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The Mediterranean in the post-pandemic world

20/06/2022

"Mediterranean Economies 2021-2022" edited by the CNR Institute for Studies on the Mediterranean, published by Il Mulino, will be launched in Naples on June 22nd. The focus of the book is the economic, political and social impact of Covid-19 on the area. Cnr President Maria Chiara Carrozza, Naples Mayor Gaetano Manfredi, Professors Luigi Nicolais and Giovanni Tria are scheduled to participate.

The economic, political and social effects of the pandemic on the countries of the Mediterranean region, changes in global geopolitics, growing tensions and conflicts, intensifying competition between democracy and authoritarianism, and the synergy between market and state. These are the topics focused on in the "Mediterranean Economies 2021-2022" (ME21/22) nearly 20-year Report edited by the Institute for Studies on the Mediterranean of National Research Council (CNR-Ismed), which is being presented on June the 22nd in Naples, at the Circolo Ufficiali della Marina Militare (via Cesario Console 3/bis), The event will be attended by National Research Council President Maria Chiara Carrozza, Naples Mayor Gaetano Manfredi, and Professors Luigi Nicolais and Giovanni Tria.

"COVID-19 has seriously affected the area, in terms of human losses and triggering an unprecedented crisis. In 2020, in most countries, GDP decreased by more than 7 percent, and in some cases, such as Italy, the decline (nearly 9 percent) erased the cumulative growth of the previous 20 years. However, some countries such as Egypt and Turkey even increased their real GDP. 2021 was a year of recovery, but the economic future is still uncertain due to the current geopolitical situation, the evolution of the pandemic and government interventions," explains Salvatore Capasso, editor of the book and director of Cnr-Ismed. "The economic crisis has been asymmetrical within the Med area. Sectors such as tourism, sports, music and art have suffered the most, in some cases their activity has come to a halt; others such as food have done relatively well."

Government interventions to support domestic demand have played a crucial role in buffering the negative impact, particularly in EuroMed countries, however, driving deficits and public debts higher. In 2020, global public debt reached an all-time high of 97 percent of GDP, rising to 99 percent in 2021. These impressive numbers pose unprecedented risks of global financial instability. The average change in public debt in the Mediterranean region relative to GDP is 14.32% in 2020-2021. Italy will reach a ratio of 144%, Portugal 123%, France 106%, and Algeria will rise to 60.5%," the ISMed director ends.

Anna Maria Ferragina, professor at the University of Salerno, views the pandemic as a "natural experiment" to study how firms react to an unexpected aggregate macro shock.  "Studying a sample of Italian publicly traded companies, we see that the first and most immediate reaction to increased risk exposure from COVID-19 leads firms to an increase in total debt and causes an important change in other balance sheet indicators (ROE and ROI). Perceived risk is positively correlated with firms' total debt, but increased uncertainty about the future reduces firms' choice of short-term debt in favor of long-term debt."

If the pandemic's impact on the world economy has been severe, "the consequences have been even worse for trade flows, which decreased in 2021 by an average of 5.3 percent," Giovanni Canitano and Luca Forte, CNR-Ismed researchers, emphasize. "The pandemic and the resulting restrictions affected world trade through: the decline in demand for consumer goods, due to the closure of most many economic activities not related to food and other primary goods; the breakdown of supply chains, due to the border lockdown, affecting 94 percent of Fortune 1000 companies. In the end, most globally integrated companies suffered from shortages of inputs for their production processes and increased costs of logistics services."

At the same time, the pandemic has powered and accelerated the digital transformation already underway. "Digital technologies have shown to be crucial in mitigating the impact of the crisis, allowing economic and social activities not to be interrupted drastically, especially in countries with high connectivity infrastructures. Specifically, the need to limit contagions has led to enabling people to work at home, fostering the spread of tools such as videoconferencing platforms," Luisa Errichiello and Luigi Guadalupi, researchers at the Institute for Mediterranean Studies, note. Their colleagues Immacolata Caruso and Bruno Venditto examined migration in Italy, pointing out that "containment measures to limit the virus have significantly reduced migration flows, hampering mobility, reducing new regular and irregular arrivals, and making it very difficult for refugees and asylum seekers to apply for international protection. Although migrants have been infected in the same proportions as native Italians, COVID-19 has overall hindered their inclusion process in the country. It is not the status of migrants that represents a health risk as much as the precarious conditions in which these people live, for example with respect to decent housing, local health services, employment contract or education." "The pandemic must represent an opportunity to rethink public places and spaces, to enable a more livable city for all, expanding their use in a healthy way," Marichela Sepe, Ismed researcher, adds in this regard.

Marco Ferrazzoli and Cecilia Migali of the Cnr Press Office point out that "media coverage of COVID-19 has become so pervasive to deserve the term infodemic. But in the web, print and radio-TV narratives, there are deep treatment differences, with a strong lack of interest regarding the southern and eastern shores of the basin".

The report could not consider the effects of the current Ukrainian crisis, which erupted during the release. Roberto Aliboni, Francesca Caruso and Andrea Dessì of the Institute of International Affairs (Iai), explain, "In analyzing the most recent geopolitical developments, we found that in the last year of the pandemic, the Mena (Middle East-North Africa) region has witnessed a temporary pause in major interregional conflicts, due to: "on the one hand, growing economic and social threats within individual states, which threaten the stability of regimes and governing elites; on the other hand, uncertainty about the approach that Joe Biden's administration will implement in the region.

Rome, 20-21 june 2022

 

The tab

Who: CNR Institute for Studies on the Mediterranean in Naples (Cnr-Ismed)

What: Mediterranean Economies 2021-22

Link al programma

https://www.ismed.cnr.it/en/books-presentation-mediterranean-economies-2021-2022

When and where: 22 june 2022, 10,00 am-12,00 pm Circolo Ufficiali della Marina Militare, via Cesario Console 3/bis

For information: Salvatore Capasso, editor and director Cnr-Ismed, email capasso@ismed.cnr.it; Giovanni Canitano, co-curatore Cnr-Ismed, email canitano@ismed.cnr.it

Capo ufficio stampa:
Marco Ferrazzoli
marco.ferrazzoli@cnr.it
ufficiostampa@cnr.it
06 4993 3383