LETTER FROM SWITZERLAND

Grey River Argus, 1 February 1946, Page 2

LETTER FROM SWITZERLAND

WINTER COMES. Switzerland is, to a very high degree, dependent on foreign sources of supply and must obtain almost all her raw materials from abroad. Owing to these circumstances, her national economy was in an extremely delicate situation last Spring when the war was at its peak in Europe. Now, as we write these lines, seven months after’ the Allied victory, a very marked improvement has set in and, at the close of the year, the country can look forward with less anxiety to the coming Winter months. Imports reached their lowest level in February, 1945, with a bare total of 30,000 tons, a frightening figure if one compares the pre-war monthly average of over 610,000 tons. By October, 1945, the situation had improved considerably: 211,160 tons were imported that month. This favourable trend made it possible for the Federal authorities to alleviate slightly the very severe food restrictions. In the field of industrial products, restrictions on textiles and footwear have been eliminated completely and control of certain other products has been lessened. Apart-from relatively important arrivals of cotton, wool, skins, leather, gasolene and different metals, the first thought small consignment of rubber has also arrived. The most difficult problem is still that of coal supplies. All restrictive measures on this commodity have had to be maintained. The cement shortage, due in the first place to the lack of coal, is hampering the revival of the building trades, where improvement is much to be desired if the housing shortage is to be met. On the export side, a remarkable upward movement is noted: 20,000 tons of merchandise left the country in October, 1945, as compared with 5,000 tons last January. The October figure still falls far short of the 1938 monthly average of over 50,000 tons, but the general trend does show that Switzerland is already coming out of the economic isolation in which war conditions had placed her. The value of imports once again exceeds that of exports; the trade balance shows a deficit which, in itself, reflects a more normal situation in relation to the country’s natural economic structure.

Desirous of developing her trade with foreign countries which constitutes so vital a factor for her and, at the same time, wishing to participate in the economic reconstruction of devastated Europe, Switzerland has recently concluded a series of commercial treaties with France, Holland, Italy, Czechoslovakia, Denmark and Sweden. Negotiations are under way with other States, England, Poland and Norway. The lack of means of transport still constitutes an obstacle to the re-establishment of internationan trade, but the situation has already improved considerably. Several countries now allow Switzerland to use their sea-ports. In Northern and Mediterranean ports, although they are still partially useless, merchandise for Switzerland can be um loaded. The war damage of foreign railways is being repaired. Barge traffic on the Rhine has been partially re-established. Airlines are being re-organised. Thus, little by little, Switzerland is renewing her contact with the world, a contact broken by recent events. In order to facilitate the revival of trade, the Government has nominated, or is about to nominate, commercial attaches to recently created posts in Paris and Rome; new legations are being opened in Canada, China, Scandinavia and elsewhere. Unemployment in Switzerland is still negligible, despite demobilisation, and there is even a shortage of manpower in certain branches of trade and industry. The improvement in transport conditions and the import trade has arrested the rise in cost of living. Prices are even showing a slight downward trend which the Government is determined to encourage as far as possible. The Swiss Federal budget for 1946 anticipates an excess of expenditure of N.Z. £35,000,000. Emergency expenditure since 1939 amounts to N.Z. £643,000,000 against a national revenue of N.Z. £700,000,000. The control and registration of the property of German nationals is continuing; it is a complicated task and the definite report will not be published for a long time. Provisionally, German property deposited in Switzerland is estimated at N.Z. £70,000,000; if confirmed, this figure falls very far short of the exagerated estimate

made in certain circles abroad, where N.Z. £700,000,000 and even N.Z. £1,050,000,000 were suggested. To resume, all things point to the fact that Switzerland is gradually coming out of her involuntary isolation of the last few years, and her national economy is reviving. The Government is preparing the progressive “demobilisation” of the War Economy Departments and planning for a re-

turn to greater economic freedom. Supplies are improving and the country is hard -at work. Nevertheless, many difficulties still have to be overcome. Apart from this, Swiss industry can hope to maintain a normal degree of activity only if the surplus of production can be exported. Competition on the post-war international markets still remains an unknown quantity.