Ideas to Action:

Independent research for global prosperity

Switzerland

2013

Aid

Aid quality is just as important as aid quantity, so the CDI measures gross aid as a share of GDP adjusted for various quality factors: it subtracts debt service, penalizes “tied” aid that makes recipients spend aid only on donor goods and services, rewards aid to poor but relatively well-governed recipients, and penalizes overloading poor governments with many small projects.

Switzerland’s aid performance

  • Score: 5.4
  • Rank: 10

Strengths

  • Small share of tied or partially tied aid (2.54%; rank: 7)
  • Large share of aid to poor and better-governed recipients (selectivity rank: 9)
  • Large amount of private charitable giving attributable to tax policy (0.01% of GDP; rank 5)

Trade

International trade has been a force for economic development for centuries. The CDI measures trade barriers in rich countries against exports from developing countries. It also penalizes costly importation processes and restrictions against purchasing services from foreigners.

Switzerland’s trade performance

  • Score: 18
  • Rank: 24

Strengths

  • Low tariffs on rice (0.2 % of the value of imports; rank: 4)
  • Low tariffs on clothing (5.1 % of the value of imports; rank: 2)
  • Few limitations on the importation of services (Services Trade Restrictions Index score: 12.9; rank: 4)
Weaknesses
  • High tariffs on agricultural products (64.9% of the value of imports; rank: 24)
  • High agricultural subsidies (equivalent to a tariff worth 15.7% of the value of imports; rank: 19)
  • High tariffs on sugar (87.7% of the value of imports; rank: 27)
  • High tariffs on beef (303.9% of the value of imports; rank: 26)
  • High tariffs on other meats (141.3% of the value of imports; rank: 26)
  • Relatively high cost to import a shipping container ($1,537 per container; rank: 25)
 

Finance

Rich-country investment in poorer countries can transfer technologies, upgrade management and create jobs. Conversely, policies that permit financial secrecy of companies and banks can facilitate illicit activities and financial flows abroad. The CDI rewards policies that support healthy investment in developing countries and promote transparency in financial transactions at home.

Switzerland’s finance performance

  • Score: 3.2
  • Rank: 27

Strengths

  • Active participation and leadership in extractive industries transparency initiatives such as the Extractive Industries Transparency Initiative (EITI) and the Kimberley Process on blood diamonds
  • Provides assistance to companies looking for investment opportunities in developing countries
  • Strong support to identifying bribery and corrupt practices
Weaknesses
  • Does not have Political risk insurance agency
  • Scores below average in the Financial Secrecy Index for having few regulations in place to prevent illicit financial transactions within its jurisdiction (rank: 27)
 

Migration

The movement of people from poor to rich countries provides unskilled immigrants with jobs, income and knowledge. This increases the flow of money sent home by migrants abroad and the transfer of skills when the migrants return.

Switzerland’s migration performance

  • Score: 6.4
  • Rank: 9

Strengths

  • Bears large share of the burden of refugees during humanitarian crises (rank: 4)

Weaknesses

  • Small share of foreign students from developing countries (34.5%; rank: 21)

Environment

Rich countries use a disproportionate amount of scarce resources, and poor countries are most vulnerable to global warming and ecological deterioration, so the CDI measures the impact of policies on the global climate, fisheries and biodiversity.

Switzerland’s environment performance

  • Score: 6.1
  • Rank: 18

Strengths

  • Low greenhouse gas emissions rate per capita (6.1 tons of carbon dioxide equivalent; rank: 3) 
  • No fishing subsidies (rank: 1)
  • No fossil fuel production (0 tons of carbon dioxide equivalent; rank: 1)
Weaknesses
  • Low gas taxes ($0.63 per liter; rank: 22)
  • High consumption of ozone-depleting chemicals per capita (rank: 21)
  • Has not ratified the UN Fisheries Agreement
 

Security

Since security is a prerequisite for development, the CDI rewards contributions to internationally sanctioned peacekeeping operations and forcible humanitarian interventions, military protection of global sea lanes, and participation in international security treaties. It also penalizes arms exports to poor and undemocratic governments.

Switzerland’s security performance

  • Score: 4.6
  • Rank: 16

 

Strengths

  • Participates in major international security treaties and regimes

Weaknesses

  • Low personnel contributions to UN peacekeeping and humanitarian interventions over last decade (rank by share of GDP: 23)
  • Relatively small contribution to the UN Peacekeeping Operations budget (rank by share of GDP: 23)
  • No protection of global sea lanes
 

Technology

Rich countries contribute to development through the creation and dissemination of new technologies. The CDI captures this by measuring government support for R&D and penalizing strong intellectual property rights regimes that limit the dissemination of new technologies to poor countries.

Switzerland’s technology performance

  • Score: 4.9
  • Rank: 14

Strengths

  • Provides patent exceptions for research purposes
  • Revokes unused patents
Weaknesses
  • Low tax subsidy rate to businesses for R&D (rank: 21)
  • Allows patents on plant and animal varieties
  • Pushes to extend intellectual property rights in bilateral trade treaties (“TRIPS Plus” measures) that restrict the flow of innovations to developing countries
  • Imposes strict limitations on anti-circumvention technologies that can defeat encryption of copyrighted digital materials
  • Offers patent-like proprietary rights to developers of data compilations, including those assembled from data in the public domain 
  • Does not force patent holders to license to meet social needs