By Vishv Bandhu Gupta*
In what was once the most diabolical pinning of any state policy ever, the Swiss carved out for itself an innovative niche in an early 19th century. The exact year was 1848. Lacking enough population, sharing borders with five militarily powerful nations, nourishing five diverse ethnicities and little agriculture, the Swiss decided that, barring some high-precision industry, they needed some other source of money to keep their kitchen hearth lit with fire. What they came up with was an industry to slyly and secretly keep sleaze money of the dictators, crooks, bandits and merchants. To ensure that they could run this industry on the largest possible scale, the Swiss, in 1848, declared itself as permanently “neutral state”, which, in simpler words, meant that they could keep the money of warring groups withing a nation or two nations at war. The Swiss started multi-timing the villains of the world.
The blunt truth is that Switzerland operated as a financial whore who promised to keep every promiscuous client’s secrets. The Swiss cultivated this art to such an extent and built legal provisions to rigorously punish whoever breached the client’s confidentiality that since 1848 no country has ever invaded Switzerland, despite the fact it shares borders with the military powers of Germany, France and Italy. While, in all fairness, it must be said that apart from having sleaze money as prime source of livelihood, the Swiss also created a manufacturing industry that specialises in high-end technology, knowledge-based production of precision instruments, chocolates and watches. The Swiss also promoted tourism by keeping the age of girls eligible or opting for prostitution at 16 years, as against the European norm of 18 years, and permitted restaurant and hotel owners to import sex workers from Korea and Thailand. These workers were called ‘dancers’ and given two-year work permits. Some of them were as young as 16.
The Swiss also developed a close alliance with the Buckingham Palace in the 19th and the 20th centuries, through which most of the offshore islands under the English occupation were also used for secret banking, which helped these criminal billionaires to immigrate to any place in Switzerland and England. The truth of the strength of the close bond between these two nations is evident from the fact that England has no outstanding dispute of recovery of its hidden stolen assets in Swiss banks.
Since 1848, Switzerland did not side with any of the warring nations for nearly a century, wilfully asserting to abstain from taking sides in wars between nations. However, it is a different scene now, as no Swiss ambulances are seen in terrorism-tarred Pakistan, where violence has become an everyday occurance. In fact, this policy was a charade that made a lot of sense to the economics of Switzerland. Even as the facade of ‘state neutrality’ was being played on by bagpipers, the ‘private bankers’ of Switzerland were busy providing ‘numbered’ secret accounts to the world’s dictators who looted their people and hoarded wealth in Swiss banks. Switzerland has had a history of preserving the loot of most notorious leaders of the world, be they Hitler, Mussolini, Marcos, Hosni Mubarak, Saddam Hussein or Asaf Ali Zardari.
It is, indeed, a tribute to the Swiss diplomacy and its wiliness − or, perhaps, to the corrupt regime in India − that we are refusing to pressure them for the return of US$1.4 trillion. The Indian government should note that the Swiss economy is still in recession, and they badly want access to Indian markets and permission to set up precision unit industries in India, because a lot of growth in the world is likely to be centred on China and India in the coming years. This corrupt government allowed Switzerland’s most notorious bank UBS to open branches in Hyderabad in 2005 and in Mumbai in 2008. How strong this government’s desire to earn sleaze money is is evident from the fact that in 2007 it entertained a full delegation of Swiss Private Bankers’ Association when it came to India to seek permission to operate as FIIS in the Bombay Stock Exchange via the notorious Mauritius route. This permission was finally granted by the Union cabinet when the UPA returned to power. In crude terms, it means that the US$1.4 trillion of the hard-earned money of Indian taxpayers was permitted to be used by these unscrupulous bankers in Switzerland.
But, as they say, “Good times do come to an end”, and surely they did by 2008. Ever since the recession that hit the US and Europe around 2008, the Swiss political elite is jumping like a cat on a hot tin roof. Partly, and ironically, the Swiss sleaze banking industry played a huge role in the onset of the crisis. An unregulated American mortgage and banking industry allowed some greedy players with the sleaze money in billions that they had kept in Swiss banks to form what are known as ‘hedge hunds’. This unregulated industry of hedge funds, an alliance of billionaires operating from huge funds invested in all kinds of derivatives, right from crude oil barrels; metals, like gold, copper, aluminium, copper and platinum; and foodgrains, like wheat, rice and corn, in such a manner that it created huge scarcities when they betted derivatives to synchronise a prolonged shortages for each of them for a sustained period. The price of crude oil touched US$140 a barrel from just US$40 a barrel a year ago due to the severe onslaught of the biggest speculators working in tandem to make humungous profits. Most of them made profits; some lost money as well. The result was that the US alone lost roughly US$24.4 trillion and over five million jobs as a result of severe recession that emanated in the US and soon spread to the most of Europe, Asia and Africa. It was this in 2008 that President Obama, with the assistance of the OECD countries and the European Union decided to crack the whip at the Swiss sleaze.
The result is that it has created the problem of unemployment in Switzerland. Tourism has vanished from the country, partly, because sleaze money depositors are under fear of losing their deposits and worried about being noticed by the international law enforcement agencies, which seem determined to crack this banking industry to its knees. The Swiss economy is reeling under recession, as more and more sleaze deposits get taxed or are confiscated by international law enforcement agencies, including Interpol, whose assistance the US president has sought. Now the Swiss are worried about keeping their money in their own banks. With zero interest rate on deposits, the Swiss economy grew just by 0.8 per cent in 2009 and 2010.
At the end of December 2010, cash worth 54.3 billion Swiss francs was in circulation in Switzerland. This means that the volume of cash in Switzerland has risen by almost 30 per cent, or CHF12 billion, in the last 10 years. The cash in circulation is increasing roughly at par with its GDP growth. Furthermore, the volume in periods of crisis and low interest rates, such as we have experienced in recent years, is rising disproportionately. At such times, people put their trust just in cash. In other words, they would rather hoard cash without earning any interest than worry that the bank might become insolvent, taking their savings with it.
*Vishv Bandhu Gupta is a former commissioner of the income tax department in India.