In a country where the rules of direct democracy dictate that a referendum must be held if supporters manage to muster over 100,000 signatures, the issue is headed for the ballot box as the campaigners, a group called the Swiss Freedom Movement, claim to have collected over 150,000 signatures.

While the issue of physical money is an emotive issue in a country where citizens’ holdings of cash is among the highest in economies and physical cash is used for one in every three transactions, it does present a contradiction of sorts in a country that is seen as having moved proactively to ready a template for digital transformation. According to Benedikt Wechsler, Head of Digital Division, Federal Department of Foreign Affairs of Switzerland, the process of digitisation has to be a gradual, consensus-based project, with the need for policy makers to communicate how people can truly benefit from the digitalisation. Talking to visiting journalists and analysts from India, Wechsler said that it was important for people to comprehend what the digital age is bringing to them personally, and that’s an area where governments, even in high-trust societies such as Switzerland, have the task of proactively communicating the pros and cons of digitally-focused policy measures.

With its Digital Switzerland Strategy, the country’s Federal Council in Bern – the city that is the de facto capital of the country that has 26 cantons, each with its own government, legislature, constitution, and judicial system – sets out the guidelines for policy action, which aims to position Switzerland as an innovative economic and scientific centre in the heart of Europe. The Digital Strategy sets out the guidelines for Switzerland’s digital transformation, which is binding for the Federal Administration, while acting as a template for other stakeholders such as the cantons, communes and civil society. The Swiss digital push somewhat overlaps with Brussels’ “Europe fit for the digital age” strategy – one of the political priorities of the European Commission President Ursula von der Leyen to position the bloc as a central digital player on the world stage. While in more ways than one, Brussels is already the world’s digital regulator by default, Switzerland is prepping for a larger role in the broader digital discourse that is underway.

On the ground, campaigns such as the push for cash offer a contradiction in Bern’s digital push, catalysed largely by its unique direct democracy model that requires any amendment to the constitution to be put before the people in a referendum. There have been other issues that have been put to the vote and booted out: In 2021, nearly 65 per cent of voters said no in a referendum to an electronic identity (eID) programme, which was being piloted by the Swiss government but service providers would have mainly been private companies. Government officials and analysts testified to the fact that the policy makers failed in communicating the benefits of the scheme, somewhat akin to India’s Aadhaar.

Also, despite the federal government’s digitisation push, Swiss banks such as Credit Suisse have been cautious in their foray into digital assets, which has far greater support in other geographies in Europe. But there are signs of progress in other areas, including a digital bond issued by the city of Lugano last month that has become the first digital asset accepted as eligible collateral for Swiss National Bank — the country’s central bank — repos.

According to Dieter J Tschan, E-Government Representative for the Swiss Confederation, the focus of the digital infrastructure is to ensure reliable, fast and secure network infrastructure, including outside of cities, and enabling electronic payment and signature solutions. The eID proposal was an important step in this direction, before faltering at the referendum stage.

As part of its 2020 Digital Switzerland strategy, the country’s Federal Council sets out the guidelines for government action and is continuously in dialogue with the EU to coordinate activities at the national level in order to benefit from the digital single market and avoid the risk of exclusion. In Bern, there is also a broad consensus on leveraging digitalisation as a new area of engagement with New Delhi, including as part of a broad-based Trade and Investment Agreement under negotiation between the EFTA nations – Switzerland, Iceland, Liechtenstein, and Norway – and India. Talks for a pact are being revived after having been officially launched way back in January 2008 and then put on hold after some 13 rounds of negotiations that were held until late 2013. A Swiss delegation led by the State Secretary of Economic Affairs, Helene Budliger was in India last week for renewed talks on the proposed pact. Officials in the delegation indicated that Switzerland had agreed to make concessions on issues such as the movement of Indian service professionals (mode 4 under the General Agreement on Trade in Services), which is a key area of focus in bilateral trade talks for New Delhi.

Swiss National Council member Niklaus-Samuel Gugger, who was part of the delegation that visited New Delhi earlier last week, said that Bern was actively seeking to engage with India in areas ranging from digital governance to digital self-determination. With over 330 Swiss companies in India, Switzerland is the twelfth largest investor in the country, with some 100 Swiss companies manufacturing locally in India.

The FTA is being seen as an effort to further the cooperation, even though there could be constraints from India’s perspective given that New Delhi already has its hands full with negotiations that are underway currently for trading pacts with the UK and the EU, while also needing to expand the early harvest scheme inked with Australia into a full-fledged trade agreement. Unlike the deal with Canberra, indications are that Bern is keen to negotiate a full-fledged EFTA trade pact in one go.

(The writer was in Switzerland on an invitation from the Swiss government)