Italy’s industrial development began at the end of the 19th century, with relatively rapid expansion in the north before and during World War I (1914-1918). Fascist policies under Benito Mussolini and the world depression of the 1930s encouraged restructuring rather than expansion of the economy. By the end of World War II in 1945, nearly half the workforce was still employed in agriculture.
After the war Italy developed a diversified industrial base, especially in the north, which contributes significantly to the economy. The rate of economic growth slowed in the 1970s and 1980s, and in the 1990s the government introduced reforms to deal with underlying inefficiencies in the economy. Privatization of public industries began so that Italy could reduce its large public debt and meet European Union (EU) requirements. Government spending also dropped, sparking protests. However, economic stagnation persisted into the early 2000s.
In 2005 Italy’s gross domestic product (GDP) was estimated at $1.76 trillion, or about $30,073.50 per capita. GDP is a measure of the total value of the goods and services a country produces. Industry (including manufacturing, mining, and construction) contributed 27 percent to the GDP, services (including trade, banking, and government) 71 percent, and agriculture (including forestry and fishing) a scant 2 percent. Italy essentially has a private-enterprise economy, although the government formerly held a controlling interest in a number of large commercial and manufacturing enterprises, such as the oil industry (through the Italian state petroleum company) and the principal transportation and telecommunication systems. In the 1990s Italy began transferring government interest in many enterprises to private ownership. The government—at the national, regional, and local levels—remains a major employer in Italy.
An ongoing problem of the Italian economy has been the slow growth of industrialization in the south, which lags behind the north in most aspects of economic development. Lack of infrastructure and organized crime have hampered development in the south and discouraged large corporations from opening there. Government efforts to foster industrialization in the south through subsidies have met with mixed results. Although public spending in the south increased during the 1980s, efforts to reduce the public debt from the 1990s on meant that less funding was available. The government succeeded in reducing unemployment in the 1990s and early 2000s; however, the unemployment rate remained at about 8 percent of the working-age population. Unemployment remained much higher in the south than in the north.
A large national debt has plagued Italy’s economy: The national budget of Italy in 2005 included revenue of $694 billion and expenditure of $629 billion. In keeping with provisions of the Maastricht Treaty, which created the European Union (EU), Italy reduced its budget deficit and its debt-to-GDP ratio during the 1990s. As a result Italy met the EU single-currency requirement and was able to adopt the euro in 1999. Although the annual deficit dropped below the EU goal of 3 percent, the accumulated debt remained large, at more than 100 percent of GDP, in the early 2000s. Some 35 percent of the land area of Italy is cultivated or used for orchards; agriculture, with fishing and forestry, engages 4 percent of the labor force. Variations of climate, soil, and elevation allow the cultivation of many types of crops. Italy is one of the leading nations in the production of grapes and ranks among the world’s foremost wine producers. Italian wine production totaled about 5 million metric tons at the beginning of the 21st century. Italy also is one of the world’s leading producers of olives and olive oil. Chief field crops included sugar beets, maize wheat, and tomatoes. Other field crops are potatoes, rice, barley, lettuce, soybeans, and artichokes. Orchard crops, prominent in the Italian economy, include apples, oranges, peaches, pears, figs, dates, and nuts. Dairy farming is a major industry. About 50 kinds of cheese are produced, including Gorgonzola, pecorino, and Parmesan. Livestock included cattle, sheep, hogs, goats, horses, and poultry
Tourism’s importance to Italy’s economy has increased enormously in the last 50 years, and today tourism contributes a larger portion to the economy than agriculture. Italy offers both natural and cultural attractions to the tourist. As far back as the 16th century, the education of an English gentleman was incomplete until he had seen Italy as part of the so-called Grand Tour of European cities. Today, tourists visit Italy for its ancient Greek and Roman ruins in Sicily, Paestum, Pompeii, and Herculaneum; for the Byzantine and medieval art and architecture in Ravenna and Venice; and the major monuments of the Renaissance found in Tuscany, especially Florence, and regions nearby. A trip to Rome generally includes visits to the ancient forum, the Colosseum, Saint Peter’s Basilica, and the museums and Sistine Chapel of the Vatican City.
Italy’s landscapes are diverse, and the scenery is magnificent in all regions of the country. Especially popular with tourists are the lakes of Lombardy in northern Italy and the hilltowns of Tuscany and Umbria. For outdoor enthusiasts beach resorts abound, including Rimini, on the Adriatic coast, Taormina in Sicily, Positano on the Bay of Sorrento, San Remo on the Italian Riviera, and the Costa Smeralda (Emerald Coast) of Sardinia. The beaches of Calabria, in the south, have recently been developed for tourism but are still less frequented than those of other regions. Skiing and other winter sports are popular in the Dolomites and Italian Alps. "Italy" © Emmanuel BUCHOT, Encarta, Wikipedia
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