In economic and political terms, Switzerland is doing better than almost any other nation in the world. What does it do better than others? What’s behind its competitive edge? And how can it stay on top?
German economist and exponent of classical liberalism Gerd Habermann offers his take on a small but extraordinary country. Whether we are comparing global business locations and the civil liberties they enjoy, considering the number of Nobel Laureates or the quality of academics, entrepreneurs, artists and authors, Switzerland has long occupied the topmost echelons.
For the fourth time in a row, the World Economic Forum has declared Switzerland the most competitive country in the world – ahead of Singapore, Finland, Sweden and the Netherlands – placing the country first in the categories of innovative capacity and labor market efficiency and lauding its business sector for its close collaboration with its universities. Its national institutions are among the world’s most effective and transparent. Though a small nation, Switzerland boasts a midsized economy. Internationally, it ranks 20th in gross domestic product, ninth in export statistics and fifth in export of services.
Most importantly, it is one of the world’s wealthiest countries. Even in terms of the biggest economic policy challenges we face today – national debt and unemployment – Switzerland comes out on top. While once-stable countries teeter on the brink of insolvency, Switzerland has managed to reduce its national debt drastically over the past 10 years, from 55 percent to roughly 35 percent, measured against its gross domestic product.
What are the reasons for this success? What does Switzerland know that no one else does? I see seven ways in which the country excels.
- Small Size
- Genuine Democracy
- Decentralization
- Subsidiarity Principle
- Non-Professional Politicians
- Middle-Class Mentality
Switzerland is consciously middle-class – and that is an advantage. It did not go through the devastating catastrophes of the two world wars, or suffer inflation as a result, as Germany did. Even today, it stands as a model of moderation, mainstream thinking and deliberation, for business sense, a no-nonsense attitude and realism. In Switzerland, you have not just attorney-client and doctor-patient privilege, pastoral secrecy, and confidentiality of correspondence and communications – you also have banking confidentiality, an expression of respect for the privacy of its citizens and their property.
Switzerland is able to offer broader guarantees for private property and independence and provide more opportunities on the municipal and cantonal level than many major states. It is only thanks to this historical-political tradition and balance of interests that the confederation can even be called a single entity.