Economic Relations Between Italy and Mediterranean 3rd Report

  • 27 January 2014

The Economic Relations Between Italy and Mediterranean 3rd Report, made by the Centre for Study and Research in the Mediterranean (SRM) inside the Permanent Observatory on the economy Mediterranean, is composed by four sections: economy; trade and business; finance and cash flows; infrastructure.

Maximum Deandreis , General Manager of SRM said: ” The data contained in the 2013 report highlight , with greater clarity that in these latest years, the importance of commercial exchange between Italy and South of the Mediterranean grew of  76.8 % from 2001. In addition, many Italian companies – even of the South – used this potential; in fact the number of companies with Italian capital in these countries (and that from there they operate outside) grew . There are around 2,000 Italian companies – just in Turkey , Tunisia and Morocco. However , looking at the most recent data , we note that our country has a lower share of manufacturing interchange to its potential and is losing its primacy in favour of other players such as Germany, the United States and China, growing at a faster rate . These countries have well understood – even better than Italy which also has the advantage of geographical proximity and cultural – the strategic importance of the southern shores of the Mediterranean as well as a gateway to other neighbouring markets of Africa and the Middle East. ”

The key issue of the SRM analysis are:

• Foreign trade (import / export ) between Italy and the Mediterranean area grew by 76.8 % between 2001 and 2013 .

• Italy was the first EU country in 2012 with 61 billion Euros in import-export , but this data is estimated to fall at the end of 2013 to 58.3 billion due to the decline in imports.

• The exchange of non-energy products between Italy and the Mediterranean area is 32.7 billion Euros , and there is an increase of 69.4 % between 2001 and 2013. The estimated value for 2015 is 35.3 billion Euros .

• Italian exports to the Mediterranean area is in growth (+3.9%) in the 1st half of 2013 .

• Exports (excluding energy) in the early six months of 2013 to the Mediterranean area estimated an increase of 7.1% for Italy and the for the South of Italy of 11 , 1 % .

• The South is the second Italian macro-region for interchange to the Mediterranean with 14.7 billion ; at the first place there is the North-West with 19 billion Euros .

• The South of Italy , in terms of the interchange , has a value almost triple compared to other macro – regions of the country (15.5% compared to 5.5 % of the Centre; 6.2% of the North -West , 5.4% of the North East) .

• There are 2,000 enterprises participated by Italian shareholders , with a turnover of almost 20 billion Euros , located in Morocco , Tunisia and Turkey.

• The 76% of the interchange with the Mediterranean area by sea . Italy is Europe leader as far as concern short sea shipping in the Mediterranean Basin( with 37.5% of the exchanges).

Financial sector , the second point analysed by SRM researchers, presents lots of potentialities. There are lots of difficulties avoid funding by commercial banks (and therefore , from the traditional finance ) : innovative institutions such as hedge funds , venture capital or private equity are rarely introduced . The banks, however, are in sharp growth, especially those related to Islamic banks , obedient to principles different from those of normal banks and inspired by Islamic finance , which prohibits formulations loan interest only and is committed to investments that have a social significance . However, bank branches are not spread all over Mediterranean countries,  significantly lower for density of population , compared to those in European countries : in Morocco and Tunisia, there are 22.3 and 17.2 bank branches per 100 thousand branches adults ( in the EU there are 49.2) . However, the branches of the Mediterranean area have a better profitability, comparing those  European ,. This situation certainly dues to the flows of remittances that migrants send to families (total 2012 flows: $ 400 billion and 2015 flows estimated is 515 billion dollar). The impact of remittances is crucial for the economies of the Arab countries of North Africa : in Tunisia, remittances that come from immigrants who moved in Italy, compose the  4.4% of GDP , 6% of the Egyptian and 7.2% of the Moroccan GDP. Considering this the governments of such countries are working to lower the cost of transferring money and investments to facilitate routing utilities ( first of all the infrastructure works ) .

As far as concern infrastructure, the report shows that in the Mediterranean passes 19% of the world’s maritime traffic . Italy should exploit its geographical position, by cooperation with the Mediterranean area in the construction and maintenance of ports and marine infrastructure . Currently Italy has not worked enough in terms of innovation and therefore not sufficiently competitive. The countries on the southern shores of the Mediterranean, on the other hand , are investing heavily in the maritime sector : Tunisia, for only four years 2010-2014 , has provided well over 4.2 billion Euros . In addition to contributing to the economic recovery and trade , the full exploitation of resources and sea routes is crucial for the euro -Mediterranean integration . The areas on which to work and invest are the streamlining of bureaucratic procedures , the fluidity of logistics processes related to transport , planning of all the maritime system .

In the infrastructural section, the SRM also analysed and included the topic of renewable energy. The Mediterranean area, at least until 2030, will grow its energy demand by almost 2 percentage points per year (especially in the countries of the South and the Middle East): this new demand should satisfied through renewable sources (in especially wind and solar, which records a presence throughout the area plentiful). The first step is the construction of power plants of medium size, then will be required electrical infrastructure and interconnected networks.

The annual report of SRM has also announced the results of the work of observation , which opened last year , the Italian business presence in 9 countries in the Mediterranean followed by the Observatory. This year the data were collected pertaining to Morocco, Tunisia and Turkey.

In Morocco are currently 140 active Italian companies , 13.1 % of whom work in machinery , metals and transport equipment, with a turnover of almost one billion euro per year.

Commercial relations among Mediterranean countries

  • 21 January 2014

 

The Mediterranean represents one of the geo- political spaces of interest in the scenario of international relations. Place of conflicts, intense rivalries , but also of intense cultural exchanges , this area continues to maintain a role of strategic importance not only for the countries of Europe, but also for other world powers , as it connects with its narrow sea three continents : Europe, Asia and Africa. Agriculture has taken advantage of this strategic location and dynamics of the many favorable trading location in the center of the political strategies of the world’s great powers and the evolution of international trade.

The dynamics of the intensity of agri-food trade between the countries of the Mediterranean are not unique as a justification are influenced by a variety of factors, including the entry into force of the agreements between the EU and the Mediterranean partner countries not members the economic situation of the countries affected by the bilateral trade, the importance of the agri-food sector in economic terms, the signing of free trade agreements with other countries of the Mediterranean partners or are geo -economics. Overall, there has been a weakening of the agri-food trade between the countries in the area and indirectly a gradual opening up of the countries of the southern and eastern shores of the Mediterranean to the non-European markets with which , in recent years , have increased trade agreements such preferential bilateral and sub – regional .

In terms of geographical distribution of trade in the euro -Mediterranean , there was a strong bias in trade of some countries. In particular, the area considered France takes a role of great importance , not limited to intra- Mediterranean but also international ones ; the country is , in fact, among the top exporters of food products worldwide. In the fifteen years of reference, France was , between the Mediterranean Member States of the EU, the only intensify in the whole agri-food trade with area partners and in particular with Morocco and Algeria , respectively , the main markets supply and outlet . With the latter countries , the dynamics of trade intensity , although showing some variability , detects , on the whole , an intensification of trade flows especially in the period 2006-2008, due to a faster growth of bilateral trade than that marked the global trade of the two countries .

This trend may be partially related , in particular Algeria, the entry into force of the said Agreement EU-Algeria Association in 2005. A trend characterizes different , however, relations with Israel ; with that country, the intensity of the agri-food trade maintains a certain continuity until 2006 showing only from 2007 onwards a gradual erosion of the intensity of trade due, on the one hand , the contraction of the bilateral agri-food trade – and in particular to a reduction of agri-food imports from France Israeli – market and, secondly, to a greater openness to foreign markets of Israel, not rilevandosi no effect of the subscription, in 1995 , and entered into force in 2000 of the Agreement EU-Israel Association . Many of the countries belonging to the region of the Middle East or North Africa, in recent years, have gone towards a gradual integration into the international economic system ; Israel , for example, in December 2007 signed a free trade agreement with the Mercosur countries in which it is expected to be 10 gradual removal of all tariff barriers existing between the parties. Beginning in 2008 , the changes that occurred within the agri-food trade with some of the main partners , are partly due to the crisis that hit the world economy and in a very differentiated the various countries of the Mediterranean according to their greater or lower trade and financial integration with the international economic system and in particular with the countries of the northern shore of the Mediterranean.

With regard to Greece , the results reveal , as already mentioned above, a reduction in the overall intensity of agri-food trade with partners in the area. In particular, there is a substantial stability of the intensity of trade flows in particular with Turkey , while Morocco recorded an appreciable increase in the intensity of trade after the entry into force of the EU-Morocco Association in 2000, compared , however, a progressively lower strength of trade relations with Israel , as a result of a contraction of bilateral agri-food trade and in particular of Greek imports from the country. Tends also to decrease the intensity of bilateral trade with Albania due to a higher growth rate that characterized the world flows than bilateral , although the country continues to be the main export market of agro-food products Greek . Conversely , increases in the intensity of the whole agri-food trade with Tunisia , as a result of an increase in bilateral trade and a parallel decline in world trade of the two partners ; However , since 2008 , there has been a gradual weakening of the relationship , partly due , as well as for other countries , the economic crisis has had a significant impact on Tunisia also important , and in particular on exports of agricultural products in this country. For Italy the results show an overall weakening of the intensity of bilateral agri-food trade with the countries of the South and East of the Mediterranean , while rilevandosi a flow growth in absolute terms , highlighting a growing diversification of markets and a loss of centrality of the countries of North Africa and the Near East as a whole. The analysis for each trading partner , sheds light on an intensification of trade with major trading partners and in particular with Tunisia and . With both countries , bilateral trade intensified especially in the early years presumably dictated by enthusiasm for an initial subscription of the Agreement in 1995 in Barcelona. Beginning in 1999, the year following the entry into force of the Association Agreement ( March 1998) , it is noted , in contrast, a reduction in the intensity of exchanges involving , in particular Tunisia, 1999-2003 , but they tend to grow again from 2004 to undergo a gradual weakening thereafter tied to a greater extent to a sharp contraction in exports of Italian food products in these countries , compared to the decline that has characterized purchases . Also with reference to Turkey is detected , on the whole , an initial increase in the intensity of bilateral trade, with a maximum value achieved between 2004 and 2005 , followed by a progressive deterioration of trade, due to the increase in world trade and in particular, a greater openness to foreign market of Turkey. Same trend is observed in bilateral trade with Croatia , another important area partners for Italy ( especially in terms of exports)

characterized by an increasing intensity over the period 1999-2003 (coinciding with the period of the signing of the Stabilization and Association Agreement in 2001 ), due to an increase in bilateral trade more sustained than that which accompanied the global trade in the period considered , and a subsequent gradual loss of intensity in their business since 2005 year of entry into force of the Agreement. At the same fifteen years , intensify relations with Egypt and Israel , as a result of a growing dependence of Italian food products . The weakening of the Italian agri-food trade with the countries of the area can also be read in relation to the effects of the crisis on the national economy ; Italy , among the advanced economies of the Mediterranean, is , in fact , the one that has most affected by the crisis as presenting a fragile economic system itself which since 2007 has shown modest growth rates , compared to those reported for other Mediterranean countries with a high income , but mostly negative since 2008 .

Spain has , on the whole , reduced the intensity of trade with partners in the Mediterranean region , which has invested performance , in particular , trade with Algeria, Tunisia and Turkey , in the face , however, a growth in value of the flows agri-food area countries .

From 2007 there was a decrease in the value of the index, is due to a reduction of bilateral trade, both for a greater openness to the world market of the Moroccan State . The gradual weakening of relations with Morocco can be explained , on the one hand , the recession which has hit Spain, starting in 2007 , and the Moroccan State , and on the other hand , the spread in recent years , numerous reports political and trade among them was an agreement on agricultural trade between Morocco and the U.S. , which entered into force in 2005, which provides for a system of progressive tariff elimination for the majority of food products in a period of 15 years with the exception of some highly sensitive products for which there is a system of quotas. With Tunisia , as well as Algeria , there was a reduction in the intensity of trade flows , however, shows a fluctuating trend throughout the period considered.

Regarding the member states that joined the EU team with the enlargement of May 2004, the Trade Intensity analysis was performed for the same fifteen years of reference in order to detect any changes in the intra -Mediterranean relations following the ‘ accession. With regard to Slovenia , there has been , since 2004 , a decrease of the intensity of trade in agricultural and food products has notably Croatia and to a lesser extent the other Mediterranean partners , however , absorb modest shares of trade ‘ area ; what could be named to an intensification of intra -Community trade.

With regard to Cyprus , increases the intensity of agri-food trade with the countries of the area that was mainly due to an intensification of relations with Syria ; more moderate increases have affected trade with Lebanon , Israel and Egypt , which are major trading partners with whom the agri-food trade , albeit modest , have intensified in recent years thanks to the physical proximity between them. Finally , the relations between Malta and the remaining non-EU Mediterranean partners have become less intense after the entry of Malta into the EU presumably due to an intensification of intra -Community trade. However, the results highlight how increased trade intensity , as of 2004 , although in a very small extent with Morocco and Lebanon , as a result of an increase in bilateral trade, while a different dynamic has characterized the bilateral relations with Egypt and Turkey.

Tourism and investment opportunities in Turkey

  • 15 January 2014

 

Turkey has undertaken initiatives to promote the development of the internal market, in tourism sector, that include international operators. This activity wants  make country more attractive for foreign investment.

The incentive policy adopted by Turkey aims to emphasise the historical, cultural and natural patrimony of the country, in order to became a destination for development initiatives and investments.

According to data from the Ministry of Culture and Tourism of the Republic of Turkey  ” international tourists between January and August 2013 were 24,089,031 with an average increase of 10.67% compared to the same eight months of last year . Considering only the summer months, June had an increase of 4.93% -compared to June 2012 ( with 4,073,906 visitors) , in July the increase was 0.48 % -compared to July 2012 ( with 4,593,511 visitors) and August had an increase of 10.64% ( with 4,945,999 visitors) -compared to August 2012″.

“Turkey – says the Minister of Culture and Tourism Omer Celik  – is one of the countries with a greater propensity to tourism, as the statistics show, despite crisis of local and regional industry . Data Minister includes 4.5 million of Turks, who living abroad and came back home for holidays. Last year, Turkey was the sixth most visited country in the world and the southern city of Antalya has registered a record: 12 million visitors (three million came from Russia and two million from Germany)”.

The countries that, between January and August 2013, choose Turkey as a tourist destination , are – based on data provided by the Ministry of Culture and Tourism of the Republic of Turkey – Germany ( share of 13.86 % with 3,339,626 tourists) , followed by Russia ( share of 12.89 % with 3,104,869 tourists) and Great Britain ( share of 7.23 % with 1,742,549 tourists) . Georgia ranked fourth, followed by Bulgaria, the Netherlands, Syria, Iran, France and Ukraine.

Italian tourists who chose Turkey between January and August 2013 were 497 363, with an increase of  1,36% compared to the same period of last year.

Despite the economic crisis that, according to data from the National Tourism published in September, led to a general decline of the movements of Italians abroad for the purposes of recreation , – in the first six months of  the year there was an increase of 12.2 %, compared to January-June 2012, “we can be satisfied with the balance of the summer and finding  Turkey as a destination on the Italian market ,” says Aye Ozgen Türkgücü , the new director of the Office of Information and Culture of the Embassy of Turkey .