SWISS INSULARITY: A MODEL, MAYBE

Reputed for its cheese, mountains and banks, Switzerland today represents a country whose long cherished culture of parochialism could serve as a template for the rest of the world. A small nation of about 7.5 million inhabitants, Switzerland boasts of a thriving gross domestic product and a booming economy. As of 2010-2011, Switzerland topped the overall ranking in the Global Competitiveness Report of the World Economic Forum. Even as many nations in the EU zone grapple with a potential economic crisis many economic analysts have begun to look at Switzerland as a case study for emulation.

Switzerland interests me, however, not just for its wealth but its traditions ranging from her neutrality stance since 1815 to her insistence on maintaining the Swiss Franc in spite of the allure of the Euro. When key foreign policy issues is concerned Switzerland invariably resorts to an isolationist mode. This may have earned it a lot of flak like when it refused entry of refugees during the international wars but it has evidently served the nation well especially when viewed in the light of flagging world powers like USA and Britain. So the question is whether insularity is the ideal foreign policy every nation should adapt. To make a sweeping generalization from one nation is by no means a fair approximation. For instance, it would be imprudent to compare Israel surrounded by many hostile nations with Switzerland snuggling between France and Germany. So many other factors have to be weighed in before a logical conclusion can be reached. The foregoing does not in any way detract from the lesson that can be gained from studying this land-locked European nation.

Today the USA spends close to $700 billion annually on its military. Many American service men are strewn all over the world on military interventions or peace-keeping missions. Recently, the American president pledged increased military presence in the Pacific. Laudable as this may sound this belligerent airs which the American government asserts is having a huge toll on the American economy. Before any nation makes plans for foreign exploits, it is expedient it considers its own resources back home. America has ignored this rule, biting far more than it can chew. Not Switzerland. It spends less than $5 billion on its military and has maintained neutrality that exempts it from armed combats. From the American point of view Switzerland is not doing the world any favours but again from the American point of view the US spending is neither doing America nor, arguably, the world any favours. It would be sadistic to watch dictators across the globe kill and oppress subjects while we idly watch on but military intervention which USA exerts so flamboyantly is not the most efficient (economically and otherwise) stratagem to deploy. Switzerland is always at the fore of financial sanctions considering its financial institutions manage large amount of foreign assets. This action has helped cripple many despotic regimes. It may not be the most effective measure but when viewed from the entire context of national versus international interests it may yet be the most agreeable scheme to follow.

The EU was founded to serve the function of making war impossible and to make Europe economically vibrant. While the EU has largely fulfilled the role of the former, as trying times in 2011 Greece show there may be worse things than war. The euro is at the brink of collapse due to a multiplicity of factors from lax financial regulations to irresponsible fiscal policies of member states. With all the promise of a united Europe, Switzerland turned down the offer and we might just as well say it dodged a bullet. Safe in the haven of a stable Swiss Franc, Switzerland’s current anxiety is the value increase of its currency against the Euro which would make its exports to other countries more expensive and lead to trade deficit. Arguably, that is a better problem to have than the fear of government collapse which is a looming threat to Greece. Italy, once a marketing model, must have a chaperone in the IMF before it can make crucial financial decisions. Here again Switzerland demonstrates insularity has an advantage over outright internationalism.

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