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Last week, I was in the unusual out-of-the-ordinary European country called Liechtenstein. Behind the hotel — the Alps along the border with Austria ; while these mountains in the photo are the Swiss Alps:. All the same, its economy is a very advanced one. Its main physical exports are machinery, precision instruments, power tools, vacuum technology, electronics and pharmaceuticals. An example of a tools manufacturer is the Liechtenstein multinational Hilti , whose power drills and other kit are to be found on any building site and in many a home.
But Liechtenstein is perhaps better known for its strong financial services sector, based on its status as an offshore financial center. Oh yes! So there you have it: almost all the top are small monarchies — or constitutional monarchies — and offshore zones. It became so curious, my travel companion, OA, delved deep into the internet to find out more. Moreover, given the support of most of his citizens who voted in the referendum, the Prince was granted authority on a par with that of an absolute monarchy.
The citizens of Liechtenstein have much to thank their state rulers for. During the post-war period the economy of Liechtenstein fell on such tough times that the ruling dynasty had to sell off its priceless artworks to keep the country afloat. Later, in the s, economic reforms initiated by the Prince — especially the sharp cut in corporate taxes — brought the country roaring economic growth.
The growth has continued since, and today Liechtenstein has more registered companies than citizens. However, the notion that Liechtenstein is a small tax haven wholly dependent on the financial services sector is a false one: a third of the economy is made up of industrial manufacturing.
