Switzerland: An Economic Overview
Abstract
Switzerland is one of the most prosperous countries in Europe. With a stable government, sound economy and highly skilled labor force and strong tourism, Switzerland is driving force in the world economy. However, in the coming years Switzerland will face three challenges that threaten their positive economic outlook, they are 1) agriculture protectionism,
2) Non membership in the EU and 3) aging population.
This paper takes a brief look at these three factors and how they will effect Switzerland's future economic growth and the country's well being.
Switzerland has one of the world's most stable economies. Because of the country's small size and highly specialized workforce, exports and trade are key to Switzerland's economic livelihood.
In 2006, Switzerland's real GDP was 3.2% with exports exceeding imports by $9.6 billion (a trade surplus). The machinery, metals, electronics, and chemicals sectors are known for precision and quality and they account for well over half of Switzerland's export revenues. The country is approximately 60% self-sufficient, taking only 7.5% of it imports from the U.S. With a low inflation and unemployment rate (1% and 2.5% respectively), Switzerland is positioned to be a powerhouse in the world's economy. The Swiss economy earns approximately 50% of its corporate earnings from exports, of which, about 70% are destined for the EU market (The World Factbook, 2007).
Switzerland is also one the world's most prosperous countries in terms of private income. In 2003 the median household income in Switzerland was an estimated $54,000 (U.S.), 26% higher than the 2003 U.S. median income of $43, 000. They also consistently rank high on quality of life indices such as high concentrations of computer and internet usage per capita, high insurance coverage per individual, and high health care rates.
Switzerland is headquarters to the World Health Organization (Geneva) and several major retail, pharmaceutical, banking and food corporations such as Bally Shoe Company (high end designer shoes), Credit Suisse(banking), Roche Holding AG(pharmaceuticals), Nestle' foods, Rolex(high end watches), Novartis( pharmaceuticals) and one the world's largest banks, UBS AG with $9.4 billion in revenues(2006), (Top 500 Swiss Companies, 2006). An amazing accomplishment for a country that is slightly less than twice the size of New Jersey.
EU Membership
The Swiss federal government is greatly divided over joining the European Union (EU). In a March 2001 referendum 70% of Swiss voters rejected steps toward EU membership (The World Factbook, 2007).
The economics of Haiti has deceased in the last 4 years after the devastating earthquake that struck it 4 years ago. The Haiti economy has become very poor and one of the poorest country in the south, Central America and Caribbean region making it ranked 24 out of 29 countries in this area and its overall score is below average. Haiti’s economic freedom is 48.1 making it economy the 151st freest country while in the last several years Declines in the management of government spending, freedom from corruption, and labor freedom make its overall score 2.6 points lower than last year. Recovering from the disastrous earthquake in 2010 with the support of the U.S. recovering efforts “Haiti’s post-earthquake reconstruction efforts continue, assisted by substantial aid from the international community. Governing institutions remain weak and inefficient, and overall progress has not been substantial. The parliament has not renewed the mandate of the Interim Haiti Recovery Commission, which had been tasked with overseeing reconstruction efforts but was unpopular.”( .heritage.org). The open market of Haiti trade weighted to be 2.1 this is because the lack of tariffs hamper the trade freedom of Haiti. Foreign investors are given national treatment but the investment is small and the financial sector is remained underdeveloped and does not provide any adequate support.
It is well known that after World War II, states began to move away from the trends of nationalism that had brought on conflict in the first place. Across large parts of Europe, there is instead great support for federalism and get support for integration and interdependence. In 1952, the European Coal and Steel Community was created, followed by the establishment of European Economic Community in 1957. With allies being made and different treaties and agreements being signed, Europe was definitely becoming a ‘federation’. In 1973, Britain joins the EEC along with Denmark and Ireland. The European Union is then formally established by the Maastricht in 1993 and gains its 28th member, Croatia by July 2013. When a referendum was taken in the UK regarding joining the EU the vote was two-to-one in favour. The benefits of joining of the EU were clear. The UK would benefit not only in an economic sense but also politically and socially. However, in recent times, opinions have changed. There is now debate as to whether the UK should remain n member of the EU. More and more people are speaking in favour of the United Kingdom leaving the EU and standing on its own. While there are persuasive arguments for and against, it could still be argued that the argument against...
Agriculture is of major importance to the economy of Canada as it represents 1.5% of gross domestic product (GDP). “Agriculture is an industry that, in the absence of government farm programs, is a real-world example of the perfect-competition model” (McConnell, Brue and Flynn, 2012).
... middle of paper ... ... But, much more is needed for these countries to fully reap the economic benefits of agriculture and to truly have economic growth they have to change their input from agriculture to industries. By reducing protection developed countries give poor countries the opportunity to trade, but lower tariffs and investments along with reduced protection is the only thing that will truly help these countries to overcome obstacles keeping them from trading.
In 1995 Austria joined the European Union (EU), and in 1999 they joined the European Monetary Union. The use of a common currency the “Euro” has facilitated trade and promoted economic stability for U.S. companies to manage pricing, balance accounts, and move products into Austria and throughout the EU member nations (“globaledge”, 2003). An unfavorable exchange rate for U.S. exporters turned positive in 2003 making the U.S. able to compete on more favorable terms in the near future.
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes.
The domestic market is relatively small, but the countries financial center is mainly international. In 2009 there was considered to be 152 banks, with over 27,000 employees. Another big resource of Luxembourg is the Steel industry, founding of the Arbed company in 1911. The iron and steel industry is located on the French border. Steel accounts for almost 29% of all exports and 3.9% of the work force. The relative decline in the steel sector arose when Arbed became Arcelor, taken over by Mittal Steel the largest steel producer in the world. Tourism is another important part of the national economy, bringing in about 8.3% of GDP in 2009. Luxembourg welcomes over 900,000 travelers a year. Luxembourg has a small agricultural sector, which most farmers are working in dairy and meat production. Agriculture has 0.3% composition of GDP, while industry has 11.3% and services at 88.3%. Products of the agriculture industry are grapes, barley, oats, potatoes, wheat, and fruits. Some of the industries are composed of banking and financial services, construction, iron, metals, and steel, chemicals, engineering and tourism. The labor force of Luxembourg is around 265,800, which excludes foreign workers, having nearly 150,000 workers form France, Belgium and
1: To protect the quality of life for people we need to first change how countries see growth. To change the idea of growth for a country might be difficult, but certainly it would be more accurate on what everyone t...
Kopel, David , and Stephen D-Andrilli. "What America Can Learn From Switzerland." guncite. 13 Feb. 1990. Web. 12 Jan. 2014.
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