Best Countries to Live In - Part 4 : Switzerland

SWITZERLAND

CAPITAL: Bern

FLAG: The national flag consists of an equilateral white cross on a red background, each arm of the cross being one-sixth longer than its width.

ANTHEM: The Swiss Hymn begins "Trittst in Morgenrot daher, Seh' ich dich in Strahlenmeer" ("Radiant in the morning sky, Lord, I see that Thou art nigh").

MONETARY UNIT: The Swiss franc (SwFr) of 100 centimes, or rappen, is the national currency. There are coins of 1, 5, 10, 20, and 50 centimes and 1, 2, and 5 francs, and notes of 10, 20, 50, 100, 500, and 1,000 francs. SwFr 1 = $0.81301 (or $1 = SwFr 1.23) as of 2005.

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year, 1–2 January; Labor Day, 1 May; Christmas, 25–26 December. Movable religious holidays include Good Friday, Easter Monday, Ascension, and Whitmonday.

TIME: 1 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

A landlocked country in central Europe, Switzerland has an area of 41,290 sq km (15,942 sq mi), extending 348 km (216 mi) e–w and 220 km (137 mi) n–s. Comparatively, the area occupied by Switzerland is slightly less than twice the size of New Jersey. Bounded on the n by Germany, on the e by Liechtenstein and Austria, on the se and s by Italy, and on the w and nw by France, Switzerland has a total boundary length of 1,852 km (1,151 mi).

Switzerland's capital city, Bern, is located in the western part of the country.

TOPOGRAPHY

Switzerland is divided into three natural topographical regions: (1) the Jura Mountains in the northwest, rising between Switzerland and eastern France; (2) the Alps in the south, covering three-fifths of the country's total area; and (3) the central Swiss plateau, or Mittelland, consisting of fertile plains and rolling hills that run between the Jura and the Alps. The Mittelland, with a mean altitude of 580 m (1,900 ft), covers about 30% of Switzerland and is the heartland of Swiss farming and industry; Zürich, Bern, Lausanne, and Geneva (Genève) are on the plateau. The central portion of the Alps, around the St. Gotthard Pass, is a major watershed and the source of the Rhine, which drains into the North Sea; of the Aare, a tributary of the Rhine; of the Rhône, which flows into the Mediterranean; and of the Ticino, a tributary of the Po, and of the Inn, a tributary of the Danube, which flow into the Adriatic and the Black seas, respectively.

The highest point in Switzerland is the Dufourspitze of Monte Rosa at 4,634 m (15,203 ft); the lowest is the shore of Lake Maggiore at less than 195 m (640 ft). The second-highest and most celebrated of the Swiss Alps is the Matterhorn (4,478 m/14,692 ft), long a challenge to mountaineers and first scaled in 1865.

Switzerland has 1,484 lakes, more than 12,900 smaller bodies of water, and many waterfalls. Lake Geneva (Léman), with an area of 581 sq km (224 sq mi), is considered the largest Swiss lake, though its southern shore is in France. Lake Neuchâtel, the largest lake totally within Switzerland, has an area of 218 sq km (84 sq mi). Switzerland also contains more than 1,000 glaciers, many the relics of Pleistocene glaciation. The largest area of permanent ice is in the Valais.

CLIMATE

The climate of Switzerland north of the Alps is temperate but varies with altitude, wind exposure, and other factors; the average annual temperature is 9°c (48°f). The average rainfall varies from 53 cm (21 in) in the Rhône Valley to 170 cm (67 in) in Lugano. Generally, the areas to the west and north of the Alps have a cool, rainy climate, with winter averages near or below freezing and summer temperatures seldom above 21°c (70°f). South of the Alps, the canton of Ticino has a warm, moist, Mediterranean climate, and frost is almost unknown. The climate of the Alps and of the Jura uplands is mostly raw, rainy, or snowy, with frost occurring above 1,830 m (6,000 ft).

FLORA AND FAUNA

Variation in climate and altitude produces a varied flora and fauna. In the lowest zone (below 550 m/1,800 ft), chestnut, walnut, cypress, and palm trees grow, as well as figs, oranges, and almonds; up to 1,200 m (3,940 ft), forests of beech, maple, and oak; around 1,680 m (5,500 ft), fir and pine; around 2,130 m (7,000 ft), rhododendron, larches, dwarf and cembra pine, and whortleberries; and above the snow line, more than 100 species of flowering plants, including the edelweiss. Wild animals include the chamois, boar, deer, otter, and fox. There are large birds of prey, as well as snipe, heath cock, and cuckoo. Lakes and rivers teem with fish. As of 2002, there were at least 75 species of mammals, 199 species of birds, and over 3,000 species of plants throughout the country.

ENVIRONMENT

The Swiss have long been aware of the need to protect their natural resources. Switzerland's federal forestry law of 1876 is among the world's earliest pieces of environmental legislation. Since 1953, provisions for environmental protection have been incorporated in the federal constitution. A measure creating a federal role in town and rural planning by allowing the central government to set the ground rules for the cantonal master plans took effect in January 1980.

Air pollution is a major environmental concern in Switzerland; automobiles and other transportation vehicles are the main contributors. In 2000, the total of carbon dioxide emissions was at 39.1 million metric tons. Strict standards for exhaust emissions were imposed on new passenger cars manufactured after October 1987. Water pollution is also a problem due to the presence of phosphates, fertilizers, and pesticides in the water supply. The nation has 40 cu km of renewable water resources, of which 73% of the annual withdrawal is used for industrial purposes. The country's cities have produced about 3.1 million tons of solid waste annually. On 1 November 1986, as a result of a fire in a chemical warehouse near Basel, in northern Switzerland, some 30 tons of toxic waste flowed into the Rhine River, killing an estimated 500,000 fish and eels. Despite a Swiss report in January 1987 that damage to the river had not been so great as was first thought, most environmentalists considered the chemical spill a major disaster.

Chemical contaminants and erosion damage the nation's soil and limit productivity. In 1986, the Swiss Federal Office of Forestry issued a report stating that 36% of the country's forests had been killed or damaged by acid rain and other types of air pollution.

Important environmental groups include the Swiss League for the Protection of Nature, founded in 1909; the Swiss Foundation for the Protection and Care of the Landscape, 1970; and the Swiss Society for the Protection of the Environment. The principal federal agency is the Department of Environment.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 4 types of mammals, 8 species of birds, 1 species of amphibian, 4 species of fish, 30 species of invertebrate, and 2 species of plants. The northern bald ibis and the Italian spadefoot toad are extinct; the false ringlet butterfly, Italian agile frog, and marsh snail are threatened. The bear and wolf were exterminated by the end of the 19th century, but the lynx, once extinct in Switzerland, has been reestablished.

POPULATION

The population of Switzerland in 2005 was estimated by the United Nations (UN) at 7,446,000, which placed it at number 95 in population among the 193 nations of the world. In 2005, approximately 16% of the population was over 65 years of age, with another 16% of the population under 15 years of age. There were 94 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 0.2%, a rate the government viewed as too low. The projected population for the year 2025 was 7,401,000. The population density was 180 per sq km (467 per sq mi).

The UN estimated that 68% of the population lived in urban areas in 2005, and that population in urban areas was declining at an annual rate of -0.06%. The capital city, Bern, had a population of 320,000 in that year. The largest metropolitan area is Zürich, with 984,000 residents in 2000. Other large cities and their estimated populations include Basel, 186,871; Geneva, 185,526; and Lausanne, 126,766.

MIGRATION

Foreign residents in Switzerland comprised about 20% of the total population in 1998. Nearly a third of all resident foreigners were of Italian nationality; the former Yugoslavia, Spain, Portugal, Germany and Turkey were the next-leading countries of origin. In April 1987, Swiss voters approved a government plan to tighten rules on immigration and political asylum.

From the beginning of the civil war in Bosnia, Switzerland took in some 27,000 Bosnian refugees by 1997, granting most only temporary protection. In 1997, 8,000 singles and couples without children returned to Bosnia; another 2,800 returned voluntarily. Nonetheless, as a result of the drastic increase in the number of asylum seekers, Switzerland suspended its resettlement policy in mid-1998.

As a result of the Kosovo conflict, Switzerland again faced a major increase in asylum seekers in 1999. The Swiss government offered temporary protection to about 65,000 Kosovars living in the country. In 2004, Switzerland hosted 47,678 refugees, 18,633 asylum seekers, and 25 stateless persons. Main countries of origin for refugees included Bosnia and Herzegovina, Serbia and Montenegro, and Turkey. Asylum applications came from 19 countries of origin, the largest numbers from Bulgaria and Belarus. The net migration rate in 2005 was an estimated 3.58 migrants per 1,000 population. Worker remittances in 2002 were $146 million.

ETHNIC GROUPS

The four ethnolinguistic groups (Germanic, French, Italian, and Rhaeto-Romansch) that make up the native Swiss population have retained their specific characteristics. Originally, the country was inhabited by Celtic tribes in the west and south and by Rhaetians in the east. With the collapse of Roman rule, Germanic tribes poured in, among them the Alemanni and Burgundians. The Alemanni ultimately became the dominant group, and the present Alemannic vernacular (Schwyzertütsch, or Schweizerdeutsch) is spoken by nearly two-thirds of the total population as their principal language. About 65% of the population is German, 18% is French, 10% is Italian, 1% is Romansch, and 6% are of various other groups.

LANGUAGES

Switzerland is a multilingual state with four national languages—German, French, Italian, and Rhaeto-Romansch. About 63.7% of the resident population speaks German as their principal language, predominantly in northern, central, and western Switzerland; 19.2% speak French, mainly in the west and southwest; 7.6% Italian, primarily in the southern region closest to Italy; and 0.6% Rhaeto-Romansch, used widely only in the southeastern canton of Graubünden (Grisons). The remaining 8.9% speak various other languages. There are numerous local dialects.

RELIGIONS

Religious denominations as of a 2002 report stood at about 44% Roman Catholic, 47% Protestant, 4.5% Muslim, and about 1% Orthodox Christian. There are about 17,577 members of the Jewish community and about 11,748 Old Catholics. About 12% of the population claimed no religious affiliation.

There is no official state church and religious freedom is guaranteed. However, all of the cantons financially support at least one of three traditional denominations—Roman Catholic, Old Catholic, or Protestant—with money collected through taxes. In all cantons, individuals may also choose not to contribute to church taxes if they do not formally belong to a church. As a result, since the 1970s there has been a trend of individuals formally resigning their church membership in order to avoid church taxation. According to the latest statistics, about 41.8% of the population are Roman Catholic, 33% are Protestant, 4.3% are Muslim, and 1.8% are Orthodox Christians. Jews, Buddhists, Hindis, and other Christian churches each report membership of less than 1% of the population. About 11% have no church affiliation.

TRANSPORTATION

As of 2004, Switzerland's railway system consisted of 4,527 km (2,816 mi) of standard and narrow gauge track. Of that total, 3,232 km were standard gauge. Nearly all of the railway system (4,494 km/2,795 mi) was electrified. Because of its geographical position, Switzerland is an international railway center, with traffic moving from France, Germany, Austria, and northern Europe through the Simplon, Lötschberg, and St. Gotthard tunnels to Italy and southern Europe.

The Swiss road network covered 71,212 km (44,293 mi) in 2002, all of which was paved, and included 1,706 km (1,061 mi) of expressways. In 2003, there were 3,753,890 passenger cars, and 335,958 commercial vehicles. The longest road tunnel in the world, the 17-km (10.6-mi) St. Gotthard, in the Ticino, opened in September 1980.

Inland waterway (65 km/40 mi) traffic is an important component of Swiss transportation. Basel, the only river port, has direct connections to Strasbourg, the German Rhineland, the Ruhr, Rotterdam, and Antwerp. The Rhine-Rhône canal provides an alternative link between Basel and Strasbourg. There are 12 navigable lakes. During World War II, the Swiss organized a merchant marine to carry Swiss imports and exports on the high seas. In 2005, it consisted of 23 ships of 1,000 GRT or more, totaling 604,843 GRT. Switzerland's merchant fleet is larger than that of any other landlocked nation.

There were an estimated 65 airports in 2004. As of 2005, a total of 42 had paved runways and there were also two heliports. Swissair, partially owned by the federal and local governments, is the flag line of Switzerland. It has flights from the principal international airports at Zürich, Geneva (Cointrin), and Basel to major European cities, North and South America, the Middle East, Asia, and West Africa. In 2003, about 10.589 million passengers were carried on scheduled domestic and international flights, and 1,248 million freight ton-km of service.

HISTORY

The Helvetii, a Celtic tribe conquered by Julius Caesar in 58 bc, were the first inhabitants of Switzerland (Helvetia) known by name. A Roman province for 200 years, Switzerland was a prosperous land with large cities (Avenches was the capital) and a flourishing trade. In ad 250, however, Switzerland was occupied by the Alemanni, a Germanic tribe, and in 433 by the Burgundians. The Franks, who defeated the Alemanni in 496 and the Burgundians about 534, incorporated the country into the Frankish Empire. Under Frankish rule, new cities were founded; others, such as Zürich and Lausanne, were rebuilt; and Christianity was introduced.

In 1032, some 200 years after the death of Charlemagne, king of the Franks, and the defeat of his weak successors, Switzerland became part of the Holy Roman Empire. In the 13th century, it was placed under the House of Habsburg. Harsh domination resulted in the rebellion of several cities and the formation on 1 August 1291 of the "eternal alliance" between the three forest cantons of Schwyz, Uri, and Unterwalden, the first step toward the Swiss Confederation. The Habsburgs invaded the three provinces, but with their defeat at Morgarten Pass on 15 November 1315, the Swiss secured their independence. By 1353, five other cantons, Luzern (1332), Zürich (1351), Glarus and Zug (1352), and Bern (1353), had joined the confederacy. All these allies were called Swiss (Schwyzer), after the largest canton. Four victories over Austria (1386, 1388, 1476, and 1499) confirmed the confederation. The Swiss also defeated Charles of Burgundy, whose ambitions threatened their independence until his death in 1477. Complete independence was secured by the Treaty of Basel (1499) with the Holy Roman Empire. Switzerland thereafter remained unmolested by foreign troops until the French Revolution of 1789. Such legendary or real heroes as William Tell, Arnold von Winkelried, and Nikolaus von der Flüe symbolized Swiss bravery and love of freedom. The Helvetian Confederation (Eidgenossenschaft) continued to grow with the inclusion of Aargau (1415), Thurgau (1460), Fribourg and Solothurn (1481), Basel and Schaffhausen (1501), and Appenzell (1513). As of 1513, there were 13 cantons and several affiliated cities and regions. Swiss sovereignty reached south of the crest of the Alps into the Ticino. The Swiss also controlled many of the vital mountain passes linking southern and northern Europe.

The power of the Confederation was, however, undermined by conflicts stemming from the Reformation, led by Ulrich Zwingli in Zürich and John Calvin in Geneva. Seven cantons resisted the Reformation, and a prolonged conflict resulted. In its first round, Zwingli was killed in action (1531). The Catholic cantons later allied with Savoy and Spain. The struggle with the Protestant cantons centered during the Thirty Years' War (1618–48) on control of the Valtelline pass. The Treaty of Westphalia ending that war granted the Swiss Confederation formal recognition of independence by all European powers.

In the following centuries, the Catholic-Protestant conflict continued with varying success for each side. Apart from this struggle, a number of abortive uprisings against oligarchic control occurred in such places as Geneva and the canton of Vaud. The oligarchs were still in power in most cantons when the French Revolution broke out. With the progress of the revolution, radical groups gained the upper hand in several cities. In 1798, the Helvetic Republic was proclaimed, under French tutelage, and during the Napoleonic imperial era Switzerland was governed as an appendage of France. Boundaries were partly redrawn, and six new cantons were added to the original 13.

In 1815, the Congress of Vienna reconstituted the independent Swiss Confederation with three additional cantons (for a total of 22) and recognized its perpetual neutrality. Switzerland, however, did not remain untouched by the great conflict between liberalism and conservatism that affected all of Europe in the first half of the 19th century. Many revolutionaries found temporary refuge in Switzerland and influenced some of its citizens. Under their goading, several cantons introduced more progressive governments and liberalized their old constitutions.

In 1848, a new federal constitution, quite similar to that of the United States, was promulgated. Meanwhile, the struggle between Protestants and Catholics had culminated in the Secession (Sonderbund) War of 1847, in which the Protestant cantons quickly overcame the secessionist movement of the seven Catholic cantons. As a result of the war, federal authority was greatly strengthened.

In 1874, the constitution was again revised to enlarge federal authority, especially in fiscal and military affairs. Since the last quarter of the 19th century, Switzerland has been concerned primarily with domestic matters, such as social legislation, communications, and industrialization. In foreign affairs, it remained rigidly neutral through both world wars, resolutely determined to protect its independence with its highly reputed militia. In 1978, Switzerland's 23rd sovereign canton, Jura, was established by nationwide vote. In 1991, Switzerland celebrated the 700th anniversary of Confederation.

Despite its neutrality, Switzerland has cooperated wholeheartedly in various international organizations, offering home and hospitality to such diverse bodies as the League of Nations, the Red Cross, and the UPU. Switzerland has long resisted joining the UN, however, partly on the grounds that imposition of sanctions, as entailed in various UN resolutions, is contrary to a policy of strict neutrality. In a March 1986 referendum, a proposal for UN membership, approved by the Federal Assembly, was rejected by Swiss voters. Switzerland is a member of most specialized UN agencies and is a party to the Statute of the International Court of Justice. Swiss attitudes toward UN membership changed at the beginning of the 21st century, as citizens decreasingly saw participation in the UN as jeopardizing the country's neutrality. In a referendum held on 3 March 2002, nearly 55% of Swiss voters approved of joining the UN, but approval by the country's 23 cantons received a narrower 12 to 11 vote. On 10 September 2002 Switzerland became a full member of the UN.

Foreign governments have targeted Switzerland's tight bank secrecy laws as providing a haven for tax evasion and money laundering. The EU maintains that if Switzerland were to join the body, such laws would have to be reformed. Switzerland suffered from the global economic downturn that began in 2001; it employs 220,000 people (out of a total population of some seven million) in financial services, of which more than half work in banking. The Swiss have also expressed ambivalence toward Europe. In December 1992, the Swiss rejected participation in the two major European organizations—the European Economic Area (EEA) of the European Union (EU). Fearing adverse effects from nonparticipation, the Swiss government has taken steps to bring the country's laws and economy into harmony with the EEA. Because of the fact that all legislation can be subjected to referenda, however, the government is finding it difficult to alter certain protectionist policies and to lower certain barriers. Officially, the government is committed to eventually joining the EU, although in order to do so it will have to convince a majority of voters it is the correct path.

In a blow to Euro skeptics, in June 2005 voters, in a referendum endorsed by a 55–45% majority, planned to join the other European Union members then in the Schengen passport-free travel zone. Voters also approved joining the EU's Dublin agreement on handling asylum seekers, and of participating in further coordination of policing and crime-fighting. In September 2005, a bilateral accord on the free movement of labor to the 10 newest EU member states was approved in a referendum.

In October 2003, the right-wing Swiss People's Party (SVP) became the largest force in the National Council after winning 26.6% of the vote in general elections. That December, parliament decided to grant the SVP the second post in the seven-seat government at the expense of the Christian Democrats, altering the "magic formula" which had brought stability to Swiss politics since 1959.

GOVERNMENT

The Swiss Confederation is a federal union governed, until 2000, under the constitution of 1874, which vested supreme authority in the Federal Assembly, the legislative body, and executive power in the Federal Council. On 1 January 2000, a new federal constitution entered into force, replacing the 1874 constitution. The new constitution formally separates and codifies four pillars of Swiss constitutional law: democracy; the rule of law; social welfare; and federalism. Fundamental rights, such as freedom of speech and assembly, which had not been explicitly mentioned in the 1874 constitution, now received their formal expression.

The Federal Assembly consists of two chambers: the National Council (Nationalrat ) of 200 members, elected by direct ballot for four-year terms by citizens 18 years of age or older, and the Council of States (Ständerat ) of 46 members, two appointed by each of the 20 cantons, and one from each of the six half-cantons, and paid by the cantons; deputies are elected according to the laws of the cantons. Legislation must be approved by both houses.

The Federal Council of seven members is elected for four-year terms by joint session of the Federal Assembly. The president and vice president of the Federal Council and of the Confederation are elected by the assembly for one-year terms and cannot be reelected to the same office until after the expiration of another year. The seven members of the Federal Council, which has no veto power, are the respective heads of the main departments of the federal government. After general elections held in October 2003, the four-party power-sharing agreement known as the "magic formula"—whereby the Free Democrats, Social Democrats, and Christian Democrats each held two seats, and the Swiss People's Party held one seat—was disturbed, as the SVP, which had campaigned on an antiforeigner and anti-EU platform, became the largest party in parliament. The Christian Democrats forfeited one seat to the SVP. After the 2004 election for president, the Federal Council elected Samuel Schmid. The Federal Council meets in secret and tries to appear congenial at all times. Moritz Luenberger won the 2005 election and took office 8 January 2006.

The cantons are sovereign in all matters not delegated to the federal government by the constitution and may force federal law to a plebiscite by the right of referendum. In addition, by popular initiative, 50,000 citizens may demand a direct popular vote on any legislation or regulation proposed by the federal government, and 100,000 citizens may demand a referendum on a constitutional revision. Any proposed amendments to the constitution must be submitted for public approval.

In 1971, Swiss women were granted the right to vote in federal elections. In November 1990, the Federal Court ruled in favor of female suffrage in the half-canton of Appenzell-Inner Rhoden, the last area with male-only suffrage.

LOCAL GOVERNMENT

The Swiss Confederation consists of 23 sovereign cantons, three of which are divided into half-cantons (i.e., 20 cantons and six half-cantons). The most recent of these, Jura, was formed from six French-speaking districts in the German-speaking area of Bern Canton in 1978. In 1993, the German-speaking Laufental district of Beru joined the canton of Basel-Land. This was the first time a political unit in Switzerland left one canton to join another. Swiss cantons are highly autonomous and exercise wide administrative control, with the weak federal government controlling only foreign affairs, national security, customs, communications, and monetary policy. The cantons have their own constitutions and laws, and are responsible for their own public works, education, care of the poor, justice, and police forces. Local forms of government vary, but each canton has a legislative council (called Grand Conseil, Grosser Rat, Kantonsrat, or Gran Consiglio), which appoints a chief executive. In a few of the small cantons, the general assembly of all voting citizens, or Landesgemeinde, decides on major matters by voice vote; in the majority of the cantons, this ancient institution has been replaced by referendum. Communes, numbering over 3,000, are the basic units of local government. For the most part, Swiss districts (Bezirke), constituting a middle level of organization between the cantons and communes, are little more than judicial circuits.

JUDICIAL SYSTEM

The Federal Court of Justice in Lausanne is composed of 30 permanent members appointed for six-year terms by the Federal Assembly. Until 2000, the court had both original and final jurisdiction in the majority of cases where a canton or the federal government was involved, and was the highest appeals court for many types of cases. Judicial reforms carried out in 2000 reduced the caseload of the Federal Court, by creating a federal criminal court and federal administrative bodies with judicial competence. Now, the Federal Court exists as a pure appellate court.

Each canton has its own cantonal courts. District courts have three to five members and try lesser criminal and civil cases. Each canton has an appeals court and a court of cassation, the jurisdiction of which is limited to reviewing judicial procedures. Capital punishment was abolished in 1942. Minor cases are tried by a single judge, difficult cases by a panel of judges, and murder and other serious crimes by a public jury.

The judiciary is independent and free from interference by other branches of government. The trials are fair and the judicial process is efficient. The judicial system is based on civil law influenced by customary law. Switzerland accepts compulsory jurisdiction of the International Court of Justice.

ARMED FORCES

Switzerland's armed forces in 2005 were built around a core of 4,300 active military personnel and a well-trained force of 210,000 citizen-soldier reservists that can be mobilized within 48 hours. The country has universal compulsory military service for males at age 19–20, followed by varied annual training requirements until age 42 (55 for officers), with exemption only for physical disability. Initial basic training of 15 weeks is followed by regular short training periods. In addition, there is also a paramilitary civil defense force of 105,000 members. When fully mobilized, Switzerland's land forces (Army) would have an estimated manpower of 153,200, with 355 main battle tanks, 446 reconnaissance vehicles, 127 armored infantry fighting vehicles, 1049 armored personnel carriers, and 1,008 artillery pieces. The land forces also have a marine arm that is outfitted with 10 patrol/coastal boats. The air force, when fully mobilized, had an estimated 32,900 personnel and has 90 combat capable aircraft, including 57 fighters and 33 fighter ground attack aircraft.

Swiss fighting men are world famous, and from the 16th to the 19th century some two million Swiss served as mercenaries in foreign armies. The modern Swiss citizen-soldier is trained only for territorial defense in prepared mountain positions, which is his only mission. A continuing legacy of Swiss mercenary service is the ceremonial Vatican Swiss Guard. Switzerland has military personnel deployed to eight countries or regions under UN, NATO, European Union or other auspices. The military budget in 2005 totaled $3.82 billion.

INTERNATIONAL COOPERATION

Although it was a member of and served as the site for the League of Nations, Switzerland was not a member of the United Nations until 10 September 2002, partly from a fear of compromising traditional Swiss neutrality. The country participates in ECE and in several nonregional specialized agencies, such as the FAO, UNESCO, UNHCR, UNIDO, the World Bank, ILO, IAEA, and the WHO. Switzerland has actively participated in the OSCE. The nation is also a member of the Asian Development Bank, the African Development Bank, the Euro-Atlantic Partnership Council, the European Bank for Reconstruction and Development, the Council of Europe, the Paris Club, the Inter-American Development Bank, OSCE, EFTA, the WTO, and the OECD. Switzerland holds observer status in the OAS and the Latin American Integration Association (LAIA). The headquarters of the International Committee of the Red Cross is located in Geneva. Switzerland is also the repository of the Geneva Convention, governing treatment of civilians, prisoners, and the wounded in wartime.

Switzerland is part of the NATO Partnership for Peace and a guest of the Nonaligned Movement. The nation has supported UN missions and operations in Kosovo (est. 1999), Ethiopia and Eritrea (est. 2000), and the DROC (est. 1999). Switzerland is part of the Australia Group, the Zangger Committee, the European Organization for Nuclear Research (CERN), the Nuclear Suppliers Group (London Group), the Organization for the Prohibition of Chemical Weapons, and the Nuclear Energy Agency.

In environmental cooperation, Switzerland is part of the Antarctic Treaty; the Basel Convention; Conventions on Biological Diversity, Whaling, and Air Pollution; Ramsar; CITES; the London Convention; International Tropical Timber Agreements; the Kyoto Protocol; the Montréal Protocol; MARPOL; the Nuclear Test Ban Treaty; and the UN Conventions on Climate Change and Desertification.

ECONOMY

Because of the paucity of its minerals and other raw materials and its limited agricultural production, Switzerland depends upon imports of food and fodder and industrial raw materials, which it finances with exports of manufactured goods. Agriculture is important (in agriculture, Switzerland is about 60% self-sufficient) though limited by a scarcity of level and fertile land, but manufacturing engages more than five times as many workers as farming. Swiss manufacturers excel in quality of workmanship rather than quantity of output. Other important branches of the economy include international banking, insurance, tourism, and transportation. Switzerland ranks among leading countries in research and development (R&D), and is among the world's top five countries for R&D for biotech and nanotechnology.

Switzerland was less affected than most other nations by the worldwide recession of the early 1980s and experienced a strong recovery beginning in 1983. However, between 1986 and 1992, GNP grew by an annual average of only 0.7% and it fell in 1991, 1992, and 1993. From 1993–95, growth averaged barely 1% a year and decreased once again in 1996. In 1998, however, the economy grew by 2% and by 1.9% in 1999, before soaring, relatively speaking, to 3.4% in 2000. Switzerland's economy was in recession in 2002: the global international slowdown in 2001 and the appreciation of the Swiss franc brought small contractions in 2001 (-0.9%) and 2002 (-0.2%). The financial sector was particularly affected by the slowdown in the economy. However, by 2004, the economy was growing by 1.7%, thanks to eastern and Asian export markets. The GDP growth rate was forecast for 1.5% in 2006 and 2% in 2007.

From 1990 to 1992, the annual inflation rate averaged 5.1%. By 1994 inflation had plummeted to 0.9%; it was 1.8% in 1995, 0.8% in 1996, and 0% in 1998. From 1999 to 2002, average annual inflation was about 1%. In 2004, the inflation rate stood at 0.9% and at 1.1% in 2005. Despite high oil prices forecast for 2006, inflation was expected to remain low. Swiss unemployment has remained consistently low in comparison with other countries, although it reached an unusually high 4.5% in 1993. In 1994 unemployment was 3.8%, and 3.6% in 1998—rates a fraction of France and Germany. Unemployment fell further, to an average annual rate of 2.3%, 1999 to 2002. The unemployment rate in 2004 had risen to 3.4%, and young workers (ages 15–25) were particularly hard hit, as were restaurant and hotel industry workers. Meanwhile, the Swiss GDP per capita—in 2004, $48,596 in market exchange rate terms and $34,160 in purchasing power parity (PPP) terms—continued to be among the highest in the world.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Switzerland's gross domestic product (GDP) was estimated at $262.1 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $35,000. The annual growth rate of GDP was estimated at 1.2%. The average inflation rate in 2005 was 1.2%. It was estimated that agriculture accounted for 1.5% of GDP, industry 34%, and services 64.5%.

According to the World Bank, in 2003 remittances from citizens working abroad totaled $1.709 billion or about $233 per capita and accounted for approximately 0.5% of GDP.

The World Bank reports that in 2003 household consumption in Switzerland totaled $167.22 billion or about $22,751 per capita based on a GDP of $320.1 billion, measured in current dollars rather than PPP. Household consumption includes expenditures of individuals, households, and nongovernmental organizations on goods and services, excluding purchases of dwellings. It was estimated that for the period 1990 to 2003 household consumption grew at an average annual rate of 1.3%. In 2001 it was estimated that approximately 19% of household consumption was spent on food, 9% on fuel, 3% on health care, and 18% on education.

LABOR

In 2005, the Swiss workforce numbered an estimated 3.8 million. As of 2003, the service sector employed 72% of the labor force, with 23.9% engaged in industry, and 4.1% in agriculture. Foreign workers account for about 30% of the country's workforce. In 2005, Switzerland's unemployment rate was estimated at 3.8%.

About 25% of the labor force was unionized in 2005. Swiss law provides for and regulates union organization and collective bargaining. Most labor disputes are settled on the basis of a so-called peace agreement existing since 1937 between the head organizations of employers and employees. Other collective disputes are dealt with by the various cantonal courts of conciliation. Strikes are rare and Switzerland generally records the lowest number of days lost to strikes in the OECD. Approximately 50% of the country's labor force in 2005 was covered by collective bargaining agreements.

The legally mandated maximum workweek is set at 45 hours for blue- and white-collar workers in the services, industrial and retail sectors. A 50-hour workweek covers the rest. Minors as young as 13 may perform light work for up to nine hours per week during the school year and 15 hours otherwise. There are severe restrictions on the hours and conditions of employment of workers until the age of 20. There is no government mandated minimum wage. The Federal Labor Act and the Code of Obligations mandate various other workplace requirements.

AGRICULTURE

Some 443,000 hectares (1,095,000 acres), or about 10.8% of the country's total land area, is under seasonal or permanent crops. Most of the cultivable land is in the Mittelland, or central plateau, and the cantons regularly producing the largest quantities of wheat are Bern, Vaud, Fribourg, Zürich, and Aargau. Soil quality is often poor, but yields have been increasing as a result of modern technology. In 2003, agriculture contributed 2% to GDP.

Agricultural production provides only about 60% of the nation's food needs. Although productivity per worker has been increasing steadily, the proportion of the total labor force engaged in agriculture has fallen from 30% in 1900 to about 4.2% in 2000. Between 1955 and 2003, the number of farm holdings fell from 205,997 to 65,866. Some principal crops, with their production figures for 2004, were as follows: potatoes, 484,000 tons; sugar beets, 1,340,000 tons; wheat, 456,000 tons; barley, 230,000 tons; maize, 220,000 tons; oats, 35,000 tons; and rye, 20,000 tons. In the same year, an estimated 11.6 million liters of wine were produced, and there were 15,000 hectares (37,000 acres) of vineyards.

Swiss agricultural policy is highly regulated, with fixed prices and quota restrictions maintained on several products. Domestic production is encouraged by the imposition of protective customs and duties on imported goods, and by restrictions on imports. The Federal Council has the authority to fix prices of bread grains, flour, milk, and other foodstuffs. Production costs in Switzerland, as well as international exchange rates favorable to the Swiss franc, make competition with foreign products difficult. This highly protectionist system has led to excess production and mounting costs associated with the management of surpluses. The Uruguay Round and subsequent Swiss implementation of its provisions in July 1995 (along with rising costs in the agricultural sector) has forced the government to begin reforming its agricultural support system.

ANIMAL HUSBANDRY

More than half of Switzerland's productive area is grassland exploited for hay production and/or grazing. Livestock production contributes about 2% to GDP. Dairying and cattle breeding are practiced, more or less intensively, in all but the barren parts of the country and, during the summer months, even at altitudes of more than 1,200 m (4,000 ft). In 2005 there were 1,540,000 head of cattle and 1,594,000 pigs, 443,000 sheep and 74,000 goats. Meat production in 2005 included (in tons): pork, 233,000; beef, 134,000; poultry, 58,000; mutton/lamb, 6,000; and horse meat, 1,000. Swiss cheeses are world famous; production was 178,000 tons in 2005. That year, 34,000 tons of eggs were produced.

While home production almost covers or exceeds the domestic requirements for milk and dairy products, substantial quantities of eggs and meat must be imported. New agricultural reforms for 2004–07 entail the progressive abolition of the milk quota system, and changes in import tariffs for meat. Selective cattle breeding, research, and improvement of production standards are promoted by the federal government and by farmers' cooperatives. Exports of milk, dairy products, and eggs amounted to $467.6 million in 2004.

FISHING

Fishing is relatively unimportant but is carried on in many Swiss rivers and on lakes Constance, Neuchâtel, and Geneva. The total catch was 2,950 tons in 2003. Rainbow trout, whitefish, and perch are the main species. Local fish supply about 12% of domestic needs.

FORESTRY

Forests occupied 1,199,000 hectares (2,962,000 acres) in 2000. About two-thirds of the forested land is owned by communes; most of the remainder is owned privately. Federal and cantonal governments account for about 8%. About 80% of the wood in Swiss forests is coniferous, primarily spruce; the remaining 20% is deciduous, predominantly red beech.

The timber cut yielded 4,713,000 cu m (166 million cu ft) of roundwood in 2004, with 21% used as fuel wood. The government estimates that the annual cut represents only two-thirds of potential. Forestry production in 2004 amounted to about 1,505,000 cu m (53 million cu ft) of sawnwood, 1,777,000 tons of paper and paperboard, and 271,000 tons of wood pulp. The trade deficit in forestry products amounted to $169 million in 2004.

MINING

Mining, exclusively of industrial minerals for construction, played a minor role in Switzerland's economy. Metal mining has ceased, reserves of the small deposits of iron, nickel-cobalt, gold, and silver were mostly depleted, and new mining activities were discouraged for environmental reasons. Industrial minerals produced in 2004 included hydraulic cement, common clay, gravel, gypsum, lime, nitrogen, salt, sand, stone, and sulfur (from petroleum refining). Metal processing, restricted to primary and secondary aluminum, secondary lead, and steel, depended on imported raw materials or scrap. Environmental concerns have led to a policy to curtail or gradually cease smelting activities. The production and export of chemicals were among the nation's leading industries. Steel was another leading export commodity. A large diamond center, Switzerland was actively involved in cutting and polishing diamonds, and played a big role in international trade activities.

ENERGY AND POWER

Switzerland is heavily dependent on imported oil, natural gas and coal to meet its hydrocarbon needs, although it does have the refining capacity to permit a modest amount of refined petroleum products to be exported.

In 2002, Switzerland's imports of all petroleum products averaged 277,350 barrels per day, of which 99,860 barrels per day were crude oil. Total refinery output in 2002 averaged 104,280 barrels per day. Demand for refined oil products in 2002 averaged 267,230 barrels per day, allowing Switzerland to export an average of 11,550 barrels per day of refined oil products.

In 2002, Switzerland's imports and consumption of natural gas each totaled 107.18 billion cu ft. Coal imports that year totaled 169,000 short tons, with demand at 221,000 short tons.

Switzerland's electric power plants had an installed capacity of 17.268 million kW in 2002, of which hydroelectric plants accounted for 13.240 million kW of capacity, followed by nuclear plants at 3.200 million kW, conventional thermal plants at 0.453 million kW and geothermal/other plants at 0.375 million kW. Electricity production in 2002 totaled 63.240 billion kWh, of which 1.6% was from fossil fuels, 55.1% from hydropower, 40.9% from nuclear power, and 2.3% from renewable sources.

INDUSTRY

Manufacturing industries contributed 34% of GDP in 2003. The industrial growth rate in 2004 was 4.7%. Swiss industries are chiefly engaged in the manufacture, from imported raw materials, of highly finished goods for domestic consumption and for export. Most of the industrial enterprises are located in the plains and the Swiss plateau, especially in the cantons of Zürich, Bern, Aargau, St. Gallen, Solothurn, Vaud, Basel (Baselstadt and Baselland), and Thurgau. Some industries are concentrated in certain regions: the watch and jewelry industry in the Jura Mountains; machinery in Zürich, Geneva, and Basel; chemical industries (dyes and pharmaceuticals) in Basel; and the textile industry in northeastern Switzerland. In 1993, the industrial sector was targeted for assistance by a government-initiated revitalization program; in 1995, the sector again benefited from government policy when the turnover tax was replaced by a value-added tax system, expected to relieve industry of SwFr1–2 billion per year in taxes. Switzerland, along with Germany and Japan, is at the forefront of the emerging industry of environmental technology.

The textile industry, using wool, cotton, silk, and synthetics, is the oldest Swiss industry and, despite foreign competition resulting from the elimination of textile quotas by the World Trade Organization in 2005, remains important. The machine industry, first among Swiss industries today, produces goods ranging from heavy arms and ammunition to fine precision and optical instruments. Switzerland is the world's largest exporter of watches and watch products (followed by Hong Kong and China), with exports worth $9 billion in 2004. For the first half of 2005, Swiss watch exports were up 11% over the same period in 2004 and exceeding forecasts. Chemicals, especially dyes and pharmaceuticals, also are important. As of 2003, Switzerland had a 4.3% share of the world export of chemical and pharmaceutical products, and ranked 9th among the largest export nations. Pharmaceutical exports as a percentage of total chemical industry exports increased from 40% in 1980 to 70.3% in 2003. Switzerland has also developed a major food industry, relying in part on the country's capacity for milk production. Condensed milk was first developed in Switzerland, as were two other important processed food products: chocolate and baby food. The Swiss company Nestlé S. A., headquartered in Vevey, is one of the world's largest food companies. In addition to Switzerland's major industries, such as textiles, nonmetallic minerals, and watch making and clock making, others, such as chemicals, plastics, and paper, have grown rapidly.

SCIENCE AND TECHNOLOGY

The major scientific learned societies, headquartered in Bern, are the Swiss Academy of Sciences, founded in 1815, and the Swiss Academy of Engineering Sciences, founded in 1981. About two-thirds of the funds for Swiss research and development (R&D), a high proportion by world standards, are supplied by industry and the rest by federal and cantonal governments. In 2000 (the latest year for which data was available), expenditures for R&D totaled $5,316.302 million, or 2.63% of GDP. Of that amount, the business sector accounted for 69.1%, followed by the government at 23.2%, foreign sources at 4.3%, higher education at 2.1% and private nonprofit organizations at 1.4%. For that same year, there were 3,594 scientists and 2,315 technicians per million people, that were engaged in R&D. The Swiss National Science Foundation was established in 1952 to finance noncommercial research for which funds would not otherwise be available. Most such spending is in the important chemicals sector. The Ministry of Public Economy, the center for federal agricultural research, has six research stations. In 2002, high-tech exports were valued at $17.077 billion and accounted for 21% of manufactured exports. In that same year, of all bachelor's degrees awarded, 25.7% were for the sciences (natural, mathematics and computers, engineering).

DOMESTIC TRADE

Zürich, the largest city, is the commercial, financial, and industrial center of Switzerland. Basel is the second most important commercial city, followed by Geneva and Lausanne. Most Swiss wholesale firms are importers as well, specializing in one commodity or a group of related commodities.

The trend in retail trade is moving from independent establishments to larger supermarkets, department stores, and discount chains. As such, many small retailers have joined together to form purchasing cooperatives. However, Switzerland is a challenging market for franchising, due to Switzerland's limited market size, high salaries, and high costs of services; also, consumer preference for high quality and authentic products or a new innovative idea over already existing products is another challenge facing potential franchisees. Companies sponsoring home shopping parties (Tupperware, Mary Kay, Body Shop, etc.) have become very popular. Some agricultural products, such as butter, grains, and edible fats and oils, are subject to import controls and price controls apply to many goods and services. The use of electronic debit cards for purchases is growing rapidly.

Advertising, mostly entrusted to firms of specialists, uses as media billboards, movie theaters, television, local transportation facilities, railroads, newspapers, and magazines.

Usual business hours are from 8 or 9 am to 5 or 6 pm. Shops are normally open from 9 am to 6:30 pm on weekdays but only to 5 pm on Saturdays; some shops close from 12 pm to 2 pm at lunchtime. In larger cities, shops generally extend their hours until 8 pm on one evening of the week, usually Thursday. Banks are open to the public from 8:30 am to 4:30 pm Monday–Friday.

FOREIGN TRADE

Switzerland's export commodities are split into two categories: machinery sold to other manufacturers, and commodities used by consumers. The country exports a large number of the world's watches and clocks.

While Switzerland is not a member of the EU, it has been seeking ways to adopt some of the advantages of membership without relinquishing sovereignty. As of 2005, 62% of Swiss exports were destined for the EU market. As of 2004, Switzerland's main export partners, in order of importance, were Germany, the United States, France, Italy, the United Kingdom, and Spain. By that date, Switzerland's primary import partners were Germany, Italy, France, the United States, the Netherlands, and Austria.

BALANCE OF PAYMENTS

In the past, Switzerland typically had a foreign trade deficit. More recently, however, this imbalance was more than compensated for by income from services, investments, insurance, and tourism. Restructuring of enterprises in the 1990s, due to the strength of the Swiss franc, caused the export-oriented manufacturing sector to become highly successful. Exports of goods and services amounted to some 46% of GDP in 2000.

In 2004, merchandise exports totaled $138.2 billion, and merchandise imports $122.6 billion, for a trade surplus of $15.6 billion. The current account surplus amounted to $50.6 billion, equivalent to 14.2% of GDP, making Switzerland a net creditor nation.

BANKING AND SECURITIES

In 2000, Switzerland had two major banks, 24 cantonal banks, and numerous foreign-owned banks, savings banks, and other banks and finance companies. There were a total of 375 banks in the country in that year. The bank balance-sheet total per capita in Switzerland is higher than that of any other nation in the world. Total assets of the Swiss banking system amounted to $1.3 trillion at the end of 2000, while total securities deposits were $3.4 trillion. Moreover, registered banks and bank-like finance companies numbered 494 in 1995, offering the Swiss, on average, the greatest access to banking services of all the world's nations.

The government-supervised Swiss National Bank, incorporated in 1905 and the sole bank of issue, is a semiprivate institution owned by the cantons, by former banks of issue, and by the public. The National Bank acts as a central clearinghouse and participates in many foreign and domestic banking operations. The two big banks, (United Bank of Switzerland (UBS) and Credit Suisse Group) dominate the Swiss banking scene and are expanding aggressively overseas. They are universal banks, providing a full range of services to all types of customers.

Regional banks specialize in mortgage lending and credits for small businesses. Since 1994, most of the country's regional banks have been linked in a common holding company providing back-office operations and other services to members in a bid to cut costs.

Foreign banks make up about a third of banks active in Switzerland. In contrast to domestic banks, their numbers have risen over the last decade but their business is increasingly focused on asset management, mostly of funds from abroad. On 1 January 1995 a new banking law came into effect allowing for foreign banks to open subsidiaries, branches, or representative offices in the country without first getting approval of the Federal Banking Commission.

Foreign capital markets; however, precise accounting of assets and liabilities in this sector are not usually made available as public information. Switzerland's strong financial position and its tradition (protected by the penal code since 1934) of preserving the secrecy of individual bank depositors have made it a favorite depository with persons throughout the world. (However, Swiss secrecy provisions are not absolute and have been lifted to provide information in criminal investigations.) The Swiss Office for Compensation executes clearing traffic with foreign countries.

In 1997, Swiss banks came under heavy criticism for losing track of money, gold, and other valuables belonging to Jewish Holocaust victims and held by the banks during World War II. Records also showed the banks had closed thousands of victims' accounts without notice after the war. The banks claimed they had lost the old records, but a group of journalists found the records archived in Lausanne in April of that year.

Also in 1997, an embarrassed Swiss government selected four members to a panel empowered to run a fund for Holocaust victims. Nobel laureate, Elie Weisel, a concentration camp survivor, turned down an invitation to serve as one of the three foreign members on the board. The fund, intended to help impoverished Holocaust victims and their families, is supported by funds appropriated by Nazis from Jews sent to concentration camps. Much of the gold, jewels, bonds, and currency taken by the Nazis had been placed in Swiss banks. In March 1998, Switzerland's banks agreed to create a $1.25 billion fund designed to compensate Holocaust survivors and their families.

Swiss banks were also under fire in 1997 for possibly facilitating money laundering of drug money accrued by a former Mexican president's brother and for failing to adequately recover the billions of dollars supposedly plundered by former Zairian dictator Mobuto Sese Seko, who was overthrown that year. All the negative publicity has caused some to question the usefulness of Swiss banks' much-lauded secrecy.

The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $102.9 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $326.3 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 1.65%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 1.59%.

Stock exchanges operate in Geneva (founded 1850), Basel (1875), and Zürich (1876). The Zürich exchange is the most important in the country. In terms of market capitalization, the Swiss stock exchanges rank seventh in the world, behind New York, Tokyo, Osaka, London, Frankfurt, and Paris, as of 1997. Overall, turnover, including shares, bonds, and options, amounted to SwFr1.2 trillion in 2002, a drop of 2.3% from the prior year. The open outcry stock exchanges in Zürich, Geneva, and Basel closed in 1994 when a national electronic stock exchange for all securities trading began operations in August. In 2004, a total of 282 companies were listed on the SWX Swiss Exchange, which had a market capitalization of $825.849 billion.

INSURANCE

The Swiss people are the most heavily insured in the world, although this reflects social insurance such as health insurance, as well as more commercial types of business. Nevertheless, Swiss insurers now rely on foreign business for two-thirds of their premium income. The insurance sector has been steadily deregulated during the 1990s. One of the last set of controls was scrapped in 1996 when the fixed tariff regime for third-party vehicle insurance was abolished. As of 1999, Swiss insurance companies numbered over 100.

Switzerland controls an estimated one-third of the world's reinsurance, and insurance income represents a major item in the Swiss balance of payments. Insurance investments are represented heavily in the Swiss capital market, and Swiss insurance firms have invested widely in foreign real estate. About half the domestic insurance business is in the hands of the state. The Swiss Reinsurance Co. in Zürich is the largest of its kind in the world. As of 1999, about 10% of all Swiss insurance companies dealt solely with reinsurance. There are several types of compulsory insurance in Switzerland, including workers' compensation, third-party automobile liability, fire, pension, hunters', aircraft, nuclear power station, old age, unemployment, and disability insurance. In 1999, the total income of the Swiss domestic insurance market was 48 million, making it the 12th largest insurance market globally. In 2003, the value of all direct insurance premiums written totaled $40.760 billion, of which life insurance premiums accounted for $24.713 billion. In that same year, Switzerland's top nonlife insurer was Winterthur, which had gross written nonlife premiums of $2.21 billion, while Winterthur Leben was the country's leading life insurer, with gross written life insurance premiums of $6.09 billion.

PUBLIC FINANCE

The Swiss government has been known historically for maintaining a relatively high degree of austerity in comparison to its European neighbors. In 1991, the federal government incurred a budget deficit of over SwFr1.5 billion, the first budget discrepancy in seven years. Cantonal budgets also were in deficit. These deficits continued throughout the 1990s and into the 2000s, prompting governments at all levels to take further cost-cutting steps. As an international creditor, debt management policies are not relevant to Switzerland, which participates in the Paris Club debt reschedulings and is an active member of the OECD.

The US Central Intelligence Agency (CIA) estimated that in 2005 Switzerland's central government took in revenues of approximately $138.1 billion and had expenditures of $143.6 billion. Revenues minus expenditures totaled approximately -$5.5 billion. Public debt in 2005 amounted to 53.3% of GDP. Total external debt was $856 billion.

The International Monetary Fund (IMF) reported that in 2001, the most recent year for which it had data, central government revenues were SwFr81,727 million and expenditures were SwFr80,498 million. The value of revenues was us$48,428 million and expenditures us$47,700 million, based on a market exchange rate for 2001 of us$1 = SwFr1.6876 as reported by the IMF.
Affairs, 14.6%; housing and community amenities, 1.0%; health, 0.3%; recreation, culture, and religion, 0.6%; education, 3.3%; and social protection, 55.3%.

TAXATION

The Swiss Confederation, the cantons, and the communes all levy taxes on income or profits. Periodic federal, cantonal, and communal taxes also are charged against capital values belonging to corporations and other corporate entities. The cantons all levy wealth taxes based on individual net assets, stamp duties, taxes on entertainment or admissions, and special charges for educational, social, and sanitary services. Most cantons also levy a tax surcharge on members of certain major churches for the support of those religions. Localities may impose taxes on land, rents, and entertainment, as well as a head tax and a dog tax.

Although corporate income taxes are taxed at a flat rate of 8.5%, the effective rate is actually between 8% and 25% when federal and cantonal taxes are taken into account. Generally, capital gains received by a company are taxed as ordinary business income at regular business rates. However, different rules may apply to gains received from real estate or to real estate companies at the cantonal/communal level. Generally, dividends distributed by Swiss companies are taxed as ordinary income, to which a withholding rate of 35% is applied. However, applicable participation exemption rules may lower the federal tax liability for the recipient. Interest income from banks, and publicly offered debentures, bonds and other debt instruments issued by a Swiss borrower are subject to a withholding rate of 35%. However, loans from a foreign parent company to Swiss subsidiaries and commercial loans, generally are exempt.

Federal tax is levied on personal income at rates up to 11.5%. However, cantonal rates can range from 10% to around 30%. Various deductions and personal allowances are granted according to circumstances. Those between the ages of 20 and 50 who do not fulfill their military obligation are liable for an additional tax. Cantonal and communal taxes are generally imposed at progressive rates.

In 1995 Switzerland replaced its old system of taxing turnover with a value-added tax (VAT) similar to those of its European neighbors. As of 2005, the VAT was 7.6% and was levied on all deliveries of goods and services, including investments, consumer goods, animals and plants, consulting and entertainment services, license fees, and the sale of rights. The VAT is also levied on imported goods and services. However, hotel and lodging services are subject to a lower rate of 3.6%, while items such as foodstuffs, medicines, newspapers, farming supplies and agricultural products were subject to a 2.4% rate. Exports were zero-rated. There are also miscellaneous federal taxes, such as stamp duties, payroll and excise taxes.

CUSTOMS AND DUTIES

Switzerland joined EFTA in 1960 and became a full member of the GATT group in 1966. In 1973, Switzerland entered into an industrial free trade agreement with the European Community (now the European Union). Duties on industrial imports from the European Community were eliminated by 1977. Although it generally favors free trade, Switzerland protects domestic agriculture for national defense reasons and its customs tariff, established in 1921, is primarily a revenue-raising instrument. Specific duties, low for raw materials, moderate for semi finished goods, and high for manufactured goods, are levied by weight of import. Import duties average 3.2% on industrial goods. Switzerland gives preferential treatment to imports from developing nations. Other import taxes include a 3% statistical tax, a standard 7.6% VAT, and an environmental tax. Specific luxuries like cigarettes and spirits are subject to an excise tax. Quotas regulate the importation of certain agricultural items such as white wine.

FOREIGN INVESTMENT

Switzerland is generally open to foreign investment and grants foreign investors national treatment. However, the government restricts investment in vacation real estate, utilities, and other sectors considered essential to national security (such as hydroelectric and nuclear power plants, operation of oil pipelines, operation of airlines and marine navigation, and the transportation of explosive materials). There are no restrictions on repatriation of profits. Federal grants are offered for investments in depressed areas. The cantonal governments offer tax and nontax incentives for new investments or extensions of existing investments on a case-by-case basis.

In 1997, total foreign direct investment (FDI) stock in Switzerland exceeded $56.58 billion (22% of GDP). US companies accounted for 23% of that total. By 1999, FDI stock had risen to over $83 billion (32% of GDP), and the United States share to 26.6%. FDI inflows were $6.6 billion in 1997, climbing to a peak of $16.3 billion in 2000, before falling back to about $10 billion in 2001. In 2003, FDI inflows amounted to $12.2 billion.

Stocks of Swiss FDI abroad totaled $170 billion (62.3% of GDP) in 1997 rising to $205.2 billion (79% of GDP) in 1999. In 1999, the largest holders of Swiss outward FDI were the United States (with $45 billion, 23%); the United Kingdom ($23.7 billion, 11.5%); Germany ($17.4 billion, 8.5%); the Netherlands ($12.5 billion, 6.1%); and France ($10.4 billion, 5%). FDI outflows in 2003 amounted to $10.9 billion.

ECONOMIC DEVELOPMENT

Private enterprise is the basis of Swiss economic policy. Although government intervention has traditionally been kept to a minimum, the international monetary crises from late 1974 to mid-1975 led to imposition of various interim control measures; in 1982, with inflation rising, a constitutional amendment mandating permanent government price controls was approved by popular referendum. The Swiss National Bank has followed a general policy of limiting monetary growth. To further raise the standard of living, the government also grants subsidies for educational and research purposes, promotes professional training, and encourages exports. Although certain foreign transactions are regulated, there is free currency exchange and a guarantee to repatriate earnings of foreign corporations.

The cause of the remarkable stability of Switzerland's economy lies in the adaptability of its industries; in the soundness of its convertible currency, which is backed by gold to an extent unmatched in any other country; and in the fact that the particular pattern of Swiss democracy, where every law may be submitted to the popular vote, entails taking into account the wishes of all parties whose interests would be affected by a change in legislation.

Switzerland's development assistance program takes the form of technical cooperation, preferential customs treatment for certain third-world products, and a limited number of bilateral aid arrangements.

The question of future European Union (EU) membership remains a point of contention among the Swiss. The French-speaking minority overwhelmingly favors EU membership, while the German-speaking majority strongly opposes it. In a 2000 referendum, Swiss voters approved closer ties to the EU. Some of the key provisions of the deal included agreement to allow EU trucks transit rights through Switzerland, as well as granting Swiss freedom of movement in the EU. Full access to the Swiss market by the original 15 EU member countries was achieved in a June 2004 agreement, ending as a result the "national preference." Switzerland approved another pact, the Schengen-Dublin agreement with the EU, in June 2005, which allows for the free movement of peoples, although fears of cheap labor coming from new EU member nations remained. However, voters approved by a referendum held on 25 September 2005 a measure to extend the provision of free movement of peoples to the 10 predominantly eastern European nations which joined the EU in 2004.

A new ordinance covering the banking sector was enacted in 2002, to combat money laundering and the financing of terrorism. Switzerland joined the UN in 2002.

SOCIAL DEVELOPMENT

There is a social insurance system and mandatory occupational pension system financed by employer and employee contributions as well as governmental subsidies. Old-age pensions are paid at age 65 for men and 63 for women. Disability and survivorship pensions are also available to qualified recipients. Sickness and Maternity benefits were first implemented in 1911. Medical care is available to all persons living in Switzerland, and there is a voluntary insurance plan for all employees to provide cash benefits. Maternity benefits are payable up to 16 weeks. Work injury insurance is compulsory, with contribution rates varying according to risk. Unemployment and disability is also covered. Family allowances are provided by the cantons, but there is a federal program covering agricultural workers. Some cantons provide birth grants.

The law provides for equal pay and prohibits gender discrimination, but there is significant bias against women in the workplace. Women earn less than men, and are less likely to receive training. There are few women in managerial positions, and they are also promoted less than men. Sexual harassment in the workplace continues, although laws and advocacy groups work to eradicate the problem. The Federal Office for Equality Between Women and Men and the Federal Commission on Women are charged with eliminating all types of gender discrimination. Physical and sexual violence against women and domestic abuse persist.

Extremist organizations continue physical and verbal attacks on religious, racial, and ethnic minorities. The government is taking some action to curtail the activities of these groups. Human rights are generally respected in Switzerland.

HEALTH

Health standards and medical care are excellent. The pharmaceuticals industry ranks as one of the major producers of specialized pharmaceutical products. Managed-care systems are widely used, especially with a "gatekeeper" component to control costs. As of 2004, there were an estimated 352 physicians, 834 nurses, 48 dentists, and 62 pharmacists per 1,000 people. The ratio of doctors per population varies by region, with the highest proportions in Basle and Geneva and the lowest in Appenzell. Total health care expenditure was estimated at 10.4% of GDP.

As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 9.8 and 8.8 per 1,000 people. About 71% of married women (ages 15 to 49) were using contraception. The fertility rate was 1.5 children per woman surviving her childbearing years in 2000. The infant mortality rate, which had been 70.3 per 1,000 live births in 1924, was 4.39 in 2005. The vaccination rates for DPT and measles were, respectively, 94% and 81%. In 2005, life expectancy was averaged at 80.39 years.

There were about nine cases of tuberculosis per 100,000 people reported in 1999. Cardiovascular disease-related deaths numbered nearly 30,000 in the mid-1990s. Tobacco consumption has dramatically decreased from 3.1 kg (6.8 lbs) per year per adult in 1984–86 to 2.4 kg (5.3 lbs) in 1995. In 1996, voters in Zurich approved a government plan to supply heroin addicts with free access to their drug.

The HIV/AIDS prevalence was 0.40 per 100 adults in 2003. As of 2004, there were approximately 13,000 people living with HIV/AIDS in the country. There were an estimated 100 deaths from AIDS in 2003.

HOUSING

Although housing standards are comparatively high, there are shortages in certain areas. In the mid-1990s, less than 40,000 new dwellings per year were constructed in communities of 2,000 or more inhabitants, down from 44,228 in 1985. In 2000, there were about 3,115,399 private households and about 1,377,552 residential buildings. About 30% of all residential buildings were designed for two or more households. The total housing stock in 2001 was about 3,604,340 dwellings.

EDUCATION

Education at all levels is first and foremost the responsibility of the cantons. Thus, Switzerland has 26 different systems based on differing education laws and varied cultural and linguistic needs. The cantons decide on the types of schools, length of study, teaching materials, and teachers' salaries. Education is compulsory in most cantons for nine years, and in a few for eight. An optional 10th year has been introduced in several cantons. Church schools in some cantons are tax supported. After primary school, students complete the compulsory portion of their education in various types of secondary Grade I schools, which emphasize vocational or academic subjects to varying degrees. Secondary Grade II schools, which are not compulsory, include trade and vocational preparatory schools and gymnasiums, which prepare students for the university and lead to the matura, or higher school-leaving certificate.

Switzerland has a large number of private schools attracting primarily foreign students. These schools, most of them located in the French-speaking cantons, are known for their high-quality education, of either the academic or "finishing school" variety.

In 2001, about 97% of children between the ages of five and six were enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 99% of age-eligible students. The same year, secondary school enrollment was about 87% of age-eligible students. It is estimated that about 98.6% of all students complete their primary education. The student-to-teacher ratio for primary school was at about 13:1 in 2000; the ratio for secondary school was about 10:1. In 2003, private schools accounted for about 3.7% of primary school enrollment and 7% of secondary enrollment.

Switzerland has 10 cantonal universities, including four in French-speaking areas and four in German-speaking ones. The universities' expenditures are largely financed by the cantons, with a 53% contribution from the Confederation. Approximately one-third of all higher-level educational funding goes to research and development. The largest universities are those of Zürich, Geneva, and Basel; others include those of Lausanne, Bern, Fribourg, and Neuchâtel. The Federal Institute of Technology in Zürich, the Economics College at St. Gallen, and the Federal Institute of Technology in Lausanne are also important. In 2003, it was estimated that about 49% of the tertiary age population were enrolled in tertiary education programs; 53% for men and 44% for women. The adult literacy rate has been estimated at about 99%.

As of 2003, public expenditure on education was estimated at 5.8% of GDP, or 15.1% of total government expenditures.

LIBRARIES AND MUSEUMS

The library of Basel University (3 million volumes) and the Swiss National Library in Bern (3.6 million volumes) are the largest in Switzerland. The University of Geneva has 1.8 million volumes; the University of Lausanne has about 1.7 million; and the University of Fribourg has two million. Switzerland has an extensive public library system with about 2,344 service points holding over 28 million volumes in total. The Library and Archives of the United Nations is located in Geneva, as is the library of the International Labor Organization (over 580,000 items).

The National Museum, a federal institution in Zürich, houses historic objects; other historical museums are located in Basel, Bern, and Geneva. Basel houses both the Museum of Ancient Art and the Basel Museum of Fine Arts, which has a fine collection of 15th- and 16th-century German masterworks, paintings by Dutch artists of the 17th and 18th centuries, and a survey from Corot to Picasso. The Museum of Fine Arts in Bern contains paintings by old masters and impressionists (Klee Foundation). The Zürich Art Museum houses modern Swiss paintings, as well as works by Dutch and Flemish masters of the 17th century. Geneva houses the Museum of the Voltaire Institute, the Museum of the Institute of Henri Dunant, founder of the International Red Cross, the Jean-Jacques Rousseau Museum, and the Museum of Modern and Contemporary Art, which opened in 1994. The League of Nations (United Nations) Museum is in Geneva. There are arts and crafts museums in most of the larger cities, and Neuchâtel has an ethnographic museum. Many fine examples of Romanesque, Gothic, and Baroque architecture are found in Switzerland.

MEDIA

The postal system and the telephone, telegraph, radio, and television systems are government owned and operated. The telephone system is completely automatic. International communications, air navigation services, and the new electronic media, including data transmission and electronic mail, are the province of Radio Suisse, a public corporation. In 2003, there were an estimated 744 mainline telephones for every 1,000 people. The same year, there were approximately 843 mobile phones in use for every 1,000 people.

Broadcasting is controlled by the Swiss Broadcasting Corp. (SBC), an autonomous corporation under federal supervision. A number of independent local radio stations have been operating since 1983. Radio programs are broadcast in German, French, Italian, and Romansch. As of 1999, Switzerland had seven AM and 50 FM radio stations and 108 television stations. In 2003, there were an estimated 1,002 radios and 552 television sets for every 1,000 people. About 376.2 of every 1,000 people were cable subscribers. Also in 2003, there were 708.7 personal computers for every 1,000 people and 351 of every 1,000 people had access to the Internet. There were 2,821 secure Internet servers in the country in 2004.

A few papers, such as the Neue Zürcher Zeitung and the Tribune de Genève, are widely read even beyond the borders of Switzerland and have excellent international coverage. The Agence Télégraphique Suisse (Schweizerische Depeschenagentur), co-owned by some 40 newspaper publishers, is Switzerland's most important national news agency.

Among the largest dailies in 2005 were Blick (in Zürich, circulation 362,000), Tages-Anzeiger (Zürich, 231,000), and Neue Zürcher Zeitung (Zürich, 151,000). Tribune de Genève was the best-selling French daily in 2005 with a circulation of about 71,000. Corriere del Ticino is a best-selling Italian paper with a 2005 circulation of about 39,000. The Schweizer Illustrierte (circulation 195,894) is the most popular illustrated weekly, and the Nebelspalter (38,630) is the best-known satirical periodical.

The constitution provides for freedom of speech and a free press, and the government is said to uphold these freedoms in practice.

ORGANIZATIONS

Both agricultural and consumer cooperatives are numerous. The Swiss Office for Commercial Expansion is an important foreign trade promotion organization. The Swiss Federation of Commerce and Industry also promotes commerce, trade and industry. The Swiss Confederation of Trade Unions serves the interests of workers/employees. The International Labour Organization has a base office in Geneva. There are chambers of commerce in all the major cities. Trade unions and professional associations exist for most occupations.

Geneva serves as home to a variety of international organizations including the International Red Cross and Red Crescent Society, the World Council of Churches, the Lutheran World Federation, the World Alliance of Reformed Churches, The World Health Organization, and the World Scout Foundation. Several United Nation's committee offices are based here as well, the UN Economic Commission for Europe, UN Environment Programme, UN High Commission for Refugees, the UN Institute for Training and Research, and the UN Research Institute for Social Development. Other international organizations with national chapters include Amnesty International, Defence for Children International, Caritas, and Greenpeace.

There are numerous cultural and educational organizations. A few with national interest include the Swiss Academy of Humanities and Social Sciences, the Swiss Academy of Medical Sciences, and the Swiss Academy of Sciences. The European Center for Culture is a multinational organization promoting understanding and cooperation between cultures.

Active youth groups within the country include Junior Chamber, YMCA/YWCA, and the Swiss Guide and Scout Movement. There are a large number of sports associations nationwide, including several international organizations such as the International Baseball Federation, the International Basketball Federation, and the International Gymnastic Federation. The International Olympic Committee is based in Lausanne.

Several human rights, social justice, and social action organizations exist, including the Association of International Consultants on Human Rights, the Berne Declaration, Green Cross, The National Council of Women of Switzerland, and the Women's International League for Peace and Freedom. The International Alliance Women and the Women's World Summit Foundation both focus on health and equal rights for women. Soroptimist International of Europe is a multinational organization of business-women working toward the causes of peace, justice, health, and equal rights.
TOURISM, TRAVEL, AND RECREATION

Switzerland has long been one of the most famous tourist areas in the world, and Swiss hospitality and the Swiss hotel industry are justly renowned. Scenic attractions are manifold, and in the Swiss Alps and on the shores of the Swiss lakes there are features of interest for the skier, the swimmer, the hiker, the mountain climber, and the high alpinist. There are approximately 50,000 km (31,000 mi) of marked footpaths and 500 ski lifts. The hotels are among the best in the world; Switzerland pioneered in modern hotel management and in specialized training for hotel personnel. Central Switzerland and the Geneva region attract the largest number of foreign tourists. Passports and visas are required of all visitors except citizens of the Americas, Europe, Japan, Australia, and New Zealand who do not need visas for stays of up to 90 days.

In 2003, there were 6,530,108 visitors who arrived in Switzerland, almost 28% of whom were German. Tourism receipts totaled $11.3 billion, and hotel rooms numbered 139,969 with 258,726 beds and an occupancy rate of 38%. Visitors stayed an average of three nights.

In 2005, the US Department of State estimated the daily cost of staying in Geneva at $380; in Zürich, $295; in Basel, $379; and in Montreux at $394.

FAMOUS SWISS

World-famous Swiss scientists include the physician and alchemist Philippus Aureolus Paracelsus (Theophrastus Bombastus von Hohenheim, 1493?–1541); the outstanding mathematicians Johann Bernoulli (1667–1748) and Leonhard Euler (1707–83); the geologist Louis Agassiz (Jean Louis Rodolphe Agassiz, 1807–73), who was active in the United States; the physiologist, pathologist, and surgeon Emil Theodor Kocher (1841–1917), who received the Nobel Prize for medicine in 1909; Charles Édouard Guillaume (1861–1938) and the German-born Albert Einstein (1879–1955, a naturalized Swiss citizen), Nobel Prize winners in physics in 1920 and 1921, respectively; and Paul Karrer (b.Russia, 1889–1971), authority on vitamins, who shared the 1937 Nobel Prize in chemistry. Other Nobel Prize winners in the sciences include Alfred Werner (1866–1919; chemistry, 1913); Yugoslav-born Leopold Ruzicka (1887–1976; chemistry, 1939); Yugoslav-born Vladimir Prelog (1906–1998; chemistry, 1975); Austrian-born Wolfgang Pauli (1900–1958; physics, 1945); Paul Hermann Müller (1899–1965), Walter Rudolf Hess (1881–1973), and Polish-born Tadeus Reichstein (1897–1996), Nobel laureates for medicine in 1948, 1949, and 1950, respectively; Werner Arber (b.1929; medicine, 1978); Heinrich Rohrer (b.1933; physics, 1986); and K. Alex Müller (b.1927) and German-born J. Georg Bednorz (b.1950), for physics in 1987.

Jean-Jacques Rousseau (1712–78), a Geneva-born philosopher, musician, novelist, and diarist in France, was a great figure of the 18th century whose writings exerted a profound influence on education and political thought. Swiss-born Mme. Germaine de Staël (Anne Louise Germaine Necker, 1766–1817) was acclaimed the world over as defender of liberty against Napoleon. Other noted Swiss writers include Albrecht von Haller (1708–77), also an anatomist and physiologist; the novelists and short-story writers Johann Heinrich David Zschokke (1771–1848) and Jeremias Gotthelf (Albert Bitzius, 1797–1854), also a clergyman and poet; and the poets and novelists Gottfried Keller (1819–90), Conrad Ferdinand Meyer (1825–98), and Carl Spitteler (1845–1924), the last of whom won the Nobel Prize for literature in 1919. The diaries of the philosopher, poet, and essayist Henri-Frédéric Amiel (1821–81) are famous as the stirring confessions of a sensitive man's aspirations and failures. Charles Ferdinand Ramuz (1878–1947) is often regarded as the most powerful Swiss writer since Rousseau. The German-born novelist and poet Hermann Hesse (1877–1962) was awarded the Nobel Prize for literature in 1946. Other recent and contemporary Swiss writers include Robert Walser (1878–1956), a highly individualistic author, and the novelists and playwrights Max Rudolf Frisch (1911–91) and Friedrich Dürrenmatt (1921– 90), whose psychological dramas have been performed throughout Europe and the United States.

Ludwig Senfl (1490–1543) was an outstanding Renaissance composer. The Dodecachordon (1547) of Henricus Glareanus (Heinrich Loris, 1488–1563) was one of the most important music treatises of the Renaissance period. Swiss-born composers of more recent times include Ernest Bloch (1880–1959), Othmar Schoeck (1886–1957), Arthur Honegger (1892–1955), Frank Martin (1890–1974), Ernst Lévy (1895-1981), Conrad Beck (1901-89), and Paul Burkhard (1911–77). Ernest Ansermet (1883–1969) was a noted conductor. Renowned Swiss painters include Konrad Witz (1400–1447), Henry Fuseli (Johann Heinrich Füssli, 1741–1825), Arnold Böcklin (1827–1901), Ferdinand Hodler (1853–1918), and Paul Klee (1879–1940). In sculpture and painting, artist Alberto Giacometti (1901–66) won world acclaim for his hauntingly elongated figures. Le Corbusier (Charles Édouard Jeanneret, 1887–1965) was a leading 20th-century architect.

Swiss religious leaders include Ulrich Zwingli (1484–1531), French-born John Calvin (Jean Chauvin, 1509–64), and Karl Barth (1886–1968). Other famous Swiss are Johann Heinrich Pestalozzi (1746–1827), an educational reformer who introduced new teaching methods; Ferdinand de Saussure (1857–1913), the founder of modern linguistics; Auguste Henri Forel (1848–1931), psychologist and entomologist; the noted art historians Jakob Burckhardt (1818–97) and Heinrich Wölffl in (1864–1945); the psychiatrists Eugen Bleuler (1857–1939), Carl Gustav Jung (1875–1961), and Hermann Rorschach (1884–1922); Jean Piaget (1896–1980), authority on child psychology; and the philosopher Karl Jaspers (1883–1969). Swiss winners of the Nobel Prize for peace are Henri Dunant (1828–1910) in 1901, founder of the Red Cross, and Elie Ducommun (1833–1906) and Charles Albert Gobat (1843–1914), both in 1902.