The
Republic of Italy is one of seven countries that belong to the prestigious
Group of Seven. The Group of Seven is a
global committee that reviews the economic conditions throughout the
world. Italy is not usually thought of
as an economic stronghold throughout the world, even though there gross
democratic product is right up there with such countries as England. Italy’s economy has grown tremendously since
World War II. In the 1950’s Italy’s
economy expanded when big companies, such as Fiat and Olivetti came to the
northern part of Italy and drew thousands of workers from the southern part of
Italy (Frankeland, 129). Even with the
almost miraclialiously growth the economy has seen post war, there are still
many problems that confront Italy’s economy today. One of the Republic’s economic problems is the economic
lopsidedness in Northern and Southern Italy.
The Northern part of Italy is well developed, and on an even par with
most of Western Europe, the south is still really underdeveloped. Another problem Italy’s economy must deal
with its high unemployment rate of 10% (Frankeland, 129). Also creating a problem for Italy’s economy
is the problem of illegal immigration.
Since the fascist days of Mussolini, Italy has wanted to create an
economic powerhouse. It has had a
long-term goal to be equal, economically, with other countries in Western
Europe. It wants to have economic
prosperity throughout the country not just in certain regions of the Republic
(Hellmen 431-35). It would also like to
have a country open to all others but only as legal immigrants. It would also like to see its unemployment
rate drop, so they can continue as a society that is on the same level
economically as a United States.
In
the recent past Italy has employed many policies to help overcome some of its
economic problems. The main focus for
Italy since 1950 has been trying creating the southern part of Italy into an
equivalent to the well-developed northern part. “According to Mignone (“The Two Italies and the Southern
Question,” 186), The new republic undertook one of the largest and most
ambitious regional development programs in Western Europe to solve the southern
question.” The policies created to help
the south develop were created to focus on land reform, infrastructure
development and industrialization. For
example of how focused the state was, by the mid 1990’s it had spent over 150
billion dollars of public funds in helping develop the southern part of
Italy. It will and has been a major
concern to the government because, according to Mignone, (187), “By the early
1990’s the south-an area the size of Greece, with 40% of Italy’s land area and
30% of its population-accounted for only 20% of its GDP, and has an official
unemployment rate of nearly 20% of the labor force, against only 5% in the
North.” The public funds used by the state created new roads, new schools, a
network of new entrepreneurships, and other such things. The government also passed laws to help
bring new business owners into the south.
“In order to create entrepreneurs in the new generation South, under a
1986 law, the government established the Committee for the Development of
Young Entrepreneurs in the Mezzogiorno (southern Italy),” (Mignone,
195). This law was created for people
living in the South that were under the age of 29. The law was passed to educate and encourage young citizens in the
South to want to create and own their own companies.
Similar
to the way Cuban refugees come to America, Italy has had a problem with the
nearby country of Albania. Albanians
choose to cross the Adriatic Sea to look for a better life in Italy. In response to the problem of illegal
immigrants coming from the country of Albania, Italy strengthened its Coast
Guard (Frakeland, 130). This was not
the only measure taken to prevent illegal immigration, but this shows how much
of a national concern it was. Another
problem facing the economy is the unemployment rate in Italy. To combat the high unemployment rate that
Italy has, has been the lowering of interest rates at banks. In a recent economic survey done on Italy
explains that with the lower interest rates, small business owners have had a
greater confidence in the economy (www.oecd.org/eco/surv/esu-ita.htm). With a greater confidence in the economy,
people are more likely to buy and others may be more likely to invest. Regardless, money is made and jobs in turn
get created.
Their
need to be a change in some of the policies Italy has tried in the project of
trying to develop the South. The State
has placed a lot of public funds and time into creating an equal north and
south parts of Italy, and has yet to be successful. There is a way I feel to create some government run programs
similar to the law passed in 1986 which offered programs to under 29 year olds
in the South on becoming entrepreneurs.
One
of the possibilities I see is implementing a program that would place
entrepreneurs from the North has apprentices to young entrepreneurs. This
program would take successful retired or willing entrepreneurs to become
government employees. They would then
be placed with pupils in the Southern part of Italy. They would then teach them what is needed to become
successful. It would be on the job
training for the pupils and the trainers would still be paid employees. The State would save money, because I feel
it would be much cheaper and logical to pay retirees then to just dump public
funds into a region and appropriate on bigger things, like roads and
hospitals. The pupils would be trained
to run small, private owned businesses that would be owned partly by the
government until the new owner is successful enough to be on his own. That is a way to force the new entrepreneur
to want to be successful. This would
only help the GDP, and start to help the southern part develop. It would create many new jobs and new
employees. That is another reason for
implementing this plan to help bring up the south. This program would also be helpful in bringing down the
unemployment rate. This, overtime,
could create several new jobs and employees.
With the creation of new business, which again would be run by a trained
person and the government, the south would be influenced to take new jobs. This, however, is not the only policy to
bring the unemployment rate down.
Another
way to bring down the unemployment rate is to lower the income and property
taxes on businesses. This would give
the business owners more money to spend on their particular business. Which they could use to expand their business
and create more job opportunities.
This, along with the lowered interest rates by the banks, would also
increase confidence in small business owners.
If this policy were implemented by the government business owners would
be freed up a lot of money. We are not
talking a small amount; this could possibly save an individual millions of
dollars. There is a lot someone in the
business owner can do with a million dollars.
That is when expansion can really take place. Creating a lot more capital for the owner and economy. The government would not be hurt terribly
with the lowered property and income taxes on business owners. This could potentially create a strong
economy in the south and therefore not as much public funds would need to be
placed in programs to develop the south.
I could potentially see a drop in the unemployment rate, overtime, from
10% to somewhere around six percent.
Illegal
immigration is a tough task to conquer.
It is going to be hard to stop because at first the Italian government
let the first Albanians flee and enter Italy (Frakeland, 130). The strengthened Coast Guard should be able
to control the problem of Albanians from crossing over the Adriatic Sea, but
one concern may be people fleeing from the former Yugoslavia. To prevent that from occurring the state should
create a strong military threshold around the boarder of Italy and
Slovenia. Even with a stronger Coast
Guard, it must remain a focus of the Italian government because illegal
immigration is still a problem. So,
military must make sure that illegal immigrants remain out of Italy, because they
come from impoverished countries and there is not many opportunity to gain an
instant job. Which in turn brings the
unemployment rate up and the economy at a point lower then what it could be.
In
conclusion, the Italian government has made tremendous strides since World War
II. It is somewhat phenomenal how
quickly they recovered in the 1950’s.
However, there are some problems that persist in its economy to this
date. In order for Italy to become the
nation it wants to it must develop the south, drop the unemployment rate and
get a control on illegal immigration.
Regardless of those three things it still remains a prestigious member
of the Group Seven.
Works Cited
1.)
“The Economic Survey of Italy.” www.oecd.org/eco/surv/esu-it.htm.
2.)
Frankeland, Gene, E.: Global Studies: Europe Studies,7th
Edition. McGraw-Hill/Dushkin. 2002
3.)
Hellman, Stephan: European Politics in Transition, 4th Edition. Pgs. 411-5111, Houghton Mifflin Company.
2002
4.)
Mignone, Mario, B.: “The
Two Itallies and the Southern
Question.”
5.)
Mignone, Mario, B.: “Italy
Today.”