Syria - Future trends

In order to overcome its existing economic problems, Syria will need to attract major international investors. This does not seem likely in the near future due to domestic and international problems. In the domestic arena, the 34-year-old Bashar Assad, son of the late Hafez Assad, tried to cement his position while launching his liberal political and economic agenda. Bashar and his reformist elite tried to bring a new openness to the country, but efforts were thwarted by the "old guard" of military and political veterans who remained loyal to the legacy of Hafez Assad.

With regard to regional politics, it is clear that Bashar Assad must strengthen his domestic political standing before entering into peace talks with Israel. Syria's other main foreign policy concern, Lebanon, has become akin to a domestic policy issue. Syria has politically dominated Lebanon for a decade, making foreign and defense policy decisions for the country, and approving all senior politicians. Under the elder Assad, no opposition was allowed to Syria's dominant position in Lebanon. After Israel withdrew from Lebanon in May 2000, many Lebanese continue to resent the presence of Syria and call for the removal of its troops. Bashar Assad might be forced to make a vital decision regarding his policy towards Lebanon. Most likely, the Syrian government will ask Lebanon for some concessions because of the economic advantages they gain from about 500,000 to 1 million Syrian workers in Lebanon.

Syria has long sheltered revolutionaries and terrorists to get leverage in regional politics. If the government wants to attract foreign investors, it must reconsider its support for international terrorism. Depending on policy options embraced by the new president, the outcomes of these domestic and international policy decisions will shape Syria's economic performance in the next decade. Because of population and unemployment problems, Syria's reliance on oil revenue puts it in an unstable situation. Decreasing production in the sector might have a negative impact on the economy in the end, while increasing oil prices on the international markets seems to continue boosting export revenues in the short-run.