The transformation of Syria's economy began with the Agrarian Reform Law in 1958, which called for the expropriation of large tracts of land. During the union with Egypt, laws were passed for the nationalization of banks, insurance companies, and large industrial firms. After the Ba'ath Party came to power in 1963, the socialist trend reasserted itself with greater force. A series of laws created a new banking system and instituted public ownership of all large industries. By the early 1970s, however, the government had relaxed many restrictions on trade, foreign investment, and private-sector activity, in an effort to attract private and foreign, especially Arab, contributions to Syria's economic growth.
Since 1961, a series of five-year plans has concentrated on developing the nation's infrastructure and increasing agricultural and industrial production. Investments reached 60% of the target under the first plan (1961–65); the second plan (1966–70) aimed to expand real GDP by 7.2% annually but achieved a yearly growth rate of only 4.7%. The third plan (1971–75) was disrupted by the 1973 Arab-Israeli war, but thanks to aid from other Arab states and large oil price increases, Syria experienced an economic boom with a high annual growth rate of 13%. The fourth plan (1976–80) was hampered by the high cost of Syria's military intervention in Lebanon and a cutoff of aid from Gulf states; economic growth varied widely, from 2.8% in 1977 to9.2% in 1980.
Under the fifth plan (1981–85), development projects begun during the previous plan were to be continued or completed. Total investment was estimated at s£101 billion, of which 23% was to be provided by the private sector. Real GDP was to grow by 7.7% annually; actual growth rates ranged from 10.2% in 1981 to 3.6% in 1984, averaging 2.3% for the period.
Syria's sixth development plan (1986–90) emphasized increased productivity rather than new projects, with special emphasis on agriculture and agro-industries. Actual investment in agriculture accounted for 18.7% of total spending. The share of the industry and energy sector was at 19.7%, far below the planned 30.9%. Services received the highest share, with 53% of the total.
The seventh five-year plan (1991–95) proposed total investments of s£259 billion, more than double the amount spent under the previous plan. It aims at spending 81.7% of the total on the public sector and 18.3% on the mixed sector/private-sector cooperatives. Officials at the Supreme Planning Commission have stated that agriculture and irrigation continue to receive top priority, with self-sufficiency in cereal production a policy objective. Output in agriculture and manufacturing is planned to expand by 5.6% per annum.
During 1949–86, multilateral assistance to Syria totaled $822.7 million, of which 77% came through the IBRD. US loans and grants during the same period amounted to $581.9 million. Financial aid to Syria from Arab oil-producing states is not made public. Since 1982, Syria has received a million tons of oil annually from Iran, free of charge. Since Syria is in arrears on payments to the World Bank, disbursements were halted in 1988 and projects canceled. Syria has been in violation of the Brooke Amendment since 1985. The improvement in Syria's external payment position in 1989 as well as the resumption of aid flows to Syria in 1990 due to its participation in the coalition against Iraq helped to restore its ability to repay its debt.