- (April 2006)
What is the problem with Italy.
As Italians vote to determine the next prime minister, their elections
look like a sterile exercise in democracy. Other than bickering against
each other, the leading candidates (media tycoon Silvio Berlusconi and
former Euro-politician Romano Prodi) are offering no bold visions.
Italians will basically choose between a smart crook and a senile
bureaucrat.
The list of Italy's problems is getting longer and longer.
(See Italy is not fit for the eurozone).
To start with, Italy has had the slowest GDP growth of any major country in
the world, which means that just about any country in the world, from the
Philippines to Morocco, has been getting rich faster than Italy.
According to Eurostat 2005, Italy has also the lowest recorded "employment" rate: only 58% of Italians who could be working are working (the others don't work because either they don't want to or they are invalid or they are pre-retired or they can't find jobs.
While it cannot create wealth, Italy loves to spend it. It has one of the
highest public spending rates in the world. Italy offers its citizens
services that USA and Japanese citizens can only dream of.
Its ageing population (Italy has one of the lowest birth rates in the world)
is compounding the problem, as a shrinking number of working Italians has
to pay for the benefits of a growing number of elderly.
Italy has not been able to create stable, profitable big firms. Many of the
big firms of the past have collapsed. Fiat, the largest one, is always on the
brink of collapsing too. There are many success stories in Italy, but they
invariably involve small companies in niche markets (sport cars, fashion)
that cannot employ more than a few thousand people. Italy has trouble
sustaining the big firms that could give employment to hundreds of thousands
of workers. Not only do big firms employ a lot of people, but they are
better equipped to compete in the global market. Small Italian firms have
to compete against both western and developing giants. The Italian firms
are clearly at a disadvantage.
Italy's traditional pride, its exports, are collapsing. The reason is
twofold: on one hand, many countries can make the same products at a much
cheaper price, and, on the other hand, the myth of "Italian quality" is
very often just that, a myth. Italian cars (Fiat, Alfa Romeo) disappeared from
the USA market for the simple reason that they were breaking more often than
products by other manufacturers.
Worse: Italy's exports are mostly confined to the "old" economy (from olive oil
to clothes). High-tech products only account for 12% of all exports, one of
the lowest percentages in the entire world.
Entrepreneurs are discouraged. Many are moving their operations abroad.
Others are selling to foreigners while they can. Almost nobody is hiring
in any significant number. Almost nobody is opening new businesses.
The Economist ranks Italy very low in terms of "business environment".
A less publicized reason for Italy's economic problems is its justice system,
one of the least reliable and least efficient in the world. Italian
entrepreneurs and, worse, its average citizens, live in a virtual state
of anarchy. Verdicts are more or less random, if they come at all.
The tax code is no less ridiculous.
The whole bureaucracy stinks with redundancy and distortions. One of the most
lucrative jobs in Italy is still the "notaio" (in theory, the notary public,
but, in practice, a time-consuming interface between the industrial sector,
the financial sector and the taxing government), who uses an army of "geometra".
Italy has the highest percentage of police officers in the West.
Italy has the highest percentage of "social assistants" of any major country.
It turns out that these problems date from the beginning of the Italian
"economic boom". Italy was never competitive to start with. Italy's strength
was its weakness: the lira. Whenever in trouble, Italy would simply devalue
the lira, thus making its goods cheaper than the competitors' goods.
Every devaluation made Italians poorer than Germans and Japanese (that's
how Italians ended up being poorer than the other two nations of the economic
boom), but it also kept the economy going.
In the global economy the bluff couldn't work anymore.
Italy had a choice: staying out of the euro with the poor countries or joining
the club of the rich euro countries. Italy chose the latter, and the whole
truth came out: the Italian economy is just not competitive. Almost no foreign
investor wants to create jobs in Italy. Italian entrepreneurs are leaving
Italy for other countries.
There are structural problems that have never been solved. For example,
the South is still plagued by organized crime, an excellent reason for
investors to stay out of the entire region south of Rome. And Rome itself
is proverbially famous for corruption, not exactly a motivation for foreign
investors.
Needless to say, it wasn't always like this. In the 1960s Italy enjoyed an
economic boom that rivaled Japan's and Germany's. Even under the fascist
dictatorship of Mussolini, Italy enjoyed some serious economic progress.
And, of course, during the Rinascimento (Renaissance) Italy was the leading
economic center of Europe. And all these ages were not ages of enlightened
governments. Leonardo, Galileo, Marconi and Fermi lived under governments
that were not much better than the recent ones.
It is hard to pinpoint the cause, but the effect is even too clear.
Italy ranks 42nd in the Economist's "networked readiness index" (an index
for computing and telecommunication), two positions behind India, five behind
South Africa, eight behind Thailand, eleven behind
Spain, eighteen behind Malaysia, etc.
And, of course, 41 positions behind the USA.
Italian scientists have won only four Nobel prizes in a century,
while Germany has won 16, Britain 18 and the USA 56.
The problem, of course, is that many Italians deny that any of these
statistics are true. Those who reluctantly admit that they are true
tend to think that they are irrelevant. To make things dreadfully worse,
those who think that these statistics are correct and are relevant turn
out the ones who have caused the problem more than anyone else (trade
unions and old-fashioned leftist parties).
It will take a genius to reverse the decline of Italy.
Both candidates for prime minister are as far from the word "genius"
as a politician can get.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
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- (March 2006)
Berlusconi to the rescue of Islam
In an interview with the powerful Arab station Al Jazeera, Italian prime minister Silvio Berlusconi has condemned the Danish cartoons that make fun of
Mohammed, the man whom Muslims consider a prophet.
Berlusconi's interview came after Bush, Chirac, Putin and Blair all condemned
the cartoons. Each had his own reason for doing so. Bush and Blair have
just invaded two Muslim countries. Putin has just massacred thousands of
Muslims in Chechnya. Chirac is scared of the civil war that Muslims could start
any time in France. Berlusconi was probably also motivated by fear: Al Qaeda
has promised a terrorist attack in Italy, but still not delivered on its
promise. And he himself could be the target.
One could view the statements by these leaders as words of moderation at a
time when tempers, thanks to Al Jazeera's jihadist campaigns, are inflamed on
a daily basis.
But the implications are not lost on the millions of Europeans who studied
history in school: the leaders of Europe are giving Muslims worldwide (even the
ones who live in distant countries) the power to influence European policies
and politics. It is a power that, potentially, extends to the entire Western
civilization, because there are countless element of Western civilization that
are in direct opposition of Islam.
Berlusconi, for example, should know better for one reason: Dante's "Divine Comedy".
Dante places Mohammed in hell. Will Berlusconi now burn all copies of
Dante's masterpiece because it offends the Islamic world?
While we are at it, why don't we just burn the entire western civilization,
just to make sure that nothing produced by Shakespeare, Michelangelo, Newton
or Darwin offends the Islamic world?
De facto these European leaders are saying that, from now on, European comedians are allowed to make fun of Jesus and Buddha, but not of Mohammed.
Presumably, one is no longer allowed to treat Islam as a religious superstition:
historians will still be free to study any religion in the world (including
Christianity) as a religious superstition, but not Islam.
Europe is de facto moving under an Islamic dictatorship. So far this
dictatorship is limited to how one can write and say of Mohammed, but clearly
this is a powerful precedent.
The effect on European voters of this collective surrender to the will of
radical Muslims will be felt at the next elections.
Millions of Europeans
feel that their own leaders are abandoning them to an Islamic dictatorship.
Muslims can get Europe to listen to just about any grievance: all they have to
do is riot in the streets.
Even if they do it in remote Pakistan, radical Muslims always get
the European leaders to listen to them. On the other hand, European citizens
(who do not habitually riot in the streets) feel that their leaders never
listen to them.
Millions of European voters feel that there is noone
to defend their civilization. Inevitably they will turn to the fascist,
xenophobic right-wing parties, the only ones that dare contradict and rebel to
the Islamic dictatorship.
European leaders, intimidated by Al Jazeera and Al Qaeda (two sides of the same
coin), are selling out the European civilization. They don't seem to
realize that they will pay a heavy political price.
TM, ®, Copyright © 2005 Piero Scaruffi All rights reserved.
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