Recent report highlights the growing gap in economic performance between Northern and Southern Italy.

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The 2005 report on the Southern Italian economy has signalled a widening gap between the Centre-North and the South. In Southern Italy, the GDP is growing slowly, employment is declining and the unemployed are abandoning the labour market and returning once again to fuel internal migration.

The third report on the Southern Italian economy published by the Association for the Development of Industry in the Mezzogiorno (Associazione per lo sviluppo dell’industria nel Mezzogiorno, Svimez) has shown how the differential between the economic development of the Centre-North and the South of Italy is once again growing. In 2004, GDP in the Centre-North regions rose by 1.4%, while the figure for Southern Italy was only 0.8%. More specifically, Southern Italy's industrial output fell by 1.7% while and small craft sector output fell by 2.5%. Energy output was the reverse ( 2.9%). But because of the reduction in private consumption, the tertiary sector grew by only 0.4%.

The report shows substantial differences between the two areas of the country in terms of employment indicators. In Southern Italy the positive employment trend that was recorded in the three-year period 2000-2003 has been interrupted. During the past year, the southern Italian regions have lost about 23,000 jobs whereas in the North there has been an increase of some 187,000 jobs. The unemployment rate shows an apparently different outcome. Whereas in the Centre-North the number of job seekers rose by 19,000, in Southern Italy there was a fall of over 100,000. But the simultaneous reduction in employment and in unemployment is a doubly worrying sign for the Southern Italian economic system. The authors of the report maintain that the fall in unemployment is not a positive indicator of the economic performance of the South, but a signal of discouragement on the part of the unemployed, who have given up looking for regular employment, in order to take haven in the underground economy. This interpretation is confirmed by the fall of about 130,000 people in the Southern Italian active population.

The Svimez report then addresses the re-emergence of internal immigration. But compared with the past, migration is no longer merely a choice taken by unqualified labourers. Today it is above all the more highly qualified who migrate from the south to the north: one graduate in five from southern Italy now moves to the Centre-North in search of work. This transfer of resources from the Centre-North is due to the lack of a demand for skilled labour in the South. This is confirmed by the report which says that half the graduates who have found work in the South consider that they are overqualified for the work they have been recruited to do.

The Svimez report also suggests positive policy actions that can be used to reverse the negative trend in Southern Italy: measures to upgrade infrastructure, tax incentives for business, a selective fiscal policy, and the promotion of technological innovation.

The Secretary-General of Italian Confederation of Workers’ Unions (Confederazione Italiana Sindacato Lavoratori, Cisl), Savino Pezzotta, has remarked that one way of reviving the Southern Italian economy is to promote local development by implementing co-ordinated policies involving the institutions, the social partners, establishments of higher education and research centres.

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