Pyrnell Christian Ramas

CyrielJores Valdez

Daniel Reynaldo Ladra

BSIS – 2

What makes Switzerland a global city?

Switzerland, officially the Swiss Confederation, is a sovereign state situated in the

confluence of western, central, and southern Europe. It is a federal republic composed
of 26 cantons, with federal authorities seated in Bern. Switzerland is a landlocked
country bordered by Italy to the south, France to the west, Germany to the north, and
Austria and Liechtenstein to the east. It is geographically divided between the Alps, the
Swiss Plateau and the Jura, spanning a total area of 41,285 km2 (15,940 sq mi), and
land area of 39,997 km2 (15,443 sq mi). While the Alps occupy the greater part of the
territory, the Swiss population of approximately 8.5 million is concentrated mostly on the
plateau, where the largest cities are located, among them the two global cities and
economic centers of Zürich and Geneva. The establishment of the Old Swiss
Confederacy dates to the late medieval period, resulting from a series of military
successes against Austria and Burgundy. Swiss independence from the Holy Roman
Empire was formally recognized in the Peace of Westphalia in 1648. Since the
Reformation of the 16th century, Switzerland has maintained a strong policy of armed
neutrality; it has not fought an international war since 1815 and did not join the United
Nations until 2002. Nevertheless, it pursues an active foreign policy and is frequently
involved in peace-building processes around the world. Switzerland is the birthplace of
the Red Cross, one of the world's oldest and best known humanitarian organizations,
and is home to numerous international organizations, including the second largest UN
office. It is a founding member of the European Free Trade Association, but notably not
part of the European Union, the European Economic Area or the Eurozone. However, it
participates in the Schengen Area and the European Single Market through bilateral
treaties. Switzerland occupies the crossroads of Germanic and Romance Europe, as
reflected in its four main linguistic and cultural regions: German, French, Italian and
Romansh. Although the majority of the population is German-speaking, Swiss national
identity is rooted in a common historical background, shared values such as federalism
and direct democracy, and Alpine symbolism. Due to its linguistic diversity, Switzerland
is known by a variety of native names: Schweiz [ˈʃvaɪts] (German); Suisse [sɥis(ə)]
(French); Svizzera [ˈzvittsera] (Italian); and Svizra [ˈʒviːtsrɐ, ˈʒviːtsʁɐ] (Romansh). On
 coins and stamps, the Latin name, Confederation Helvetica – frequently shortened to
"Helvetia" – is used instead of the four national languages. Switzerland is one of the
most developed countries in the world, with the highest nominal wealth per adult and
the eighth-highest per capita gross domestic product. It ranks at or near the top in
several international metrics, including economic competitiveness and human
development. Zürich, Geneva and Basel have been ranked among the top ten cities in
the world in terms of quality of life, with Zürich ranked second globally.

Swiss Economy – Facts and Figures

Switzerland has one of the most competitive economies in the world thanks above all to
its highly developed service sector.

 Switzerland has the second highest gross domestic product (GDP) per capita in the
world. At the end of 2015 Swiss GDP per capita stood at CHF 77,943 (approx. EUR
73,000 or USD 81,000).
 About 74% of Swiss GDP is generated by the service sector and 25% by industry. The
contribution from the agricultural sector is less than 1%.
 The European Union (EU) is Switzerland's main trading partner. Around 78% of Swiss
imports are from the EU, while 43% of Swiss exports are destined for EU countries.
 Most Swiss firms (over 99%) are small- and medium-sized enterprises (SMEs). These
are defined as companies with fewer than 250 employees.
 The public debt-to-GDP ratio in Switzerland has fallen considerably in recent years,
from 54.6% in 1998 to 34.7% in 2014.
 Switzerland has the lowest rate of value-added tax in Europe. 8% is levied on most
goods and services, 3.8% on accommodation services, and 2.5% on basic necessities
and other everyday items.
 Every year Switzerland spends close to 3% of its GDP, more than CHF 18.5 billion
(around EUR 15 billion or USD 20.6 billion), on research and development . Over
three-quarters of this funding comes from the private sector.
 The currency of Switzerland is the Swiss franc. One Swiss franc is equal to 100
centimes. It is abbreviated to CHF, SFr. or Fr.

Switzerland, a country that espouses neutrality, is a prosperous and modern market

economy with low unemployment, a highly skilled labor force, and a per capita GDP
among the highest in the world. Switzerland's economy benefits from a highly
developed service sector, led by financial services, and a manufacturing industry that
specializes in high-technology, knowledge-based production. Its economic and political
stability, transparent legal system, exceptional infrastructure, efficient capital markets,
and low corporate tax rates also make Switzerland one of the world's most competitive
economies.
The Swiss have brought their economic practices largely into conformity with the EU's to
enhance their international competitiveness, but some trade protectionism remains,
particularly for its small agricultural sector. The fate of the Swiss economy is tightly
linked to that of its neighbors in the euro zone, which purchases half of Swiss exports.
The global financial crisis of 2008 and resulting economic downturn in 2009 stalled
demand for Swiss exports and put Switzerland into a recession. During this period, the
Swiss National Bank (SNB) implemented a zero-interest rate policy to boost the
economy, as well as to prevent appreciation of the franc, and Switzerland's economy
began to recover in 2010.

The sovereign debt crises unfolding in neighboring euro-zone countries, however,

coupled with ongoing economic instability in Russia and other eastern European
economies continue to pose a significant risk to the Swiss economy, driving up demand
for the Swiss franc by investors seeking a safe-haven currency. In January 2015, the
SNB abandoned the Swiss franc’s peg to the euro, roiling global currency markets and
making active SNB intervention a necessary hallmark of present-day Swiss monetary
policy. The independent SNB has upheld its zero interest rate policy and conducted
major market interventions to prevent further appreciation of the Swiss franc, but
parliamentarians have urged it to do more to weaken the currency. The franc's strength
has made Swiss exports less competitive and weakened the country's growth outlook;
GDP growth fell below 2% per year from 2011-17.

In recent years, Switzerland has responded to increasing pressure from neighboring

countries and trading partners to reform its banking secrecy laws, by agreeing to
conform to OECD regulations on administrative assistance in tax matters, including tax
evasion. The Swiss government has also renegotiated its double taxation agreements
with numerous countries, including the US, to incorporate OECD standards, and is
openly considering the possibility of imposing taxes on bank deposits held by
foreigners.