You would not know it from the English-language signs promising to servepassengers “quckly”, but Naples’ Capodichino airport is British-owned. InAugust, 70% of it was bought by BAA, a company that also runs, among otherthings, London’s main airport, Heathrow. For the Italian south this is a symbolof hope. Finding an international firm of this calibre willing to invest therehas greatly boosted its confidence. BAA, for its part, was attracted by thesouth’s tourist potential, but spent three years thinking hard about the $44mdeal.
What clinched it in the end was the enthusiasm of Antonio Bassolino, themayor of Naples since 1993. He won round BAA bosses with his clear commitment toprivatisation, and fought off opposition at home to foreign ownership, brandedas “colonisation by the British”. A former communist fundamentalist, MrBassolino is an unlikely champion of privatisation. But the BAA deal is noone-off. Mr Bassolino boasts about selling the municipal dairy-“What was a citycouncil doing selling milk?”-and about pioneering, with Merrill Lynch, Italy’sfirst international municipal bond issue, which sold well in America. The cashwas used to renovate the city’s public transport system.
He is promotingpublic-private partnerships; and he has just persuaded the Chinese commercialfleet to use Naples as its main container port for serving Europe. The city’sinefficient bureaucracy has been shaken up, with the mayor leading by example.His distinctly un-Neapolitan punctuality and long working hours have earned himthe nickname “the German”. Using money for hosting the G7 summit in 1994 as acatalyst, the city has cleaned and restored many of its vast number of touristattractions. It has also extended its opening hours and cleared the main piazzasof parked cars (though not, alas, of moving mopeds).
Mr Bassolino talks withpassion of re-born civic pride, of the need for Naples to solve its ownproblems. “The south has been living on money from the government for toolong,” he says; this has created a “deadly dependence”. Mr Bassolino explainsthat he has been able to make these changes only thanks to a new system,introduced in 1993, for the direct election of mayors in cities throughoutItaly. This gave him a mandate for four years, allowed him to appoint his ownsenior officials, and made him directly accountable to the electorate ratherthan to party politicians on the city council-who cannot now remove him withoutalso triggering new city-council elections. Past mayors, chosen by the rulingparty on the council, did well to last a year.
Direct election has produced acrop of impressive new city mayors all over the south (and some in the north,too), many of whom have followed Naples’ strategy of promoting cultural tourismand tackling inefficient bureaucracy. Their first test will come later thismonth, when some of them are up for re-election. But there is still plenty ofinefficient southern bureaucracy left. Consider, for example, the startlingstatistic that in 1996 Italy managed to spend only 30% of its entitlement to EUmoney to help disadvantaged regions such as the mezzogiorno. The country’s localand regional governments, it seems, are not even up to collecting hand-outs.
TheEU increasingly allocates money to specific projects instead of handing it overin a chunk. That means local administrators have to prepare a project submissionand translate it for officials in Brussels, for which many of them at presentlack the skills. But things may be getting better, slowly.
For instance, a“Europe Office” with English-speaking staff has been set up in Palermo’s cityhall. Bassolino’s new recipe for Naples Bureaucracy has also made it hard to doanything new. One big firm wanted to sink some wells so it could build a newplant in Sicily. Enzo Bianco, the mayor of Catania, tells the story of how,after two years of waiting, the firm made its fourth phone call to the regionalgovernment, only to be told that “if you call a fifth time, you will never getpermission.” Mr Bianco has made some improvements in his city, includingsetting up a “one-stop shop” to help firms with permits. But much remains tobe done, he says: over the years, the impact of bureaucracy on Sicily’sdevelopment has been “no less than the impact of the Mafia”. Who is the bossnow? The Mafia (along with similar criminal organisations, such as the Camorrain Naples) remains a huge problem for the south.
Even in areas where theinfluence of organised crime has been greatly reduced, the image of Mafiaviolence continues to worry outsiders. In Palermo, where two prominentanti-Mafia judges, Giovanni Falcone and Paolo Borsellino, were blown up in 1992,“The Mafia is now the cultural minority; it was the majority,” says the city’smayor, Leoluca Orlando. “The bureaucracy is now honest, which it was not tenyears ago.” Local experts on the Mafia say he may be exaggerating, but notmuch. Palermo is spending a fortune in establishing itself as a centre forcultural tourism, mounting hundreds of musical and theatrical events. Many ofits buildings have been beautifully restored.
Those tourists who come say theyfeel safe. Yet it will be many years before the city sheds its worldwidereputation as the city ruled by the Corleone family. Naples, too, is more incontrol of its Camorra now. Tourists in the city centre are probably as safe at3am as they would be at noon in midtown Manhattan. Yet when 500 soldiers weresent to the city last summer to support local police, newspaper headlines athome and abroad conjured up images of mob rule and tanks patrolling the streets.In fact, the soldiers were used mostly to replace police guarding consulates andcivic buildings while new police officers were being trained.
Camorra killingsstill go on around Naples, but they arise from battles between rival gangs, awayfrom the tourist areas. Both local and national government are anxious to reducesuch activity to levels no worse than organised crime anywhere else. Theauthorities say the Sicilian Mafia over-reached itself by declaring war on thestate with the murder in 1992 of the two judges and Salvatore Lima, a leadingSicilian politician. The public turned against the “men of honour”, and manypentiti, former mafiosi, gave evidence that led to hundreds of arrests. Thecommand structure of the highly centralised Sicilian Mafia is thought to havebeen destroyed. The main concern of the police now is to identify anyone who maybe trying to fill the void.
Elsewhere in the south, organisations such as theCamorra tend to be fragmented, so it takes far more arrests to reduce theireffectiveness than in Sicily, where a few key arrests had a huge impact. Evenso, the state is winning out. According to Giorgio Napolitano, the minister ofthe interior, far more progress against organised crime has been made on thepolitical front-by breaking the links between crime, government and thejudiciary-than on the economic side, where the potential for drug-dealing andracketeering remains significant. A new strategy of “investor protection” isto be put in place, coinciding with the establishment of special enterprisezones, which will offer companies tax breaks to attract them southwards. Inareas where significant investment is planned, the government will provideresources for policing and surveillance to keep organised crime at bay. If theauthorities can show they are able to protect investors, many more internationalcompanies may follow in the footsteps of BAA.
But before they do, there isanother thing that the south will have to get right: infrastructure. It suffersnot only from the problems afflicting Italy as a whole-such as inadequate roadsand rail services and insufficient integration between different kinds oftransport-but also from its very own surfeit of white elephants. Much of thecorruption revealed in the tangentopoli scandal was concentrated in the south,where many public-works programmes became purely a means of distributing publicmoney.
Few people bothered to ask whether a particular project was needed, andmany such projects never got finished. As one Neapolitan businessman put it,“70% of the new roads around Naples cannot be used. Lousy infrastructure is abigger problem for my company than the Camorra.
” Seeing orange The mezzogiornocannot afford any extravagant gestures. It is heavily exposed to internationalcompetition, explains Giovanni Pecci, an economist at Nomisma. Its location onthe periphery of European markets puts it at a disadvantage compared withCentral and Eastern Europe, which also offer far cheaper labour. Agriculture inthe south is under threat from North Africa as well as from the Middle and FarEast.
For instance, Sicily now imports oranges, of all things, from Israelbecause they are cheaper. (Encouragingly, the Sicilian grower who complainedabout this was on his way to Kuwait to try to sell his crop there.) And untilthe recent crisis in Albania, small industrial firms in Apulia, in thesouth-east of the region, were increasingly moving parts of their productionthere. With a GDP per head of only 70% the Italian average, the mezzogiorno iscasting around for an economic winner.
Its best hope seems to be tourism. It maybe hard to believe, but the tourist industry in Italy, and especially the south,is seriously underdeveloped. In 1996, the country had only 33m visitors fromabroad, compared with Spain’s 41m and France’s 62m, despite its unrivalled rangeof tourist attractions (see chart 5). Politicians and businessmen were slow tocatch on, but are now making the promotion of tourism a top priority.Geography