Photo by Morgan Pedersen
Introduction
Liechtenstein is a small country in the center of Europe, located next to Switzerland to the west and Austria to the east. It is located on the banks of the Rhine and is nestled in the center of the Alps.
It is the sixth smallest country in the world, with a population of 37,000 people, and a total area of 160 square kilometers. The national language is German, primarily spoken with an Alemannic dialect. Approximately 75.9 percent of the population are Roman Catholic, 6.5 percent are Protestant Reformed, 5.4 percent are Muslim, 1.3 percent Lutheran. In spite of the country's small size, it is a prosperous and industrialized country. The economy is diverse, with a large number of small businesses, and with a GDP of $4.978 billion in 2014. It is part of the Expanding Circle of English, which means that although English is spoken occasionally, it is not prevalent on a daily basis in Liechtenstein. However, it is used largely in tourism, education, and international business. |
Political SystemLiechtenstein is headed by Prince Hans-Adam II. However, official duties are conducted by his son, Prince Alois.
It is a constitutional hereditary monarchy, consisting of a head of state, prime minister, parliament, and eleven municipalities, each with their own head. The legislative branch consists of the parliament, which contains 25 members, each with a term of 4 years. After each election, the head of the winning political party is appointed prime minister by the monarch. There are four political parties: Fatherland Union Progressive Citizens' Party The Free List The Independents |
Economy
Although small, Liechtenstein's economy is highly industrialized and thriving. Forty-one percent of its economy is based in industry, while 52 percent is service-based. It has the third-highest per capita income in world, after Qatar and Luxembourg.
Its key industries include electronics, metal manufacturing, dental products, and ceramics, as well as a strong financial sector. It has an abundant amount of small businesses, with one business for every nine people (Leichtenstein, 2018). Because of its small size, its economy is very dependent upon neighboring countries. Fifty-one percent of the labor force commutes daily from Switzerland, Germany, and Austria. Its customs treaty with Switzerland also greatly influences the economy. Liechtenstein uses the Swiss franc as its currency, and imports more than 90 percent of its energy from Switzerland. In addition, it relies upon Switzerland for Internet and cellular reception. Like Switzerland, Liechtenstein is known for its low tax rates and low-transparency banking system. Liechtenstein banks are a part of Switzerland's banking organization, and is known for being a tax haven. Approximately 75,000 companies are registered in Liechtenstein without having physical headquarters there (Eccardt, 2005, p. 25). Yet, in spite of the low tax rates, these businesses contribute 30 percent of the government's income. Liechtenstein has recently faced international pressure to improve its transparency in its banking and tax systems. In 2004, it passed anti-money laundering legislation, and continues to pass other laws for improvement. Its reputation as a tax haven has made it recognizable on an international scale. Many banking websites are in English, and many Liechtensteiner businesses speak English as well. |
History
Holy Roman Empire/ 1719
The Principality of Liechtenstein was established within the Holy Roman Empire in 1719.
The Principality of Liechtenstein was established within the Holy Roman Empire in 1719.
Sovereign State / 1806
In 1806, it became a sovereign state.
In 1806, it became a sovereign state.
Joined German Confederation / 1815
It joined the German Confederation in 1815, which was a combination of German-speaking countries such as Austria and Germany.
It joined the German Confederation in 1815, which was a combination of German-speaking countries such as Austria and Germany.
German Confederation Dissolves / 1866
The German Confederation dissolved in 1866, making Liechtenstein a fully-independent country.
The German Confederation dissolved in 1866, making Liechtenstein a fully-independent country.
Abolishment of Army / 1868
Liechtenstein abolishes their army, causing them to be neutral during all future wars.
Liechtenstein abolishes their army, causing them to be neutral during all future wars.
Customs Treaty with Switzerland / 1924
Liechtenstein entered a customs treaty with Switzerland, and adopted the Swiss franc as currency. From this point on, Liechtensteiners are heavily aligned with Switzerland on education, economic matters, and military-based decisions. The alliance allowed their economy to flourish and become centered on industrialization.
Liechtenstein entered a customs treaty with Switzerland, and adopted the Swiss franc as currency. From this point on, Liechtensteiners are heavily aligned with Switzerland on education, economic matters, and military-based decisions. The alliance allowed their economy to flourish and become centered on industrialization.
WWII to Present
After WWII, Liechtenstein's economy boomed. Since, its low tax rates spurred economic growth.
After WWII, Liechtenstein's economy boomed. Since, its low tax rates spurred economic growth.
Fun Facts
+ It is the fourth-smallest country in Europe and the sixth-smallest country in the world.
+ The principality has no coastline, no airport, and no harbor. + It is the only country located 100% in the Alpines. + It is doubly landlocked, which means that neither it nor any of its surrounding countries are next to a body of water. + It has no border control. + It has not had an army since 1868. + In Liechtenstein, there is one business for every nine citizens. + Liechtenstein has won the most Olympic medals per capita. |
Kayleigh Macdonald, Winter 2018