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 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200080001-6

people—and commute daily to their scattered patches of earth on foot or by mule, bicycle, or motorbike.

In the south as a whole, the Cassa has stimulated industry, and several important new industrial zones have been created. The most important are the Bari-Brindisi-Lecce-Taranto zone in Puglia and the coastal strip of Catania-Augusta-Siracusa in eastern Sicily. Taranto has one of the largest and most modern steel mills in Italy; Lecce has the largest factory in Europe for earthmoving equipment, and Bari has an oil refinery and other new plants. The Sicilian coastal strip has become a major center of oil refining and petrochemical industries. A number of new factories, including the giant Alfa-Romeo automobile plant, have been built in the Naples area, which always had some factories.

In some cases the building of factories in the south has backfired. The initial demand for low-skilled construction workers was often followed by layoffs and staffing at a reduced level by skilled workers and engineers from elsewhere in Italy. The construction workers, many of whom had shifted over from farming, either joined the rolls of the unemployed of found some sort of low-paid work. Critics of the Cassa have enjoyed referring to the new factories as "cathedrals in the desert," but most government planners still consider that industrialization is the best way to make use of the excess labor of the south.

From 1950 to 1970 the per capita income of southerners rose from $320 to $800 per year, but their position relative to the northerners remained roughly the same. Nevertheless, keeping in step with the north during those years was no mean achievement. According to official estimates, the actual number of jobs in the south dropped, primarily because the number of people working on the land diminished by half, while all of the new industries added less than 200,000 new jobs. Poverty has been reduced, but unemployment is still a problem. Around Naples, for example, there are usually about 100,000 unemployed out of a total population of 1.7 million, and 15,000 more jobs must be found each year just to keep the unemployment figure stable.

During the 1970's the rate of government spending in the south will increase. A law passed in 1971 authorized the Cassa to spend $12.5 billion over the next 5 years, as much money as it had during the previous 20 years. State-owned holding companies, which are responsible for around half of Italy's industrial investment, now must locate 80% of their new investment in the south. The system of incentives for attracting new industry has been overhauled, and the government hopes to attract a broad range of industry, both labor intensive and capital intensive.

The Miracle and After (c)

Life in Italy has changed tremendously since the country emerged from the years of fascism and war. The "economic miracle" has almost erased the memory of the poverty, crime and runaway inflation of the early postwar years, where the main problem was to ward off starvation. The economic problems then were like those of an underdeveloped country, with one important difference—though industrially backward, Italy was culturally advanced and had a labor force of high potential waiting to be used.

The 1950's and 1960's were the years that transformed Italy. The annual growth in manufacturing was in most years the highest in western Europe, and Italian automobiles, industrial machinery, typewriters, appliances, chemicals, and clothing were exported all over the world. An enormous amount of building took place, and superhighways were extended from one end of the peninsula to the other. For the first time in this century, unemployment ceased to be a major problem. The sharp edge of poverty was blunted, and people began to buy things that once seemed remote luxuries. The whole feeling of Italian life changed, and even its social structure appeared to become more fluid. The growing industrialization brought southerners to the

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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200080001-6