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Liechtenstein

LIECHTENSTEIN

LOCATION, SIZE, AND EXTENT
TOPOGRAPHY
CLIMATE
FLORA AND FAUNA
ENVIRONMENT
POPULATION
MIGRATION
ETHNIC GROUPS
LANGUAGES
RELIGIONS
TRANSPORTATION
HISTORY
GOVERNMENT
POLITICAL PARTIES
LOCAL GOVERNMENT
JUDICIAL SYSTEM
ARMED FORCES
INTERNATIONAL COOPERATION
ECONOMY
INCOME
LABOR
AGRICULTURE
ANIMAL HUSBANDRY
FISHING
FORESTRY
MINING
ENERGY AND POWER
INDUSTRY
SCIENCE AND TECHNOLOGY
DOMESTIC TRADE
FOREIGN TRADE
BALANCE OF PAYMENTS
BANKING AND SECURITIES
INSURANCE
PUBLIC FINANCE
TAXATION
CUSTOMS AND DUTIES
FOREIGN INVESTMENT
ECONOMIC DEVELOPMENT
SOCIAL DEVELOPMENT
HEALTH
HOUSING
EDUCATION
LIBRARIES AND MUSEUMS
MEDIA
ORGANIZATIONS
TOURISM, TRAVEL, AND RECREATION
FAMOUS LIECHTENSTEINERS
DEPENDENCIES
BIBLIOGRAPHY

Principality of Liechtenstein

Fürstentum Liechtenstein

CAPITAL: Vaduz

FLAG: The national flag is divided into two horizontal rectangles, blue above red. On the blue rectangle, near the hoist, is the princely crown in gold.

ANTHEM: Oben am jungen Rhein (On the Banks of the Young Rhine).

MONETARY UNIT: The Swiss franc (SwFr) of 100 centimes, or rappen, has been in use since February 1921. There are coins of 1, 5, 10, 20, and 50 centimes and 1, 2, and 5 francs, and notes of 10, 20, 50, 100, 500, and 1,000 francs. SwFr1 = $0.80418 (or $1 = SwFr1.2435; as of 2004).

WEIGHTS AND MEASURES: The metric system is the legal standard.

HOLIDAYS: New Year's Day, 1 January; Epiphany, 6 January; Candlemas, 2 February; St. Joseph's Day, 19 March; Labor Day, 1 May; Assumption, 15 August; Nativity of Our Lady, 8 September; All Saints' Day, 1 November; Immaculate Conception, 8 December; Christmas, 25 December; St. Stephen's Day, 26 December. Movable religious holidays include Good Friday, Easter Monday, Ascension, Whitmonday, and Corpus Christi.

TIME: 1 pm = noon GMT.

LOCATION, SIZE, AND EXTENT

Liechtenstein, roughly triangular in shape, is a landlocked country situated in the Rhine River Valley. The fourth-smallest country in Europe, it is bordered by the Austrian province of Vorarlberg to the n and e, the Swiss canton of Graubünden to the s, and the Rhine River and the Swiss canton of St. Gallen to the w, with a total boundary length of 76 km (47 mi).

The principality has an area of 160 sq km (62 sq mi) and extends 24.5 km (15.2 mi) ns and 9.4 km (5.8 mi) ew. Comparatively, the area occupied by Liechtenstein is about 0.9 times the size of Washington, DC.

Liechtenstein's capital city, Vaduz, is located in the western part of the country.

TOPOGRAPHY

Liechtenstein is divided into a comparatively narrow area of level land bordering the right bank of the Rhine River and an upland and mountainous region occupying the remainder of the country; the level land occupies about two-fifths of the total surface area. The greatest elevation, Grauspitz (2,599 m/8,527 ft), is in the south, in a spur of the Rhaetian Alps.

CLIMATE

Climatic conditions in Liechtenstein are less severe than might be expected from its elevated terrain and inland situation; the mitigating factor is a warm south wind called the Föhn. The annual lowland temperature varies between -4.5°c (24°f) in January and 19.9°c (68°f) in July. Late frost and prolonged dry periods are rare. Average annual precipitation is 105 cm (41 in).

FLORA AND FAUNA

The natural plant and animal life of Liechtenstein displays a considerable variety because of the marked differences in altitude. A number of orchid species are able to grow because of the warmth carried by the Föhn. In the higher mountain reaches are such alpine plants as gentian, alpine rose, and edelweiss. Common trees include the red beech, sycamore, maple, alder, larch, and various conifers. Indigenous mammals include the deer, fox, badger, and chamois. Birds, including ravens and eagles, number about 120 species.

ENVIRONMENT

The Nature Conservation Act, adopted in 1933, was the nation's first major piece of environmental legislation; the Water Conservation Act dates from 1957, and air pollution laws were passed in 1973 and 1974. All wastewater is purified before being discharged into the Rhine. According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included two types of mammals, one species of bird, and five species of invertebrates. Threatened species include the great horned owl, the Eurasian beaver, the hermit beetle, and the Apollo butterfly.

POPULATION

The population of Liechtenstein in 2005 was estimated by the United Nations (UN) at 35,000, which placed it at number 187 in population among the 193 nations of the world. In 2005, approximately 11% of the population was over 65 years of age, with another 18% of the population under 15 years of age. According to the UN, the annual population rate of change for 200510 was expected to be 0.4%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 40,000. The population density was 219 per sq km (567 per sq mi), with the population heavily concentrated in the Rhine Valley, in which the two largest communities, Vaduz and Schaan, are located.

The UN estimated that 21% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 1.51%. The capital city, Vaduz, had a population of 5,000 in that year.

MIGRATION

There were 12,000 foreign residents in Liechtenstein in 2000, comprising approximately one-third of the total population. Moreover, about 6,885 Austrians and Swiss commute to Liechtenstein daily. Several hundred Italian, Greek, and Spanish workers have migrated to the principality on a semipermanent basis. In 1998 and 1999, Liechtenstein accepted a high number of Kosovo Albanian asylum seekers, granting them temporary protection. The number of asylum seekers and people under temporary protection comprised nearly 2% of the overall population of Liechtenstein in 1999. In 2004 there were 149 refugees and 68 asylum seekers. The estimated net migration rate in 2005 was 4.8 migrants per 1,000 population. The government views the migration levels as satisfactory.

ETHNIC GROUPS

The indigenous population, accounting for 86% of the total population, is described as being chiefly of Alemannic stock, descendants of the German-speaking tribes that settled between the Main and Danube rivers. Italian, Turkish, and various other groups account for the remaining 14%.

LANGUAGES

German is the official language. The population speaks an Alemannic dialect.

RELIGIONS

The state religion is Roman Catholicism, to which about 78% of the population adhere; however, absolute freedom of worship prevails. About 0.07% of the population are Protestants and 0.04% are Muslims. The Eastern Orthodox Church has about 254 members. Buddhists, Jehovah's Witnesses, Anglicans, Jews, Baha'is and New Apostolics each have less than 80 members.

TRANSPORTATION

The line of the Arlberg express (Paris to Vienna) passes through Liechtenstein at Schaan-Vaduz, extending for 18.5 km (11.5 mi), but few international trains stop. The main center for reaching Liechtenstein is Buchs, Switzerland, about 8 km (5 mi) from Vaduz.

Postal buses are the chief means of public transportation both within the country and to Austria and Switzerland. A tunnel, 740 m (2,428 ft) in length, connects the Samina River Valley with the Rhine River Valley.

In 2002, there were some 250 km (155 mi) of paved roadways. A major highway runs through the principality, linking Austria and Switzerland.

The nearest airport is in Zürich, Switzerland. As of 2004, the country had 28 km (17 mi) of navigable waterways.

HISTORY

The territory now occupied by the Principality of Liechtenstein first acquired a political identity with the formation of the sub-country of Lower Rhaetia after the death of Charlemagne in 814. The County of Vaduz was formally established in 1342 and became a direct dependency of the Holy Roman Empire in 1396. The area (to which, in 1434, was added the Lordship of Schellenberg, in the north) was ruled in turn by various families, such as the counts of Montfort, von Brandis, van Sulz, and von Hohenems.

During the Thirty Years' War (161848), the area was invaded first by Austrian troops and then, in 1647, by the Swedes. After the von Hohenems line encountered financial difficulty, Prince Johann Adam of Liechtenstein purchased from them first Schellenberg (1699) and then Vaduz (1712). The Liechtenstein family thus added to its vast holdings in Austria and adjoining territories.

The Principality of Liechtenstein as such was created on 23 January 1719 by act of Holy Roman Emperor Charles VI, who made it a direct fief of the crown and confirmed the rule of Prince Anton-Florian, Johann Adam's successor, under the title of Prince von und zu Liechtenstein.

During the Napoleonic wars, Liechtenstein was invaded by both the French and the Russians. Following the Treaty of Pressburg (1805), Liechtenstein joined the Confederation of the Rhine, which made the principality a sovereign state. In 1815, following the downfall of Napoleon, Liechtenstein joined the newly formed Germanic Confederation.

With Prussia's victory over Austria in the Seven Weeks' War (1866), the Confederation was dissolved and the constitutional ties of Liechtenstein to other German states came to an end. In the war, Liechtenstein had furnished Austria-Hungary with 80 soldiers; two years later, the principality disbanded its military force for all time.

From 1852, when the first treaty establishing a customs union was signed, until the end of World War I, Liechtenstein was closely tied economically to Austria. After the war, the collapse of the Austrian currency and economy inclined the principality to seek economic partnership with its other neighbor, Switzerland. A treaty concluded with Switzerland in 1923 provided for a customs union and the use of Swiss currency.

Liechtenstein (like Switzerland) remained neutral in World War II, as it had in World War I. After Germany was defeated in 1945, Nazi sympathizers in Liechtenstein who had supported incorporation of the principality into Hitler's Third Reich were prosecuted and sentenced. The postwar decades have been marked by political stability and outstanding economic growth.

Prince Franz Josef II, who succeeded his granduncle, Franz I, in 1938, was the first reigning monarch actually to reside in Liechtenstein. On 26 August 1984, Franz Josef II handed over executive authority to his eldest son and heir, Crown Prince Hans-Adam. Hans-Adam II has been ruling prince since 13 November 1989, after Franz Josef II died.

Liechtenstein has sought further integration into the world community. The country was admitted to the UN in September 1991. In Europe, Liechtenstein joined EFTA in 1991 and became a member of the European Economic Area (EEA) in 1995.

Disagreements between Prince Hans-Adam II and parliament arose in the latter half of 1999. In September, the prince's assertion that he had the right to dissolve the government at his discretion raised tensions to the point where Hans-Adam threatened to go into exile in Austria. In October, the European Court of Human Rights ruled on a complaint filed by Dr. Herbert Wille, a senior judge whom the prince had refused to re-appoint because of Wille's assertion that the country's Supreme Court rather than its monarch should be the ultimate authority on constitutional issues. The court ruled that in depriving Wille of his judicial position because of his political views, the prince had violated the judge's freedom of speech. Wille was awarded 10,000 Swiss francs in compensation as well as payment of his legal costs.

Sixty-four percent of Liechtenstein's voters approved a new constitution for Liechtenstein in a referendum held in March 2003; Hans-Adam II will be granted near-absolute powers. Turnout was large, with 14,800 of Liechtenstein's 17,000 electorate casting votes. The prince now has the right to dissolve government, control a committee appointing judges, and has veto power over legislation. The constitution also gives the people the power to call a referendum and abolish the monarchy. As a result of the changes, which many observers deemed undemocratic, Prince Hans-Adam II rescinded his pledge to leave the country. On 15 August 2004 Prince Hans-Adam II transferred the official duties of the ruling prince to his son and heir apparent, Alois, who was seen as less confrontational than his father. Prince Hans-Adam II retained the status of Chief of State.

Liechtenstein ranks as one of the world's most prosperous countries with one of the world's highest living standards while its people pay very low taxes. In 1999, the royal family itself was ranked as the wealthiest in all of Europe while Prince Hans-Adam II personally was ranked as Europe's third-wealthiest monarch. However, in 2000 Liechtenstein ranked among the top 15 countries named by an international task force investigating countries whose banking laws make money laundering possible. Liechtenstein took steps in 2001 to make its banking system more transparent, however a 2003 International Monetary Fund report concluded that although the banking sector had updated its banking regulation, there were not enough staff to fully enforce the regulations.

GOVERNMENT

Liechtenstein is a constitutional monarchy ruled by the hereditary princes of the house of Liechtenstein. The monarchy is hereditary in the male line. The constitution of 5 October 1921, as amended in 1987, provides for a unicameral parliament (Landtag) of 25 members elected for four years. Election is by universal suffrage at age 18 and is on the basis of proportional representation. Women gained the right to vote in 1984. A new voting system that went into effect as of the 1974 national elections provides nine representatives for the Upper Land district and six representatives for the Lower Land district.

A new constitution was approved in March 2003 that grants the ruling prince extensive powers, including the right to veto legislation and to control the appointment of judges, in addition to the rights guaranteed to him under the former constitution.

The prince can call and dismiss the Landtag. On parliamentary recommendation, he appoints the prime minister, who must be of Liechtenstein birth, and the deputy prime minister for four-year terms. It is the regular practice for the prime minister to be of the majority party and the deputy prime minister to be selected from the opposition. The Landtag appoints four councilors for four-year terms to assist in administration. Any group of 1,000 persons or any three communes may propose legislation. Bills passed by the Landtag may be submitted to popular referendum. A law is valid when it receives majority approval by the Landtag and the prince's signed concurrence.

POLITICAL PARTIES

The two principal parties are the Fatherland Union (Vaterländische UnionVU) and the Progressive Citizens' Party (Fortschrittliche BürgerparteiFBP). In the general elections of 1997, the VU, which has held a majority since 1978, won 13 seats in the Landtag and the FBP 10. Other parties included the Free List (Freie ListeFL), two seats; and the Liechtenstein Non-party List (Uberparteilische Liste LiechtensteinsULL), which was not represented.

The general elections in 1993 resulted in a coalition government headed by Mario Frick of the Fatherland Union (VU). Frick was reelected as prime minister by the Landtag in 1997. Although the VU remains the largest single party, Liechtenstein had a coalition government from 1938 until 1997.

In the 2001 elections, the FBP won 49.9% of the vote and 13 seats in the Landtag, to the VU's 41.1% and 11 seats. The Free List (Greens) won 8.8% of the vote and 1 seat. Otmar Hasler was named prime minister. It was the first time since 1978 that the FBP held a majority in parliament. The 2005 elections saw the FBP retaining power with 48.7% of the vote and 12 seats, to the VU's 38.2% and 10 seats. The minority party Free List increased their following with 13% of the vote and 3 seats. The next elections were scheduled for 2009.

LOCAL GOVERNMENT

The 11 communes (gemeinden) are fully independent administrative bodies within the laws of the principality. They levy their own taxes. Liechtenstein is divided into two districtsthe Upper Land (Vaduz) and the Lower Land (Schellenberg)for purposes of national elections.

JUDICIAL SYSTEM

The principality has its own civil and penal codes, although in certain instances courts composed of Liechtenstein, Swiss, and Austrian judges have jurisdiction over Liechtenstein cases. Courts that function under sole Liechtenstein jurisdiction are the county court (Landgericht), presided over by one judge, which decides minor civil cases and summary criminal offenses; the juvenile court; and the Schöffengericht, a court for misdemeanors. The remaining courts, with five judges each, have a mixed composition for purposes of impartiality: three Liechtenstein lay judges, one Swiss judge, and one Austrian judge. The criminal court (Kriminalgericht) is for major crimes. Other courts of mixed jurisdiction are the assize court (Schöffengericht-Vergehen), the superior court (Obergericht), and a supreme court (Oberster Gerichtshof). An administrative court of appeal hears appeals from government actions, and the Constitutional Court determines the constitutionality of laws. In June 1986, Liechtenstein adopted a new penal code abolishing the death penalty.

The constitution provides for public trials and judicial appeal. The judiciary is separate from the executive and legislative branches. The 2003 referendum gave the prince the ultimate right to control the appointment of the country's judges.

The constitution provides for freedom of assembly, association and religion. Crime is rare and Switzerland is responsible for Liechtenstein's defense. Liechtenstein retains a restrictive law on the availability of abortion, and is allowable only when the life or health of a woman is threatened.

ARMED FORCES

Since 1868, no military forces have been maintained in Liechtenstein, but there is obligatory military service for able-bodied men up to 60 years of age in case of emergency.

INTERNATIONAL COOPERATION

Liechtenstein became a member of the United Nations on 18 September 1990; it belongs to the IAEA, ITU, UNCTAD, UPU, and WIPO. Liechtenstein is also a member of the Council of Europe, the European Bank for Reconstruction and Development, EFTA, the OSCE, and the WTO. The principality joined the European Economic Area in 1995. Liechtenstein now has diplomatic relations with nearly 50 countries. In environmental cooperation, the country is part of the Basel Convention, Conventions on Biological Diversity and Air Pollution, Ramsar, CITES, the Kyoto Protocol, the Montréal Protocol, and the UN Conventions on Climate Change and Desertification.

ECONOMY

Despite its small size and limited national resources, Liechtenstein is one of the richest countries in the world on a per capita GDP basis. It has developed since the 1940s from a mainly agricultural to an industrialized country and a prosperous center of trade and tourism. Factories produce a wide range of high-technology manufactures, especially precision instruments. Liechtenstein is also a world leader in specialized dental products. Industrial products are manufactured almost exclusively for export.

Special economic advantages enjoyed by very small nations of Europe (e.g., the issuance of new postage stamps, free exchange of currencies, and liberal laws that provide incentives for the establishment of bank deposits and of nominal foreign business headquarters) also play a part in this prosperity.

In 1999 Liechtenstein became the subject of an international investigation into money laundering. Although Liechtenstein subsequently drafted legislation to combat money laundering, the Finance Action Task Force placed the principality on the international "black list" for failing to cooperate with international authorities on the matter.

About 35% of the people employed in Liechtenstein commute from Switzerland and Austria. Liechtenstein remains a well-known tax haven, and a location for holding companies to establish nominal offices; these provide for 30% of state revenues. The country has no central bank and does not print its own currency, but uses the Swiss franc instead. Liechtenstein is engaged in harmonizing its economic policies with those of the EU.

In 1999, its GDP (at purchasing power parity) was $825 million, an 11% improvement over the previous year. In 2002, the unemployment rate for the country's 10,000 domestic workers was 1.3%. More than 19,000 workers commute to Liechtenstein from neighboring countriesAustria, Switzerland, and Germany.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Liechtenstein's gross domestic product (GDP) was estimated at $825.0 million. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $25,000. The annual growth rate of GDP was estimated at 11%. The average inflation rate in 2001 was 1%.

LABOR

As of end 2001 (the latest year for which data was available), there were 29,000 persons in the labor force, including 19,000 foreigners, of whom 13,000 commuted to work from Switzerland, Germany and Austria. As of that date, 1.3% of the workforce were in the agricultural sector, with industry accounting for 47.4% and the services sector 51.3%. Liechtenstein's workforce is highly skilled, but there are not enough native-born workers to meet industry's needs. Unemployment as of September 2002 was 1.3%.

All workers, including foreigners, are entitled to form and join unions. There is one trade union that represents about 13% of the workforce. Strikes are permitted but are not generally used. Most collective bargaining agreements are adapted from ones signed between Swiss workers and employers.

There is no minimum wage, although wages are among the highest in the world. The legal workweek is 45 hours in the industrial sector and 48 hours in nonindustrial firms. The actual workweek is usually 40 to 43 hours. Occupational safety and health standards are set by the government and are rigorously enforced. The minimum working age is 16, but exceptions to this may be made for children wishing to leave school at the age of 14.

AGRICULTURE

Liechtenstein has only 912 hectares (2,254 acres) of arable land. Until the end of World War II (193945), the economy was primarily focused on agriculture. In the Rhine Valley, the most productive area, the chief vegetables are corn, potatoes, and garden produce. On gradual mountain slopes, a variety of grapes and orchard fruits are grown.

ANIMAL HUSBANDRY

Alpine pasture, particularly well suited for cattle grazing, covers over 35% of the total land area.

In 2005, cattle numbered about 6,000; hogs, 3,000; and sheep, 2,900.

FISHING

There is no commercial fishing in Liechtenstein. Rivers and brooks are stocked for sport fishing.

FORESTRY

The forests of Liechtenstein not only supply wood but also have an important function in preventing erosion, landslides, and floods. Forests cover about 7,000 hectares (17,200 acres).

More than 90% of all forestland is publicly owned; of the 474 hectares (1,171 acres) of private forest, 158 hectares (390 acres) are the property of the prince. The most common trees are spruce, fir, beech, and pine. Roundwood production in 2004 amounted to 22,167 cu m (782,820 cu ft).

MINING

There was no mining of commercial importance.

ENERGY AND POWER

The first Liechtenstein power station went into operation in 1927; its capacity is now 900 kW. Another station was constructed in 194749; it has an installed capacity of 9,600 kW. Total installed capacity in 1989 was 23,000 kW; production amounted to 150 million kWh in 1995. Since domestic production no longer meets local requirements, supplementary energy is imported from Switzerland, especially in winter. In 1995, 92.5% of Liechtenstein's energy requirement was imported from abroad. Consumption of electricity in 2001 was 313.5 million kWh. Imports of electricity in the same year totaled 232.8 million kWh.

INDUSTRY

The industry of Liechtenstein, limited by shortages of raw materials, is primarily devoted to small-scale production of precision manufactures. The output includes optical lenses, dental products, high-vacuum pumps, heating equipment, electron microscopes, electronic measuring and control devices, steel bolts, knitting machines, and textiles. Pharmaceuticals, electronics, ceramics, and metal manufacturing are also important. The largest industrial companies in Liechtenstein are Hilti (construction services), Balzers (electro-optical coatings), Hilcona (frozen foods), and Ivoclar-Vivadent (dental medical technology). Liechtenstein's industry is completely geared to exports; industrial exports rose from SwFr196.7 million in 1967 to SwFr3.0 billion in 1996. Around 48% of the labor force is engaged in industry, trade, and construction.

In 1999, industry made up approximately 40% of the overall GDP. By 2004, this share fell to 26.4%. Trade and services are the main contributors to the economy, with a 71.6% share.

SCIENCE AND TECHNOLOGY

Like Swiss industry, manufacturing in Liechtenstein entails a high degree of precision and technological sophistication. Balzers, the country's second-largest employer, is known for its leading role in providing equipment and thin film technology for the CD-ROM industry. Liechtenstein itself has no educational institutions offering advanced scientific training. The Liechtensteinische Gesell-schaft für Umweltschutz, founded in 1973, is concerned with environmental protection.

DOMESTIC TRADE

Liechtenstein and Switzerland are essentially linked in one common economic zone. The domestic economy is largely based on industry and financial services. The primary product industries are electronics, metal manufacturing, and medical precision instruments. About 48% of the work force are foreigners, with 29% commuting from Switzerland and Austria. Vaduz and Schaan, the chief commercial centers, have some specialty shops, but the smaller communities have only general stores. Regular business hours are generally from 8 am to 6:30 pm. Normal banking hours are from 8:15 am to noon and from 1:30 pm to 4 or 5 pm, Monday through Friday.

FOREIGN TRADE

Goods to and from Liechtenstein pass freely across the frontier with Switzerland, with which Liechtenstein maintains a customs union. Exports in the mid-1990s averaged SwFr2,021,800 per year, as compared with SwFr893,385,000 in 1980. Exports in 1994 were valued at $2.6 billion. Some 40% of exports in 1996 went to EEA countries.

Important exports include precision instruments, ceramics, textiles, and pharmaceuticals. Liechtenstein imports mainly raw materials, light machinery, and processed foods. In the mid-1990s, imports averaged SwFr1,074,600,000 per year.

In 2003, Liechtenstein's exports reached $3.6 billion. Most of these exports went to the EU and Switzerland. The principal export commodities were construction techniques, electronic products, car parts, dental products, and processed agricultural products.

BALANCE OF PAYMENTS

The US Central Intelligence Agency (CIA) reported that in 1996 the purchasing power parity of Liechtenstein's exports was $2.47 billion while imports totaled $917.3 million resulting in a trade surplus of $1.5527 billion.

BANKING AND SECURITIES

Although there is a national bank, the duties of the central bank are performed by the Swiss National Bank, a consequence of the currency union with Switzerland. Liechtenstein's banks form an important part of the economy, and they have experienced significant growth in the 1990s. An estimated 4% of the work force was employed by the banking sector in the 1990s.

The National Bank of Liechtenstein (Liechtensteinische Landesbank), founded in 1861, is the state bank of issue; in addition, it deals in real estate mortgages and ordinary banking operations. Liechtenstein Global Trust (LGT), the country's biggest financial institution (owned by the royal family), and the Private Trust Bank Corp., founded in 1956, play an important role in the finance and credit spheres of Liechtenstein's economy. Banking is linked with the Swiss banking system, as is securities trading. In 1945, Liechtenstein's banks had a combined balance sheet of SwFr38 million; in 2003, it was SwFr120 billion, an astonishing SwFr3.6 million for every person in the country. Net income from Liechtenstein's banks totaled SwFr232.5 million in 1996, and contributed over 12% to the country's national income in terms of taxes and dividends paid.

Because of Liechtenstein's strict bank secrecy, several thousand foreign businesses are nominally headquartered there. The secrecy laws are, however, waived in the case of criminal intent. There are at present no restrictions on foreign investors' access to financing in Liechtenstein. New laws to combat insider trading and money laundering have recently tightened fiduciary regulations.

INSURANCE

Insurance activities in Liechtenstein are variously conducted by the government (old age and survivors' insurance), by private companies under government regulation (e.g., life, accident, health, and fire), and by farmers' associations. In 1996, a new insurance law came into force, focusing on attracting insurance business from abroad, as Liechtenstein is now a member of the European Economic Area.

PUBLIC FINANCE

Liechtenstein's economy has experienced more extensive development and industrialization in the past 40 years than any other Western country. In that period, it went from a predominantly agricultural economy to a highly advanced industry-driven economy.

The US Central Intelligence Agency (CIA) estimated that in 1998 Liechtenstein's central government took in revenues of approximately $424.2 million and had expenditures of $414.1 million. Revenues minus expenditures totaled approximately $10.1 million.

TAXATION

The main taxes are levied on personal income, business income, and principal. Personal income tax rates are determined by taxable income and taxable wealth. The basic tax rate is 1.2% on income and 0.06% on wealth. However, the communes levy a communal tax of 200%, which brings the combined tax rates to 17.82% on income and 0.89% on wealth. In addition, a surcharge is levied on the basic tax on income and wealth at rates ranging from 5395%. Thus, the totals of basic tax, communal tax, and surcharges results in the national tax due. Corporations pay income tax at a rate of 7.515%. However, if the company's distributed dividends exceed 8% of taxable capital, an increase of 15% is added, based upon the dividend distribution percentage, which can push the maximum rate to 20%. Dividends and interest are subject to a 4% withholding tax. Royalty income is not taxed.

Other levies include a capital gains tax on the sale of real estate; death, estate, and gift duties; a motor vehicle registration tax; and a value-added tax (VAT) on goods and services within Liechtenstein and Switzerland at a standard rate of 7.5%.

Firms domiciled in Liechtenstein but conducting no gainful pursuits there benefit from extremely favorable tax arrangements, a prime factor in the establishment of nominal business headquarters. Foreign clients pay 1% per year in capital taxes; and only 0.5% for foundations with taxable assets exceeding SwFr10 million. The communes may impose property and income taxes.

Since joining the European Economic Area in 1995, Liechtenstein has not entered into any agreements covering double taxation, except for Austria.

CUSTOMS AND DUTIES

There have been no customs between Switzerland and Liechtenstein since a customs treaty was ratified in 1924. On the Austrian border, Switzerland collects the customs at its own rates. Liechtenstein's part of the duties is calculated on the basis of population and the principality pays an annual indemnification to Switzerland for customs and administration.

FOREIGN INVESTMENT

The Prince of Liechtenstein Foundation has established a number of ventures abroad, mainly in the field of investment management and counseling.

Several thousand foreign companies have established offices in Liechtenstein because taxes are very low, banking operates in strict secrecy, and the principality is politically stable. Some industrial establishments are owned and managed by Swiss interests.

ECONOMIC DEVELOPMENT

The government generally encourages the increasing diversification of industry and the development of tourism. The principality's low taxes and highly secret banking system are attractive to foreign corporations wanting to safeguard patents and trademarks and to individuals who want to protect their wealth for the future. Thousands of corporations have established nominal headquarters in Liechtenstein. In recent years, the principality is accused of serving as a center for money laundering. In 2002, the International Monetary Fund (IMF) conducted an Offshore Financial Center (OFC) Assessment of Liechtenstein, to evaluate the regulation and monitoring of the country's financial center. The IMF approved of Liechtenstein's efforts to fight money laundering and the financing of international terrorism, and of its planned establishment of an independent supervisory authority.

Research and development is a driving force of Liechtenstein's economic success; in 2000, total research and development spending rose over 20% to around $149 million. Also, the industrial sector is diversified and dynamic, serving mostly niche markets outside the country. The relative attractive tax base keeps some of the more prominent companies (Hilti and Unaxis Balzers) in the country, and the low public spending costs (Liechtenstein has no army, no university, and no major medical clinics) keep the federal budget on a surplus. Export income per capita outweighs that of Germany by more than 10 times.

SOCIAL DEVELOPMENT

There is a universal pension system covering all residents, employed persons, and self-employed individuals. It is funded primarily by the government along with contributions from employees and employers. It provides benefits for old age, disability, and survivorship. A social insurance system and universal medical coverage provides sickness and maternity benefits. All residents and persons employed in Liechtenstein are entitled to medical coverage. Work injury and unemployment insurance are provided to all employed persons. There is a family allowance based on number of children and a birth grant provided to all residents and nonresident workers.

Equality for women is protected by law, and several groups monitor and promote women's rights. An equal opportunity law addresses workplace discrimination and sexual harassment. In 2004 the government-sponsored mentoring classes to inspire women to run for seats in parliament. Domestic violence laws have been enacted and are actively implemented. Human rights are fully respected in Liechtenstein.

HEALTH

The government regulates the practice of medicine and subsidiary occupations, such as nursing and pharmacy. Life expectancy in 2005 was about 79.55 years. As of 2002, the crude birth rate and overall mortality rate were estimated at, respectively, 11.2 and 6.8 per 1,000 people. The infant mortality rate was an estimated 4.7 per 1,000 births in 2005.

In 2000, Liechtenstein had an estimated 2.5 physicians per 1,000 people. There were approximately 8.3 hospital beds per 1,000 people. A program of preventive medicine, introduced in 1976, provides regular examinations for children up to the age of 10.

HOUSING

Houses in the countryside are similar to those found in the mountainous areas of Austria and Switzerland. Liechtenstein does not have a significant housing problem. About 82% of all dwellings have central heating, 89% have a kitchen, 91% have a private bath, 95% have hot water, and 88% have a common sewage system.

EDUCATION

Education is based on Roman Catholic principles and is under government supervision. In 1974, the compulsory primary school attendance period was lowered from eight years to five, beginning at age seven. Kindergarten, offered to children ages five to seven, is optional, followed by five compulsory years of primary school. Secondary education is divided into three tracks: oberschule (general); realschule (which offers vocational and, in some cases, university preparatory education), and gymnasium (which provides an eight-year program to prepare students for a university education, with concentrations in either the classics and humanities or economics and mathematics). Liechtenstein also has an evening technical school, a music school, and a children's pedagogic-welfare day school.

While there are no universities in Liechtenstein, gymnasium graduates are may attend universities in Switzerland and Austria and the University of Tubingen in Germany without passing an examination.

LIBRARIES AND MUSEUMS

The National Library (founded in 1961) serves as the public, academic, and national library. It is located in Vaduz and has over 200,000 volumes. There are three specialized libraries maintained by private institutes, and a small library attached to a state music school.

The National Museum, located in Vaduz, includes collections from the Prince and the State, containing an important Rubens collection. The Prince Liechtenstein Art Gallery, founded in 1620 and located in Vaduz, is an important cultural institution in Liechtenstein. The museum is housed upstairs in the tourist information office. Also in the capital are a postage museum and a state historical museum. A ski museum opened in Vaduz in 1994, and there are also museums in Schaan, Schellenberg, and Triesenberg.

MEDIA

The post office (including telegraph and telephone services) is administered by Switzerland. Liechtenstein, however, issues its own postage stamps. The Swiss dial system extends to the principality. Direct-dialing is used throughout the country and includes international service. In 2002, there were 19,900 mainline phones and 11,400 mobile phones in use throughout the country. Telegraph service is efficient.

As of 2001, there were one state and one private television station broadcast, along with a private radio station. Residents also receive radio and television broadcasts from neighboring countries. In 1997 there were 21,000 radios and 12,000 television sets in the country. In 2002, there were 20,000 Internet subscribers in the country.

Two daily newspapers are published. The Liechtensteiner Volksblatt reflects the political outlook of the Progressive Citizen's Party. It had a circulation of about 8,200 in 2002. The Liechtensteiner Vaterland reflects the views of the Fatherland Union. It had a circulation of about 9,580 in the same year. Liechtensteiner Wochenzeitung, a weekly, had a circulation of 14,000.

The media is said to enjoy a large degree of autonomy and freedom from interference, owing to an independent press, an effective judiciary, and a democratic political system.

ORGANIZATIONS

Organizations include the Chamber of Industry and Commerce, the Historical Society of the Principality of Liechtenstein, three concert societies, and various other cultural organizations. There are professional organizations representing several fields and occupations. Kiwanis and Lion's clubs are active in the country. Charitable institutions include the Liechtenstein Caritas Society (founded in 1924) and the Liechtenstein Red Cross Society (1945). Youth organizations include the Scouts and Guides of Liechtenstein. There are also several organizations devoted to sports and leisure activities.

TOURISM, TRAVEL, AND RECREATION

Attractions include mountaineering and nature walks, the castles of Vaduz and Gutenberg (overlooking Balzers), the ruins of several fortresses, the numerous local brass bands and choirs, as well as the operetta societies of Vaduz and Balzers. The most popular sports are swimming, golf, tennis, hiking, and skiing. The ski resort of Malbun has 12 hotels and 7 ski lifts.

Modern, comfortable buses offer regular service throughout Liechtenstein, connecting with Austria and Switzerland. In Vaduz, the lower country, and the Alpine regions there are hotels and guest houses.

The government actively encourages and supports the tourism industry. In 2003, there were 49,002 visitors, mainly from Luxembourg and Switzerland. Hotel rooms numbered 591 with 1,160 beds and an occupancy rate of 25%. The average length of stay that year was two nights.

FAMOUS LIECHTENSTEINERS

Joseph Rheinberger (18391901), an organist and composer who lived in Munich, was the teacher of many famous composers. Prince John II (r. 18581929) was admired for donating some SwFr 75 million to the struggling country after World War I. Prince Franz Josef II (190689), whose rule began in 1938, was Europe's longest-reigning sovereign. Liechtenstein's current monarch is Prince Hans Adam II (b.1945), who first was given executive power in 1984 and assumed control in 1989. Prince Alois (b.1968) is regent.

In 1980, Hanni Wenzel (b.1956) and her brother Andreas (b.1958) won the World Cup international skiing championships.

DEPENDENCIES

Liechtenstein has no territories or colonies.

BIBLIOGRAPHY

Annesley, Claire (ed.). A Political and Economic Dictionary of Western Europe. Philadelphia: Routledge/Taylor and Francis, 2005.

Beattie, David. Liechtenstein: A Modern History. New York: I.B. Tauris, 2004.

Duursma, Jorri. Self-Determination, Statehood, and International Relations of Micro-States: The Cases of Liechtenstein, San Marino, Monaco, Andorra, and the Vatican City. New York: Cambridge University Press, 1996.

Meier, Regula A. Liechtenstein. Santa Barbara, CA: Clio Press, 1993.

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Liechtenstein

LIECHTENSTEIN

Principality of Liechtenstein

Fürstentum Liechtenstein

COUNTRY OVERVIEW

LOCATION AND SIZE.

The independent principality of Liechtenstein is located in central Europe and bordered on the east by Austria and on the south, west, and north by Switzerland. It is one of the smallest countries in the world, with a total area of only 160 square kilometers (62 square miles). Liechtenstein is about 25 kilometers (15.6 miles) long and 6 kilometers (3.75 miles) wide. Its total area is about 0.9 times the size of Washington, D.C. The western edge of the territory lies in the valley of the upper Rhine River and contains a narrow flat strip of arable land. The rest of the area consists of the foothills of the Alps, covered with forests and rising to several high and rugged peaks in the south. Along with Uzbekistan in Central Asia, Liechtenstein is one of the only two doubly landlocked countries in the world (bounded by other land-locked countries only). The capital and principal urban center, Vaduz, is a small town with a population of about 5,000 located in the west-central part of the country near the Rhine River.

POPULATION.

The population of Liechtenstein was estimated at 32,207 in July of 2000; in 1998, it was 31,717. Although quite mountainous, Liechtenstein is densely populated, with an overall density of 198 persons per square kilometer (513 per square mile). The population is unevenly distributed and concentrated in the western, lower part of the country, along the Rhine. The principality has a population growth rate of 1.02 percent, with a birth rate of 11.83 births per 1,000 population. The death rate is 6.64 deaths per 1,000 population, and there is a high positive net migration rate of 5.03 immigrants per 1,000 population (all according to 2000 estimates).

Approximately one-third of the population are resident aliens, including Iranians, Turks, and others, while the vast majority of the Liechtenstein nationals are mostly of ethnic Germanic origin, like their neighbors in eastern Switzerland and western Austria. A south German dialect, Alemannish, is commonly spoken by some 87.5 percent of the population, while literary German is the official language of the country. In 2000, the labor force included 22,891 people, of which an astounding number of 13,847 were foreigners, mostly guest workers ; 8,231 people commuted from neighboring Austrian and Swiss towns to work daily. Unlike Switzerland, however, immigration does not seem to be a major issue in the domestic political debates in Liechtenstein (in 2000, the Swiss electorate had to vote in a referendum on a conservative proposal to impose an 18 percent quota on the number of foreign workers in the country but decided against).

Approximately 88 percent of the population are traditionally Roman Catholic. In 1991, primary (elementary and junior high) school enrollment in the principality totaled 1,985 children, and about 1,200 attended secondary (high) schools. Primary and secondary education is free in Liechtenstein and schooling is required for 8 years. The population, as elsewhere in Europe, is aging, with a high life expectancy at birth (82.47 years for women, 75.16 for men, 78.81 for the total population, all 2000 estimates). Around 18 percent of the people are 14 years of age and younger, 71 percent are between 15 and 64, and 11 percent are 65 or older. The high and stable standards of living and the declining fertility rate, combined with the limited but steady immigration flow, will contribute to a slow growth of the population and the aging of the Liechtenstein nationals, while immigrants' and guest workers' families will display a more youthful population profile.

OVERVIEW OF ECONOMY

Liechtenstein is tiny in size and has very limited natural resources, but it is nevertheless a prosperous country with a highly industrialized market economy and a robust financial services sector. Since World War II (in which the principality remained neutral), its liberal political regime and remarkably low business taxes have fueled strong economic growth and attracted many foreign companies. For over 80 years, Liechtenstein has been participating in a customs union with Switzerland; it uses the Swiss franc as its national currency, and in most aspects may be regarded as a part of the Swiss economy. Liechtenstein statistics are also included in the Swiss national statistics. Since 1919, Switzerland has represented Liechtenstein abroad diplomatically, as well. Living standards in the country are similar to those in the urban areas of neighboring Switzerland and Austria, both reckoned among the most affluent societies in the world. Its gross domestic product (GDP) per capita of $23,000 (1998 estimate) is also among the highest in the world.

Favorable tax treatment and extremely streamlined incorporation legislation have lured as many as 74,000 holding (or so-called "letter box") companies, operating overseas, to establish their head offices nominally in Liechtenstein, providing thus as much as 30 percent of the country's revenue basically in maintenance, administrative, and office services fees. Liechtenstein has been an active member of the European Economic Area (EEA), an organization serving as an intermediary between the European Free Trade Association (EFTA) and the European Union (EU) since May 1995. The government is working to harmonize its economic policies and legislation with those of the EU, although it is not negotiating for full membership in the union.

Some modern manufacturing industries have developed recently; notably in precision instruments, dental and optic materials, pharmaceuticals, and electronics. These industries contribute much to the country's positive trade balance. Yet much of the principality's income is also derived from tourism, banking, the sale of postage stamps and other retail services, and from the office expenses of the international companies maintaining their headquarters there.

POLITICS, GOVERNMENT, AND TAXATION

Liechtenstein is a constitutional monarchy governed by a hereditary prince. According to the constitution of 1921, legislative power is vested in the unicameral parliament (Landtag), consisting of 25 members elected by universal suffrage for 4-year terms. The Landtag members are elected in the 2 multi-seat constituencies (electoral districts): the Upper (or highland, formerly called Vaduz) and the Lower (or lowland, formerly called Schellenberg), by proportional representation . Although very small in size, Liechtenstein is further divided into 11 administrative units or communes (Gemeinden): Balzers, Eschen, Gamprin, Mauren, Planken, Ruggell, Schaan, Schellenberg, Triesen, Triesenberg, and Vaduz.

Elections for the Landtag held on 9 and 11 February 2001, gave 49.9 percent of the vote and 13 Land-tag seats to the Progressive Citizens' Party in Liechtenstein (FBPL), a conservative group. The then ruling conservative Patriotic Union (VU) received 41.1 percent and 11 seats, and its representative, chief of government Mario Frick, resigned accordingly. An environmentalist group, Free List (FL), remained third with 8.8 percent of the vote, or just 1 seat in the House. In February 1997, the Free List (FL) had achieved the best score in its history with 11.6 percent of the vote, corresponding to 2 seats in the Landtag. Like the VU, in 2001 the FL lost some votes in favor of the FBPL and was not able to retain its former positions in the lowland constituency. Participation in the election reached 86.7 percent, just a bit less than in 1997, when 86.9 percent of the electorate voted.

The hereditary prince and the elected government constitute the executive branch of government. The ruling prince, Hans Adam II, assumed his executive powers in 1984, and his heir apparent is his son, Prince Alois von und zu Liechtenstein. On the motion of the parliament, the prince appoints a prime minister and 4 councilors to form the cabinet. Prior to the February 2001 elections, Mario Frick of the VU was the prime minister and chief of government since 15 December 1993. Following the 2001 elections, Otmar Hasler was selected as the prime minister.

Liechtenstein is a member of many international organizations such as the United Nations (it maintains a permanent mission to the UN in New York), the Council of Europe, the Organization on Security and Cooperation in Europe, the European Bank for Reconstruction and Development, the EFTA, the World Trade Organization, the International Atomic Energy Agency, and the World Intellectual Property Organization, among others.

With a maximum tax rate of 18 percent, Liechtenstein has one of the most liberal tax regimes in the world, and its banks, generally considered as members of the Swiss banking family, enjoy a stable reputation for their solidity and privacy policies. The country has a stable foreign trade balance surplus and zero foreign debt . But in 2000, it faced its biggest domestic and foreign political crisis since World War II as the affluent principality was shaken by allegations that it was an international money laundering center and by the subsequent arrests of several leading public figures ordered by a special prosecutor from Austria.

A conflict between Prince Hans Adam II and the government over the extent of the royal family's powers, rein-vigorated by the money laundering allegations in 2000, almost brought about a constitutional crisis later that year. The prince and the cabinet had been at odds for quite a long time over a pending project for a constitutional reform. The prince had claimed he wanted to modernize the way Liechtenstein is run and give more power to the people, while the then prime minister Mario Frick and other critics held the opposite was true and claimed the envisaged reforms would concentrate more power in the prince's hands. The prince threatened to muster the 1,500 signatures required by law to bring about a referendum on the issue if he did not get what he wanted, and said if he was to lose the constitutional debate he would leave for Austria, the seat of his family before World War II. That might raise serious questions about how the principality would be governed in the future.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

The transportation system of Liechtenstein consists of 18.5 kilometers (11.5 miles) of railroads, all electrified, owned and operated by, and included in the statistics of

Communications
Country Telephones a Telephones, Mobile/Cellular a Radio Stations b Radios a TV Stations a Televisions a Internet Service Providers c Internet Users c
Liechtenstein 20,000 N/A AM 0; FM 4; shortwave 0 21,000 N/A 12,000 44 N/A
United States 194 M 69.209 M (1998) AM 4,762; FM 5,542; shortwave 18 575 M 1,500 219 M 7,800 148 M
Germany 45.2 M 15.318 M (1999) AM 51; FM 767; shortwave 4 77.8 M 373 (1995) 51.4 M (1998) 123 18 M
Switzerland 4.82 M (1998) 1.967 M (1999) AM 4; FM 113; shortwave 2 7.1 M 115 (1995) 3.31 M 44 2.4 M
aData is for 1997 unless otherwise noted.
bData is for 1998 unless otherwise noted.
cData is for 2000 unless otherwise noted.
SOURCE: CIA World Factbook 2001 [Online].

the Austrian Federal Railways. There are 323 kilometers (201 miles) of paved highways. There are no ports or harbors (the Rhine River is not yet navigable anywhere in Liechtenstein) and there are no airports in the small mountainous principality. The country is served in these respects by the extensive infrastructure of neighboring Switzerland and Austria. Liechtenstein is not traversed by any major international routes and road traffic in the country is 96 percent home-made while only 4 percent is accounted for by transit traffic, running mostly along the Schaanwald-Nendeln-Eschen-Bendern axis.

Electricity production in 1995 was about 150 million kilowatt hours (kWh), and Liechtenstein imported more than 90 percent of its energy from Switzerland and Austria. There is a modern telecommunications network with 19,000 main lines in use in 1995. All are linked to and operated by the Swiss telecom networks (some of the world's most technologically advanced) by cable and microwave radio relay. In 1999, 115 of the Swiss Internet service providers were offering service in Liechtenstein.

ECONOMIC SECTORS

Liechtenstein is highly industrialized, but much of its income is derived from banking, tourism, commerce, the sale of postage stamps, and from the international firms maintaining offices in the country because of more favorable tax treatment. Major manufactures include precision machinery, instruments and tools, pharmaceuticals, food products, metal goods, furniture, and pottery. The distribution of the labor force by occupation in 1997 was estimated to be as follows: industry, trade, and building, 45 percent; services, 53 percent; and agriculture, fishing, forestry, and horticulture less than 2 percent.

AGRICULTURE

Agriculture contributes just 2 percent of GDP, although about 24 percent of Liechtenstein's territory consists of arable land, with permanent highland pastures making up 16 percent, and forests and woodland occupying 35 percent of the land. Animal husbandry and dairy farming are among the principal agricultural activities. Livestock graze in the alpine meadows during the summer. The fertile soil of the Rhine valley is used mostly for market vegetable gardening. Local agriculture products include wheat, barley, corn, potatoes, and grapes. The principality imports food, and some of it is processed and reexported.

Before World War II, almost half of the working population was occupied in agriculture. This number has continually decreased, and in 2000, about 350 persons (or 1.7 percent of the workforce) are active in agriculture, fishing, forestry, and horticulture. Despite the decline in that number, yields have been significantly increasing due to scientific rationalization and intensive machine cultivation.

INDUSTRY

About one-third of the nearly 23,000 working people of Liechtenstein are employed in industrial establishments. Due to the favorable economic conditions, an efficient, export-oriented high-tech industrial manufacturing sector developed over the last decades of the 20th century. Manufacturing, reported jointly with construction and trade, was responsible for nearly 45 percent of the jobs and the GDP by 2000 and a large percentage of the country's exports. Electronics, metal manufacturing, textiles, ceramics, pharmaceuticals, food products and beverages, and precision instruments manufacture are all well developed. The fact that Liechtenstein's economy exports so much is largely due to its high-tech manufacturing sector that accounts for the majority of its exports.

Among the most important domestic manufacturers are the Hilti Corporation, a large international supplier of rail anchors and anchor installation services to the rail transport industry, and electrical equipment; Ivoclar-Vivadent, developer and distributor of well-regarded products for prosthetic, restorative, and preventive dentistry; Balzers-Bal-Tec AG, manufacturers of electron microscopy preparation products for biological specimens; Fancoldi R.T., gem industry specialists, producing colored diamonds; and Aqualine, a major Austrian Alps mineral water bottling company.

Construction is also an important contributor to the economy, although its scope is necessarily limited. According to the building statistics, in the last quarter of 2000, 115 new buildings were granted permits. As compared to the same period of 1999, this corresponded to 39 permits less, but the construction volume increased by 5.6 percent and construction costs increased by 17.2 percent to 163.3 million Swiss francs. Building activities generally shifted from housing developments and public buildings towards industry and trade. The construction volume in that sector increased by 110.4 percent, while a decrease of 93.4 percent was registered for public buildings.

SERVICES

Liechtenstein's economy is increasingly service-based, as in most of western Europe. Services contributed to 53 percent of GDP, and about 10,000 people were employed in the sector in 2000. It particularly expanded over the last decade of the 20th century. In addition to the catering branch (made of 42 hotels and inns, and 81 restaurants and cafes), the public administration, insurance companies, and the health and educational systems, this sector is specially characterized by a vigorous presence in international commercial and financial transactions and in fiduciary business.

Finance in Liechtenstein is traditionally a very well-developed sector. Apart from the presence of the Swiss banks due to the monetary and customs union and the geographical and cultural proximity between the 2 states, 13 local banks exist. These include Liechtenstein-LGT Bank, an international private bank, claiming to be the largest banking operation in the country; Bank von Ernst, a financial institution providing Swiss private banking services, portfolio management, and family foundation; and Liechtenstein-VP Bank Group, a private bank founded in 1956, providing a wide range of financial services, holding assets worth some $5.5 billion, and employing about 600 people (but currently facing some serious legal troubles, as shown below), as well as the Centrum Bank AG, Liechtensteinische Landesbank AG, Neue Bank AG, Verwaltungs-und Privat-Bank AG, and Vorarlberger Volksbank AG. The largest banks in Liechtenstein belong to the Swiss Banking Association and recognize most of its rules, as do all the Swiss banks.

The Liechtenstein banks, which administer 112.5 billion Swiss francs (US$70 billion), have been known for their liberal policies and privacy, yet, following some serious money laundering allegations in 2000 described below, they intend to end anonymous accounts and carry out identity checks on their customers. Legislative changes to that effect are being pushed through parliament in hopes of averting possible sanctions from European Union countries and the United States following the scandals. However, bankers are reluctant to give up their judicial independence.

Tourism is also an important contributor to the economy. Despite its small size, alpine Liechtenstein is a diverse country with various communities offering a mix of attractions for all tastes. Situated between some of the most attractive tourist regions in Europe, the Swiss and Austrian Alps, the tiny principality often appears on their visitors' itineraries. Museums, banks, boutiques, dining establishments, historical sites, vineyards, and sports (particularly skiing and hiking) facilities are varied and charming. Liechtenstein is considered a microcosm of the European continent. Apart from the 42 hotels and 81 restaurants, the sale of postal stamps by the state post offices, galleries and shops offering art objects, local handicrafts, and souvenirs are also a significant source of revenue.

Retail is well-developed and targeted at serving the tourist clients as well as the local customers and commuters, but the small size of the market is still more conducive to small family-owned stores. Retail trade experienced a marked upswing over the 1990s as a result of increased specialization of stores, so that a wide range of diverse products is now available. As the Swiss retail sector is developing towards large-scale self-service and discount chain stores, Liechtenstein retailers have had to face fierce competition from the large Swiss shopping malls in the vicinity. Many of the small family-owned shops, relying basically on local customs, went out of business during the 1990s. Some 1,600 retail and wholesale trade enterprises are united in the Liechtenstein Chamber of Trade and Commerce as an umbrella organization. Trade enterprises cater mainly to the domestic market and contribute to the efficient infrastructure of the country.

Companies specializing in serving the offshore "letter box" companies' various needs in Liechtenstein include the Gestina Trust, specialists in the development and management of offshore companies, legal structures, and settlement advice; the Vazus-Syndikus Treuhandanstalt, offering financial advice and consulting in economic and legal matters, accounting, and contracts; the Vazus-Wanger Group, a law and patent firm in commercial law and asset management, and many others.

INTERNATIONAL TRADE

Due to the very small size of the country's market, Liechtenstein's industry is heavily dependent on exports. In 1996, the country exported $2.47 billion worth of goods and services, while importing $917.3 million worth. The European Economic Area (EEA) states are its most important export destinations. Liechtenstein joined the European Free Trade Association (EFTA) as an associate member in 1960 and has been a full member since 1991. In addition, it became a member of the EEA (the intermediary body between the EFTA and the EU) in 1995. Although small, the Liechtenstein economy is very open and its foreign trade balance is traditionally strikingly positive, with exports far outweighing imports, largely thanks to its high-tech manufacturing sector. Principal trade partners in 1995 were the EU and EFTA, recipients of 60.57 percent of exports, and Switzerland, recipient of 15.7 percent, and they were the origins of a comparable percentage of its imports. All trade numbers for Liechtenstein are included in the Swiss national statistics, and therefore a more clear-cut picture of its international trade is difficult to assemble.

MONEY

Liechtenstein has many advantages issuing from its use of the Swiss franc and from officially being part of the Swiss monetary system. It has a strong currency, a balanced budget with revenues of $424.2 million and expenditures of $414.1 million in 1998 (estimate), and a leading banking sector with solid private banks with a reputation for privacy, limited regulation, and the acceptance of foreign deposits with little oversight. Similarly to Switzerland in the late 1990s, however, these conditions have also led to some serious legal drawbacks.

Throughout 2000, Liechtenstein has been troubled by recurrent international allegations of domestic money laundering for transnational organized crime, an abuse of Swiss banking privacy policies. In 2000, the German press printed stunning details from a German federal intelligence agency report accusing Liechtenstein of acting as banker to Central American drug cartels and the Russian mafia. The report alleged that a former prime minister, Hans Brunhart, currently head of the Verwaltungsund Privat-Bank (VP Bank), had been laundering drug money. The report named Liechtenstein as the only European country on an International Financial Action Task Force (FATF) list of 15 nations accused of failing to cooperate against money laundering. Finally, the Organization for Economic Cooperation and Development (OECD), in another 2000 publication, listed the principality

Exchange rates: Liechtenstein
Swiss francs, franken, or franchi (SFR) per US$1
Jan 2001 1.6303
2000 1.6888
1999 1.5022
1998 1.4498
1997 1.4513
1996 1.2360
SOURCE: CIA World Factbook 2001 [ONLINE].

among harmful offshore tax havens alongside Tonga, the Bahamas, and Barbados.

The allegations caused a storm of indignation in the country. Brunhart objected, and an independent investigator from Austria appointed by Liechtenstein did not support the case. The investigator found that Liechtenstein was not a hub of money laundering, although he criticized its preventive work against "hot money." In early 2001, the FATF confirmed that the country had made significant progress in connection with the fight against money laundering. The country was removed from the blacklist by the FATF in June of 2001.

POVERTY AND WEALTH

Liechtenstein is renowned as one of Europe's most affluent and carefree communities. With one of the highest measures of GDP per capita in the world, a low inflation rate (in terms of consumer prices) of 0.5 percent (1997 estimate), and the benefits of the monetary and economic union with Switzerland, the tiny principality offers its subjects one of the highest standards of living in the world, although at a very high cost of living. No data as to Liechtenstein's economic equality index ( Gini index ) are currently available, but if Switzerland's index is used for reference, economic equality in the principality is likely to be in better shape than the United States and even in the more egalitarian United Kingdom. No data as to any extreme cases of poverty are available.

WORKING CONDITIONS

Due to the number of specialized high-tech companies in Liechtenstein, there is an enormous demand for highly qualified specialists. Since the national job market, on account of its tiny size, can only partly satisfy the demand, the internationally active companies in particular are heavily recruiting in other countries, mostly Switzerland and Austria, but also elsewhere in Europe and the Middle East.

GDP per Capita (US$)
Country 1996 1997 1998 1999 2000
Liechtenstein 23,000 N/A 23,000 N/A N/A
United States 28,600 30,200 31,500 33,900 36,200
Germany 20,400 20,800 22,100 22,700 23,400
Switzerland 22,600 23,800 26,400 27,100 28,600
Note: Data are estimates.
SOURCE: Handbook of the Nations, 17th,18th, 19th and 20theditions for 1996, 1997, 1998 and 1999 data; CIA World Factbook 2001 [Online] for 2000 data.

In 2000, the labor force included 22,891 people of which 13,847 were foreigners, mostly guest workers; 8,231 people commuted from neighboring Austrian and Swiss towns to work daily. A highly skilled workforce, laws promoting labor flexibility, and agreements between trade unions and employers' associations have resulted in very little labor unrest. The late 1990s have been good for Liechtenstein workers, with salaries having increased by an average of 7 percent between 1997 and 1999. It is all the more important that it was possible at the same time to realize improvements on the job market and to lower the unemployment rate.

In 2000, the unemployment ratio fell to 1.0 percent of the domestic labor force. The number of 274 individuals registered as unemployed at the end of February 2001 represents the lowest figure since June 2000, when 260 individuals had been registered. In February 2001, 28 persons were registered as unemployed either for the first time or were re-registered. Some 51 individuals were taken out of the statistics, 32 of whom started a new job, and the rest reached retirement age or started a new business. Full employment is a prominent aim of domestic economic policy. It is a goal that can be reached through measures including a project for the occupation of long-time unemployed, as well as a program for the better integration of handicapped employees.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

1719. The former domain of Schellenberg and the country of Vaduz are combined into the Principality of Liechtenstein within the Holy Roman Empire.

1806. The principality is recognized as a sovereign state. Until the end of World War I, it remains closely tied to the Austrian Empire (named the Austro-Hungarian Empire after 1867).

1918. The military defeat and the collapse of the Austro-Hungarian Empire in World War I forces Liechtenstein to conclude a customs and monetary union with its other prosperous yet neutral neighbor, Switzerland.

1938. Prince Franz Joseph II becomes sovereign; the principality remains neutral in World War II (1939-45), while neighboring Austria is annexed by Nazi Germany.

1984. Executive authority is transferred to Prince Hans Adam II (crowned in 1989); a referendum grants women the right to vote in national elections.

1990. Liechtenstein joins the United Nations.

1991. Liechtenstein joins the European Free Trade Association (EFTA).

1992. Voters approve Liechtenstein's membership in the European Economic Area (EEA).

2000. Liechtenstein is disturbed by a money-laundering scandal and a constitutional crisis between the prince and the government.

FUTURE TRENDS

The Liechtenstein economy is closely related to the Swiss one and is dependent on the latter's progress towards full integration in the EU. It is likely that, despite financial scandals and constitutional problems, the principality will preserve its sound economy and high living standards and will continue to attract foreign companies and workers in the foreseeable future.

Liechtenstein has already developed close links with the EU through its participation in the EEA, the comprehensive adjusting of its domestic economic regulations to fit the EU standards, and its close relations with the Austrian economy (Austria is a full member of the union). In the event Switzerland finally decides to join the EU, the adjustment of the monetary and banking system (and possibly some agricultural subsidy policies) will likely be among the serious problems facing the small principality in this regard.

As to the problems related to the 2000 banking scandal, there is reason to believe that Liechtenstein can guarantee the implementation of some effective measures to combat money laundering. The former prime minister appointed 4 new judges working at the national court, the prosecution was restructured , the state department for financial services was strengthened, a new Financial Intelligence Unit (FIU) was founded, and a special bank department was set up within the national police force. Some needed legislative changes are being vigorously debated. It is expected that the country's banking practices will be soon brought in line with the general EU provisions, without reducing its competitive advantages too much. The positive ruling by the FATF in June of 2001 indicated the success of these measures.

It is harder to predict the outcome of the constitutional crisis. In 2000, Hans Adam II announced that he would end the discussion around the constitution as soon as possible. But reflecting on his new constitutional proposal of 1 March 2001, the former head of the constitutional commission, Peter Wolff, noted that in the controversial points, on which parliamentary criticism focused, nothing had been changed. Whatever the decision, however, it is not likely to cause any serious political disturbance in the principality that might jeopardize social stability and economic development.

DEPENDENCIES

Liechtenstein has no territories or colonies.

BIBLIOGRAPHY

Global Investment Business Center, Inc. Staff. Liechtenstein: A Country Study Guide. International Business Publications, 2000.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed July 2001.

U.S. Department of State. Background Notes: Europe: Liechtenstein. <http://www.state.gov/www/background_notes/eurbgnhp.html>. Accessed January 2001.

Valentin Hadjiyski

CAPITAL:

Vaduz.

MONETARY UNIT:

Swiss Franc (SFR). One SFr equals 100 centimes or rappen. There are notes of 10, 20, 50, 100, 200, and 1,000 Swiss francs, and coins of 5, 10, 20, and 50 centimes and 1, 2, and 5 Swiss francs. The country maintains a monetary and customs union with Switzerland. The Liechtenstein monetary, fiscal, and banking systems can therefore be regarded as an extension of their Swiss counterparts.

CHIEF EXPORTS:

Small specialty machinery, dental products, stamps, hardware, pottery.

CHIEF IMPORTS:

Machinery, metal goods, textiles, foodstuffs, motor vehicles, fuels.

GROSS DOMESTIC PRODUCT:

US$730 million (1998 est.).

BALANCE OF TRADE:

Exports: US$2.47 billion (1996 est.). Imports: US$917.3 million (1996 est.).

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Liechtenstein

LIECHTENSTEIN

Principality of Liechtenstein

Major City:
Vaduz

Other Cities:
Malbun, Triesen

INTRODUCTION

The region now known as LIECHTENSTEIN has been continuously inhabited since 3000 BC. The region was a part of Charlemagne's empire in the 8th century, and it later was incorporated into the Holy Roman Empire. The Imperial Principality of Liechtenstein was established in 1719 and has been politically independent since 1815. The principality remained neutral in both World Wars. From 1852 until 1919, Liechtenstein was closely tied economically to Austria. When Austria's economy collapsed after World War I, Liechtenstein sought closer ties with its other neighbor, Switzerland. Liechtenstein has thrived since World War II as a prosperous center for trade, finance, precision manufacturing, and tourism. Wine production is also economically important.

MAJOR CITY

Vaduz

Vaduz is Liechtenstein's capital and main city, located in the western part of the country near the Rhine River. An estimated 5,000 people (about one-sixth of the country's population) lives in Vaduz. Many Swiss and Austrian citizens commute to Vaduz. Few international trains make stops in Liechtenstein, but the main terminal for reaching the country is Buchs, Switzerland, about five miles from Vaduz. Buses regularly travel from Vaduz to Feldkirch, Austria via Schaan. Two oneway streets encircle the center of town. Banking is an increasingly important part of the local economy, and Vaduz is the headquarters for many law firms, banks, and trust companies. Bank secrecy laws and low taxes encourage foreigners to invest in the financial services industry. Near Vaduz are several industrial firms that produce a wide array of products including frozen foods, dental products, central heating systems, and protective coatings for CD-ROMs.

Recreation and Entertainment

The principality's ski resorts are world famous, especially those at Steg and Malbun. The Steg resort has a popular cross-country ski course with an illuminated 1-mile stretch for night skiing. The Malbun resort is located 10 miles from Vaduz and has 12 miles of downhill runs. Members of the British royal family and other celebrities visit the Malbun resort. Hiking, bicycling, and soccer are popular in the summer.

The annual number of tourists has been in decline since 1981, although tour buses are seen in Vaduz as much as ever. Vaduz is a small town, and in the summer its streets can become congested with buses and cars. There is a plan to close the main street to all but pedestrian traffic in order to reinvigorate the center of Vaduz.

The castle at Vaduz is closed to the public, but it is a popular subject for photographers. The Gutenberg Castle at Balzers is also closed to the public but there are plans to convert it into a museum.

The Liechtenstein National Museum contains coins, weapons, and folklore of the country. For such a small country, Liechtenstein has an extensive collection of art works but has never had a museum in which to display them. Hilti, the country's biggest company, has pledged to help finance the building of an art museum in the center of Vaduz. The museum will house the state art collection, exhibit parts of the prince's personal collection, and attract outside exhibitions. The Liechtenstein Postal Museum contains more than 300 frames of national stamps issued since 1912. Groups of ten or more are permitted to sample wines from the prince's own vineyard. Many residents belong to social clubs, and performing in choirs and bands is popular as well.

OTHER CITIES

MALBUN is a hamlet in the mountains of southeast Liechtenstein and is known as the country's ski resort. The resort offers two ski schools, and most runs are for novices or intermediates.

With a population of only about 4,200, TRIESEN is the third largest village in the country. South of Vaduz, it lies nestled between the Rhine and the Liechtenstein alps. The beautiful countryside is perfect for outdoor sports enthusiasts. Hikers may take a trail along the gorge of Lawena, the 1500 meter high alp, or move down into the valley at the foot of the Falknis cliffs. Triesen has several tennis courts and bicycle paths through the village and a beautiful indoor swimming pool. Nearby is the winter sports area Malbun, which offers ski slopes and a natural ice rink. Triesen may also serve as a starting point for excursions to the Swiss mountains or to Lake Constance and to Walensee (Lake Walen).

Triesner Hall offers a variety of local cultural and entertainment events throughout the year, including changing historical exhibits and concerts. The St. Mamerten and Maria Chapels are located in the lower part of the village and also contain exhibits on local history.

COUNTRY PROFILE

Geography and Climate

Liechtenstein is a landlocked country situated along the Rhine River Valley. Liechtenstein is one of Europe's so-called "microstates" (the others are Andorra, Monaco, San Marino, and Vatican City) and has an area of only about 62 square miles, almost the size of Washington, D.C. It is bordered to the north and east by the Austria, and to the south and west by the Switzerland. The Rhine River flows along its western boundary.

A narrow area of relatively level land lies near the Rhine River. The level land occupies about 40% of the country's total area, and the rest of the country is mountainous. The highest point is Grauspitz (8,527 feet) in the south. A steep Alpine slope called the Drei Schwestern ("three sisters") extends across the border with Austria.

A warm southern wind called the Föhn makes the climate less severe than might be expected from the elevated terrain and inland location. Lowland temperatures average 24° F in January and 68° F in July. The average annual precipitation is 41 inches.

Population

Liechtenstein's population is approximately 32,000. The population is most heavily concentrated in the Rhine River Valley between Schaan and Vaduz.

Approximately 88% of the population is Alemannic, descendants of the Germanic tribes that settled between the Main and Danube rivers. The rest of Liechtenstein's population consists of foreign residents, mainly Italian and Turkish. Several thousand Swiss and Austrians commute daily to work in the principality.

The state religion is Roman Catholicism, to which approximately 80% of the population adheres. Protestants and other sects account for the remainder.

German is the official language, spoken in an Alemannic dialect.

Government

The Principality of Liechtenstein was created on January 23, 1719 by act of Holy Roman Emperor Charles VI. The government is a constitutional monarchy, ruled by the hereditary princes of the house of Liechtenstein. The current monarch is Prince Hans Adam II, who was first given executive power in 1984 and assumed control in 1989. There is a unicameral parliament of 25 members elected every four years. The prince appoints a prime minister, currently Otmar Hasler, selected from the majority party of the parliament. Although the principality has its own civil and criminal codes, in certain instances courts composed of Liechtensteiner, Swiss, and Austrian judges may have jurisdiction over domestic cases.

The national flag is divided into two horizontal rectangles, blue above red. On the blue section near the hoist is the princely crown in gold.

Arts, Science, Education

Primary and secondary education is modeled on Roman Catholic principles and is conducted under government supervision. Many students pursue higher education in Switzerland, Austria, and Germany. The country also has a music school and a children's pedagogic-welfare day school.

Commerce and Industry

Liechtenstein has developed since the 1940s from a mainly agricultural to an industrialized nation and a prosperous center for trade and tourism. The majority of factories produce specialized small machinery in addition to precision instruments. Industrial products are made almost exclusively for export.

Transportation

The main railway for reaching Liechtenstein is Buchs, Switzerland, about 5 miles from Vaduz. Postal buses are the main form of public transportation. A half-mile tunnel connects the Samina River Valley with the Rhine River Valley. A major highway runs through the principality, linking Austria with Switzerland. The nearest airport is in Zürich, Switzerland.

Communications

Telecommunications services are administered by Switzerland. There are no television stations that transmit from Liechtenstein. There are two daily newspapers, the Liechtenstiener Volksblatt and the Liechtensteiner Vaterland, both printed in German.

Health

The principality has formed agreements with Switzerland and Austria that allow its residents access to hospital facilities in those countries. The government's health care system provides complementary medical examinations for children under the age of 10.

NOTES FOR TRAVELERS

A passport is required for travel to Liechtenstein. A visa is not required for U.S. citizens for stays up to 90 days. For more information on entry requirements, travelers may contact the Embassy of Switzerland at 2900 Cathedral Avenue N.W., Washington D.C. 20008, telephone (202) 745-7900, or the nearest Swiss consulate in Atlanta, Chicago, Houston, Los Angeles, New York, or San Francisco.

There is no U.S. Embassy or Consulate in Liechtenstein. For assistance and information on travel and security in Liechtenstein, U.S. citizens may contact or register at the U.S. Embassy in Bern at Jubilaeumstrasse 93, telephone (41)(31) 357-7011.

LOCAL HOLIDAYS

Jan. 1 New Year's Day

Jan.2 St. Berchtold's Day

Jan. 6 Epiphany

Feb. 2 Candlemas

Feb/Mar.Shrove Tuesday*

Mar. 19St. Joseph's Day

Mar/Apr.Good Friday*

Mar/Apr.Easter*

Mar/Apr.Easter Monday*

May 1Labor Day

May/JuneAscension*

May/JuneWhitsunday*

May/JuneWhitmonday*

May/JuneCorpus Christi*

Aug. 15 Assumption

Sept. 8 Nativity of Our Lady

Nov. 1All Saints' Day

Dec. 8Immaculate Conception

Dec. 24Christmas Eve

Dec. 25Christmas

Dec. 26St. Stephen's Day

Dec. 31New Year's Eve

*variable

RECOMMENDED READING

Honan, Mark. Switzerland. Hawthorn, Victoria, Australia: Lonely Planet Publications, 1997.

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Liechtenstein

Liechtenstein

Basic Data
Official Country Name: Principality of Liechtenstein
Region: Europe
Population: 32,207
Language(s): German, Alemannic
Literacy Rate: 100%

History & Background

The Principality of Liechtenstein is located between Switzerland and Austria in the Alps of central Europe. Liechtenstein, one of Europe's smallest countries, was acquired by the Liechtenstein family. Prince Hans Adam of Liechtenstein purchased the Imperial Free Territory of Schellenberg in 1699 and the County of Vaduz in 1712, uniting the two territories in 1719 as the Imperial Principality of Liechtenstein, a member state within the Holy Roman Empire. Compulsory education was mandated in 1805. The responsibility for school construction and financing was given to the municipalities resulting in lack of enforcement and unequal educational opportunities for the principality's residents.

The sovereignty and independence of Liechtenstein was established in 1806, developing from a special relationship between French Emperor Napoleon I and Prince John I of Liechtenstein, an Austrian general. First, Liechtenstein was a member state in Napoleon's Confederation of the Rhine and later was in the German Confederation. Liechtenstein escaped Europe's nineteenth century wars of German unification, because the country was tucked between Imperial Austria and neutral Switzerland. In 1842, Prince Aloysius II became the first Prince of Liechtenstein to actually visit his country. During the long reign of Prince John II (1858-1929), Liechtenstein was given a Constitution (1862, revised in 1921), disbanded its army (1868), and ended the principality's long standing customs union with Austria in favor of a customs treaty with Switzerland (1923). Prince Francis I (reigned 1929-1938) was the first Prince of Liechtenstein to regularly visit the country. In 1938, the same year Germany annexed Austria, Prince Francis Joseph II (reigned 1938-1989) became the first reigning prince to permanently reside in Liechtenstein.

After World War II, Liechtenstein joined the United Nations, the Council of Europe, and the European Economic Area to guarantee its continued political and economic independence. Liechtenstein is a constitutional monarchy with a Prince, Hans Adam II, as Head of State since 1989. Prince Hans Adams represents the country under international law and appoints members of the government, the nation's judges, and civil servants. The Lantag or Parliament, a legislature of 25 delegates elected by the people of Liechtenstein, has authority for the budget, supervises the government's administrative activities, establishes investigating commissions, and recommends legislation.

Educational SystemOverview


Liechtenstein's current educational system is based on a series of reforms launched in the middle of the 1980s and implemented in the 1990s, and is under regular review. The Constitution of Liechtenstein requires the state to supervise the whole system of education and schooling. National education in Liechtenstein offers a system of general and vocational education for pupils, students, trainees, and apprentices, which is unrestricted and free of charge. The educational system is responsible for providing students with access to a vocational education based on their abilities and interests. Studies of foreign languages are promoted to prepare students for the demands of a professional career of international interconnections. Pupils and students are motivated to be participants in a life-long learning process that will benefit both them and the nation. Through close collaboration with Liechtenstein's neighboring countries, Switzerland and Austria, options in all fields of education are available.

Liechtenstein's educational system is comparable to the educational systems found in other German-speaking countries. Kindergarten is voluntary and lasts for two years. In practice, 99 percent of all children attend kindergarten. Compulsory school attendance begins at age seven, continues for nine school years, and includes primary and secondary education levels. A voluntary tenth year is available for students to prepare for career opportunities and select professional choices. The Liechtenstein school year begins in mid-August and continues for 40 weeks. In addition to the public school statistics listed below, Liechtenstein has two private preprimary schools, two private primary schools, and one private secondary school. In the year 2000, Liechtenstein had 34 preprimary schools enrolling 334 male and 328 female students with a teaching staff of 59, fourteen primary schools employing 231 teachers for 281 male and 254 female students, and nine secondary schools enrolling 917 males and 931 females with a teaching faculty of 267.

Because of its small size, Liechtenstein is not able to offer a fully developed higher educational system within its own borders. Liechtenstein has two public universities. The Fachhochschule Liechtenstein (FHL) enrolls 330 students, 110 from Liechtenstein, in comprehensive programs of graduate and post-graduate vocational education in the fields of building management, international management, logistics, environmental technology, and economic engineering. Liechtenstein's vocational education system utilizes the apprenticeship as the practical method of instruction developed in partnership with the business community. Liechtenstein's second institution of higher learning, the Internationale Akademie fur Philosohie (IAP), offers a course of study in philosophy and enrolls 60 foreign students. The majority of Liechtenstein students graduating with Liechtenstein's university-entrance certificate study abroad in either Switzerland at Fribourg, St. Gall, or Berne universities or Austria in the fields of medicine, law, and economics. In Germany, individual study programs are granted to Liechtenstein students seeking higher education on a case by case basis by the German federal or state governments. A few students attend university in Great Britain and France and in the United States for postgraduate work. Adult education is assigned to non-profit-making institutions within Liechtenstein.

The government of Liechtenstein and the Department of Education supervise the whole educational system, provide the financial support for the population's education within the country and abroad, and determines the curricula and the accreditation of all educational institutions within the nation's borders. The Schulamt (Schools Office) oversees the education system at preprimary, primary, and secondary levels. The Schulamt reviews and recommends qualifications for teacher employment, teacher salaries, the level of state investment in the educational system, the inspection procedures for public and private schools, and curricula. The authority of the Schulamt extends to higher education and grants, pedagogy, media, and teaching materials. Oversight for vocational education is given to the Council of Vocational Education (Berufsbildungsrat ), an advisory committee, and the National Authority of Vocational Education (Amt fur Berufsbildung ) to administer and organize the system.


Summary

Since 1995, Liechtenstein has participated in the European Union's Leonardo DaVinci Action Program on vocational education. This initiative promotes the integration of Liechtenstein's vocational education system into Europe's educational system. The government of Liechtenstein advocates that its businesses and employees be prepared to cope with the rapid pace of technological and economic change. The Principality of Liechtenstein is committed to an active and continuous review of its educational programs to meet the needs of its people and the nation.

Bibliography

Jansen, Norbert. Francis Joseph II Ruling Prince of Liechtenstein. Vaduz: Government Press and Information Office, 1978.

Korner, Kurt. The Educational System in the Principality of Liechtenstein. Vaduz, 1998.

National Authority of Vocational Education. Vocational Education in the Principality of Liechtenstein. Liechtenstein: Leonardo DaVinci Office, 1998.

Seger, Otto. A Survey of Liechtenstein History. Vaduz: Government Press and Information Office, 1984.


William A. Paquette

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Liechtenstein

Liechtenstein

Official name: Principality of Liechtenstein

Area: 160 square kilometers (62 square miles)

Highest point on mainland: Grauspitz (2,599 meters/8,527 feet)

Lowest point on land: Ruggeller Riet (430 meters/1,411 feet)

Hemispheres: Northern and Eastern

Time zone: 1 p.m. = noon GMT

Longest distances: 9.4 kilometers (5.8 miles) from east to west; 24.5 kilometers (15.2 miles) from north to south

Land boundaries: 76 kilometers (47 miles) total boundary length; Austria 35 kilometers (22 miles); Switzerland 41 kilometers (25 miles)

Coastline: None

Territorial sea limits: None

1 LOCATION AND SIZE

With an area slightly smaller than that of Washington, D.C., Liechtenstein is one of the smallest countries in the world, and the fourth-smallest in Euroh2. Shaped like an elongated triangle, it is sandwiched between the Swiss cantons of Graubünden and St. Gall to the south and west, and the Austrian province of Vorarlberg to the north and east.

2 TERRITORIES AND DEPENDENCIES

Liechtenstein has no territories or dependencies.

3 CLIMATE

Liechtenstein has a continental climate tempered by a warm south wind called the fohn. Even at the upper Alpine elevations, winter temperatures rarely drop below -15°C (5°F), and lowland temperatures average -5°C (24°F) in January. Summer highs are generally between 20°C (68°F) and 28°C (82°F). Annual precipitation ranges from 91 to 114 centimeters (36 to 45 inches). The higher Alpine peaks are snowcapped year-round.

4 TOPOGRAPHIC REGIONS

The western third of Liechtenstein lies on flat land in the floodplain of the Rhine River, which forms its western boundary. The eastern region consists of Alpine highlands.

5 OCEANS AND SEAS

Liechtenstein is landlocked.

6 INLAND LAKES

Liechtenstein has no major inland lakes.

7 RIVERS AND WATERFALLS

The Rhine River and its tributaries drain most of Liechtenstein. The mountain valleys to the east are drained by the Samina River, which rises in the southeast and flows northward through Liechtenstein's mountains into Austria.

8 DESERTS

There are no deserts in Liechtenstein.

9 FLAT AND ROLLING TERRAIN

An unusual hill formation, called the Eschnerberg, rises to heights of 730 meters (2,395 feet) on the flat terrain of Liechtenstein's western plains area. Meadows and pastureland make up about 40 percent of the total land area.

10 MOUNTAINS AND VOLCANOES

Liechtenstein's Alpine foothills and peaks are located on a spur of the Rhaetian Alps called the Rhätikon Massif. Three main valleys traverse the country's mountains. Their highest point is the Grauspitz, which rises to 8,527 feet (2,599 meters) on the southeastern border with Switzerland.

11 CANYONS AND CAVES

Over the course of many centuries, water has carved a gorge 300 meters (985 feet) deep in the Salzach Valley.

12 PLATEAUS AND MONOLITHS

An unusual hill formation, called the Eschnerberg, rises to heights of 730 meters (2,395 feet) on the flat terrain of Liechtenstein's western plains area.

13 MAN-MADE FEATURES

Former marshland on the banks of the Rhine was reclaimed for agricultural use in the first half of the twentieth century. Both concrete and wooden bridges span the Rhine, connecting Liechtenstein to neighboring Switzerland.

DID YOU KNOW?

Liechtenstein is one of only two countries in the world that are doubly landlocked (surrounded by other landlocked countries). The other is Uzbekistan.

14 FURTHER READING

Books

Cussans, Thomas, ed. Fodor's Switzerland. New York: Fodor's Travel Publications, 1988.

Frommer's Switzerland and Liechtenstein. New York: Prentice Hall Travel, 1994.

Greene, Barbara. Valley of Peace: The Story of Liechtenstein. Vaduz: Liechtenstein Verlag, 1947.

Web Sites

Lonely Planet World Guide: Destination Liechtenstein. http://www.lonelyplanet.com/destinations/europe/liechtenstein/ (accessed April 13, 2003).

Travel.orgwebsite. http://www.travel.org/liechtens.html (accessed April 24, 2003).

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Liechtenstein

Liechtenstein

Basic Data

Official Country Name: Principality of Liechtenstein
Region (Map name): Europe
Population: 32,207
Language(s): German, Alemannic
Literacy rate: 100%

The Imperial Free Territory of Schellenberg (1699) and the County of Vaduz (1712), purchased by the German princely family of Liechtenstein, were merged to form modern Liechtenstein in 1719. Liechtenstein was, successively, a member state of the Holy Roman Empire until its dissolution in 1806, Napoleon's Confederation of the Rhine from 1807 to 1815, and the German Confederation until 1866. Geographically separated from a united Germany by Austria and Switzerland, Liechtenstein opted for a custom's union, first with Austria and since 1923 with Switzerland. The first Liechtenstein Prince to take up permanent residence in the principality was Francis Joseph II, who reigned from 1938 to 1989.

Liechtenstein is a constitutional monarchy with a reigning prince; since 1989 this has been Hans Adam II. The government is centered in the capital, Vaduz, where a 25-member Diet, or legislature, represents the principality's population of over 32,000 residents. Article 40 of the Constitution of Liechtenstein guarantees each person the right to freely express his opinions and to communicate his ideas verbally, in writing, and in print, or by picture, within the limits of the laws and of morality. The same Article 40 rejects censorship except in public performances and exhibitions.

Although a small nation, Liechtenstein has a highly developed industrialized economy based on the free-enterprise system. Low business taxes and easy incorporation rules have enabled almost 74,000 companies to establish offices within the principality. Liechtenstein's workforce is divided among the service industry, agriculture, fishing, foresting, horticulture, and industry, trade, and building, and the country's workers are among Europe's highest wage earners.

Newspapers and periodicals and radio and television represent the media in Liechtenstein. Liechtenstein's two daily newspapers are Zeitungen (www.vaterland.li), with a 1995 circulation of 8,920, and the Liechtensteiner Volksblatt (www.lol.li/Volksblatt), with 8,700 readers in 1995. The Liechtensteiner Woche is a weekly newspaper with a 1998 circulation of 13,900. Liechtenstein prints two weekly periodicals of general interest, Liechtensteiner Anzeigere, which had a 1995 circulation of 29,000, and the Liechtensteiner Wochenzeitung, with 13,880 readers in 1995. Liechtenstein has only one radio station, Radio Liechtenstein (Radio L, www.radio.li), and only one television station, XML Television. The three press bureaus in Liechtenstein are L-Press, Mediateam, and Pressburo Vaduz. The population of Liechtenstein also has ready access to newspapers, periodicals, radio stations, and television stations published and/or broadcast from outside the borders of the principality. Liechtenstein citizens considering a career in the media usually attend universities in neighboring Switzerland, Austria, or Germany.

Bibliography

Constitution of the Principality of Liechtenstein. Vaduz: Gutenberg, 1982.

Kranz, Walter, ed. The Principality of Liechtenstein. Vaduz: Government Printing Office, n.d.

Seger, Otto. A Survey of Liechtenstein History. Vaduz: Government Printing Office, n.d.

World Mass Media Handbook, 1995 ed. New York: United Nations Department of Public Information, 1995.

William A. Paquette

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Liechtenstein

Liechtenstein (lĬkh´tənshtīn´), officially Principality of Liechtenstein, principality (2005 est. pop. 33,700), 62 sq mi (160 sq km), W central Europe. It is situated in the Alps between Austria and Switzerland and is bounded in the west by the Rhine River. Vaduz is the capital.

Land, People, Economy, and Government

The country is mainly mountainous, with the Rhine valley in its western third. The population is largely Roman Catholic, with a Protestant minority. German is the national language; Alemannic, a High German dialect, is also spoken. There is a large component of foreign workers.

Historically agricultural, Liechtenstein has been increasingly industrialized, with industry and services now employing most of the workforce. Only a small fraction of the population still engages in agriculture, producing wheat, barley, corn, potatoes, livestock, and dairy products. The leading manufactures include electronics, metals, dental products, ceramics, pharmaceuticals, and precision and optical instruments. A large part of the production is exported. Tourism is an increasingly important industry. About a third of state revenues are derived from the many international corporations that are headquartered in Liechtenstein because of the low business taxes. The stable political environment and the secrecy of its financial institutions contributed to Liechtenstein's development as a banking center and tax haven, but that secrecy has been diminished in the 21st cent. under pressure from foreign governments. Agricultural products, raw materials, fuels, machinery, metal goods, foodstuffs, textiles, and motor vehicles are imported. The main trading partners are the European Union countries and Switzerland.

Liechtenstein is a constitutional monarchy governed under the constitution of 1921 as amended. The hereditary monarch is the head of state and has significant executive power. The head of government is appointed by the monarch, and the cabinet is elected by the legislature. Members of the 25-seat unicameral Parliament or Landtag are elected by popular vote for four-year terms. Liechtenstein uses Swiss currency and is represented abroad through Switzerland. Administratively, Liechtenstein is divided into 11 communes.

History

The Liechtenstein ruling house is an old Austrian family. The principality was created in 1719 by uniting the county of Vaduz with the barony of Schellenburg. The princes, vassals of the Holy Roman emperors, also owned huge estates (many times larger than their principality) in Austria and adjacent territories; they rarely visited their country but were active in the service of the Hapsburg monarchy. Liechtenstein became independent in 1866, after having been a member of the German Confederation from 1815 to 1866.

The principality escaped the major upheavals of the 19th and 20th cent. Prince Hans Adam II succeeded to the throne in 1989 after the death of his father, Francis Joseph II, and has had a number of conflicts with the parliament due to his attempts to have a significant role in running the government, particularly its economic policy. In 2003 voters approved a number of constitutional amendments that the prince had demanded, including giving him the right to dismiss the government and approve judicial nominees; his power to veto legislation and referendum results was preserved then and also by a 2012 referendum. In 2004 Prince Alois became regent for his father and assumed responsibility for the everyday affairs of state.

Bibliography

See P. Raton, Liechtenstein: History and Institutions of the Principality (1970); T. A. Larke, Index and Thesaurus of Liechtenstein (1984).

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Liechtenstein

Liechtenstein Independent principality in w central Europe, between Austria (e) and Switzerland (w); the capital is Vaduz. It was formed in 1719 through the merging of Vaduz and Schellenberg, but remained part of the Holy Roman Empire until 1806. A member of the German Confederation from 1815, it gained independent status in 1866. In 1921, Liechtenstein entered into a currency union with Switzerland and, in 1923, a customs union. Until 1990 Switzerland also handled its foreign policy. In 1990, the principality joined the UN. Liechtenstein has a constitutional and hereditary monarchy; the ruling family is the Austrian House of Liechtenstein. Women finally received the vote in 1984. Liechtenstein is the fourth-smallest country in the world, but among the richest (1998 GDP per capita, US$23,000). After 1945, it developed a manufacturing base. Most revenue derives from multi-nationals attracted by the low taxation rates. In 2000 it reformed its banking laws after criticism that it encouraged money-laundering. Tourism is important. Area: 157sq km (61sq mi). Pop. (2000) 28,000.

http://liechtenstein.li; http://www.tourismus.li

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Liechtenstein

Liechtenstein

LIECHTENSTEINERS … 175

The people of Liechtenstein are called Liechtensteiners. Over 60 percent of the population are descended from people of Switzerland and southwestern Germany.

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"Liechtenstein." Junior Worldmark Encyclopedia of World Cultures. 1999. Encyclopedia.com. 25 Aug. 2016 <http://www.encyclopedia.com>.

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"Liechtenstein." Junior Worldmark Encyclopedia of World Cultures. 1999. Retrieved August 25, 2016 from Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3435900286.html

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