Looking for American corporate investors interested in European markets, Dr. Nino Navacco, president of the Institute for Assistance in the Development of Southern Italy (IASM), arrived in Washington last week to publicize the aggressive policies his government has adopted to attract foreign capital.
Leading a delegation of technical and marketing experts, Navacco explained his presence in Washington: "Europe is recognizing that Washington is becoming more and more a center of world trade and finance and this is the moment we think is right for profitable investment in southern Italy."
Navacco was also anxious to dispel any hesitancy that might be engendered by the recent collapse of the Italian coalition government. "Despite the current government crisis in Italy," he said, "our mission has a purpose. It is our first technical contact with American businesses here in your country."
The delegation's efforts do not mark the first aggressive attempt to sell the Mediterranean charms of southern Italy, or Mezzoogiorno, as the territory south of Rome is commonly known. Active development of the area has been going on for nearly 30 years, and already 76 U.S. manufacturing companies, including Goodyear, Procter & Gamble, IBM, Westinghouse and Dow Chemical, have located facilities there.
Those American investments total about $2.4 billion and provide nearly 37,000 jobs in the economically depressed region.
"There are certain kinds of investments consisting of what we like to call "triangularization,'" Navacco explained. "We want to combine local Italian resources with primarily American technology and aim the end products at the markets of the Mediterranean basin. Spaces are opening in the area that are particularly appropriate to certain businesses."
Primary among those specific businesses are the rubber and plastics, chemical and pharmaceutical industries. In the Mezzogiorno seaside town of Termoli, Union Carbide is building a $40 million installation for the production of plastics materials, and Pennwalt, a Pennsylvania-based firm, is constructing a $30 million pharmaceutical plant. A multi-million-dollar port facility is also being planned by architects and developers of the Japanese giant, Mitsubishi.
Formation of a new Italian government is anticipated in the immediate future, and Navacco was quick to confirm the continuity of tax incentives and loan programs that have lured some foreign firms to the Mezzogiorno.
"There is total agreement among all the concerned factors to keep and guarantee similar or equal incentives as new legislation is enacted. In fact, there is a move towards the simplification of the paperwork necessary to set up shop in Italy," he said. "The economic value of incentives will be available much more quickly and automatically."
Heading the list of incentives is what Navacco termed "bankruptcy insurance -- assuming the financial and managerial responsibilities, if necessary, of a new firm and absorbing its losses during the first three years of operation." Easy credit and inexpensive government loans are also available to qualified American investors. Land is cheap, labor is plentiful, and the Italian government lends a hand with initial social security costs. A 50 percent, 10-year "tax holiday" on corporate taxes arising from "new productive enterpirses" is also allowed.
"We did not come here to look for capital. We came to find technology, managerial skills, and entrepreneurship, that certain boldness in doing business that is sometimes rare in our country," Navacco stated.
The group also announced the formation of a New York Mezzogiorno office at 25 West 51st St. in the Rockefeller Plaza, headed by delegation member Dr. Italo Piccolo. "Our efforts to introduce ourselves to the American market will be subtle and at the same time competitive," he said.