Monday, December 1, 2014

The Swiss Immigration Referendum: A Sign of the Times

The world is a mobile place. According to Gallup research, 700 million adults worldwide would like to permanently move to another country if they could.  Both actual and potential migration tends to be from the developing world to the developed world.

In raw numbers, the United States is the number one desired destination for these potential migrants. However, people who study these trends express potential net migration to or from a country in terms of a given country's population.  Switzerland, with its $80,000 per capita GDP, has by far the highest net potential migration index in Europe at 136% of population.  The United States has a net potential migration index of 45%. Israel has a net migration index of just 3%. Within the Middle East folks mostly want to go to Saudi Arabia (218%) and Kuwait (198%).

Younger and more educated people are more likely to migrate. International migration, therefore, tends to be a brain and energy gain for the receiving countries.

For example, Switzerland has benefited from the rich contribution of foreigners in its midst. The Swiss association of chemical, pharma, and biotech businesses has reported that of 67,000 people employed 45% are from abroad. According to this recent article [German] 44% of the population of Basel are foreigners. Indeed, towns like Basel, Geneva and Zurich have benefitted from a cosmopolitan flavor provided by internationals for centuries.

But a net population migration index of 136% can also exert pressures on a country. Since the beginning of the 20th Century, Switzerland's population has more than doubled, from 3.3 million in 1900 to 7.8 million in 2009.  During this time period, the percentage of permanent resident foreigners has also doubled. Nearly a quarter of the population are now not Swiss citizens.  [Legal residents are eligible for Swiss citizenship after a decade in the country, recently reduced from 12 years]
Permanent Foreign Residents as % of Pop.
Switzerland is a small country, just 41,258 square kilometers--roughly three times the size of Los Angeles County (roughly twice the size of Israel):
Switzerland superimposed on Los Angeles
Sixty percent (the Southern area) is covered by the Alps; another ten percent is covered by the Jura mountain range (the Northwest region). The Swiss think of themselves as a mountain folk, but in reality most of them (~5 million) live in the central plane bounded by Geneva--Neuchatel--Olten,--Winterthur--St. Gallen--Luzern--Bern,--Lausanne.  Throw in Basel (which is slightly apart), and all the heavy machinery, all the watches, all the processed foods, all the pharmaceuticals, all the banking happen in the central plane (Mittelland).
The Swiss Mittelland
The increase in population from 3.3 million in 1900 to 8.2 million today has mostly impacted this central plane. Although Switzerland does a better job at managing growth than most, the landscape has nevertheless been changing with forward progress.  Open fields and forests have yielded to infrastructure and housing needed to accommodate the increased population and industry.  So when there are reports that Switzerland is losing farmland to development at the rate of 27 acres per day, this periodically results in push back: "Enough of this growth, enough of these foreigners! Why can't we just go back to how things were?"

And because Switzerland practices direct democracy, such impulses result in voter initiatives from time to time.  The initiative (2009) prohibiting the construction of minarets was a manifestation of this inward looking desire for the past. Switzerland's refusal to join the European Union in 1992 is a manifestation of this apprehension of what the future will bring.

After Swiss voters declined to join the EU (by a narrow margin of 50.3%) Switzerland nevertheless negotiated various free trade treaties with the EU. In 2005 Swiss voters also agreed to join the European open border "Schengen" area.  This means Switzerland permitts free travel to and from EU member states (plus Norway and Iceland). In addition, Switzerland has made several bilateral free trade agreements with the EU, which among other things, commit Switzerland to free movement of peoples to work and live anywhere in the EU and in Switzerland.

This commitment has now been questioned.

This past February, the conservative Swiss Peoples Party (SVP) sponsored an initiative to curb mass-immigration to Switzerland, including immigration from EU member states.  The mass-immigration-initiative, adopted on February 9, 2014 reestablished immigration quotas (although the quota levels were left open). Passage of this initiative has placed in jeopardy several of Switzerland's bilateral treaty commitments on free trade with the EU. Under the treaties, Switzerland has three years, until February 9, 2017 to sort this out.  The legal implications, as well as the reaction of the EU are in doubt.

Passage of the mass-immigration initiative this past February will provide lots of uncertainty for the next two years, with potentially severe consequences for Switzerland's trade position with the EU member states.  Stay tuned ....

In the meantime, conservative forces in Switzerland tried to up the pressure with a new initiative which would have established a strict ceiling on net immigration of 0.2 percent of population (about 16,000 persons).  This would have resulted in a significant reduction of immigration to Switzerland, which has been as high as 100,000/year recently.  This initiative was handily rejected by 74% of Swiss voters on November 30, 2014.

The Swiss immigration quotas that remain in place after the February initiative will also play into discussions in various EU member states, where similar forces are playing out.

As in the United States, immigration policy will be a big part of the political landscape in Europe for the next few years.

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