Poor, Poorer, Poorest

Poor, Poorer, Poorest

Once upon a time, Italy's old Mezzogiorno was Europe's most impoverished region. It still is—only much more so.

By Barbie Nadeau
Newsweek International

Sept. 26 - Oct. 3, 2005 issue - The ruins of Matera in Italy's southern region of Basilicata are a grim reminder of how desperate life has been for the region's poor. Generations of families once lived here in squalid, windowless caves cut out of the steep ravines, often sleeping alongside their pigs, chickens and goats. Malaria was rampant and few babies survived to see their first birthday. Finally, in 1960, a public outcry across Europe prompted the Italian government to evacuate the entire impoverished population of 15,000 up the hill to government housing. Now the area is a UNESCO World Heritage site and many of the abandoned caves are being transformed into tony wine bars and four-star hotels for curious tourists. Mel Gibson even filmed a segment of "The Passion" here—fittingly, the gruesome Crucifixion scene.

Matera and other picturesque southern Italian villages may be enjoying a relative renaissance, thanks to tourism. And Italy itself has become Europe's fourth largest economy, with dynamic growth over the past decades despite recent years of sporadic recession. Yet life in the old Mezzogiorno remains as tough as it's always been—if not worse. Instead of catching up with the rest of Italy, the region seems to be falling farther and farther behind.

According to two studies released last month, southern Italy, if it were independent, would be the poorest of the EU's 25 members in terms of per capita national income. Many residents cannot afford adequate housing and such basic utilities as hot water and central heating. Infant mortality in the first 28 days of life is 5.7 per —1,000 live births—four times higher than in the northern provinces and double the European median. The dropout rate for primary-school students—through grade eight—is 24 percent, 2.5 times higher than the rest of Europe. Says Maurizio Bonati of the Mother and Child Health Laboratory at Mario Negri Institute in Milan, coauthor of one of the studies: "We're talking about people who cannot buy simple groceries, who cannot buy milk for their children, who cannot find nourishment when they are pregnant." The second study, by Giorgio Tamburlini of the Institute for Child Health Burlo Garofaloin Trieste, found that 17 percent of children and adolescents in southern Italy suffer from mental-health problems including depression, suicide and eating disorders like anorexia—all disproportionate side effects of Italy's enduring north-south income divide.

What's remarkable is how little impact 40 years of government aid and investment have had. For decades, the richer Italian provinces in the north have complained—often to the point of demanding separation—that taxes paid to the government in Rome are siphoned by the poor south. To be sure, there are some successes: government investment in agriculture has made Puglia the largest provider of pasta for Europe. Calabria has become one of Europe's major suppliers of citrus fruit. In Campania, investment in tourism has transformed the Amalfi coast into a top tourism destination, while Naples is slowly being remade into a clean and safe city. Yet the overall picture remains grim: 7.3 million residents in southern Italy still make less than 521 euro a month, and half of those live on less than 435 euro a month, according to ISTAT, Italy's national statistics institute. "There are hotels in the south that can demand 500 euro a night, and families live on less than that just a few kilometers away," laments Francesco Loporfido, who owns the Andrisani Enoteca, tucked inside a Matera cave.

Part of the problem is how resources have been allocated. In 2000 the government earmarked $50 billion in EU funds and matching national funds for Mezzogiorno development through the year 2006, much of which was meant for health-care reform and infrastructure enhancements. But under Prime Minister Silvio Berlusconi, more than half those funds have gone to Campania for urban revitalization in Naples and development along the already rich Amalfi coast. Recently the government allocated 300 million euro for broadband infrastructure, despite the fact that only a slender fraction of southern Italians can afford computers. It has spent millions in studying whether to build a 4.6 billion euro bridge from Sicily to the mainland. As for social services, reports the Mother and Child Health Laboratory study: "Not a single program for maternal and pediatric intervention exists in Italy right now." Many southern hospitals suffer from shortages of doctors, nurses and medical supplies. Scores of public buildings have been declared unsafe.

Why hasn't northern Italy's wealth trickled south? The reasons are many, ranging from the mafia's control of many southern businesses to the unusually large share (an estimated 30 to 40 percent) of the local economy that operates in the black—the black market, that is. Money made on the side, whether by day labor or crime, does not flow into taxes, which in turn impoverishes municipal governments. More fundamentally, Italy's economic good times never touched the south. Prosperous northern businesses invested in plants in their own region; service industries operate where the money and markets are—in the north. It has been the same story with foreign investment, except for the relatively modest amounts of EU aid. All this is compounded by low health and literary rates. With 24 percent of primary students abandoning school, unemployment hovers between 30 and 50 percent and shows little prospect of improving. Perhaps worst, long years of inequity have all but stifled the will to change. The perception is that southern Italy will always be as it is, says Bonati. "Especially in the south, people feel that it's their destiny to be poor."

The prognosis is not good. The latest studies are full of well-intentioned recommendations for change, from improving local health services with mobile clinics and tougher regulation to greater emphasis on prenatal and childhood medical assistance. There's also brave talk about ways of narrowing the north-south income divide: measures to force black-market jobs into the mainstream, bolstering tax revenues and adopting initiatives to ensure that parents keep their kids in school. None of this is likely to amount to much, however, without a commitment from Italy's federal government to invest economically in the south—and offer incentives for northern businesses to do the same. Without that, the region's chief potential resource—its low-cost, underemployed labor pool—will remain untapped. And its people might as well be living in caves.

© 2005 Newsweek, Inc.


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