There is a small fishing industry. Italy's economy has been gradually diversifying, shifting from food and textiles to engineering, steel, and chemical products. Although many of Italy's important industries are state-owned, the trend in recent years has been toward privatization. Italy, however, is still greatly dependent on oil to meet its energy requirements, and most of it must be imported. Italy has a large foreign trade, facilitated by its sizable commercial shipping fleet.
Tourism is a major source of foreign exchange.
The chief trade partners are Germany, France, the United States, and Great Britain. The nation has greatly improved its highway system in the postwar years, especially in the South. Italy's economy has deceptive strength because it is supported by a substantial underground economy that functions outside government controls. Despite significant government progress in the 1990s in its war against organized crime, the Mafia continues to exert a strong influence in S Italy, often hindering governmental programs aimed at integrating the region more fully economically and politically into the national scene. The spread of drugs has become a major problem in Italy, which has the highest incidence of drug addiction in Europe.