Italy eager to lessen inward FDI gap with key EU competitors
Roma - XINHUA
Italy is eager to increase the flows of inward foreign direct investments (FDI), and close the gap with key European competitors in 2016, a top trade official with the Italian Trade Agency (ITA) told Xinhua.
"One of our main tasks is to inject more liquidity into our country's system (to stimulate growth)," Andrea Napoletano, director of the foreign investment department with ITA, said in a recent interview.
According to an analysis over a 10-year period, Italy suffered a structural disparity in inward FDI flows with other major economies in Europe worth approximately 20 billion U.S. dollars (18.2 billion euros), the official said.
"Our major goal in 2016 will be to realign Italy's investment flows to the average of our direct competitors in the European Union (EU), namely France and Spain," the official said.
"That would mean filling that 20 billion gap," Napoletano explained.
Italy has long underperformed in its FDI attraction compared to its European neighbors, also considering that it is the EU's fourth largest economy, and the third largest in the eurozone.
The government, and the ministry of economic development presiding over ITA, strengthened their efforts to reverse course over the last two years, and redesigned the country's FDI attraction policy and governance.
The foreign investment department was set up within ITA to better promote investment opportunities, support foreign companies interested in starting new businesses here, and tutor them through the life cycle of their investment in the country.
FDI stocks to Italy rose to 373.7 billion dollars in 2014 from 360.9 billions in 2013, according to the latest World Investment Report (WIR) by the United Nations Conference on Trade and Development (UNCTAD).
FDI inflows halved in the same period, however, dropping to 11.4 billion dollars in 2014 from 25 billion dollars in 2013.
The United Kingdom, Germany, France, and Spain all attracted more investments by far.
Yet, Italy and the UK were the only two countries among major EU partners to post an increase in inward FDI stocks in 2014 of 3.6 percent and 1.7 percent, respectively, UNCTAD data showed.
International surveys also confirmed the country was more attractive to foreign investors, according to ITA.
Indeed, Italy ranked 12th in the Foreign Direct Investment Confidence Index 2015, up from 20th place in 2014.
It also performed better than a benchmark country like Germany in the World Bank's latest Doing Business ranking, in terms of how easy it is to start a business in the country (Italy came in 50th to Germany's 107th place).
Finally, results in terms of gross domestic product (GDP) ratio would show a recovery, according to Napoletano.
He explained that "FDI stocks to Italy reached 17.4 percent of GDP in 2014, almost equal to the 17.7 percent registered in 2007," which was before the financial crisis and the consequent sharp decrease in global investments.
"That was for us the best result since the global crisis hit, except for the year 2012," he stressed.
Still, the average FDI/GDP ratio in Western Europe remained much higher: it was at 37.9 percent in the eurozone in 2014; 51.3 percent in Spain, and 25.6 percent in France.
ITA expected good figures for 2015, although no official data were yet available in order to confirm whether pre-crisis levels might be exceeded.
In a further effort to address foreign investors more aggressively, meanwhile, 10 desks focused on FDI were being set up around the world, to work in synergy with ITA local offices and Italian embassies.
"The first opened in Istanbul in late 2015, and a second is going to be ready in Tokyo soon," Napoletano explained.
Other desks will open in Shanghai, Singapore, Dubai, London, Paris, New York, San Francisco, and possibly Sao Paulo, the official added.
Such a network is to be completed by the end of 2016.
"All desks will be run by professionals with a background in business banking or strategic consulting, in order to facilitate the dialogue with potential investors," he explained.