The Economy In Switzerland Economics Essay

The Economy In Switzerland Economics EssaySwitzerland is a peaceful, wealthy, and current market economy with low unemployment, a highly expert labor force, and a per capita GDP among the highest in the world. Switzerlands economy benefits from a highly developed service field, led by financial services, and a manufacturing industry that specializes in high-technology, knowledge-based production. Its scotch and political stability, transp bent legal system, exceptional infrastructure, efficient capital markets, and low corpo straddle tax rates also sort out Switzerland one of the worlds nearly competitive economies. The Swiss subscribe brought their economic practices largely into conformity with the EUs, to enhance their international competitiveness, but some trade protectionism remains, particularly for its half-size agricultural sector. The fate of the Swiss economy is tightly linked to that of its neighbors in the euro zone, which purchases half of all Swiss exports. The g lobal financial crisis of 2008 and resulting economic downturn in 2009 stalled export demand and put Switzerland in a recession. The Swiss National Bank (SNB) during this period effectively implemented a zero-interest rate policy to set ahead the economy as well as prevent appreciation of the franc, and Switzerlands economy recovered in 2010 with 2.7% growth. The sovereign debt crises currently unf middle-ageding in neighboring euro-zone countries coiffe a significant risk to Switzerlands financial stability and argon driving up demand for the Swiss franc by investors seeking a safehaven currency. 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 francs strength has made Swiss exports less competitive and weakened the countrys growth outlook GDP growth fell to 2.1% in 2011. Switzerland has also come under increasing pressure from individual(a) neighboring countries, the EU, the US, and international institutions to reform its banking secrecy laws. Consequently, the government agreed to conform to OECD regulations on administrative assistance in tax matters, including tax evasion. The government has renegotiated its double over taxation agreements with numerous countries, including the US, to incorporate the OECD standard, and in 2011 it reached deals with Germany and the UK to resolve outstanding issues, particularly the possibility of imposing taxes on bank deposits held by overseasers. These steps will have a lasting impact on Switzerlands long history of bank secrecy.DefinitionThis entry briefly describes the type of economy, including the degree of market orientation, the level of economic development, the most important natural resources, and the unique electron orbits of specialization. It also characterizes major economic events and policy changes in the most recent 12 mon ths and may include a statement almost one or two key future macroeconomic trends.SourceCIA World Factbook Unless otherwise noted, information in this page is entire as of July 26, 20121. IntroductionAbout two third of the area of Switzerland is covered with forest, lakes and mountains. Since Switzerland has no mineral resources, it must import, process and resell them as products. Services are the most important part of the economy. This includes banking, assurances and tourism.agricultural is also an important part of the economy. But the production of the Swiss farmers does not fulfill the needs of all good deal, so Switzerland must rely on imported goods from other countries.2. The three sectorsThe economy in Switzerland is divided into three sectorslandwirtschaft(agriculture)industrie (industry)diensteistungen(services)Less than 10% of the population is employed in thelandwirtschaft(agriculture), also considered theprimary sector. This sector is strongly supported by the gov ernment.About 40% of the population is employed in theIndustrie, Gewerbe and Handwerk(industry, trade and handicraft), also considered thesecondary sector. This sector includes theMaschinen- und Metallindustrie(machine and metal industry),Uhrenindustrie(watch industry) and theTextilindustrie(textile industry). All of them export much of their products to foreign countries and suffer a lot because of the expensive Swiss Franc. The fact that Switzerland does not belong to the European conjunction additionally slows down the Swiss exports.More than 50% of the population is employed in theDienstleistungssektor(services), also considered thetertiary sector. This sector includes banking, assurances, tourism and so on. Banking is one of the most important businesses in Switzerland. Many of the banks have started to use the Internet for business purposes. For more information, see thedirectory of Swiss banks.3. Foreign tradeSwitzerland is one of the countries with the highest contribution of the foreign trade to the gross inland product. The most important trade partners are the so called industrialized countries. In 2003, 77.2% of the exported goods were shipped to and 89.0% of the imported goods came from those countries. In particular, 60.3% of the goods were shipped to and 81.7% of the imported goods came from countries which belong to the European Union (EU).3.1 nigh important trade partnersThe give ins below show the names of the countries and the values of the imported and exported goods in million Swiss Francs (1million = 1000000) for the year 2003. sheer(a)CountryImportRankCountry export1Germany412001Germany277002Italy138002USA138003France137003France115004Netherlands64004Italy110005Austria54005Great Britain6200USA54006Japan51006Great Britain49007Austria44007Ireland4700Netherlands44008Belgium36008Belgium26009Japan26009Ireland9003.2 Most important trade goodsThe table below shows the value of the imported and exported goods in million Swiss Francs (1million = 1000000) for the year 2002.NoGoodsImportNoGoodsExport1Chemicals272561Chemicals448462Machines259252Machines316933Vehicles128433Precision tools, watches, jewelry226024Agriculture and fishery98644Agriculture and fishery42195Metals93295Vehicles37426Textile, clothing and shoes86256Textile, clothing and shoes37267Precision tools, watches, jewelry81677Leather, rubber, plastic36478Energy53698Paper32759Paper47409Other174610Other451610Metals97511Leather, rubber, plastic426411Stone, soil78012Stone, soil222912Energy3634. CurrencyThe Swiss currency is calledSchweizerfranken(Swiss Francs) or shortFranken. One hundredRappenmake up one Swiss Franc.CHFis the ISO representation for Swiss francs however, the old notation sFr. is still used quite often.This is a5 Frankencoin, called afnfliberThe currency is available in the following coins1 Rappen (Rppler, no womb-to-tomb in use)2 Rappen (Zweirppler, no longer in use)5 Rappen(Fnfer)10 Rappen(Zehner)20 Rappen(Zwanziger) Franken(Fnfziger)1 Franken(Fr nkler)2 Franken(Zweifrnkler)5 Franken(Fnfliber) a long time ago, on that point used to be afive francs bill(includes images of approx. 220kB)Imagesof all coins.The currency is available in the following bills10 Franken (images of current, previous and older bill, approx. 400 kB)20 Franken (images of current and previous bill, approx. 450 kB)50 Franken (images of current bill, approx. 220 kB)100 Franken (images of current, previous and older bill, approx. 710 kB)200 Franken (images of current bill, approx. 270 kB)1000 Franken (images of current bill, approx. 330 kB)To convert currency, we suggest theoanda online currency converter.5. constitute of life-timeNow and then I receive questions about the cost of living in Switzerland. Even tough it is difficult to compare the costs of living between various countries, I try to list some indications that may give an idea what it means to go along with your salary in Switzerland.5.1 put back ratesI remember times when I was young (some 35 years ago), when one US dollar (USD) cost more than four Swiss Francs (CHF) and one German play off cost more than one Swiss Franc. Today (May14, 2010), one US dollar costs approximately CHF1.11 and the German Mark has been replaced by the Euro (EUR). One Euro corresponds to about CHF1.40. These ever changing exchange rates are one fuss in comparing costs of living.5.2 SalariesAnother problem in comparing the costs of living is the amount of money one has available to spend, also known as the salary. This is particularly difficult because most people do not like to talk about it, at least here in Switzerland. Of course, the actual salary depends on the procreation, the position within the phoner or organization, the duration of the employment etc. The following table is a very rough approximation of a yearly income depending on the level of educationtype of educationsalary rangeapprenticeship (typically 3 or 4 years)CHF 40000 80000AcademicCHF 70000 150000lower managementCHF 120000 250000higher managementCHF 200000 ++5.3 ExpensesAgain as a very rough approximation, a Swiss family spends its income as follows25-35% for rent of a condominium or house10-20% for assurances (health, liability, theft, car), health care and savings deposits15-20% for food (at menage and in eating places)20-40% for other expenses (non-food, car maintenance, phone bills, vacations, recreational activities)5-15% for taxes (Taxes vary across the different cantons quite a lot)5.4 Cost of some food goodsThe following table is a list of some food goods and their approximative cost as of summer 2010 in the area of Zrich.GoodsAmountApproximative cost in CHFBread in a store1 kg3.00 4.00Milk in a store1 liter2.00Coffee or golf tee in a restaurant1 cup (no refill)3.50Softdrink in a restaurant0.2 or 0.3 l3.50 4.00Hamburger in fast food restaurant200 gr5.00A meal in a family restaurant without beverages1 person15.00 30.00If you are not familiar with our metric unit system, seeexplan ations about metric versus U.S. unit systems5.5 Cost of some non-food goodsThe following table is a list of some non-food goods and their approximative cost as of spring 2010 in the area of Zrich.GoodsAmountApproximative cost in CHFDiesel1 liter1.85 (changes daily)Gasoline1 liter1.70 (changes daily)Cigarettes1 relative majority5.00Compact Disk (music)1 CD10.00 25.00Jeans1100.00 150.00Building land1 m400.00 1200.00House (without land)4 . 5 rooms400000 1000000++If you are not familiar with our metric unit system, seeexplanations about metric versus U.S. unit systems