Serving as the toe of the Italian ‘boot’ on the map, Calabria is a spiny peninsula on the Tyrrhenian coast populated by 2 million people and characterised by the always-stunning juxtaposition of mountains and hills cascading into turquoise sea.  

The ugliness of its socio economic situation is at odds with the physical beauty of the place. Asked about life in Calabria, a young local, born and raised in the region, summarises it in three brutal words: “Bad. Poor. Crime.”

With one of the highest unemployment rates in Italy, and indeed in Europe, Calabria remains Italy’s least developed province and is an EU ‘Convergence’ region – an inglorious status reserved for the poorest parts of Europe. Its economy is reliant on tourism, the service sector and farming. Industrial activity is sparse and what manufacturing exists is limited mainly to low-value areas such as food processing, beverages and tobacco. Despite large public spending, infrastructure is grossly inadequate. And perhaps worst of all, the region lies fully in the grip of organised crime, namely the fearsome ‘Ndrangheta criminal network.

Choppy waters

It is against this background that the port of Gioia Tauro must face increasingly difficult headwinds. Squeezed between a challenging inland environment and lower cost competition across the Mediterranean, port officials find themselves in an unenviable position.

For a time, Gioia Tauro was the leading transshipment hub in the Mediterranean, thanks to its prime position midway along the shipping route connecting the channel of Suez to Gibraltar – one of the busiest maritime corridors in the world. As recently as 2007 it was offering 22 intercontinental services, six services for northern Europe and 28 services for the Mediterranean. It was doing business with 18 different maritime companies and was linked with 49 Mediterranean ports and 174 outside the Mediterranean.

But the onset of the global economic downturn caused a reduction in transshipment traffic and in the meantime, competitor ports upped their game. Many ports along the Mediterranean rim of north Africa have developed thriving free zones for which Italy simply has no answer. The cost of labour related to a worker in an African port is less than one-tenth of the cost of an Italian port worker. By 2010, Port Said in Egypt and Algeciras in Spain had surpassed Gioia Tauro in rankings of Mediterranean transshipment ports.

“Gioia Tauro Port has a good position in the Mediterranean but is in a difficult situation. We have got strengths but they have changed relative to international conditions,” Giovanni Grimaldi, president of the Gioia Tauro Port Authority, told attendees of a World Free Zone Convention event hosted in Gioia Tauro in June.

Political instability in north Africa in the past few years related to the Arab Spring uprisings gave Gioia Tauro momentary reprieve from the heat of southerly competition, and the first quarter of 2011 saw a 16% boost in traffic compared with the previous year. But no sooner was the port enjoying its brief bounce-back than its largest client, shipping company Maersk, decided to pull out in mid-2011. Today, only one major client, MSC, remains – and it has threatened to leave as well.  

A wider spread

There is a growing recognition in Calabria that transshipment alone is not going to pay the bills. A proper logistics and industrial cluster must be created, and value-added activities introduced at the port, if its economic potential is to ever be harnessed and if the benefits are ever to be felt by the wider region. As it stands, the economic value of the port stops abruptly at the shoreline. These realities were acknowledged in a strategic development plan approved in 2010 which spelled out a goal of transforming Gioia Tauro from a mere port of transshipment to an ‘integrated logistics centre’.  

But this goal remains as elusive as ever, with few concrete steps being taken despite a great deal of bureaucratic paper-rustling and proclamations. Critics complain of money being spent on a raft of still-empty buildings and argue that putting in place real incentives to entice companies would be a smarter use of funding.

“If we want a better future, we must act, without any more useless words,” urges Cecilia Eckelmann Battistello, president of Contship Italia, the parent company of Medcenter Container Terminal, which runs the container terminal at the port. “We still strongly believe in what we can do [with the port].”

Free zone efforts

In 2002, a law had decreed the creation of an 80-hectare free zone in Gioia Tauro and capitalised it to the tune of €2.5m. But the free zone never got off the ground. These failures have led to calls for the creation instead of a special economic zone (SEZ) offering incentives for initial investments, the simplification of customs procedures, the suspension of VAT payments and import duties, tax exemptions, exceptions to onerous regulations related to employment contracts and social security contributions, and reduced land rental and utilities charges. Such enticements are standard fare for SEZs, but are a tough sell politically in Italy and must also be cleared by the EU.

In the absence of some kind of tangible action or real moves towards the implementation of the development plan, it is hard to see how Gioia Tauro can compete or even survive in the long term. The conclusions of a 2012 report prepared for the European Commission by the Centre for Industrial Studies in Milan was as blunt as the young Calabrese man's three-word assessment of his native region. “At the moment, the catastrophic picture of the discontinuation of port activity is one of the possible future scenarios,” it stated.