In the 1967 Arab-Israeli War, Syria lost the Golan Heights to Israel. Since 1976, Syrian troops have been stationed in Lebanon, ostensibly in a peacekeeping capacity. Talks with Israel over the return of the Golan Heights have recently been revived. Although Syria has sufficient water supplies in the aggregate at normal levels of precipitation, the great distance between major water supplies and population centers poses serious distribution problems. The water problem is exacerbated by rapid population growth, industrial expansion, and increased water pollution.
Private investment is critical to the modernization of the agricultural, energy, and export sectors.
Oil production is leveling off, and the efforts of the nonoil sector to penetrate international markets have fallen short. Syria's inadequate infrastructure, outmoded technological base, and weak educational system make it vulnerable to future shocks and hamper competition with neighbors such as Jordan and Israel.