by Paul Schmutz Schaller for The Saker Blog

General situation

The SMI (Swiss Stock Market) index is presently about the same as one year ago. This means that the Swiss brokers did loose nothing in the year 2020. The feelings of the broad population however are completely different, most would say that 2020 was really a bad year. Moreover, the SMI sharply dropped twice in 2020, in the end of March and in the end of October. This corresponds to the first and the second wave of the pandemic in Switzerland. However, the SMI fall was much bigger in March while in reality, the second Corona-19 wave is much stronger. Rarely, the big discrepancy between the reality of the most rich and most mighty social class and the reality of the overwhelming majority of the population is so obvious and so easy to see.

The first wave of the pandemic was in March/April while the second started in October. Before the end of the year, about 5% of the Swiss population will be tested positive. 90% of them stem from the second wave. Statistically speaking, around 1.5% of the positive tested persons die because of the new coronavirus; the general excess mortality is almost at this level. Most of the persons who died due to Covid-19 were more than 70 years old. With respect to the data of the WHO (World Health Organization), Switzerland is one of the worst affected countries in the second wave; in very few countries, 5% of the population (or more) have been tested positive.

In spring (with respect to Switzerland), some estimations predicted that over 50% of the population will be infected and that 1% of the population will die. We are still very fare from these numbers. However, if there will be a third wave in the next months, then it is not excluded that these numbers were quite realistic. So, this is a very serious disease.

The worldwide course of the Covid-19 pandemic depends on the regions. The course in Switzerland with a first wave in spring and a much stronger wave in fall is typical for European countries (and also for Canada). On the other hand, South-East Asia and India for example had the most cases in August/September and, until now, there is no second wave. China has more or less no new cases since February. South Africa had a first wave in June/July and now, in December, a second wave seems to begin, but less strong than the first one (all indications from WHO).

Despite the fact that, in Switzerland, the second wave is much stronger than the first one, the authorities took less strong measures. While schools were closed between March 16 and summer, there remained open in fall. Most of small business were closed in spring, but not in fall. Domestic mobility remained high in fall. On the other hand, the wearing of masks is now quite general and is required. One cannot oversee that the reaction of the government and of the Swiss stock market were quite similar. This is juste an objective fact which I will neither comment nor judge.

Social distancing is still strong and so is the financial support for affected (small) business. The newest prognoses see a decrease of the GDP (gross domestic product) in 2020 of 3.3% and an increase of 3.0% in 2021. The unemployment rate was 2.3% in 2019 and is expected to be 3.2% in 2020 and 3.3% in 2021. However, the prognoses are very insecure, due essentially to the fact that the impact of vaccines in 2021 is not clear.

Switzerland is among the countries in Western Europe with the weakest restrictions (however without downplaying the pandemic). This is not so surprising since traditionally, the state is not so strong and the weight of the private sector is high. On the other hand, the Swiss prefer to be be good pupils in Western Europe and they will not risk too much confrontation. Nevertheless, Switzerland has not given in to the pressure coming from Germany and France to close ski resorts.

The vaccine question

Until now, Switzerland has received four demands for a Covid-19 vaccine registration, all coming from Western countries. It is very unlikely that Russian or Chinese vaccine producers will ask for admission in Switzerland; they have enough possible clients elsewhere. Of course, theoretically, Swiss companies could produce Russian or Chinese vaccines in collaboration with the developers, but this also is not to expect. Unfortunately, but not surprisingly, the vaccine question has been highly politicized in Switzerland and in other Western countries. Only Western developed and produced vaccines are advocated by the authorities and by the media (of course, US vaccines made in Taiwan would also be accepted). Vaccines developed and produced in Russia or China are ridiculed. Moreover, the fact is hidden that other countries such as India, Iran, South Korea, Vietnam, or Cuba are developing their own vaccines. This politicization of the vaccine question is the reason why I have decided to not getting vaccinated (even if I am 69 years old).

It is obvious that the leading class in Switzerland would like to vaccinate the whole population. This would be the easiest and cheapest way in order to bring Covid-19 under control. Their propaganda machine has already started. Of course, they benefit from the fact that getting vaccinated is a reasonable choice for a large part of the population.

Nevertheless, skepticism against Covid-19 vaccines is high in Switzerland, among the highest in the world if we can trust international surveys. This skepticism has some healthy reasons. The confidence that the big companies act for the good of the population has clearly decreased. There is pretty much of mistrust. Moreover, the confidence in sciences and technology has become weaker. Many have lost confidence that every new problem can be solved just by more technology; they rather think that the society as a whole has to get more sane.

This skepticism is violently attacked by the ruling class. The latter classify the skeptical people as anti-scientific, misinformed, conspiracists. I will not deny that such people exist. But these attacks of the ruling class are completely hypocritical. In fact, there are heir attacks against Russian or Chinese vaccines which are utterly anti-scientific and altogether a misinformation.

Having worked as a mathematician for decades, I know quite well the scientific milieu in Switzerland. While I think that my scientific spirit was always and is still high, I lost very much the respect for the Western scientific world. Most Western scientists are not very much interested in the search for truth, they are much more interested in their workplace and in their career. And the degree of independent thinking is rather low. Therefore, when this kind of people attack the population of not thinking enough, then this rather means that the thinking of the population is not servile enough.

I cannot judge by myself the scientific milieu in China or Russia or Iran. But as a whole, these societies are healthier than the Swiss society and because of that, I am confident that their scientific level and spirit is better than in Switzerland.

No bright future in sight

The crisis around the Covid-19 pandemic is a particular one. It is not, as a usual crisis, an escalation of existing conflicts. It is a problem which came from the outside. So, it s a kind of examination for each society.

Sweden’s king said yesterday that the country has failed in protecting the people from Covid-19. This has been interpreted by European media as a criticism of Sweden’s particular strategy in this pandemic. But I think that this interpretation is not justified. Much more probable is that Sweden’s king did not make a political statement, but deplored the too many deaths due to the pandemic in Sweden. In other words, he showed humility. Switzerland has no king. However, the number of deaths has a comparable size than in Sweden. But nobody in Switzerland has the courage and the humility to say that Switzerland has failed in protecting the people.

In spring, unity in Switzerland was quite big and the country managed to pass this first wave more or less without real problems. But now, the situation is quite different. The usual domestic conflicts came to the surface. The government is much more navigating than in spring. Consequently, people are more unsettled.

In my eyes, the main problem is ideological. Switzerland has no project, no aim. There is no collective engagement. There is no clear idea how Switzerland could build a more healthy society. Nearly all efforts have the objective to defend the status of Switzerland as a rich and stable country belonging to the West. This has even got stronger during this crisis. The media concentrate on Switzerland and neighboring countries. The situation with respect to the pandemic in countries in Asia, Africa, or Latin America is just ignored. Or is used for attacks against these countries. An exception is South Korea which was emphasized by Swiss media as a „better“ alternative to the „dictatorial“ China.

It is probable that, during the year 2021, Switzerland will be able to control the new coronavirus, mainly due to vaccines. Then the holiday trips abroad will restart in full force. But I would bet that the enthusiasm is somewhat gone. Even with this pandemic overcome, I cannot see a bright future for Switzerland.

PS: Even if it is not part of the theme, I cannot resist to comment the recent decision of the US authorities to label Switzerland and Vietnam as „currency manipulators“. Certainly, the US authorities have powerful computers for their sophisticated calculations. For the common mortals however, the question is quite simple. „Currency manipulation“ would mean that a country artificially devalue the currency in order to increase exports. In this regard, one observes that one year ago, one US dollar was exchanged for 0.98 Swiss franc. Now, one US dollar is worth 0.88 Swiss franc, hence a devaluation of about 10%. Hence, if one of USA/Switzerland is a „currency manipulator“, then it is clearly the USA.


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