Garbage emergency in Naples: the effects on local economy

The echoes of what in Italy is recognized as “The Garbage Emergency of  the city of Naples” has almost arrived in all the world, with suggestive images that more or less can make the idea of what the city lived in the last  years until July of 2011. What is maybe less clear to the world is the impact of the emergency on the local economy of Naples and the region in which it is.

By taking one thing at a time, let’s begin by explaining briefly how the emergency was born: it was in 1989 when the criminal system of the waste of garbage was though thanks to the convergence of interests of part of institutional men (belonging to the liberal party) and criminal organizations, in particular the clan of Casalesi.[1] The business let the clan earn 1 million of euro per 40 tonnes of trash, after the costs: this high level of earnings and the collaboration with the institutions explain why no one was able to stop the traffics of garbage managed by the clans.

The impact of this on the local economy of the region of Campania has to be measured on three sides: the growing costs for the health care, the impact on tourism and the damns to the local economy (prevalently agricultural).

The positive correlation among the health’s troubles and the Garbage Emergency has been demonstrated by lots of studies that estimate, for instance, that the risk of cancer has grown by 30%, since the problem of waste exists, in the areas of illegal landfills of waste. According with the study of Carla Guerrieri on “Cancer Biology and Therapy”, in general, the region is facing a growing of cancer of 11% and a growing of  the congenital malformations of 82%: in terms of regional economy it means that a drainage of a costs around 150 million of euros (based on expenditures for past interventions of similar type) the region can realize a saving cost of 11 billion.

Campania is predominantly an agricultural region, with very high productivity and specialization characterized by intensive cultivation. According to 2007 data, 120,000 people are employed in agriculture and 41,000 in the agricultural industry, about 80% of agricultural activities are family-run, so the agricultural production units are quite small (3.6 hectares on average) . The total agricultural production of the Campania region accounts for 2.4% (against a national average of '1.8%) of the production of national GDP[2]. The productivity rate in the region of 4,000 € / ha is almost twice the national average and is the second highest in the country (Messina 2009). Soil degradation and desertification are affecting more and more hilly areas and in the mountains, coastal dunes and a long agricultural tradition. The system of food production in Italy has suffered relapses due to the presence of contaminant waste on the territory: the dioxin scare has stopped farming and food sales have declined globally. The policies on waste in Campania region are creating a climate of death, leading to the disappearance of rural culture and traditional food production, leading to not only important economic externalities but also inflicting a cultural loss.

Last but not least, it has to be registered the impact of the emergency on tourism economy of the region: for the region and the city, the tourism is one of the most important source of the economy, not only it generates 3,6 billion of regional PIL per year, but it has also a relevant multiplicative effect on the other industries of the economies of  the region. The Garbage Emergency has affected the tourism economy very strongly: in the year of highest emergency, it was leaded a research which demonstrated that the earnings of  the enterprises of the sector, in consequence to the trash trouble have had the following  trend:

50% - lower earnings

44% - stable earnings

6% - higher earnings

Just notice that, in this case, the effect on the earnings couldn’t be due also to the global crisis because the year of the data’s collection is 2008, so the changes are supposed to be the only effect of the garbage. Moreover, a survey leaded in the same year asked to the tourist operators how much the emergency had damaged their enterprises and the results were the following:

How much has the emergency damaged your enterprise?                           Nothing            Few                   Enough            Very                   Very much        Total
Avellino	38.1	42.9	4.8	14.3	0.0	100
Benevento	52.2	39.1	6.5	2.2	0.0	100
Caserta	17.2	24.1	13.8	27.6	17.2	100
Napoli	10.7	32.9	28.0	23.1	5.3	100
Salerno	42.1	25.1	17.5	12.3	2.9	100
Campania	27.0	30.7	20.5	17.3	4.5	100

The table has to be read by knowing that the emergency was a phenomenon typically of Naples and anyway associated to Naples, no one has ever heard about the emergency in Salerno (Amalfi, Sorrento and Positano), notwithstanding they are very close to Naples: given this, it’s easy to observe that the emergency has effectively damaged the tourism in Naples and so can continue to do it in the future.

From what was said, there are clear evidences that the garbage emergency in Naples has damaged the regional economy of the city and of the territory; actually with a deeper sight to the problem we can assume that the damage of the regional economy, especially if seen in terms of opportunity costs, represents a big loss for the entire Italian economy, by considering how much the saving and the production which the regional economy of the Campania could give to the national economy, because of the uniqueness of the resources of the territory (here, we’re talking about cheese, agriculture, tourism). The solving of the problem is, thus, an interest of Italian economy, not just a regional affair.

Rosario D’Auria

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[1] Iacuelli A. (2007), Le vie infinite dei rifiuti. Il sistema campano

[2] Lucie Greyl, Sara Vegni, Maddalena Natalicchio, Salima Cure e Jessica Ferretti, La crisi dei rifiuti in Campania, A Sud (September 2009)


[artigo de opinião produzido no âmbito da unidade curricular “Economia Regional” do 3.º ano do curso de Economia (1.º ciclo) da EEG/UMinho]