Not long ago New York City was a bankrupt, crime addled, city on the verge of implosion. Abandoned cars filled central park, subways were uninhabitable and Times Square after sundown was only a destination suitable if you had a death wish. After some federal funding, conservative mayor Ed Koch being elected, many municipal projects being formed and a general turn around in the nation's economy, the city eventually transformed into the beacon of ambition it is today.
The OECD recently released its quarterly growth figures for the European Union. While the prospects of prosperity gradually begin to haunt the subconscious of numerous swabs of citizens in Germany, Spain and even a few overly optimistic Greeks, the populous of Italy continue to wallow in the seemingly eternal slump that is their country's GDP and dreary economic future.
Italy's stagnant economy once again regurgitated last quarters bile-like indigestible results of negative growth. Eurostat, the EU's statistic office reported -0.1% growth last quarter.
While import/export demand showed rays of promise, GDP figures clouded these sentiments. Keeping up with the dismal trend and continuing to its 2014's -0.4% growth. This not as bad as 2013's -1.9% decline or 2012's -2.3%, reflecting at least the notion that overall, things seem to be getting better as Italy's economy just now begins to pull out of the financial abyss.
Economist expect the outlook for 2015 to be in the positive with an estimate of 0.6% growth and 1.3% for next year. As far as comparing economic results of the 28 nations comprising the EU, the 3rd largest economy in Eurozone was outdone by all others except Cyprus. Greece reported -0.2% last quarter, but gained 1.7% for all of fiscal 2014.
Germany continues to carry the rest of the EU like a fallen soldier on its back boasting +0.7% growth last quarter, nearly doubling expectations.
France barely reporting gains, but still in the positive at 0.1%, while Spain posted a robust growth in its own right of 0.7%.
Western Europe and the EU's 28 totaling nations, continue to claw their way out the recession that until recently gripped the globe, with Italy still occupying coach seats in the caboose of this recession recovery train.
Along with myself, the rest of Italy is asking why?
A country with vast resources, ingenious people, and just by its sheer size should be leading the recovery, not being the class laggard.
Now comes the blame and where to point the finger. Is it a government grid-locked in greed and speculative nefarious tradition alone who wears this hat of responsibility? This tune has been heard before.
Maybe it's the crippling unemployment rate of 12.5% stopping the progression in the wheels of the workforce to ignite the economy. The (r)evolution of “Out with the Old, In with the New” notion where those looking for a job can find one and those wishing to retire from the workforce have the financial stability to do so, is yet another classic scapegoat.
The recent wave of immigration can be blamed for smaller yet still rippling complications such as crime, vandalism, and other seedy networks coming to fruition that otherwise wouldn't have been.
Or the fact that about 72% of the country's youth attending universities throughout, don't see Italy holding a future for them and have plans for themselves to migrate to other parts of the globe than their homeland. Again these are all problems, not answers.
One initiative I do like that I recently heard about is Italy's partnership with Israel to produce alternative fuel technologies and vehicles, more specifically natural gas. Israel Fuel Choices Initiative, along with Fiat Chrysler Automobiles, Iveco and Magneti Marelli made a pact to develop technologies based on the use of natural gas, according to the website Siliconwadi. This is an answer, an idea, a breath of fresh air blowing in the right direction for the economic future of Italy.
Another that I would like to see take shape has to do with one of Italy's oldest and recently more publicized problems plaguing the nation: garbage. But the answer also lies within the problem, more specifically the recycling of trash into profit. Recycling isn't the most lucrative of businesses, but if done correctly and efficiently it can be profitable. Instead of the already present destruction of vast areas of territory throughout the country, there would be another revenue stream (albeit sometimes a small one) to put towards other municipal projects or ideas.
The contracts and traditional ways of handling the garbage business in Italy is in the shaky hands of the private sector, with funding done by the governmental sector. The imbalance lies in the results of the removal, accumulation, and disposal in these often unsteady limbs of labor. Where the business of recycling falls short in terms of profitability is the often times volatile fluctuations of commodity prices in global markets. In a specific correlation, oil prices are directly tied to the price of recycled plastics. When commodity price of oil tumbles, it takes the profits generated from recycling plastics along with it. In the hands of government agencies this can be avoided, or more accurately “hedged” by offsetting these declines in commodity prices with commodity futures contracts that would generate their own profit when these markets trended lower. The government would even be able to team up with a reputable partner in the financial industry within Italy to carry out and execute this business model.
These are only two ideas Italy can put into play in order to give the GDP recovery a much needed boost. (Especially the garbage initiative). In addition to profit, both of these projects would in turn also create job growth.
There are so many more practical ways to add value to Italy's economy. The world, and more importantly, the society within Italy has to realize not only can the economy and infrastructure be saved, but that it's WORTH saving too!
Maybe the answer doesn't lie within what we think is wrong, but what we think is right, what's new, and what is a change for the better.
If you have any ideas or creative ways Italy can further its efforts to stimulate its economy please share them in the comment section below.