has
played a key role in improving the socio-economic
conditions
of
the
population,
fostering
entrepreneurship, and creating sustainable job
opportunities.
One of the key steps in the development of
Uzbekistan's service sector has been the improvement
of the "e-Government" system. In 2019, there were 173
electronic government services, and by 2022, this
number increased to 368, with 242 of them specifically
tailored for business entities. This, in turn, helped
simplify and regulate the business environment, as well
as improve the quality and transparency of government
services. Uzbekistan's digital infrastructure also
expanded significantly, with the length of optical fiber
communication lines increasing from 20.3 thousand
kilometers in 2017 to 118 thousand kilometers in 2022.
This growth greatly enhanced internet services and
data exchange speeds, thereby strengthening the
competitiveness of the service sector.
The process of registering small business entities in
Uzbekistan has been simplified. The number of small
business entities, which was 128,000 in 2017, increased
to 325,000 by 2022, showing a 2.2-fold growth. These
changes created favorable conditions for the
development of small and medium-sized businesses in
the service sector. At the same time, the creation of
new
entrepreneurial
entities
has
increased
opportunities for economic growth and job creation.
The logistics system also saw positive changes. The
volume of cargo transportation, which was 1,146.2
million tons in 2017, reached 1,398.9 million tons by
2022, improving the system’s efficiency and imp
acting
the service sector.
There was also significant growth in the financial
sector. Between 2016 and 2023, financial services grew
5.1 times. The involvement of private and foreign banks
helped strengthen the competitiveness of the sector.
As an example, the number of banks decreased to
1,016 by December 1, 2022, compared to 1,520 on
January 1, 2018. This reflects the sector’s ongoing
American Journal Of Social Sciences And Humanity Research
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https://theusajournals.com/index.php/ajsshr
American Journal Of Social Sciences And Humanity Research (ISSN: 2771-2141)
development and its greater efficiency.
Uzbekistan has also achieved significant progress in the
healthcare sector. In 2022, 7,320 private medical
institutions were operating, marking a 2.8-fold
increase. Additionally, in the education sector, the
number of private preschool institutions grew from 250
in 2017 to 833 in 2022, while the number of non-state
higher education institutions increased from 1 in 2018
to 55.
The communications sector also saw remarkable
growth, with services expanding 2.8 times. The capacity
of international data transmission networks increased
from 64.2 Gbit/second to 1,800 Gbit/second. These
changes have enhanced the global competitiveness of
the service sector and created opportunities for the
strengthening of international trade relations.
The rapid development of Uzbekistan's service sector
has had a significant impact on economic growth. In the
first nine months of 2023, the service sector grew by
6.5% of GDP, which is higher than the overall GDP
growth, indicating the sector's economic importance.
As of early 2024, the number of small business entities
reached 277,100, and the volume of services provided
by them amounted to 224.4 trillion soms . This
highlights the crucial role of small businesses in the
service sector.
The "Uzbekistan
–
2030" strategy outlines the goal of
increasing market services threefold by developing the
service and service-related sectors. It also emphasizes
the modernization of services in IT, education,
healthcare, tourism, hospitality, and transport.
Furthermore, the strategy focuses on the development
of modern market services and infrastructure in
medium and large cities, as well as districts with
populations exceeding 300,000. This approach aims to
ensure balanced growth and improve access to
essential services across the country.
CONCLUSION
The service sector of the Republic of Uzbekistan has
become one of the key drivers of economic growth. The
reforms and incentive programs implemented by the
government have significantly contributed to the
development of the service sector. Growth in sectors
such as tourism, trade, finance, and transport has
ensured the country’s eco
nomic stability. Furthermore,
government support has had a positive impact on
reducing poverty, creating new job opportunities, and
maintaining economic stability. The development of
the service sector, through the introduction of
innovations and digitalization, will also help integrate
the country more deeply into the global economic
system. In the future, additional measures will be taken
within the framework of the "Uzbekistan
–
2030"
strategy to further advance the service sector.
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