Milan, 12 October 2017
Minister Zayed Alzayani, (Minister of Industry, Commerce and Tourism of Bahrain),
President Cesare Trevisani (President of the new Joint Italian Arab Chamber; Vice-President of the Trevi Group),
It is my immense pleasure to participate in launching the Joint Italian Arab Chamber.
I would like to welcome you to Milan today. We are in the economic capital of Italy. A city that is always open for business and in step with global markets. The pace is fast, I can assure you: this is already the third economic event I’ve attended since the morning began:
- I signed a Memorandum of Understanding between the Ministry of Foreign Affairs and International Cooperation and the Italian Stock Exchange;
- I took part in the Italian-Hungarian business forum.
The government has an essential mission in a world of unrest and uncertainty: generate confidence and stability so that companies can find the right climate in which to make investments. We can now confirm that we have taken the right approach: confidence in Italy has returned to pre-crisis levels in the eyes of consumers, companies and investors. An effective figure is the increase in GDP, which will be +1.5% in 2017 according to estimates by the International Monetary Fund. Industrial production is another positive indicator at this time: for the seventh month in a row it is up, with as +5.7% yoy to August.
Given the positive business climate, we should now take the opportunity to reaffirm the strategic importance of our relations with Arab countries, and especially our great commitment to strengthening the economic scope of the friendship with Arab countries in the wider Mediterranean area.
The Mediterranean has always been a fundamental meeting point of mutual influence between Italy and the Arab countries. I am especially referring to the Arab expansion in the whole of Southern Europe, including my native Sicily, between 827 and 1100. It was not just a matter of conquering lands, but especially of the positive cross-fertilisation of cultures: I am referring to the translation into Arabic of the great works by Greek and Roman philosophers; and I am also referring to the contribution by Arabs to science (chemistry) and mathematics (algebra).
It may not seem like much nowadays, but imagine how hard it would be for businesspeople to keep their trade records in Roman numerals! Multiplication as we know it today was simply not possible. The dissemination of Arab numbers from 0 to 9 revolutionised the development of trade.
The wider Mediterranean region still offers a rich range of opportunities: a market of over 500 million potential consumers who generate 10% of global GDP and 30% of the world oil trade. In addition, 20% of global maritime traffic passes through the Mediterranean.
The value of trade with countries from the MENA area reached 70 billion euros in 2016 (our exports amounted to 41 billion and imports amounted to 29 billion). This equals 8.9% of our global trade (while exports alone amount to 9.8% of our total exports). Overall, Italy is the fourth-largest trading partner of the aggregate MENA countries (the United States, China and Germany).
With respect to productive investments, Italy ranks seventh in the world (according to Ernst & Young) for ‘Greenfield’ investments.
In terms of energy security, the centrality of the wider Mediterranean is very clear for Italy. Over two thirds of our oil imports come from the region, and half of our natural gas supplies. There is a strong push in favour of electrical connectivity (for example the Elmed interconnection between Italy and Tunisia) and renewable energy.
New opportunities are arising through ambitious economic diversification programmes launched by the Gulf countries: Saudi Vision 2030, Oman Vision 2020, Qatar 2030, Kuwait 2035. We hope that there will also be a Libya Vision 2030 in the near future. An important goal in these strategies is to ensure the transition from economic models based on hydrocarbon trading to more sustainable long-term models by developing the non-oil economy and widescale privatisation efforts. Italy has much to do and even more to say in this area, alongside our Arab country partners.
A number of big infrastructure projects are already underway, such as those linked to Expo Dubai 2020. Interesting prospects may also open up in terms of financial flows in the Mediterranean following the expansion of activities of important sovereign and investment funds, especially in the Gulf States.
I intend to go back to focusing more on economic matters at the upcoming Rome Med Dialogues (3 November - 2 December) since Italy’s aim is to relaunch the Mediterranean as a global economic hub, grasping new development opportunities such as: doubling the Suez canal, discovering new energy sources, and the ambitious “new Silk Road” project, in which Italian ports are the gateway to the European market.
The aim of economic diplomacy is to kick-start all the interconnection networks in the Mediterranean: from commerce to investments, infrastructure, energy, telecommunications and defence.
These were the issues on my agenda during the past few months in all my missions to the Arab countries and in my meetings with Arab leaders in Italy. These also included the new Area Meeting of Italian Ambassadors in Gulf counties (in June), with a full day was dedicated to companies.
As you know, we also measured the impact of economic diplomacy in association with Confindustria and through an independent study by the consultancy firm Prometeia. Out of the 756 contracts awarded to Italian companies abroad with the support of the Ministry of Foreign Affairs and International Cooperation, 358 were obtained in MENA countries (47.3%) for a total value of 26 billion euros.
However, the real added value of our economic diplomacy is that it pursues an integrated promotion approach that combines economic, cultural and scientific aspects.
In this spirit, I believe that investing in culture, dialogue and mutual understanding facilitates the exchange of ideas, investments and business deals.
With this in mind, on 23 October, we will launch in Palermo the “Italy, Cultures, and the Mediterranean” programme as part of the OSCE Mediterranean Conference. The programme will be implemented throughout 2018 in different areas: from the protection of cultural heritage to the development of creative industries in the field of design, fashion, cinema and publishing, and cooperation between universities in all the countries of the region.
The Organisation for Security and Co-operation in Europe evokes the word security, but we are well aware that there can be no security without cultural exchange. I have always said that where goods don’t cross borders, armies will. Equally, where culture and understanding don’t cross borders, violent conflict and controversy will.
We have staked so much on dialogue with Arab countries that - for the first time in its history - I extended the G7 format of Foreign Ministers to the Arab countries in order to discuss the Syrian situation together. It is of crucial importance to strongly support an inclusive political solution in line with United Nations Security Council Resolution 2254.
We also wish to keep the Libyan situation high on the agenda for discussion with the Arab countries and help it continue along the path agreed under the Libyan political agreement; commit to promoting inclusion and national reconciliation and refusing violence; jointly support the new road map presented by the Special Representative and Head of the UN Support Mission in Libya, Mr Salamé, and reduce the myriad of international initiatives to only one.
More importantly, again in Libya, we are primarily acting at economic level. It is important for the parties to realise what dividends are to be had from peace, as confirmed in the first Italian-Libyan Economic Forum held in Agrigento in July. The aim was to focus attention on the investment opportunities and development projects in Libya once the necessary security conditions are re-established.
We have learned over the centuries in the Mediterranean that bridges must be built on trust in order to obtain peace and security in all crisis situations.
However, sometimes dams are better suited to building peace and security than bridges: I am referring to the Trevi Group's project to repair the Mosul Dam.
There was the risk that the dam would collapse. There was the risk of a human and economic catastrophe in a country that needs to get back on track on the road to hope after the terror spread by Daesh.
An economic project - a dam - is now the symbol of a refound peace and of a new path towards growth and prosperity that we wish to help realise in Iraq, and in the entire region. It represents another shining example of how the commitment of Italian companies in the Arab world is both significant and highly valued.