What about the economic relations between Italy and the Mediterranean Countries?
On November 14th, SRM presented at the headquarters of the Banco di Napoli the result of a year of study in the context of the Permanent Observatory on the economy of the Mediterranean: the Fourth Annual Report on the Economic Relations between Italy and the Mediterranean Countries.
The Report has a tripartite structure: in Part I – dedicated to the economy, to the trade and businesses- are considered trade relations of Italy and its main international competitors with the area of the South Mediterranean and provides a framework of the most recent economic developments in these countries. It also conducted an analysis on the presence of Italian companies in Egypt, Tunisia and Morocco, which is followed by a chapter about the economic situation in these three countries.
Part II of the Report – “finance and cash flows” – presents the situation of the banking and financial systems of both countries in the South Mediterranean, both Gulf (MENA Middle East North Africa) with particular focus on Egypt, Tunisia and Morocco. The development of the financial systems of the MENA has been steady in recent years, with performance efficiency and profitability better than European banks. A subsequent chapter addresses instead the analysis of investment strategies SWFs Mediterranean and the Gulf, with particular reference to the potential investment in Italy.
Part III – “the logistics infrastructure and renewable energy” – These two important research topics Mediterranean Observatory of SRM and includes a chapter on the competitiveness of our logistics system – port and a contribution on the development of renewable energy, with a focus ongoing projects and investments required in the coming years.
The President of the Republic Giorgio Napolitano sent a reflection on the theme, focusing on the ancient mix of history and culture between the countries bordering the Mediterranean and the fact that, “as it emerged from the latest report of the Study and Research Centre on the South, the economic and trade relations between Italy and the countries of the southern Mediterranean have not lost, despite the deep political crisis that plagues the area, their traditional liveliness “. Napolitano also said that in this contingency is necessary to work with the greatest commitment to re-establish conditions conducive to the economic development of the Mediterranean region.
The General Manager of SRM, Massimo Deandreis, in presenting the report outlined the framework the commercial exchange between Italy and the MED area, described the characteristics of the cash flows of the MENA and analyzed the flow of maritime traffic and the prospects of the renewable energy sector in the Mediterranean countries. The report shows how the Italian exports to the countries of the southern Mediterranean is now about 29 billion share, 11.1% of total exports of Italy, to which sum the 15 billion export towards’ Gulf area for a total of € 43.8 billion, a figure significantly higher than exports to the United States (€ 27 billion) and from China (9.9 billion).
There remains no doubt, however, that the new challenges of globalization and the current economic crisis, with the persistent weakness of domestic demand, requiring the improvement of competitiveness and export development.
Italy, with 54.8 billion euro in trade with the area (in late 2013), is the largest trading partner of the southern shores of the Mediterranean, after the United States (62 billion) and Germany (over 57 billion). Note that 2013 showed a contraction (-11.2% on 2012) due mainly to the sharp decline in oil imports from Libya (-37.8% in 2013). The incidence of the South Mediterranean on the total foreign trade of Italy was 7.3% in 2013, a share significantly larger than its main competitors; specialization more pronounced for the South, where it reaches an incidence of 14.6%.
What Italy exports to these countries are predominantly services, manufacturing and infrastructure; SRM research finds that, in total, there are about 18,001th Italian companies operating in Egypt, Tunisia and Morocco. The countries of the southern Mediterranean Italy, in large part, exports raw materials, especially oil and gas: these countries i1 comes over 22% of our supply of energy products.
A major factor in the choice of Italy as a trading partner (by these countries, in recent years) was the geographical proximity. Over the past 10 years, while Italian exports to the Middle EAST North Africa (Mena) doubled, some competitors have developed their relations with the region in pace even more intense: Chinese exports, in particular, has increased tenfold. Italy must focus not only on geographical proximity, but on mutual benefit that can come, it and its counterpart, the sharing of technical expertise and the quality of our personnel. Therefore needs proactive diplomatic action, which is absolutely essential in a geopolitical complex and layered, able to change rapidly. Despite the political unrest, the region remains attractive growth prospects for 2015 and 2016, respectively 3.6% and 4%. These growth rates, however, imply that the region to equip itself with adequate energy infrastructure, and promoting the on-site generation of renewable energy, here favored by the topography and climate, or by putting them in the energy thus generated tracked runners international energy. The result is huge demand profitable investment in energy infrastructure, power generation and transport, which is a specific opportunity for Italian companies, among the best in the world in this field. The transfer of know-how and excellence in these markets involves the need to improve infrastructure also of our country, in terms of transport and logistics. It should also improve the functioning of the administrative and judicial institutions, and increase the supply of digital capabilities, in terms of communication, processing, and innovative use of data. From a logistical standpoint, the fulfillment of the Salerno – Reggio Calabria must be accompanied from the up-grading of transmission lines, rail and port operations on the hub of the South (Naples / Salerno, Gioia Tauro, Cagliari, Taranto), which suffer competition from Greek ports, Spanish and Algerian, to the benefit of those territories. Investment opportunities are matched by the growing availability of Sovereign Funds, as evidenced by both the SRM report is from a recent study by the Bank of Italy. In the Middle East and North Africa, 11 countries out of 20 have a sovereign fund and together manage about 1.5 trillion dollars. In the past, sovereign funds have invested mainly in the financial sector of the advanced countries, but after the crisis broke out in 2008, and the losses they have suffered, they arose in the interest also to diversify into other sectors, including the energy and raw materials. Up to now Italy has shown low capacity to attract investments of sovereign funds in Europe, absorbing only i14%. Italy could provide services and products made in Italy to the countries of Mena, to help them transform from consumers to income derived from oil platforms in production and trade (using both the large availability of capital to invest in infrastructure internally and works’ industrialization, both the central geographical position between Asia, Europe and Africa, combined with the skills and technologies Italian).
The positive growth prospects in the medium term they increase the interest of Italian companies for the area. SRM has analyzed and estimated the number, size and sectors of Italian companies in the countries of the Mediterranean focusing on Egypt, Morocco and Tunisia. Overall, the Italian companies that operate in a stable manner in these three countries are about 1,800. Is the important and growing role of sovereign funds MENA (FoS MENA) as an investment vehicle and driver potential to strengthen economic relations between Italy and the countries of the southern Mediterranean. Manage 2.7 trillion dollars and it is estimated that in the coming years may invest in Italy a figure between 1.5 and 2.5 billion dollars. Within the Mediterranean basin passes 19% of world traffic of goods by sea, an increasing share from 15% of the late ’90s. Between 2000 and 2013 steps of ships from the Suez Canal have more than doubled, with an average growth of around 8% per year.
Maurizio Barracco, President Bank of Naples said: “With this conference and the report presented by SRM as we emphasize economic relations with Southern Mediterranean are very dense and more important than commonly perceived, and this applies to Italy in general, but especially for the South. The centrality of the economic mare nostrum is also highlighted by the fact that a fifth of all goods traveling by sea in the world pass through the Mediterranean and the Suez Canal has doubled in recent years the number of ships in transit. Yet Italy cannot fully exploit the opportunities for economic growth arising from the geo-economic position of the South in the heart of the Mediterranean. From here we have to start if we want to raise, on concrete bases, the growth in our regions. ”
“There are few research centers that consistently and with permanent structures, focus on the analysis of economic relations to and from Italy with a specific focus on the South. SRM can do with perseverance and commitment with the support of the Intesa San Paolo and Banco di Napoli because we are aware that this is a strategic issue for the future of our economy. The union Midi-winning Mediterranean can be a lever, to which must be added the size of the economy maritime port, a key area for Italy and for the South in particular. You must use the relevance that have economic exchanges as leverage, as the title of the round table of our conference, to revive even political cooperation and, through it, to start a process of closer integration with the South Mediterranean “- said Paul Squires, President SRM.
“What amazes analyzing these data is their evidence – as said Massimo Deandreis, General Manager of SRM. It only takes one: 2001-2013 exports of Italy to the South Mediterranean (including Turkey) grew by 107%. Including the Gulf, with a value of 44 billion euro, Italy exports in more than it exports to the United States and four times the amount we sell in China or Russia. But there’s only export. Looking to Egypt, Tunisia and Morocco, SRM has surveyed nearly 1,800 companies with Italian capital; the number is constantly growing year after year. And ‘comforting to see that companies, and among them many of the South, we have understood the growing importance of these markets. What is lacking is a strategic vision and system. Yet the data are clear: the South would be a perfect logistics platform in the Mediterranean for the benefit of the entire Italian productive system. But we need to understand and invest, or others, even further away, we will take the place that geography has given us. ”