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Report explodes myth of Swiss economic divide

On which side would you rather be? The Saanegraben in canton Fribourg symbolises Switzerland’s linguistic divide (wikipedia) (large); swissinfo video doc (small)

A survey of regional economic differences by the Credit Suisse Group shows that growth in French-speaking Switzerland is keeping pace with the rest of the country.

The report undermines frequent claims by French-speaking Swiss that they are short-changed by their Swiss-German neighbours.

According to the survey, published on Tuesday, the myth of an economic “Röstigraben” – the tongue-in-cheek German name for the country’s linguistic dividing line – is hard to prove.

“Contrary to frequent claims, current economic growth and the industry mix in French-speaking Switzerland are not weaker than in German-speaking Switzerland,” said a Credit Suisse spokesman.

“Although some cantonal differences remain, there has been a smooth transition from an economy based on traditional industries to a knowledge-based society dominated by services and hi-tech industries.

“However, a shadow is being cast over these positive results by locational quality and public sector finances.”

The study, based on an analysis of 28 regions, compared key indicators including locational quality, household income, industry mix, degree of urbanisation and fiscal policy.

Trading places

One interesting finding concerns demographics. While population growth in French-speaking Switzerland is only just above the national average, there are big regional differences.

In Fribourg, for instance, the number of new births over the past decade is almost twice the national average – a social trend with clear economic implications for the real estate market.

The French-speaking region, which accounts for about a quarter of the Swiss population, also has higher-than-average urbanisation, with 85 per cent of people living in built-up areas.

The report’s locational quality index measures regions’ long-term growth potential, based on factors ranging from tax levels through educational standards to quality of public transport.

At cantonal level, Geneva comes fourth – behind Zug, Zurich and Nidwalden (all in German-speaking Switzerland) – thanks primarily to its highly qualified workforce. Vaud does well for the same reasons.

However, educational levels in Fribourg, Valais and Jura are below average, and all three – plus Neuchâtel – get poor marks for ease of access (distance from major population centres).

Taxing times

As for tax rates, all the French-speaking cantons score badly, though some regions – Nyon, Geneva, Morges/Rolle, Lausanne and Vevey/Levaux in particular – do better than others.

At SFr38,000 ($32,000) per year, average incomes in the French-speaking part are also below the national average of SFr41,000, though Nyon – average over SFr50,000 – once again leads the pack.

The industry mix also varies considerably, with Geneva coming top in terms of added value created per employee (banks and services).

Vaud (corporate services and IT), Neuchâtel (hi-tech) and Valais (chemicals) are the next best performers in this field, while the Jura (traditional industries) comes last.

swissinfo with agencies

Swiss commentators often refer to the “Röstigraben” – a light-hearted term for differing political and social attitudes of the main linguistic groups.
There are also growing claims that the western Swiss cantons are discriminated against politically and economically.
Some think the differences could even lead to the break-up of the country.

A new study shows economic growth is no weaker in French-speaking Switzerland than in the German-speaking majority.

The Credit Suisse study says western Switzerland as a whole has made a “smooth transition” to a “knowledge-based” economy.

However, it points to significant regional differences, particularly in terms of “locational quality”.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR