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Switzerland's Economy: The Swiss Phenomenon Essay

2069 words - 8 pages

“One of the world’s countries least blessed with physical resources has come to be, arguably, the most successful economy in the world, as well as a nation with pervasive religions and linguistic divisions that enjoys profound social tranquility.” (Fossedal, 2002)
Switzerland, despite being only the size of Vermont and New Hampshire combined, and having a desolate amount of natural resources, is one of the richest countries in the world. Indeed, Switzerland boasts more than army knives and chocolate; it claims a GDP per capita of $42,600, among the highest in the world. (Central Intelligence Agency, 2011) Its market economy boasts low unemployment, a highly skilled labor force, high wages, and an extremely profitable export trade market.
Switzerland’s long history of political stability, neutrality in world affairs, and direct democracy system has created the backbone to what has been called “the Swiss phenomenon” by National Geographic. Switzerland’s economy is built on a highly skilled labor force and a strong service sector. Switzerland’s manufacturing industry specializes in technological innovation and knowledge-related production. Its financial center is an economic marvel of the world and is well-respected for its history of secrecy. Due to its small domestic market, Switzerland depends heavily on exports for the success of its economy and the country is competitive in foreign trade. In 2008, Switzerland experienced an economic crisis, but has recovered and again boasts a strong and stable economy. The Swiss economy has many important features that are important for other countries to note as Switzerland’s economy is climbing the rungs of the economic ladder.
The roots of modern Switzerland began in 1291 with the Swiss Confederation of three cantons, which formed as a defensive alliance. In 1815 at the Congress of Vienna, Switzerland’s borders and neutrality policy were established and in 1848 the confederation was replaced with a centralized federal government with the creation of the Swiss constitution. The constitution was revised in 1874 and was made to allow for direct democracy, which has since become a foundation of the Swiss government. (BBC News, 2011)
Switzerland, a Federal republic, is comprised of 26 cantons, which are member states of the Swiss Confederation and serve as administrative divisions. The Swiss government is comprised of judicial, executive, and legislative branches (including a bicameral Federal Assembly consisting of the Council of States, 46 seats, and the National Council, 200 seats). The president, appointed by parliament yearly, rotates among members of the National Council. (The Federal Authorities of the Swiss Confederation, 2011)
The direct democracy system has a long history in Switzerland. The Swiss constitution defines in some detail all areas subject to federal legislation, with the details being left up to the individual cantons. The Swiss constitution may be changed only if an overall...

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