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ECONOMIC DIPLOMACY ACCOUNTS FOR 21.4 BILLION EUROS OF BENEFITS

Date:

12/14/2017


ECONOMIC DIPLOMACY ACCOUNTS FOR 21.4 BILLION EUROS OF BENEFITS

""Economic diplomacy" they call it, and, as the minister of Foreign Affairs Angelino Alfano reported, years ago it was considered «almost a B-series diplomacy». However, the investigation survey presented yesterday at the Ministry of Foreign Affairs outlines another reality. The 599 projects that over 300 Italian companies started abroad in 2016, with the support of Italian Embassies and Consulates around the world, have generated 21.4 billion euros of added value in Italy, equal to 1.4 % of 2016's GDP. The same projects led to an 8.8 billion tax revenue and the creation 307 jobs (1.2 % of those employed in Italy). On initiatives worth 63 billion, the share of Italian companies accounts for 39 billion (ten more, in comparison to 2015).

The most active companies among the projects were AgustaWestland, Gruppo Bonifica and Trevi. The first three as far as value of the tenders were OTO Melara, Salini Impregilo and Astaldi. SMEs also benefited from the Ministry of Foreign Affairs's support, both directly and as companies providing goods and services for large companies contracted abroad. Small and medium companies are in fact the sizes of 54% of the ones involved in nearly 600 projects started.
As far as contractors go, 68% of the international competitions promoted in 2016 were launched by the public sector, compared with 27% of the private sector. The largest number of initiatives was in North Africa - Middle East: 225 projects (in the front row, Algeria, Oman and United Arab Emirates), as opposed to 82 in Asia and 74 in South Africa. Latin America (41) and the "other Europe" follow, with 64 initiatives (including Russia and Turkey).
In 2016 infrastructure and construction still remain the most important types of project (13 billion), followed by energy (OVER 9 billion) and industrial installations (3,5). Bottomline, services and engineering projects (2,8 billion) appear. Almost the entire value of projects relating to goods (94%) is generated in Italy. On the contrary, in infrastructure and construction projects a "mere" 32% of revenues returns to the country (goods, Italian skilled work, design services).
A chapter of the study focuses on the initiatives taken by Embassies to remove non-tariff Barriers. In addition to the diplomatic work carried out on the negotiating tables for large trade agreements, there is an effort to overcome barriers to market entry (mainly technical and health/plant health standards; 2932 products are subject to barriers). The study analysed 100 operations that contributed to put an end to such barriers in 22 countries over the three-year period 2013-2015 and quantified the economic effect that these operations had on export performance throughout the following year: 23 in 2014, 29 in 2015 and 45 million in 2016. A touch of diplomacy to help the Made in Italy grow."

Andrea Carli - Il Sole 24 Ore
13 December 2017


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