Topic: Sustainable Economic Policy
Country: Switzerland
Delegate Name: Brett Bauman
School: Forest Hills Northern High School
Topic page: background guide and all position papers All Switzerland position papers GLIMUN 2015 committees
The economies of many countries are growing, but they may not be sustainable. Countries often resort to tactics such as manipulating their currency and seeking bailouts amid financial crises, such as that in 2008. These policies do not promote a sustainable economic policy, and instead they are just temporary fixes that have larger consequences in the end such as inflation and having to pay back loans. Countries in financial distress must instead use sustainable economic policies to help get them out of their financial troubles
The country of Switzerland has had a flourishing economy for many years. Switzerland has incredibly low unemployment rates, exceptional infrastructure and a very high GDP per capita. The Swiss economy also has efficient and transparent regulations and the economy supports diversified economic growth. The Swiss economy is very stable and relies primarily on the services sector and manufacturing. During the 2008 financial crisis, the country acted quickly and efficiently and therefore avoided the crisis that the rest of the world felt. Switzerland tightened the reins on the banks, and when disaster struck the stock market, the government nationalized some of USB’s (One of the larger Swiss banks) assets and set the interest rates at 0% and the economy rebounded relatively quickly compared with the surrounding countries. The Swiss economy continues to rely on that of surrounding countries because the surrounding countries purchase over fifty percent of Swiss exports.
Switzerland and the World Bank have supported sustainable economic development in projects such as The Fiscal Management and Accelerating Growth Program Project for Malawi in which money was given to Malawi to promote fiscal management. The fiscal management reforms were created to help strengthen the Government's capacity to meet stabilization targets.
Switzerland does not believe in countries spending more than what they earn in taxes. Switzerland also stresses the importance of a country having fiscal responsibility. Switzerland also employs a no-bailout philosophy with cantonal and federal governments. If a canton is in need of a bailout, they are forced to find their own way out of the situation. This system is used because of the government were to bailout a canton, the federal government’s creditworthiness would be weakened and it would have to pay higher interest rates. the fiscal discipline in Switzerland can be explained through this no-bailout policy and it shows the position of Switzerland on the bailouts of other countries.
