Switzerland has a highly successful market economy based on international trade and banking. Its standards of living, worker productivity, quality of education, and health care are higher than any other European country. Inflation is low, and unemployment is negligible. The economy is heavily dependent on foreign guest workers, who represent approximately 20% of the labor force. Agriculture employs less than 5% of the population, and since only 10% of the land is arable, the primary agricultural products are cattle and dairy goods (especially cheeses); grains, fruits, and vegetables are also grown, and there is a large chocolate-processing industry. Mineral resources are scarce, and most raw materials and many food products must be imported. Tourism adds significantly to the economy. Electricity is generated chiefly from hydroelectrical and nuclear power sources; in 2017 the Swiss voted to phase out nuclear power in favor of renewable energy sources.
Switzerland has a worldwide reputation for the high quality of its export manufactures, which include machinery, chemicals, watches, textiles, precision instruments, and diverse high-tech products. Centered in Basel, the chemical-pharmaceutical industry exports around the globe. Due to its central location in Europe and the stability of its politics and currency, Switzerland has become one of the world's most important financial centers. The banking, insurance, shipping, and freighting industries accommodate the enormous amount of international trade going through Switzerland. Banking has also benefited secrecy laws, which have led wealthy foreigners to evade taxes by hiding assets with Swiss banks. In recent years, however, that secrecy reduced as a result of pressure from foreign governments seeking to prosecute tax cheats. Imports include manufactured goods, vehicles, and clothing and textiles. Its most important trading partners are Germany, Italy, France, the United States, and Great Britain.
The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.
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