UNCLAS SECTION 01 OF 03 NAPLES 000118

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON PGOV PREL IT
SUBJECT: APULIA: INNOVATION AT HOME, OUTREACH TO THE BALKANS

SUMMARY: Apulia, at the southern tip of Italy's Adiatric coast,
is unquestionably the South's success story, with government and
academia demonstrably committed to innovation, and the private
and public sectors working together to build bridges to the
Balkans and beyond. While organized crime has not disappeared,
its power has been seriously eroded. Although Apulia has not
regained the economic parity with the North it enjoyed thirty
years ago, it is certainly doing better than its neighbors, and
has attracted major American investments - in particular,
Boeing, which is building the 787 Dreamliner near Taranto, and
Advanced Technology Services, which is involved in rebuilding
the important container port of Taranto, Italy's second largest.
Perhaps more importantly, Apulia exudes an optimism that is
rare in the Italian South, where skepticism and superstition
normally hold sway. End Summary.


2. Apulia, inhabited since ancient times by waves of
seafarers, and allegedly protected from invaders by the bones of
St. Nicholas, stolen from what is now Turkey in the eleventh
century, is putting itself back on the map after decades of
decline. On a recent three-day trip, "innovation" was the word
the Consul General heard more than any other, starting with
Minister of Innovation Luigi Nicolais, in Bari for a
Confindustria networking conference, who confirmed our
assessment that Apulia is the most likely candidate for success
in the South, possibly the only one. The Region's maverick
President, communist Nichy Vendola, told us innovation was his
number one priority, starting with the public administration.
Vendola realizes that Apulia's most important resource is its
people, and has reached out to several hundred prominent
Pugliesi who have left the region (many for the United States),
and has invited them to form a "Rete Puglia" (Apulia Network) to
provide partnership and mentorship for the region's institutions
and economy,

INNOVATION


3. Although Apulia's well-established universities such as
Bari suffer, like many Italian institutions, from internal
politics that stifles new research, the comparatively new
university in Lecce has become a beacon of innovation. A group

of engineering professors who fled the bureaucracy of Neapolitan
academia have founded the "Ecotekne" innovation center,
responsible for a flurry of recent patents (one 35-year-old
Assistant Professor already has six). This dream team's latest
achievement is an implant to repair paralysis caused by spinal
cord injuries, which has already been successfully tested in
laboratory mice. The group is in the final phases of creating
commercial spinoffs, funded by venture capital from State Street
Global Investments and the Milan-based firm Quantica. The
University of Lecce also boasts Italy's only nanotechnology
center, founded by a former researcher at Germany's Max Planck
Institut. Although Lecce's dynamic young mayor Paolo Perrone
(Forza Italia) bemoaned the decline of the region's
once-thriving textile industry, the bright young engineers of
Ecotekne have created a fabric for sweatsocks that don't sweat;
such innovations may give some of the old industries a new lease
on life with a future-oriented focus.

BALKAN OUTREACH


4. For centuries a region of seafarers, many of whom
emigrated to countries such as the U.S. over the last century,
Apulia is now on the front lines of European immigration,
especially from the Balkans. The St. Nicholas connection and
long-established sea routes have established a natural link
between Bari and Central Europe, and, with 800 kilometers of
coastline on the southeast extremity of the Italian boot, Apulia
served throughout the 1990s as the point of transit for migrants
in search of more lucrative destinations in Northern Italy or
Germany. Although the migrant flux has not ended, the port of
Bari now serves as an important transfer station for these
immigrants as they return as tourists to their homelands during
summer vacation periods. When asked whether Muslim immigrants
from Albania/Bosnia/Kosovo also visited during the Eid at the
end of Ramadan, the Port Director told the CG, "No, they're
completely Westernized; now they come for Christmas." While
only a few years ago most still arrived in Bari by bus or train,
now most come in cars. The Port Authority has reached out
through Albanian-language radio and other communication networks

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to provide logistical assistance to prevent traffic jams, and
has even constructed new port facilities catering to Albanians.
So far this year, the port has handled over 700,000 passengers
to and from Albania alone.


5. Regional President Vendola told the CG that, although in
earlier years local hospitals had offered free medical treatment
to Albanians who could not obtain specialized care at home, the
Region has now found it more profitable to improve the medical
infrastructure in Albania, and is now assisting the Mother
Teresa Hospital in Tirana to attain Western standards. The
Region's outreach and economic interests are firmly linked, with
Bari's Fiera di Levante, the major Southern Italian Fairgrounds,
reinventing itself under its new President, Cosimo Lacirignola,
as a gateway to the Balkans, with its annual fall trade fair
featuring Albanian, Macedonian, and Montenegrin days, attended
by prominent political figures from the respective countries.
The region is now looking even beyond the Balkans; Bari Mayor
Michele Emiliano told the CG that the city aspires to be "the
Geneva of the Mediterranean."


6. The region's welcoming attitude toward visitors and its
tolerance of foreigners extends even to the man on the street.
When we stepped into the Church of St. Nicholas, Bari's patron
saint, for a quick look between appointments, we were soon
joined by a local policeman who, with the intellectual breadth
of a seasoned architectural historian, gave us a tour, making
special mention of the fact that the church offers both Catholic
and Orthodox services, noting also that the city had given the
Russian Orthodox community its own church, and offering excuses
that "unfortunately we still don't have a mosque."

FURTHER CHALLENGES AHEAD


7. Apulia's rising fortunes have come, not surprisingly, with
a notable drop in organized crime. A key figure in this
development has been Bari Mayor Emiliano, Regional Secretary of
the new Democratic Party, who as prosecutor in Brindisi became a
prominent member of the pool fighting against the Sacra Corona
Unita. Although break-ins and other property crimes remain
unacceptably high, Bari Prefect Varlo Schilardi told the CG that
the entire province (over one million inhabitants) had
experienced only seven homicides all year. The Treasury Police
have also fearlessly combated economic crimes, including
intellectual property rights violations, seizing approximately
USD 750 million worth of pirated goods in the past year. They
have also claimed victory in the battle on cigarette smuggling;
seizures of illicit tobacco products, mostly from Greece and the
Balkans, have dropped from over 500,000 kilos annually in the
last decade to only 3,000 kilos this year. The Treasury Police
are now focusing on combating drug smuggling, loan sharking,
extortion, and counterfeiting/piracy.


8. Impressive as Apulia's progress is, it is still a work in
progress. Bari Mayor Emiliano compared himself to the driver of
a Wild West caravan, trying to make sure the cattle don't go off
in the wrong direction. Regional President Vendola compared
himself to a weaver, literally threading together the fabric of
his region. Clearly not everyone is living the Apulian dream.
Local Editor-in-Chief of the national daily La Repubblica,
Stefano Costantini, told us Pugliesi are increasingly frustrated
with their local and national politicians. Emiliano's
popularity has waned as he failed to deliver on numerous
campaign promises. Corruption scandals have targeted both
former Regional President Raffaele Fitto and the former mayor of
Brindisi; the latter is alleged to have taken bribes to smooth
approval for a 600 million euro regasification plant.
Unemployment is rampant (15% in Lecce, for example), as formerly
prominent industries such as sofa-manufacturing are increasingly
outsourced to China and small- and medium-sized enterprises are
driven out of business by international chain stores. Lecce
Mayor Perrone lamented that, at the opposite end of the spectrum
from the Ecotekne wonder boys are unskilled high school dropouts
who expect the government to hand them a job. When we suggested
they might be retrained to help fix up some of the still
unrestored buildings in Lecce's beautiful Baroque center, the
Mayor was skeptical, however, they could accomplish even that.
Not all immigrants have been welcomed, either; only a year ago
Italian and Polish police freed over 100 Polish tomato-pickers
working in what amounted to slave labor camps in the province of

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Foggia.


9. COMMENT: Apulia, particularly its dynamic political class
and its brilliant innovators, seems a very propitious venue for
the Mission's Partnership for Growth. We will actively pursue
outreach programs and conferences to assist the region's bright
young researchers to master the entrepreneurship skills that are
still in the development phase and to network with U.S.
institutions, both public and private (Ecotekne already has an
exchange program with MIT, and is about to sign one with
Drexel). Clearly this is a region with bright prospects for
American business, with a well-established infrastructure,
highly-qualified workforce, and good access to markets. Of all
the regions in our large distict, it is also the most propitious
for advancement of U.S. foreign policy goals, particularly in
the Balkans, and an excellent opportunity for Muslim outreach.
As Regional President Vendola told the CG, "I'm a diplomat,
too," but he made it clear, as did the rest of his political
colleagues, Confindustria, and other economic entities, that he
strongly welcomed close collaboration from career diplomats like
us, and we are eager to engage. End Comment.
TRUHN