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World Economic Forum: Globalisation under the spotlight in Switzerland

The question of whether the coronavirus pandemic and the war in Ukraine have sounded the death knell for globalisation has dominated the World Economic Forum in Swiss resort Davos.

A person carries a Chinese and an American flag at the 2022 World Economic Forum in Davos. Image: Fabrice COFFRINI / AFP
A person carries a Chinese and an American flag at the 2022 World Economic Forum in Davos. Image: Fabrice COFFRINI / AFP

Some believe the crises have unleashed an opportunity for a transformation of international trade and supply chains as the world economy slows down.

Once advocated by anti-globalisation movements, far from the quiet rooms at Davos, talk of “deglobalisation” is back in the face of supply chain disruptions linked to the Ukraine conflict and lockdowns in China.

In the hope of building stronger networks unaffected by crises like war, deglobalisation would mean bringing production back closer to home, thus allowing the movement of goods across shorter distances.

The issue has become acute after Covid-19 and the misery at Shanghai port.

The Chinese city has become a symbol of global supply chain woes after its factories were closed for weeks and containers piled up as China sticks stubbornly to a zero-Covid strategy, causing delivery delays worldwide.

And since Russia’s invasion of Ukraine, global food prices have hit an all-time high as the two countries make up a huge share of the globe’s exports in several major commodities, like wheat.

Such snags are leading many, including the world’s biggest companies, to consider what production should look like in the future.

Globalisation is “temporarily pausing”, Loic Tassel, president for Europe at the consumer goods giant Procter & Gamble said during an event at Davos.

“The price to pay or the time to wait is not compatible anymore with our industry,” Tassel said, giving the example of Shanghai, which is the world’s busiest container port.

“We are now bringing into the equation the cost and resilience of the supply chain, it was not in our mind three years ago,” he said. But rather than talk about “deglobalisation”, Pamela Coke-Hamilton, director of the Geneva-based agency International Trade Centre, preferred to speak about diversification and relocalisation — where supply chains are closer and in areas where conflict is far away.

“The change will come by the shifting to near sourcing value chains,” she told AFP.

Clouds gathering 

Sceptics said companies sought the cheapest options despite being aware of the risk of huge dependence on certain regions.

“We never imported so much from China as when we said we should rely on it less,” noted Gilles Moec, chief economist at French insurance giant Axa, on the sidelines of Davos.

“One of the reasons why people are so nervous right now is that if China was unable to meet global demand because of the pandemic, that would be a catastrophe,” he added.

Globalisation’s identity crisis comes at a time when pessimism reigns over the future of the global economy.

“The horizon has darkened,” said International Monetary Fund head Kristalina Georgieva at Davos on Monday.

And while a global growth forecast of 3.6 percent excludes the risk of recession right now, “it doesn’t mean it is out of question” for certain countries.

The clouds are already gathering in developed countries, according to data from the Organisation for Economic Co-operation and Development (OECD).

There was only 0.1 percent growth in the first quarter of 2022, the OECD said Monday, and GDP even fell by 0.1 percent among G7 countries.

The second quarter is likely to be equally sluggish, as the adverse effects of the Ukraine war and China’s lockdowns take root.

After governments spent copiously during the pandemic, “the response to put in place is not obvious and that worries everyone a little,” Axa’s Moec said.

Meanwhile, inflation is pushing central banks, including the US Federal Reserve, to raise interest rates, which will make it costlier for both companies and consumers to borrow and slow economic activity.

The European Central Bank signalled Monday the end of negative rates despite the European Commission’s growth forecast for 2022 last week for the eurozone, from four percent to 2.7 percent.

And figures from China, the global engine of growth, revealed the pain inflicted by Beijing’s strict zero-Covid policy as retail sales and factory production slumped to their lowest in over two years, while unemployment is near record levels.

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POLITICS

How Switzerland can force you to run for public office

Having Swiss citizenship brings with it all sorts of benefits - but also the possibility that you could be forced to run for public office. Here's why.

How Switzerland can force you to run for public office

In most cases, when an election for a public office is held, several candidates compete and campaign for the position.

But if you are a Swiss citizen your name can be added to the ballot against your will – even if you have no knowledge of or interest in politics.

One recent example of such “coercion” comes from the town of Buchrain (population 6,000) in canton Lucerne.

As reported by Blick, the municipality must fill a position of social director, which is an elected rather than appointed role, but no candidates have come forward to fill the vacancy on the town council.

The town has solved this conundrum by adding names of all the residents eligible to serve — Swiss nationals over the age of 18, who have lived in the community for at least five days — to its election roster.

Whoever gets the most votes in the September 25th election will be constrained to serve on the municipal council, no matter how unwillingly or reluctantly.

While  this move is undoubtedly extreme, it is not unique in Switzerland.

Another such example comes from Spiringen, Uri (population 903), where Tobias Imhof was elected to the municipal council against his will in 2017.

If elected, these people must serve, but they do have the right to appeal the voters’ decision.

Objections against one’s own election must have valid grounds, though. Other than suddenly dying (a cast-iron alibi if ever we heard one), they include being over 65 years of age or providing proof that serving in a public office would be detrimental to the person’s health or the local economy.

READ MORE: How Switzerland’s direct democracy system works 

Can you be elected to a public office against your will?

This is not a widespread or common practice, as in most cases there are enough candidates who are eager, or at least willing, to serve, but it does happen, especially in smaller places.

However it only happens at a local, rather than national, level, so you don’t need to worry that one day you will wake up and discover that you are the president of Switzerland.

Also, for your name to be added to the list of candidates, you must be eligible to stand for election in the first place.

This means you must be a Swiss citizen, whether from birth or naturalised. And being a dual national — that is, of Switzerland and another country — doesn’t exempt you from this civic obligation either. That is because in the eyes of the law, you are considered to be Swiss, regardless of what other nationalities you hold.

Each town could have its own specific eligibility criteria as well, such as the length of residency in the community, for instance.

Additionally, fluency in the language of the region (that is, German, French or Italian) is certainly a requirement too, as no municipality wants councillors who don’t speak and understand the local language.

 READ MORE: Switzerland rejects voting rights for foreigners

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