Posts Tagged ‘Direct democracy’

Swiss economy grows – with no budget-cuts, no stimulation package and lots of foreigners

May 31, 2012

Switzerland’s economy grew by 0.7% in the first quarter of 2012, after 0.5% and 0.3% in the last two quarters of 2011. The Swiss did this without having first to rein in excessive government spending. Nor is the government running a big economic stimulation programme.

Switzerland’s direct democracy, which provides for citizens to vote on practically any issue affecting their lives, may be a factor. Voters know that if they take the easy way in spending, they will have to take painful decisions later. There is no escape from the consequences and nobody else to blame. This could be why budgets do not get out of control.

Unlike truculent Britain, Switzerland is pragmatic in its relations with European neighbours. It does not belong to the European Union, but has bilateral agreements aligning it with most of EU legislation.

Switzerland belongs to the Schengen agreement, so its frontiers are open to EU citizens. With a few temporary exceptions, Europeans can freely immigrate to work in Switzerland. As a result, there is a plentiful supply of highly-qualified workers. Local analysts consider this is one important reason why Swiss companies succeed well in export markets.

As if to underline the point, the latest report from the International Institute for Management Development (IMD) ranked Switzerland third behind Hong Kong and the United States in economic competitiveness. Germany is ninth and the rest of Europe nowhere.

Responsible, steady and open to the world – perhaps this tiny country has lessons for all of us.


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