Socialism became the official economic policy after the formation of the United Arab Republic (UAR)² by Egypt and Syria in 1958.³ Syria’s main trading partner and economic model was the Soviet Union.⁴ Following the Soviet Union’s example, Syria started implementing "five-year" economic plans in 1960 with limited results.⁵ The country experienced a loss of capital, skilled workers, and administrators as centralized planning was increased. Under President Hafez Al-Assad’s leadership, Syria’s infrastructure improved slightly, providing electricity and better roads. However, economic progress was severely limited due to stringent political controls, which provided few possibilities for private enterprise.⁶ By the late 1980s, there were frequent power outages and shortages of basic commodities.⁷

Economic Reform and Lifting of Restrictions
In 1989, Syria began developing newly discovered oil and natural gas reserves. Foreign companies were brought in to design, build, maintain, and operate their new wells, pipelines, and refineries. This influx of foreign companies has helped institute Syria’s new economic reforms. In 1991, the Syrian government passed a new law, Investment Law No. 10, creating incentives for the development of private enterprises. Businesses gained the right to retain 75% of foreign exchange earnings and importers were allowed to set up foreign exchange accounts in Syria of assets held abroad.⁸ Within the next five years, the proportion of the economy in private hands rose from 35% to 70%. Credit card usage by residents and nonresidents was authorized by the Ministry of Economy and Foreign Trade in 1995. Toward the end of the 1990s, the progress resulting from Investment Law No. 10 had slowed considerably.⁹ Since coming to power in September 2000, President Bashar Al-Assad, the son of former President Hafez Al-Assad, has taken additional steps towards privatization.

Internet service with highly restricted access of information became available only to companies, embassies, and the Syrian government in 2000. A comparison of internet hosts by country revealed that Syria had zero hosts per 10,000 people in 2000 compared to 10.93 per 10,000 in Lebanon and 20.5 in Kuwait.¹⁰ In 2003, Syria had four national Internet Service Providers (ISPs) and service was slow.¹¹ Since then, service has expanded to 66 Internet hosts (2006) serving 1.1 million users (2005).¹² The government is currently developing e-commerce guidelines that will facilitate Syria’s entry into the world’s largest market place. In addition, cellular phone services are emerging, although only on an extremely limited basis due to the expensive nature of such services.¹³