Failures and breakthroughs – exposed, reflected, considered

Berlusconi: successful businessman who screwed his country

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After 17 years, the buffoon of Italy is finally gone. But who was he in reality?

Berlusconi was born to a middle-class family of a bank employee in Milan. In primary school, young Berlusconi wrote homework assignments for his classmates in exchange for morning snacks. In high school, he played the double bass and sang with a band. He attended Milan State University, from which he graduated in 1961 with an honors degree in marketing. While at university, he signed on to cruise ships as a musical entertainer. Since his university days, he was accustomed to party and fun, treats that he would showcase regularly throughout his business and political career.

A twenty something, party-lover, self-motivator, Berlusconi started up in the construction industry. He would buy and sell land in and around Milan. His break came when he acquired a vast stretch of empty farmland near the Milan airport. His fortunes turned when the landing pattern was changed and that patch of land, obtained for pennies, became an overnight fortune.

He didn’t stop at construction. Being a musician, a performer and an extrovert by nature, his attention was naturally drawn to TV. Local TV stations, limited in number, were forbidden by law to become national, avoiding competition with state-owned RAI networks. Defiant Berlusconi & Co set up local TV stations and dispatched motorcycle riders to main cities disseminating news pre-recorded on tapes.

In the end of 80s, Berlusconi and his family/friends were heading a conglomerate of companies in media, publishing and broadcasting obtained through mergers and acquisitions. Coincidentally – this contributed to Berlusconi’s soaring fortunes – Italy was on a sharp economic rise during the same period; in 1987 it became the 5th economic power in the world, with its GDP rising by more than 18%. Berlusconi crowned himself the king of Italy by becoming the owner of a star soccer team of AC Milan.

As of 2011, Berlusconi is worth an estimated $6.2bn (according to Forbes, 3rd wealthiest in Italy, 118th wealthiest in the world in 2011).

Notwithstanding his business acumen and success, Berlusconi’s fortunes in politics were not quite on par with his business achievements. On his political count there were three election victories (1994, 2001, 2008), two defeats (1996, 2006), more than 23 judicial investigations (mostly related to corruption), more than 51 votes of confidence in his government (since 2008).

Inside Italy, Berlusconi inspired awe, disgust and respect at different times. Internationally, his idiosyncratic character earned him friends and accolades in quarters where no European was previously seen. His close friendships with Russia’s Putin Lybia’s – now defunct – Qaddhafi and, at the same time, America’s Hillary Clinton were considered controversial.

Berlusconi seem to have always intermingled personal and professional relationships.

One example is information revealed by WikiLeaks about Berlusconi’s politically disguised business activities: deal arrangements on a Gazprom-Eni joint venture bringing gas from Russia to Europe; Berlusconi’s unconditional support of Putin during the Georgia-Russia conflict in 2008; decisions on Italy’s foreign policy to be based on Berlusconi’s inner circle and business associates rather than the country’s foreign interests.

Another example is his relationship Socialist PM Bettino Craxi (Berlusconi’s political mentor) who became godfather to one of Berlusconi’s children. Mr. Craxi’s brother-in-law was a mayor of Milan, which was also power center of Berlusconi’s business empire. In 1994, the recently deposed Tunisian leader Ben Ali – whose rise to the presidency was directly supported by Italy – provided refuge to Mr. Craxi.

But Berlusconi has been vocal in pointing out his political achievements to all and any who would listen. Thanks to his fiscal policies – as he boasted in international conferences in front Germany and France – Italy avoided the housing bubble, its banks did not go bust and its unemployment rate hovered around 8.5% (>20% in Spain). The budget deficit in 2011 is estimated to be circa 4% of GDP (6% in France).

However, these numbers are deceptive. The Economist’s special report revealed that only Zimbabwe and Haiti had lower GDP growth than Italy in the period of 2000-2010. GDP per head in Italy fell, and the public debt is still 120% of GDP.  Berlusconi’s Italy is 83rd in the World Bank’s “Doing Business” index, below Belarus and Mongolia, and 48th in the WEF’s competitiveness rankings, behind Indonesia and Saudi Arabia.

Thus Berlusconi leaves behind an embittered, inert and economically-degraded Italy.

His businesses are running as usual and his macho attitude and chase of women continues to date with late-night parties, which have affected his health dramatically and irreversibly.

Berlusconi’s is thus a rather sad story of how a successful businessman wouldn’t – he most probably could have if only he tried –  do the same for his country as for his businesses. I guess this makes him the most unpatriotic and un-Italian of all Italians.

As for Italy, things look grim. If the newly appointed PM Monti does not get his game together fast, Italy might yet turn to be another Greece.

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Written by Hayk

November 15, 2011 at 9:23 am

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