Strengthening international cooperation and the internationalisation of Italian businesses are the main objectives of article 7 of Law no. 49/87 (new discipline for Italian cooperation with developing countries), which authorises the foreign ministry to grant low-interest loans to Italian firms intending to enter into joint ventures with local businesses in developing countries. And it is precisely with a view to the revitalization of these objectives that the Italian Development Cooperation has introduced some modifications in this late 1980s instrument, and to offer assistance to the many Italian entrepreneurs seeking outlets in new foreign markets but caught in the credit crunch caused by the financial crisis.
Increase in number of eligible countries
At a time when the economic downturn has led to dwindling resources for developing countries, the Development Cooperation decided to strengthen article 7, not least on the basis of the suggestions that emerged at the recent International Cooperation Forum in Milan, introducing amendments to the current procedures. In particular, meeting in October the Steering Committee decided to increase the number of eligible countries from 29 to 95, thereby including not only the priorities of the Italian Cooperation but also what the World Bank designates as low/middle income countries, heavily indebted poor countries (HIPC) and less developed countries (LDC). An investment protection agreement with Italy will go into effect with all these countries.
Other amendments considered
Other amendments under consideration aim to make article 7 more appetizing, and will probably be proposed in the context of the reform of Law no. 49/87 currently under discussion in the Senate. According to those close to the discussions, the amendments should concern extension of the type of financial interventions, with a view to the further development of the private sector, intervening directly with regard to financing or to participation in joint ventures with developing countries.
This increase in low-interest loans to joint ventures will, on the one hand, foster the greater flow of financing for developing countries and, on the other, contribute to forging a stronger bond between development cooperation and Italian enterprise, with a broader vision of cooperation as a strategic investment in the development of Italy.