YOU would not know it from the English-language signs promising to serve passengers ``quckly'', but Naples' Capodichino
airport is British-owned. In August, 70% of it was bought by BAA, a company that also runs, among other things, London's
main airport, Heathrow. For the Italian south this is a symbol of hope. Finding an international firm of this calibre willing to
invest there has greatly boosted its confidence.
BAA, for its part, was attracted by the south's tourist potential, but spent three years thinking hard about the $44m deal. What
clinched it in the end was the enthusiasm of Antonio Bassolino, the mayor of Naples since 1993. He won round BAA bosses
with his clear commitment to privatisation, and fought off opposition at home to foreign ownership, branded as ``colonisation by
A former communist fundamentalist, Mr Bassolino is an unlikely champion of privatisation. But the BAA deal is no one-off. Mr
Bassolino boasts about selling the municipal dairy-``What was a city council doing selling milk?''-and about pioneering, with
Merrill Lynch, Italy's first international municipal bond issue, which sold well in America. The cash was used to renovate the
city's public transport system. He is promoting public-private partnerships; and he has just persuaded the Chinese commercial
fleet to use Naples as its main container port for serving Europe.
The city's inefficient bureaucracy has been shaken up, with the mayor leading by example. His distinctly un-Neapolitan
punctuality and long working hours have earned him the nickname ``the German''. Using money for hosting the G7 summit in
1994 as a catalyst, the city has cleaned and restored many of its vast number of tourist attractions. It has also extended its
opening hours and cleared the main piazzas of parked cars (though not, alas, of moving mopeds). Mr Bassolino talks with
passion of re-born civic pride, of the need for Naples to solve its own problems. ``The south has been living on money from the
government for too long,'' he says; this has created a ``deadly dependence''.
Mr Bassolino explains that 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 throughout Italy. This gave him a mandate for four years, allowed him to appoint his own senior
officials, and made him directly accountable to the electorate rather than to party politicians on the city council-who cannot now
remove him without also triggering new city-council elections. Past mayors, chosen by the ruling party on the council, did well to
last a year. Direct election has produced a crop 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 tourism and tackling inefficient bureaucracy. Their first test
will come later this month, when some of them are up for re-election.
But there is still plenty of inefficient southern bureaucracy left. Consider, for example, the startling statistic that in 1996 Italy
managed to spend only 30% of its entitlement to EU money to help disadvantaged regions such as the mezzogiorno. The
country's local and regional governments, it seems, are not even up to collecting hand-outs. The EU increasingly allocates money
to specific projects instead of handing it over in a chunk. That means local administrators have to prepare a project submission
and translate it for officials in Brussels, for which many of them at present lack 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 city hall.
Bassolino's new recipe for Naples
Bureaucracy has also made it hard to do anything new. One big firm wanted to sink some wells so it could build a new plant 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 regional government, only to be told that ``if you call a fifth time, you will never get permission.'' Mr Bianco has made some
improvements in his city, including setting up a ``one-stop shop'' to help firms with permits. But much remains to be done, he
says: over the years, the impact of bureaucracy on Sicily's development has been ``no less than the impact of the Mafia''.
Who is the boss now?
The Mafia (along with similar criminal organisations, such as the Camorra in Naples) remains a huge problem for the south. Even
in areas where the influence of organised crime has been greatly reduced, the image of Mafia violence continues to worry
In Palermo, where two prominent anti-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's mayor, Leoluca Orlando. ``The bureaucracy is now
honest, which it was not ten years ago.'' Local experts on the Mafia say he may be exaggerating, but not much.
Palermo is spending a fortune in establishing itself as a centre for cultural tourism, mounting hundreds of musical and theatrical
events. Many of its buildings have been beautifully restored. Those tourists who come say they feel safe. Yet it will be many
years before the city sheds its worldwide reputation as the city ruled by the Corleone family.
Naples, too, is more in control of its Camorra now. Tourists in the city centre are probably as safe at 3am as they would be at
noon in midtown Manhattan. Yet when 500 soldiers were sent to the city last summer to support local police, newspaper
headlines at home 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 and civic buildings while new police officers were being trained. Camorra killings
still go on around Naples, but they arise from battles between rival gangs, away from the tourist areas. Both local and national
government are anxious to reduce such activity to levels no worse than organised crime anywhere else.
The authorities say the Sicilian Mafia over-reached itself by declaring war on the state with the murder in 1992 of the two judges
and Salvatore Lima, a leading Sicilian politician. The public turned against the ``men of honour'', and many pentiti, former
mafiosi, gave evidence that led to hundreds of arrests. The command structure of the highly centralised Sicilian Mafia is thought
to have been destroyed. The main concern of the police now is to identify anyone who may be trying to fill the void. Elsewhere
in the south, organisations such as the Camorra tend to be fragmented, so it takes far more arrests to reduce their effectiveness
than in Sicily, where a few key arrests had a huge impact. Even so, the state is winning out.
According to Giorgio Napolitano, the minister of the interior, far more progress against organised crime has been made on the
political front-by breaking the links between crime, government and the judiciary-than on the economic side, where the potential
for drug-dealing and racketeering remains significant. A new strategy of ``investor protection'' is to be put in place, coinciding
with the establishment of special enterprise zones, which will offer companies tax breaks to attract them southwards. In areas
where significant investment is planned, the government will provide resources for policing and surveillance to keep organised
crime at bay. If the authorities can show they are able to protect investors, many more international companies may follow in the
footsteps of BAA.
But before they do, there is another thing that the south will have to get right: infrastructure. It suffers not only from the problems
afflicting Italy as a whole-such as inadequate roads and rail services and insufficient integration between different kinds of
transport-but also from its very own surfeit of white elephants. Much of the corruption revealed in the tangentopoli scandal was
concentrated in the south, where many public-works programmes became purely a means of distributing public money. Few
people bothered to ask whether a particular project was needed, and many such projects never got finished. As one Neapolitan
businessman put it, ``70% of the new roads around Naples cannot be used. Lousy infrastructure is a bigger problem for my
company than the Camorra.''
The mezzogiorno cannot afford any extravagant gestures. It is heavily exposed to international competition, explains Giovanni
Pecci, an economist at Nomisma. Its location on the periphery of European markets puts it at a disadvantage compared with
Central and Eastern Europe, which also offer far cheaper labour. Agriculture in the south is under threat from North Africa as
well as from the Middle and Far East. For instance, Sicily now imports oranges, of all things, from Israel because they are
cheaper. (Encouragingly, the Sicilian grower who complained about this was on his way to Kuwait to try to sell his crop there.)
And until the recent crisis in Albania, small industrial firms in Apulia, in the south-east of the region, were increasingly moving
parts of their production there.
With a GDP per head of only 70% the Italian average, the mezzogiorno is casting around for an economic winner. Its best hope
seems to be tourism. It may be hard to believe, but the tourist industry in Italy, and especially the south, is seriously
underdeveloped. In 1996, the country had only 33m visitors from abroad, compared with Spain's 41m and France's 62m,
despite its unrivalled range of tourist attractions (see chart 5). Politicians and businessmen were slow to catch on, but are now
making the promotion of tourism a top priority.
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