What problems does Syria have?

The economic and political liberalization promised by Bashir Assad in 2000 has not emerged,leaving the economy somewhat stagnated and there have been no major developments in terms of domestic affairs;it remains a authoritarian regime although Assad does not have his father's reputation for brutality; he is a velvet glove dictator. Relations with the U.S. were recently strained by an incident involving a U.S. violation of Syrian territory in the course of an anti-terrorist mission. Syria does not maintain relations with Israel due to the latter government's continuing occupation of the Golan Heights,held for 41 years now as booty from the 1967 war. Relations with Lebanon have improved since the withdrawal of Syrian troops a decade ago.
Currently Syria is highly regarded for it's increasing role in the arts but is very isolated diplomatically; the standard of living is modern and literacy is high but per capita income is still sub-standard for what is a fairly Europeanized secular culture. On the plus side it is highly tolerant on cultural matters; it is 15-20% Christian and there is no persecution. Alcohol is permitted in restaurants. Damascus is a lovely modern city; any Westerner would feel more comfortable there than perhaps anywhere else in the Middle East. It is regarded as a terrorist-supporting nation for it's support of Hezbollah in Lebanon and Hamas in the Palestinian Territories but neither organization is legally a terrorist group under international law; the U.S. unilaterally so designated them and several EU countries have followed suit. Given Israel's intractabiltiy over the return of the Golan it is understandable they would support it's enemies,if only as a bargaining chip.