Historical background of Switzerland.
Switzerland was formed in 1291 by an alliance of cantons that was against the Helvetic confederation (Hapsburgs dynasty) or the Swiss confederation (Schiff,2015). There was a new adoption of a constitution in 1848. Prior that year, there were common internal conflicts but Switzerland enjoyed domestic tranquility since the mid-19th century and the formation is still unchanged. The regular citizen can participate in every political and can exercise their will through referendum initiatives. By this, citizens can make direct policy decisions at the subnational and the national level.
Switzerland is one of the smallest countries in the world neighboring Germany, France, Liechtenstein, and Italy. Also referred to as Helvetic confederation in italic and its subdivided into three smaller natural regions. It comprises the south and east (the alps), the northwest (the Jura mountains), and the central lowlands that lie between Lake Geneva and late Constance. Almost half of Switzerland is covered by the two mountains then Jura and alps. The size of Switzerland is 41,300 squares kilometers and its capital city is Burn. During the 1998 census, it was estimated that Switzerland’s population was 7,374,000 people including foreign workers. It was observed that 68% of the population lives in urban areas while 32% live in rural areas. Three languages are regarded as the national language, German, French and Italian although there are other languages like Romansch which are used by merely around 1 % off the population. On a religious basis, 46.1 % of Switzerland were roman catholic, 40% protestants, 5% other dominions and 8.9 % didn’t have any religion.
Economically, Switzerland has one of the strongest economies in the world. It is ranked as number 20 out of 196 countries with a GDP as in 2019 of $703,165 million which had grown from $1,975 million from the previous year 2018. The per capita as per 2019 was $82,294, $231 higher than in 2018 which was $82,525. Switzerland has a high standard of living which again comes 4th out of 196 countries comparing their GDP (Genberg et al.1987). The following tables (1) and (2) show the growth of GDP and the evaluation of per capita in Switzerland.
table (1) showing Switzerland GDP as from 2010
table (2) shows the growth of per capita in Switzerland
the inflation rate in Switzerland is very low compared to another inflation rate in other big economies. The core to Switzerland’s inflation rate is consumers’ prices, which shakes volatile prizes of seasonal products and fresh components, fuel, and energy went down 0.5% year on year in April 2020 which was the most since March 2018. Table (3) shows the inflation rate since 2018.
Also, the rate of unemployment in Switzerland is very low standing at 2.5% though the unemployment rate tended to increase between the 1999-2018 period and stopping at 2.5% in 2018. Table (4) show the statistics on the rate of unemployment.
3 Describe the structure of the government for this nation. Also, provide a note on their financial system
Switzerland is a semi-democratic federal republic. The legislative power is vested in two chambers, the national council, and council of state and the federal assembly. The federal council hold the executive power and comprises seven power-sharing federal councilors who are elected by the federal assembly. The federal supreme court of Switzerland heads the judicial office and the judges are elected by the federal assembly. For any constitutional change, they carry out a referendum which is mandatory where it is Switzerland tradition to have a direct democracy. If there is any change in law, an optional referendum can be carried out. The people in Switzerland acts as the protector of the rule of law.
Due to their strong economy, Swiss financial institutions are well-capitalized and can withstand severe shocks during a financial crisis, but this hasn’t stopped macro-financial vulnerabilities to deepen.
4 Describe how the RGDP/RGDP per capita of the nation changed in the past 100/200/300 years. This, of course, depends upon the availability of data. Try to provide a graph for this.
In the 19th century, Switzerland had begun to develop economically through industries and trade. During his time, the rural areas remained undeveloped and poor. by 1814, both the banking and tourism sector had started to thrive and nourishing the economy. During this time, there was an industrial revolution and mostly focused on the textile industry. The railway played a major role during this stage or revolution where it was established in1847. It is in the 20th century that the industrial sector started to grow with the existence of laissez-faire industrial policy. It was at this time that Swiss was considered the most prosperous state in Europe.
During world war II, Switzerland benefited a lot through the export and delivery of weapons to the UK, France, Germany, and other European countries. In the 1950s, the average annual GDP of 5% and the consumption of energy increased by double. There was high importation of crude oil and the value of coal as the primary energy source reduced greatly. The dependency of crude oil increased as the year went as the GDP kept declining and increasing (Flückiger,1998). The economy slowed down in the 1990s and become the weakest economy in western Europe. There occurred three-year recessions from 1991 to 1993, where the economy went down by 2%. In the 2000s the Swiss economy struggled because it was closely associated with western and US economies which couldn’t run away with slowdown. The rate of GDP reduced to 1.2 %in 2001; 0.4% in 2002 and negative 0.2% in 2003. The economy recovered in 2009 and 2010 from a downfall in the previous year with 11.9% and 14.6% respectively. in December 2009 the rate of unemployment had peaked to 4.4% and has reduced until august 2018 the rate was 2.4%.the table (5) show how the GPD and per capita has changed during those years
5 Describe their major recessionary periods, and what were the unemployment nt rates, the inflation rates, interest rates, and other macroeconomic are variables of interest.
The greatest recession that occurred in Switzerland was a three-year recession between 1991 to 1993. The economy dropped down by 2%. This increased the rate of unemployment by 4.4%. also, the inflation rates decreased during that recession period. Since all businesses were affected during this period, the interest rates typically reduced.
6 Explore the Human Development Index and the poverty profile as expressed through the Gini Coefficient. And provide a note on these indicators. Study these indices over time.
Switzerland is ranked as 2nd out of 189 countries having the highest human development category with an HDI value of 0.946 as per 2018 statistics (Sagar & Najam,1998). This was a result of an increase from 1190-2018 by a 13.7% increase. The value hasn’t increased or decreased to date. In Switzerland, the number of people living below the poverty line where an individual can’t raise $27,490 a year and $48,550 in a family of four is approximately 8.2% which can be interpreted as 675,00 people out of the whole population. Switzerland has a Gini index of 29.5% implying that there well distribution of wealth the citizens. Its only 8.2% of the population that lives below the poverty line.
Research on the public safety and health system Switzerland
Switzerland is one of the safest countries that have low crime rates. The reason behind this is because people there are educated and have jobs and therefore had to be involved in criminal activities. It is estimated that there is 53% of criminal activities in Switzerland.
The health care duties and responsibilities are divided among the federal, municipal, and cantonal levels of government (De Pietro et al, 2015). The cantonal mostly controlling and providing license, subsidizing private and public premiums, and coordinating hospital services. The federal government regulates the financing system and the municipal are particularly responsible for long term care and other social services.
Switzerland claims to have one of the best education systems in the world. Most children attend public schools and the cantons are responsible for educational services. A mandatory of 6 years in primary school begging with the age of 6, 3years in high school, and then university/college. Education is free and only required to buy school supplies.
Switzerland ranks 5th in the level of skills. It has outstanding work in areas of human capital. They have a skilled taskforce and record 68.8% as the labor force.
Research on their growth policies
Switzerland holds a strong growth development policy that ensures there is progress in the economy and also to regulate the levels of competition. Some of these policies include;
- Improving regulation for enterprise and reducing administrative burden.
- Facilitating imports to strengthen competition
- Expanding the market for companies
- Continuous amendment of agriculture policies
- Improvement and development of infrastructure.
Switzerland gets an economic boost from the large chemicals and drugs industries. The pharma industry is greatly immune to the economy and it strengthens the Swiss economy. This has been seen for years brightening the manufacturing industry.
Switzerland uniqueness
The reason for the pick of Switzerland was because of their contribution to the world of invention like cellphone, Swiss army knife but to name a few and their unique political system. The best form of government where it includes its citizens fully. It one of the most world stable democratic countries. Also, because of their dominance in the top list of the strongest economies in the world. Not to mention, its neutrality during world war II.it is also one of the most successful landlocked countries in the world. Lastly, Switzerland has the lowest number of unemployed people and has maintained that even during the financial crisis period.
References
Di Pietro, C., Amending, P., Sturdy, I., Crivelli, L., Edwards-Garavoglia, S., Spranger, A., … & Quentin, W. (2015). Switzerland: a health system review.
Flückiger, Y. (1998). The labor market in Switzerland: the end of a special case?. International Journal of Manpower.
Genberg, H., Salemi, M. K., & Swoboda, A. (1987). The relative importance of foreign and domestic disturbances for aggregate fluctuations in the open economy: Switzerland, 1964–1981. Journal of Monetary Economics, 19(1), 45-67.
Sagar, A. D., & Najam, A. (1998). The human development index: a critical review. Ecological Economics, 25(3), 249-264.
Schiff, E. (2015). Industrialization without National Patents: The Netherlands, 1869-1912; Switzerland, 1850-1907. Princeton University Press.
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