Switzerland exported armaments worth around 740 million Swiss francs last year. Before 2014, Switzerland’s customers also included Russia and Ukraine.
Armored vehicles are among the most important export goods of the Swiss armaments industry. Pictured: Mowag/General Dynamics Piranha wheeled armored vehicles during an army exercise in Bière in 2008.
The army abolitionists in Switzerland are facing headwinds. Russia’s brutal war of aggression has served as a reminder that the world is not made up entirely of peace-loving democracies, and that flags of peace alone fail to impress despots. In Europe and also in Switzerland, a stronger rearmament is suddenly announced again; the peace dividend after the end of the (old) cold war will probably stop flowing in the foreseeable future.
Putin probably saved the planned Swiss purchase of new combat aircraft. And the Swiss ballot in November 2020 seems like a relic from the old days. At that time, over 42 percent voted for a popular initiative by the major left-wing parties and the group Switzerland without an army, which wanted to ban certain investors such as the National Bank, AHV and pension funds from financing armaments manufacturers via the purchase of shares, bonds and investment funds. And this regardless of whether the armaments concerned go to Germany, Finland, Poland, the Ukraine, Russia, Syria or the Swiss army. In the logic of the initiators, who took up the cause of the abolition of the army, weapons are fundamentally bad – even for defensive purposes. For security experts it was already clear back then that the initiative would not contribute anything to world peace and could even be counterproductive. But for many citizens, the proposal seemed like an invitation to pretend to have done something morally good by saying yes.
Brave GSoA
Such mental gymnastics are now becoming more difficult. But the group Switzerland without an army (GSoA) bravely continues to fight. The latest occasion was provided by the State Secretariat for Economic Affairs, which on Friday Data on Swiss war material exports in 2021 and at the same time presented a study on the economic importance of the Swiss armaments industry. The GSoA used the federal government’s timing, which at first glance seemed strange, to routinely celebrate outrage in the run-up to the presentation: it was cynical to talk about the economic importance of the armaments industry during a war in Europe. The hint seems obvious. It was not mentioned, however, that the federal government would probably have been criticized even more if it had hidden the usual annual presentation of export figures and the study, which was completed long before the outbreak of war, in drawers. One can vividly imagine the headlines in reports from lobbyist committees and in the media: “The federal government keeps sensitive data under lock and key so as not to be considered a warmonger” – or something like that.
So here is the disclosed data. According to this, Swiss companies exported war material last year to a total of 67 countries based on federal permits for around 740 million francs. The most important categories of goods were armored vehicles, ammunition, fire control systems, small arms and components for combat aircraft. The export volume corresponds to a decrease of 18 percent compared to the previous year. However, exports were higher than in most years before 2020 (see chart). Since 2010, Switzerland has exported armaments worth around CHF 620 million per year on average.
More than three quarters of Swiss arms exports in 2021 went to EU countries or to established democracies outside the EU such as the USA, Australia and Great Britain. The top three countries on the list of buyers (Germany, Denmark and the USA) together bought a good 40 percent of Swiss armaments exports. According to the federal government, the larger deals included the export of armored wheeled vehicles to Denmark (95 million) and Romania (87 million).
The most eye-catching countries on the 2021 list are Botswana (ranked 5th with purchases of wheeled armored vehicles for 63 million) and Saudi Arabia (ranked 6th with 51 million for spare parts and ammunition for anti-aircraft systems). According to the State Secretariat for Economic Affairs (Seco), Botswana is an “island of stability” in southern Africa, which is why the exports have been approved. According to Seco, Switzerland has not approved war goods exports to Saudi Arabia for a long time, which has been criticized mainly because of the war in Yemen – with the exception of spare parts and ammunition for goods delivered earlier.
Swiss war material in Russia
Russia and Ukraine do not appear on the 2021 list of countries. According to the federal government’s annual publications, between 2009 and 2014 Swiss companies delivered armaments worth a total of 2.5 million Swiss francs to Russia and 1.8 million to Ukraine. These exports primarily related to goods from the category of handguns and handguns and related ammunition. In 2014 Russia annexed Crimea. Unlike now, Switzerland did not accept the EU sanctions against Russia. It limited itself to the decision to prevent circumvention transactions via Switzerland, but it no longer issued any licenses for the export of war material to the conflicting parties (Russia and Ukraine).
In 2015, an export license for camouflage material for Russia worth CHF 90 million caused a stir in parliament critical query in parliament. At the time, the Federal Council justified the approval by saying that the relevant transaction had already been contractually agreed before the federal decree against circumvention transactions.
According to Seco, Switzerland recently received an inquiry from a country neighboring Ukraine as to whether it could pass on armaments that it had previously bought to Ukraine. The federal government rejected this request: The principle applies here too that they do not want to supply Swiss armaments to the parties to the conflict.
humble meaning
According to data of the known Stockholm Institute for Peace Research Switzerland was ranked 16th and 15th in the list of the largest arms exporters in 2020 and 2021. This roughly corresponded to the general international importance of Switzerland as an exporter of goods (ranked 18th in 2020). According to federal figures, Swiss war material exports only accounted for 0.2 percent of total Swiss goods exports last year.
That gives an indication of the overall economic importance of the armaments industry in Switzerland. The one mentioned at the beginning showed more details study by the Basel research institute BAK on behalf of the federal government. This analysis confirmed what was already known in principle: the overall economic weight of the armaments industry in Switzerland is modest. According to the BAK paper, in 2019, i.e. in the year before the outbreak of the corona pandemic, Swiss gross value added with armaments, not including suppliers, was almost CHF 860 million. Around 5,000 jobs were directly related to this.
The term gross value added can be interpreted as follows: This sum was available for wages, profits and depreciation. The total made up only 1.2 per thousand of the Swiss economy as a whole. Including the production of civilian goods, the added value of the Swiss armaments industry amounted to almost 1.6 billion francs and thus still a modest 2.2 per thousand of the economy as a whole. For comparison, the hospitality industry was five times as important in 2019 (1.1 percent share of the economy), and the pharmaceutical sector was almost 25 times as important. Even when the suppliers are taken into account, the economic importance of the armaments industry remains modest; in a comparison, the suppliers would then have to be included in the other sectors anyway.
All this does not mean that the Swiss armaments industry could confidently be “sacrificed”; even relatively small sectors have their right to exist. The figures are simply to be seen as an indication of the weighting of economic aspects in the overall political assessment of dealing with the Swiss armaments sector.