How Switzerland Get So Rich

Switzerland is known for its beautiful tourist sites and Banking system.

In 2021, Switzerland’s nominal GDP was 812 billion dollars, with a population of only 8.6 million people.

Switzerland’s GDP per capita has gone from 1.7k dollars in 1960 to 93k dollars in 2021.

It is one of the wealthiest economies measured by GDP per capita.

In 2021, Switzerland was ranked the most innovative country in the world by the World Intellectual property organization.

Switzerland is a hugely diverse country.

It has four official languages: German, French, Italian, and Romansh.

African countries have vast amounts of natural resources and provide low taxes to corporations, But despite this, many of them are poor economies.

Switzerland has little to no natural resources, but it is one of the wealthiest economies in the world.

So how did a landlocked economy like Switzerland get so rich?

A Country With No President

Every country has a president that is responsible for certain critical decisions in the country.

But in Switzerland, no one president makes decisions for the country’s direction.

They vote for a federal parliament similar to congress in the USA.

This parliament will choose seven members that will become similar to secretaries or ministers.

All of the seven chosen members will have the same power.

Every year one of the seven members takes a turn being the international representative for Switzerland, We may call that person a president.

But that person dont has more power than other members.

Instead, Every member has the same power as every seven chosen members.

In most countries, the president is a powerful individual who solely makes decisions about the country’s direction.

In Switzerland, all the decision-making is done collectively with seven chosen members.

Switzerland is a perfect example of not giving too much power into the hands of one person, which can ruin a country’s economy.

This unique political system has worked miraculously in Switzerland, which has yielded significant economic growth.

Miracles of the Free Market System

Unlike countries that recently adopted a free market system two or three decades ago.

Switzerland has been an advocate of free markets for a long time.

It is a landlocked country with little to no natural resources, which made it necessary for Switzerland to trade freely across countries because trade is the only thing that can bring prosperity to Switzerland’s economy.

It had signed free trade agreements with almost every country in the world.

But don’t make the mistake of thinking that the Swiss are a free market system with no protectionist policies.

Switzerland subsidizes its agriculture as much as the European Union or America does.

Switzerland had adopted free trade since 1874, while the rest of the world started just a few decades ago.

It was a crucial decision that had turned this nation into an advanced economy despite having neither natural resources nor a large population.

Neutrality

Switzerland remains one of the few neutral countries in the world.

It did not participate in any armed conflicts for hundreds of years.

Switzerland is a rare country that was neutral in both world wars and even stayed out of world war 2, despite most of its population being against Hitler.

The rest of the European countries had sacrificed thousands of citizens and their economies during world war two. Switzerland’s economy remains resilient.

Unlike many European countries, Switzerland’s infrastructure was the same as in the prewar period.

It made Switzerland one of the most stable political and economic environments, which attracted many international businesses.

One of the biggest enemies of economic growth is war.

Switzerland was able to achieve this miraculous growth by avoiding wars.

Switzerland’s economy began to improve during world war two because of the increased demand for its weapons which it sold to the nazis and allied powers.

From 1940 to 1944, wartime sales amounted to 900 million Swiss francs.

Mysterious Swiss Banks

Most people see swiss banks as the safety net for wealthy individuals who can store their funds in their swiss accounts to protect their wealth.

These wealthy individuals know that no matter what happens to them in their home country, their money will be safe in their Swiss accounts.

If there is a global financial crisis, their money will be safe.

Switzerland has a long history of bank secrecy reaching back to the 1700s and starting as a way to protect wealthy European banking interests.

The swiss banking law of 1934 made it criminal for swiss banks to disclose the name and details of an account holder.

This protection is the primary reason that makes Swiss bank accounts attractive to wealthy individuals who want to hide and protect their wealth from any danger.

The Swiss economy has been one of the most stable economies in the world, which is one of the reasons wealthy individuals want to keep their money in that country rather than their home country, which may have a more unstable economy and political system.

But unlike what you see in movies, Switzerland has Swiss anti-money laundering regulations, which require depositors to provide proof regarding the origin of the fund they are depositing in their bank accounts.

Today, Switzerland is not a destination for people who want to place assets acquired through illegal activities.

Swiss law requires banks to have high capital requirements and strong depositors protection, which ensures that any deposits will be safe from financial crises or conflicts.

Swiss law also prevents banks from disclosing any information regarding an account without the depositor’s permission.

The only exception is when a government agency claims that a person is involved in some severe crime or fraud.

The financial sector is one of the crucial industries of the Swiss economy.

It employed more than 222,000 people and generated a value of 70.9 billion Swiss francs in 2019, equivalent to 10 percent of Switzerland’s overall economy.

High-end Quality Products

Switzerland is one of the most expensive countries, But its people are willing to pay a higher price for high-end quality products over cheap imports.

Whether it is a high-end quality watch brand like Rolex or pharmaceutical giant Roche.

They are known all around the globe for quality products, and people are willing to pay them a higher price for better quality.

Most products made in Switzerland are usually high-end quality products.

This focus on quality over cheap products has made Swiss companies so popular and famous.

It also played a crucial role in their economic development as their companies brought more revenue into Switzerland from around the world, which also helped them grow more and employ more swiss labor force.

Swiss companies are now so big that they do not just employ Swiss people but also hire people from around the world.

Swiss multinational companies like Nestle, Rolex, Roche, Novartis, and Glencore, to name a few, play a role in the Swiss economic miracle and also build a reputation of Switzerland as a high-end quality producer.

Conclusion

Today, Switzerland has become known for its wealth and prosperity.

Historically, economic and political policies have helped Switzerland to be the most advanced economy in the world.

Switzerland becomes so rich because of its stable political and economic system.

Most wealthy individuals place their money in Switzerland because they trust the system and its neutrality.

Trust is one of the most essential things that Swiss financial institutions and governments have, which played a crucial role in their economic growth.

Sources

Originally On Medium

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