The Japan Times WORLD EYE REPORTS ROME AND THE MEZZOGIORNO
©THE JAPAN TIMES	Tuesday, September 4, 2001

Rising to the challenge of the 21st century

Twentieth Century Italy has evolved into a powerful economy - among the world's seven largest industrial nations. It is also a country whose capital, Rome, roughly splits the economic pie into unequal portions between the prosperous industrial North powered by private enterprise and the underdeveloped agricultural South traditionally dominated by large public-owned companies. Southern Italy - the historic Mezzogiorno - continues to face higher unemployment compared with the north, and the region is also still in the process of tearing itself from the grip of endemic problems such as organized crime and corruption. Today, however, the Mezzogiorno is also showing clear signs of renewed economic vitality. The promotion of the region as a high-tech industrial base has resulted in significantly raised prospects for the region's attaining its rightful share of the European economic balance.

The "Mezzogiorno" (Italian for midday, because of the strength of the noonday sun in southern Italy) refers to the modern Italian regions of Abruzzi, Campania, Molise, Puglia, Basilicata and Calabria, and the islands of Sardinia and Sicily. Although the region's GDP still falls short of the average in the rest of Italy and the European Union, preliminary figures for the first quarter of 2000 show that the whole area is on track to catching up, in terms of actual output and domestic and foreign revenues.

Ancient Roman monuments like the colosseum oversee the vital modern capital that is spearheading the investment drive for southern Italy,

In fact, exports have risen so much in the past several months that the Mezzogiorno's foreign revenue figures have topped the national average.

For the past several years, Italy's foreign policy and economic programs have also been dominated by its links to the European Union. It worked successfully to lower the GDP-budget deficit ratio to within the three-percent ceiling set by the European Monetary Union (EMU) and thus enable it to remain on schedule for the entry of the euro next year.

After several years of retrenchment, therefore, Italy has successfully shifted its economic policy towards reduced taxation, increased foreign investment and higher employment. These goals are likely to remain the pillars of economic strategy of the newly elected center-right government headed by Prime Minister Silvio Berlusconi.

Industrialist Umberto Agnelli remains a high-profile promoter of Italy-Japan relations

Italy in Japan Although a relatively late arrival in the Asia-Pacific region, Italy has recently stepped up efforts to consolidate both political and trade relations with Japan and its Asian neighbors. In the past few years a number of high-profile visits and trade events have been organized, led by both government and private sector envoys. To mark the solid diplomatic ties between Italy and Japan and highlight the importance of this relationship, a yearlong festival - "Italy in Japan 2001" - was launched in the two countries. "The number of joint ventures between Japan and Italy has increased," comments Umberto Agnelli, the powerful and world-known Italian industrialist, who is also chairman of the Italy-Japan Association. "There also seems to be a worldwide base of contacts now. Though movement could be faster, we are happy that the Japanese are open to deepening the relationship. They realize that not only they are experts in their fields. So are we. We can foster links with each other."

"The project has been designed as an important opportunity for Italians and Japanese to introduce themselves to each other, aside from providing a chance to facilitate foreign investment between the two countries," says Japan's ambassador to Italy, Akira Hayashi. One of Japan's most admired cultural traits - harmony of design - is a common thread with Italy's own expertise in modern fashion and industrial design, and the festival opens up a window for sharing experiences and technology.

While contact with Japan is extensive, Italy to-date has had a modest presence in the rest of Asia - a situation that has ironically cushioned the blow from the recent economic downturn in the region. The Italian government's long-term goal, however, remains to broaden its involvement in the Asian market and particularly in the field of technology.

The promotion of economic growth in Central Italy and the Mezzogiorno is another ongoing priority. Programs include loan and tax incentives available to all investors, foreign as well as Italian. The promotion of production activities, job creation and new entrepreneurship - through the stimulation of demand for technology innovation and by providing central and local administration for new projects - are strategic measures which are already changing the region's industrial landscape. The presence of several Mezzogiorno-based multinationals such as EDS Italia, Italdata, Oracle Italia and Nortel Networks is already a measure of success and Italy's under-appreciated regions look set to fulfill their largely unexplored growth potential - led by important initiatives from Rome. The policies have accelerated development as the 21st century gets off to a good start.

Japan's ambassador to Italy, Akira Hayashi, continues a commitment to bolster bilateral ties.

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