THE ROLE OF DIVERSIFICATION PROCESSES IN STRUCTURAL TRANSFORMATION OF A REGIONAL ECONOMY: EVIDENCE FROM SURXONDARYO REGION

This article examines how diversification processes shape structural change in Surxondaryo region’s economy, using only official statistics for 2024–2026. The analysis combines (i) annual gross regional product (GRP) structure and growth decomposition for 2024–2025, (ii) macroeconomic aggregates for 2024–2025, and (iii) early-2026 operational statistics on industry, services, trade, enterprise demography, foreign-invested firms, and external trade. In 2024, Surxondaryo’s GRP reached 54,354.1 billion UZS (growth: 5.9%), with agriculture/forestry/fishery at 39.1%, services at 41.9%, industry at 9.6%, and construction at 9.4%. In 2025, GRP increased to 66,186.5 billion UZS (growth: 6.6%); the sectoral structure shifted modestly toward services (43.4%) and industry (9.9%), while agriculture declined to 37.4%. Growth decomposition confirms that services remained the main contributor in both years (2024: +3.0 percentage points; 2025: +3.3 percentage points), while industry’s contribution stayed below 1 percentage point. Evidence from 2026 suggests that “diversification” in Surxondaryo is primarily occurring within services (composition of market services and spatial diffusion across districts) and through expanding trade and investment volumes, while industrial upgrading remains constrained by a low-technology production profile (low-tech: 80.6% of manufacturing in January 2026). Foreign-invested enterprises are concentrated in trade (296 of 509 as of 1 February 2026), which may limit productive diversification unless investment is redirected toward higher-value industry and modern services. Overall, structural change in 2024–2025 is incremental at the sector-share level, but deeper diversification signals appear in within-sector composition, firm demography, and external linkages during 2026.