The South lags behind the rest of the country. A gap that hasn't been seen since the 80s, when the Cassa per il Mezzogiorno was in full swing for better or for worse. The southern question enters and exits the political agenda which now seems to want to reposition it in the schedule of public spending, now neglecting its peculiarities. Yet the PNRR signed by Mario Draghi allocates 40% of the total budget to the Southern Regions. Infrastructures, circular economy, Public Administration, human capital, spending capacity, are the big chapters on which the new game is being played to bridge the gap with the rest of Italy. The privileged observatory of this duality has always been the EVIMEZ, Association for the development of industry in the South. We interviewed the Director Luca Bianchi, economist but also with experience as a public administrator.
Director Bianchi, you said "for 15 years we kept the engine of the South off". The data, unfortunately, does not deny it. But who did it depend on?
“For years SVIMEZ has highlighted the existence of a double gap, between Italy and Europe and between South and North, which Covid has further widened. A 'unitary' vision of Italian stagnation has been lacking. A country that has stopped investing, due to lack of resources but above all due to planning and implementation incapacities, in the North as in the South, can only increase its internal inequalities. Investment spending in Italy went from 59,4 billion in 2007 (3,7% of GDP) to 34,6 billion in 2018 (2,1% of GDP). It is inevitable that, precisely where the level of infrastructure is most incomplete, the effects on growth potential are much stronger. It is therefore the general tone of the national economic policy - lacking an industrial and infrastructural strategy capable of counterbalancing the effects of widening inequalities between people and territories - which has profoundly conditioned the process of convergence between the two areas of the country and has weakened the Italian economy”.
Then came the pandemic...
"Yes. It is in this context of lack of development that even before the crisis triggered by Covid-19, the redistribution of wealth entered into a zero-sum game in which what is given to one party is taken away from another, favoring a continuous opposition of the interests between North and South which led to the loss of the sense of unity of the country; it has increased territorial conflict ending up weakening both areas in the global competition”.
Svimez, therefore, saw well. But don't you think that the narrative of a North that cannot recover without the South is ending up in rhetoric?
"Absolutely not. Past experience confirms this that a significant increase in the national growth rate can be achieved, as occurred in the economic boom, only with the decisive contribution of the weakest areas. This is confirmed by the data on the strong interdependence between the North and South of the country. Anyone who does business knows very well that the supply chains are long and cross the whole country, from pharmaceuticals to aerospace. The challenge of development lies precisely in strengthening national supply chains. It is also enough to think that every euro invested in the South activates around 30% in the rest of the country. Finally, 'the new Europe' has taken note of this and with Next Generation EU has set itself the goal of relaunching European growth by concentrating investments on the reduction of social and territorial inequalities”.
Can you clarify?
“For the first time, European politics places the reduction of gaps at the center of its strategy, as a fundamental and decisive component of development policy. And when I speak of gaps I am not thinking only of physical and infrastructural gaps, but also and I would say above all of the gaps in the supply of essential services, constitutive of Italian and European citizenship itself, starting from health, education and mobility".
Yes, but therea our bureaucracy continues to be the enemy of development and the South despite 40% of the resources of the Recovery risks more than the rest of the country. What do you think?
“On the amount of resources destined for the southern areas, I'm not passionate about the debate on the 40% share envisaged by the Plan. A traditional approach is that of the "allocation quotas" which is often contradicted by the actual expenditure. The real challenge, especially for the South, is the ability to spend the available resources well”.
Are you talking about administrative capacity or am I wrong?
“Administrative quality is decisive for actually reaching that expenditure quota. As far as the Italian PA is concerned, and even more so that of the South, there is no doubt that it has reduced middle managers, managers and employees over the years due to the lack of turnover. Furthermore, it has an ever-decreasing number of graduates and lacks the skills needed to dialogue with Europe and prepare high-level project proposals.”
Regions and Municipalities claim more centrality in the spending of PNRR funds for environmental services, as well as for digitization and services to people. Is this a fair claim or is there no risk of failure?
“The PNRR is a national policy that requires a strong national strategy and an identification of interventions consistent with this strategy. We cannot afford a localist fragmentation of programming if we do not want to repeat the fragmentation that characterizes the use of regional cohesion policy funds. Within this strategy, however, we cannot underestimate the fact that the grounding of the interventions will instead depend on the decisive role of the local authorities as subjects implementing the investments”.
Let's get into it, then.
“From the first tenders under the PNRR, project deficiencies emerge from the southern territorial administrations, which risk not being able to access those funds, making even the 40% share useless. The striking case was that of the tender in the water investment sector of the Ministry of Agriculture. The Sicily Region, characterized by greater infrastructural shortcomings, took zero euros because none of the projects presented had reached the quality standards required by the European Union. The lower planning capacity of the southern administrations exposes them to a high risk of non-absorption".
A paradox...
“Exactly, in the sense that the realities with the greatest needs could benefit from insufficient resources. If this risk is to be avoided, support for the planning of these bodies must be strengthened, without deluding ourselves that the solution can end in the new hires of technicians in the local administrations of the South. new personnel additions will ensure skills of the required level”.
We come to the ecological transition. It is one of the cornerstones of the PNRR. What prospects are there for the southern regions?
“The ecological transition is one of the central axes of the PNRR, not only due to the amount of resources on Mission 2 (69,9 billion including PNRR, ReactEU and Endowment Fund), but also for the development drivers that are connected to it. Inside this large container we find a multiplicity of actions that range, in a truly integrated vision for the first time, from the energy issue ‒ functional to linking the decarbonisation objectives undertaken by the Union ‒ to the growth of the circular economy both in the industrial sector and in the new agriculture. The South can play a leading role. Let's think of renewables: few people know it, but already today, wind power capacity installed in the South is equal to 97% of the national total, while solar still represents 40% of the total. The construction of the renewable plants necessary to reach the zero emission objectives will be accompanied in the coming years by huge investments in the networks which have some of the central hubs in the South. In short, there are the conditions for imagining a future for the South which, in addition to being a bridge between the energy systems of the Mediterranean, can become an exporting area of clean energy”.
The 2019 Svimez Report talks about the bioeconomy and, precisely, about the growth of renewable sources. But who invests in the South: private individuals or is it just public money?
“When we talk about circular bioeconomy we are actually dealing with a meta-sector that involves those companies capable of combining the sustainable use of natural resources with the innovations of the new industrial revolution underway. It is therefore a vast playing field with broad prospects. It is no coincidence that the main studies agree in highlighting a better resilience capacity in the face of the crisis of companies active in these areas and the good positioning of Italy ‒ and in it of the South ‒ in the international context”.
Yes, but we are interested in perspectives.
“Here too, the prospects for the South are enormous: let's think of how the Made in Italy system is already being remodeled ‒ the agri-food (in primis) ‒ in the new bioeconomy, but also to the prospects of green chemistry or biofuels. Like Svimez, we have been studying the phenomenon for some years and it is evident that the results could come from a joint commitment: from above, starting from the choices of the public decision-maker; bottom-up with business investment. The PNRR will play a fundamental role, with several billion interventions being envisaged, among others. As regards renewables, it is clear that the greatest commitment in financial terms will come both from the institutional side (Europe, Government, regional and local administrations), and from the banking side ‒ to which Governor Visco returned a few days ago, emphasizing the need to promote adequate finance to support eco-sustainable investments‒ both by large national and multinational players which, in view of the progressive abandonment of fossil fuels in the two steps of 2030 and 2050, will increasingly have to convert their strategies towards the production or distribution of energy clean".
If this is the horizon, I ask you when we will see real circular economy systems implemented in the South. I'm thinking of energy communities, waste management, agribusiness?
“According to the Legambiente 2021 Report, there are 32 energy community projects already completed or starting and 15 in the start-up phase between communities and self-consumption projects. The PNRR dedicates 2,2 billion euros to this item within Mission 2. The objective is to encourage the creation of collective self-production structures by extending the experimentation already started involving Public Administrations, families and micro-enterprises in Municipalities with less than 5.000 inhabitants . It is a good economic measure, but also useful for strengthening the social cohesion of internal areas and smaller municipalities, especially in the South".
Think we will have finally a quantum leap?
“Yes, but in this field, as in the others you mentioned, the South will be able to make the real qualitative leap if the local administrations and the business system are able to ground credible and competitive projects. The theme, as it is now clear, is not resources, but the ability to spend and to spend well within an overall project and a clear vision of the future of the South and of the country. This is the real challenge of the current ruling class, capable of marking the future of the next generations”.
