Jennifer J.

Hunt
Heather Bennett

Liechtenstein
International Business
December 6, 2006
Size-

Liechtenstein is a very unique country in Europe, landlocked between Austria and

Switzerland. The country is the fourth smallest in Europe, measuring smaller than
Washington D.C. in size, roughly .9x’s the size (Liechtenstein, 2002).

Climate-

Liechtenstein’s climate is somewhat similar to that of the states, having four seasons,
spring, summer, fall and winter. Summers are typically warm and wet, with temperatures
ranging from about 68-82° F. An interesting climate fact involves the longer vegetation
periods in the spring and the fall due to warm winds that come from the south.
Liechtenstein’s average amount of precipitation is around 900-1200mm, but can be as
high as 1900 mm in the mountainous areas of the Alps. Due to Liechtenstein’s small size
the climate is the same throughout the country, unlike that of the US (CIA- World
Factbook, 2006)

Population-

Liechtenstein’s population is fair, with 34,000 people which is about 214/km2. The age
distribution follows:
Age Distribution
0-14 17%
15-64 70%
Over 64 13%

Liechtenstein is made up of many people from surrounding countries. Roughly 1/3 of the
country’s population is from Switzerland, Austria, Germany and Italy. Although
Liechtenstein’s capital is Vaduz, the following graph depicts Schaan a city to the north of
Vaduz, as having a larger population (Atlas Reporter, 2004).

Language-

The official language of the country is German, however, there is an unofficial Alemannic
dialect is used. Also, in the Triessenburg mountain region a Walser dialect is spoken as

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well. Other languages such as English and French are taught as secondary languages in
school (Atlas Reporter, 2004).

Religion-

Freedom of religion is guaranteed in Liechtenstein. Although the state religion is Roman

Catholism, there is a large percentage of other religions people practice (Atlas Reporter,
2004).

Breakdown of
Religion:
Roman Catholicism 76%
Protestant 7%
Other/unknown 17%

Political Environment-

Liechtenstein generally maintains neutrality like their neighbor Switzerland. One conflict
the country has dealt with occurred in 1918, when the Czech Republic confiscated 1,600
sq. km. of land. This plot of land is quite large compared to the size of Liechtenstein, so
the royal family of Liechtenstein claims restitution, but has yet to receive it
(Liechtensteiners, 2006).

Political Structure-

Liechtenstein’s political structure is a constitutional monarchy, on a democratic and

parliamentary basis. The strong position of the reigning prince, Prince Hans Adam II, is
well balanced by the direct democracy rights of the people. Similarly to the US is
Liechtenstein’s separation of powers, having an Legislative, Executive and Judicial
branches. Parliament serves terms and is elected every four years (Liechtensteiners,
2006).

Family-

The typical Liechtenstein family is nuclear, including parents and usually two children. It
is common for a couple to cohabitate together before, or instead of marrying. Also, many
married women do work outside of the home (Liechtensteiners, 2006).

Education-

Liechtenstein has an impressive 100% literacy rate. Primary and Secondary schools are
run by the government, and all children between the ages of 7 and 16 must attend school.
Students go to Kindergarten through ages 5 and 7, which normally is voluntary on the
parent’s behalf, unless the child does not speak German. After Kindergarten students

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attend Primary school which consists of five grades, essentially would be like elementary
school in US. After which secondary school provides a variety of options for students.
Oberschle (grades 6-9) prepares students for their vocation. Realschule is a challenging
school, preparing students for professional careers or further schooling. Finally
Gymnasium which mainly prepares students for university’s, where they receive their
Matura (Liechtenstein, 2003). The breakdown of the secondary schooling options is as
follows:

Secondary School
Breakdown:
Oberschule 28%
Realschule 50%
Gymnasium 22%

Employment-

Liechtenstein has a labor force of about 30,000. Roughly 50% or 14,000 commute daily
from outside the country. These foreign workers come from Austria, Switzerland and
Germany. There is a very low employment rate of about 1.3% and the GDP per capita a
$25,000. Liechtensteiner’s normally work long days, from about 8am to 6:30 pm, with a
lunch break that usually lasts an hour or more. Another interesting fact is that while
Switzerland and Liechtenstein use the Swiss Franc, Austria and Germany use the Euro.
So it is quite possible that commuters from those countries use two different currencies
daily (Liechtenstein, 2003). The occupation breakdown is a common one:

Occupation Breakdown:
Agriculture 2%
Industry 47%
Services 51%

Major Business-

Industry breakdown:
• Metal manufacturing
• Ceramics Pharmaceuticals
• Electronic Equipment
• Dental products
• Optical Instruments

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Agricultural breakdown:
• Wheat
• Barley
• Corn
• Potatoes
• Livestock
• Dairy Products

Liechtenstein has a huge tourism industry. Not only is skiing a huge sport in the winter,
but sight seeing and vacations are very popular in Liechtenstein. Other services
Liechtenstein is involved with includes insurance, real estate and banking (Liechtenstein,
2003).

Exports and Imports-

Exports: Imports:
Agricultural
Specialty machinery Products
A/V connectors Raw Materials
motor vehicle parts Machinery
Dental Products Textiles
Hardware Foodstuffs
prepared food motor vehicles
Electronic Equipment
Optical products

Liechtenstein’s raw materials are unusual, and include hydroelectric potential and arable
land. This is unusual because Liechtenstein is landlocked, but the Rhine River not only
provides the prospect of implementing hydroelectricity, but it also provides very fertile
land, where good crops can grow (Liechtenstein, 2003).

Export and Import Partner’s-

Export partners Import partners
EU ~ 63% EU
US ~ 20% Switzerland
Switzerland ~ 16%

Relations with the U.S.-

United States and Liechtenstein share a common commitment to democracy, and human
rights. The two have a common rule of law, tolerance, and the free flow of ideas. Also,

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having friendly relations they share mutual respect, common values and principles. Later
discussed in moral climate, but one unique difference is the two countries view on capital
punishment. The US to this day practices capital punishment, and Liechtenstein does not.
Although the two share many other similarities Liechtenstein feels that no life is worth
the crime they have committed. Also, there is no US embassy in Liechtenstein (CIA-
World factbook, 2006).

Relations with Switzerland-

Liechtenstein and Switzerland are closely related neighbors. In 1924, the two countries
signed a trade and tariff agreement, which has evolved into an economic, monetary and
postal union. Switzerland maintains Liechtenstein’s mail, the country is so small it does
not even have its own post office. Also, Switzerland is responsible for Liechtenstein’s
military and defense. Liechtenstein is dependant on Switzerland for many things. Also,
there is an open border between the two neighbors, which is like going from state to state
here in the US, versus going from the US to Canada (CIA-World factbook, 2006).

Relations with Austria-

Austria and Liechtenstein are also close neighbors. The two are tied together through
several international agreements including the EEA agreement which they joined together
in 1995. This agreement has greatly strengthened the economic exchange between the
two countries. Also, out of the thousands of commuters from other countries, roughly
half of the commuters, 7,000, commute daily from Austria.

Travel-

Liechtenstein is unusual in that it has not 1 airport. People seeking to fly, travel to
Switzerland or Austria to catch a plane. Liechtenstein has a fair amount of roadways
which are all paved, however, in the winter roadway travel can become treacherous due
to the mountainous terrain and windy roadways. Commuters take advantage of a railway
in Liechtenstein which is owned and operated by the Austrian Federal Railway system
(CIA- World Factbook, 2006).

Moral Climate-

Briefly discussed before, Liechtenstein does not practice capital punishment. Capital
Punishment was only recently banned about 20 years ago in 1987. Although capital
punishment was banned a few decades ago, the country has not actually carried out such
a punishment since 1785(Capital Punishment Worldwide, 2006).

If a person was caught stealing they would pay hefty fines and possible serve jail time,
depending on the severity of the crime. Liechtenstein has a very low crime rate, which
tends to increase in the summer, when tourist season hits. The most common crime then
is pick pocketing and purse snatching (DOSTRAVEL, 2004).

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If an extramarital relationship occurred in Liechtenstein the most likely outcome would
be divorce. However, there is a policy in Liechtenstein which states couples wishing to
divorce must be separated for several months, before the divorce will be granted. Some
thoughts on this include that there is possibly a high reconciliation rate and therefore the
governments wants to ensure that the couple will not end up getting back together before
they grant divorces(Liechtenstein, 2003).

If a citizen is convicted of first degree murder the sentence will be a very long prison
term. However, murders are not a common thing in Liechtenstein. In fact, in 2002 there
was not 1 murder in the country that year.

If a person was spotted running a red light and was found to have one ounce of
marijuana, they would most likely pay hefty fines and possible jail sentence (CIA-World
Factbook, 2006).

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 References:
(2004). Atlas Reporter. Retrieved November 1, 2006, Web site:
http://atlas.reporter.pl?id=ls&pl=Liechtenstein&en=Liechtenstein

(2006). Capital Punishment Worldwide. Retrieved September 9, 2006, Web site:

<http://encarta.msn.com/media_461543496?Capital_Punishment_Worldwide.html>

(2006). CIA-The World Factbook-Liechtenstein. Retrieved November 2, 2006, Web site:

https://www.odci.gov/cia/publications/factbook/geos/ls.html

(2004). DOSTRAVEL archives. Retrieved October 12, 2006, Web site:

http://lists.state.gov/SCRIPTS/WA-USIAINFO.EXE?A2=ind0403d&L=dostravel&D.html

(2003). Liechtenstein: History, geography, and Culture. Retrieved November 1, 2006, Web site:
http://www.infoplease.com/ipa/A0107726.html

(2002). Retrieved October 12, 2006, from Liechtenstein products and Aleman Languages Web site:
http://www.worldlanguage.com/Spanish/Countries/Liechtenstein.htm

(2006). Retrieved October 15, 2006, from Liechtensteiners Web site:

http://www.everyculture.com/wc/Japan-to-Mali/Liechtensteiners.html