“Tired mermaid”, “hungry shark”, or “clever dolphin”. Foreign Minister Emma Bonino much prefers the third image to describe Italy. The first was used by Sir Martin Sorrell, chairman of the International Business Advisory Council (IBAC), to describe how our country is perceived today. The second describes the strategy recommended by some commentators to change the direction of our economy and once again attract foreign investment. But the dolphin, explains Minister Bonino, is the animal we should take our inspiration from: “robust, agile, clever and very elegant: it expresses our identify beautifully”.
On Friday 10 January Minister Bonino hosted a meeting of the IBAC at the Farnesina. An organisation composed of the senior managers of major multinationals and sovereign funds, the IBAC’s role is to suggest best practice to attract investment, improve the quality of life and develop technology and infrastructure. The aim is to increase a given region’s international competitiveness. This was the first time a meeting by the Council was dedicated not to a city, as has occurred in the past for London and Rome, but to an entire “country system”, in collaboration with the national government.
“We had a very frank discussion”, said Emma Bonino in her interview with CorrierEconomia. “For example, investors already operating in Italy underscored the positive aspects. Others had good things to say about the Destinazione Italia project, because they agree with its analysis of the problems and the solutions to begin to resolve the most significant of those problems. As you know, thanks not least to the recommendations and proposals received through the online consultation, we have decided to focus on 10 of the 50 measures to be tackled in the short term. Seven of these were already included in the Decree Law issued in December 2013. The debate confirmed that there is consensus on the problems”.
Could you list them in order of importance?
“In general, Sorrell’s view is that the main obstacle is our rigid labour market. But many commentators laid the stress on the overall uncertainty as to timescales and procedures, even more than ‘red tape’ itself. How long does a procedure take, how long to obtain a permit or licence. The factor that people most appreciated was the reform of the ‘Conference of Services’ envisaged by the Decree. Another question to emerge was that not just foreign investors but Italian investors too need to take a bolder approach. Our own investors are not always willing to take a risk and tend to prefer the safer option”.
Another topic for discussion was the resistance by some authorities to foreign investment in Italy. We’ve had examples with Finmeccanica and the plan to sell certain important assets such as Ansaldo Energia, or with the government’s announcement of the sale of residual holdings in ENI or ENEL. Where does the strongest resistance lie?
“The idea that strong state industries are needed is certainly a part of our country’s mind-set. If you ask people what the ‘sensitive’ sectors are, in practice they seem to apply that definition to every sector. Last summer [2013], when Loro Piana decided to sell and the sale of Cova – the historic café and pastry-shop in Milan – was announced the same week, the reaction was: they’re stealing our crown jewels. That’s what I call the ‘Fort Apache Syndrome’. Its opposite, again typically Italian, is the ‘Outlet Syndrome’: come this way, buy up everything you see.
Italy has always swung between these two extremes. It won’t be easy to change our mind-set, especially in these times of crisis. But we need to develop a new approach that also sees selling as a way of enhancing and adding value to our assets. Resistance to that approach won’t just come from the left. The right wingers haven’t been all that liberal in Italy either. You need only observe the municipally owned companies”.
Sorrell commented that Destinazione Italia is underpinned by a good strategy but mentioned structural and communication problems that still need to be resolved. What’s the approach there?
“We plan, for example, to have a department of Invitalia dedicated solely to attracting direct foreign investment”.
And what role will our embassies play?
“We’re trying to advance the concept that exports are one thing, attracting investment to Italy is another. They involve two different skill-sets. Reorganising and refocusing the diplomatic network doesn’t mean transforming our ambassadors into travelling sales representatives. It means flanking them with specially trained personnel with the expertise to convince foreign investors that Italy is a good risk. They won’t necessarily be career diplomats but they’ll be posted in a number of easily identifiable strategic markets. And I don’t just mean the BRICS countries [Brazil, Russia, India, China and South Africa]. I’m also talking about countries like Angola and Senegal in Africa, or Burma, in Asia.
Political instability was mentioned as a concern expressed by potential foreign investors to Italy. What sort of reassurance were you and Prime Minister Letta able to provide?
“Nobody can guarantee anything. The Italian situation is what it is. There were two roads we could take: either do nothing, because we can’t count on five years in power, or else make good use of the time that we do have. How long we’ll last, nobody knows. But we’ve started a process, in the hope that whoever comes after us will continue it”.
