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2021-12-27 17:46:35

Main reasons why Switzerland is so rich

Main reasons why Switzerland is so rich

The geographical location of a small European country is not the most profitable: there is no access to the sea, useful resources on the territory of the country suitable for extraction and sale are not as much as we would like, fertile soil is not enough. Nevertheless, Switzerland constantly occupies the highest lines in the rankings when it comes to wealth and standard of living. Doormen are among the richest people in the world, the country's economy has unimaginable means.

Even 150 years ago, the Swiss state was one of the poorest among European countries. What influenced such a rapid enrichment of the country? Contrary to popular belief, it's not about the famous banks and gold. The true reasons for the wealth of the Swiss are different.

Why is everyone talking about Swiss banks and Nazi gold?

The history of cooperation between Swiss bankers and the Nazi government is shrouded in many mysteries and continues to be the subject of numerous disputes and conspiracy theories. According to experts, there are about $ 4 billion in accounts in local bank branches. The amount is large, against the background of the entire GDP of the country, which is 1.2 trillion, it seems quite insignificant.

Historically, banks in Switzerland have played a significant role in the country's economy, but never predominantly. And after the global economic crisis in 2008, this importance of banks began to decline. If earlier huge capitals of politicians flocked to Swiss offshore companies, now there are many other countries ready to accept depositors' money.

The True Causes of the Country's Wealth

The Swiss government understood that it would not be possible to achieve wealth due to natural conditions, so it was necessary to find other ways to attract money. And they succeeded!

Highest level of education

The unusual tradition of passing on skills from generation to generation has allowed the country to provide itself with many great masters in any craft. Itinerant journeymen are highly valued, because, cooperating with him, you can be sure of the virtuosity of the work.

Territorial-state structure of Switzerland – federalism

Historically, different areas of the Swiss state differ in culture, mentality and way of life. By dividing the country into 26 cantons – areas with autonomy – the government made the right decision. After all, having received the opportunity to make important decisions that benefit the whole country, residents of individual cantons do not fall under the framework that could be under a unitary state.

Overvaluation of the local currency leaves only the strongest producers on the market

It is extremely problematic to produce goods for export with such an overvaluation of francs, because not everyone will be able to sell goods at a highly inflated price. Therefore, the most competitive companies remained on the Swiss manufacturers' market, capable of providing a product that can both cover costs and bring considerable profit to the state's economy.

The famous neutrality of the Swiss

The last war in which the country took part was a civil conflict on the basis of religious contradictions. Switzerland's involvement in both World Wars was avoided, retaining a seemingly impossible neutrality. Without openly accepting either side, the country did not have to spend a significant part of the budget on arming the army and rebuilding cities destroyed by fighting and bombing.

Direct democracy in the country

Residents of the state have the opportunity to directly participate in the introduction of new laws into the country and in the introduction of key changes. Every 4 years, a list of important issues, the fate of which depends on the population, is submitted for general discussion.

The usual president for other countries is also not here - his role is performed by seven ministers, each of whom takes turns trying on the role of the head of the country. The peculiarities of the political life of Switzerland are one of the main reasons for solvency, because its inhabitants can directly influence the adoption of laws.

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Egor Eremeev
Current material has been prepared by Egor Eremeev
Education: Westminster University (Business & Management), London.
Egor studied and lived in the UK for 8 years and graduated from the university of Westminster. He is currently the co-founder and the director of business development at Smapse Education and personally visits foreign schools and universities, interviews students studying in those institutions.
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