H.E. Jean Daniel Ruch, Ambassador of Switzerland to Serbia:

Invest In Education, Support Domestic Investments

From the economic perspective, Serbia is on a better track, says H.E. Ambassador Jean Daniel Ruch, speaking in his farewell interview for CorD. He believes Serbia has overcome the difficulties of the 2008 financial crisis, but suggests efforts continue to clean up the financial system, reform the judiciary and, above all, bring the education system closer to the needs of the market

From the year 2000 until today, in two placements – first as Deputy Chief of Mission (2000 – 2003) and then as Ambassador (2012 to 2016), H.E. Jean Daniel Ruch has spent six years in Serbia, becoming one of the most active ambassadors in the diplomatic corps. He is now departing Belgrade bound for Israel, where he will continue his mission of representing Switzerland in the best possible way. Ambassador granted a farewell interview exclusively to CorD magazine, stating that he is grateful for the exceptional cooperation he has enjoyed with our publication during the previous years.

Your Excellency, let us begin with this topic that amazes many people outside of Switzerland – the referendum that was held in your country recently on “the universal monthly income”: a sum of 2,500 francs, which according to the proposal, every citizen over the age of 18 should receive from the state. The fact that the majority rejected that proposal looks like a typically Swiss attitude. How do you see it?

In our constitutional system, a hundred-thousand citizens can propose an amendment to the Constitution and then the government is obliged to organise a referendum around that topic. So, that was it – a bill proposal was signed saying every Swiss citizen should receive 2,500 francs per month, regardless of his or her status – unemployed, student or working professional. I think that the people who did that tried to make some projections for the future of our economic system. They came to the conclusion that, because of the new industrial revolution, there will be fewer jobs and in some cases people will be replaced by robots, as many jobs will be automated. In such a situation, the idea was that instead of having an unemployment benefit or more pensions or social support for those who cannot find jobs, everybody would have a basic income of 2,500 francs.

Why did the Swiss public reject that?

I believe it was for two reasons. First, the described perspective is very far away. Switzerland has almost no unemployment – it is currently lower than 4 per cent. Plus our industry is doing rather well. The second reason was that the financing of the scheme was not very clear. Nobody could really figure out how much that plan would cost and how it was going to be financed. You know, the Swiss people are usually very mature; they go to the polls with the feeling “the State is mine” and it’s about management of my own budget. If they have to spend money, they want to know where the income comes from.

You are leaving Serbia, with your mandate having almost come to an end. What impressions will you be taking with you?

My impression is that, from the economic perspective, Serbia is on a better track. I have seen improvement of the economic situation and it seems to me that the trends also look moderately positive when it comes to public finances, but also to GDP, unemployment rates, export and foreign investments. Of course, the growth is still timid and one would hope for more robust growth, but it seems that Serbia has overcome the difficulties of the 2008 financial crisis. I also see a strong determination on the side of the government to continue to work towards a better business- enabling environment. Now, what I would think would contribute even further to creating good business conditions in Serbia are two things. The first one is the cleaning up of the financial system, dealing with banks and non-performing loans and the creation of a healthy financial market in Serbia that would nurture domestic investments. So far the emphasis has been on attracting foreign investments, which has led to some success, but what is still missing is support for domestic investors. At the end of the day, what makes the power of an economy are not foreigners, but rather domestic forces. Secondly, I think the reform of the judicial system is urgently needed.

Serbia is very well known in Switzerland, thanks to a diaspora of around 200,000 people. Remittance from Switzerland, thanks to those families, is around 300 million euros anually

You have often spoken of the need to have a solid, transparent and stable judicial system?

It is about legal security. I hear from Swiss investors of the combination of the legal system and incompetent administration rendering the business climate quite uncertain. The administration is not always predictable and it is often marked by dirty networks and corruption, especially at the lower levels, which I call the “deep state”. I can tell you openly that I have a lot of investors who are very happy, but I also have a few who say that if they had known about that, they would never have invested in Serbia. And here we are talking about major investments worth tens of millions. This is why I am saying that the whole governance system – the courts and the administration – has to be professional, effective and serviceorientated. Too often people within the administration, especially at the lower levels, tend to see themselves as some kind of power which is wielding its authority, rather than providing a service; instead of having the “what can I do to help you?” attitude, which we have in Switzerland and most of Western Europe.

What can you tell us about Swiss investments in Serbia?

We have about 200 companies that have invested more than a billion euros in the last twelve years and employ close to 10,000 people. Additionally, almost every week I am contacted by new companies who are studying the market. I think Serbia has two assets when it comes to Swiss investments. Serbia is very well known in Switzerland, thanks to a diaspora of around 200,000 people. Remittance from Switzerland, thanks to those families, is around 300 million euros annually. Very often investments come because somebody in a Swiss company comes from Serbia or knows the market. The second asset of Serbia is its cheap labour force and the cheap costs of real estate. That makes it cheaper to invest. Plus, there are government subsidies for foreign investors which also make the country attractive. However, I believe that improvements are needed in the education system. Those who have the best experience in finding new staff are IT companies, so there should be more well-educated people in this field, in order to meet the needs of investors. A problem arises when companies want to invest in the non- IT sector, in industrial production. It is not very easy there to find skilled workers.

How would you describe overall bilateral relations between Switzerland and Serbia?

Our relations are as good as they can be. We have had numerous contacts during the past couple of years at the top political level. This was especially due to our consecutive OSCE chairmanship, when we were at the centre of the management of the Ukrainian crisis, which has represented the biggest crisis between Eastern and Western Europe since the fall of the Berlin wall. I think that we played a useful role in trying to calm the situation. We also had lots of contacts on the bilateral level, trying to cooperate more closely in certain areas. I mentioned education and during our vice president’s visit last year we discussed the education system a lot.

The economic success of Switzerland is built on an education model where about 70 per cent of the young population leaves school at the age of 16 and then enters companies as apprentices. Only 25 per cent do the “normal curriculum”

And dual education?

Precisely, very few people understand that the economic success of Switzerland is built on an education model where about 70 per cent of the young population leaves school at the age of 16 and then enter companies as apprentices. Only 25 per cent do the “normal curriculum”, meaning that they go from primary school to high school and later to university. We have fewer university students and our education is more through companies, and is therefore closer to the needs of the private sector.

Because you have so many private companies! Is that system applicable in Serbia’s still weak economy?

You have to start somewhere. I can tell you that we have projects in the region of Zlatibor and Užice, with some companies involved in wood processing and those companies have hired young people so that they can acquire the necessary skills. The education system should be brought closer to the market needs. This requires partnership between the private sector and the state, where the state would work closely with companies in order to develop a proper curriculum for each profession. There should, of course, be a possibility for a young person who became a carpenter at 19 to go back to university if they wish to do so later, and study to become an architect, for example. We have a system which allows that.

In an interview you gave a few months ago, you said people in Serbia should protect their neutrality and not allow others to tell them they have to make a choice between East and West…

What I said, and my foreign minister said the same during the Ukraine crisis, was that it wasn’t normal that countries should be forced to choose between East and West in the 21st century. We have this lucky situation that we are very much anchored in the western model of society, while keeping our independence from military alliances. We are not members of the EU either, and we do not suffer too much from that situation. So, whether Serbia wants to preserve its neutrality or join NATO is something for the Serbs to decide themselves. I give no advice in that respect. Our historical, cultural and geographical situations are so different.

Don’t you think that in today’s world the very principle of neutrality is questioned?

Well, we are neutral; Austria is neutral; why shouldn’t it be possible? It, of course, gets more difficult to be neutral in times of war. We luckily remained neutral during WWII and at the end of it we had an intact industry and that boosted Swiss economic successes. Yugoslavia also tried to remain neutral, but then what happened, happened. But Europe is not at war today; these are peaceful times, despite the Ukraine crisis.

You must be aware of the message circulating in this region which suggests that there is no stability without NATO, which some mention even as a precondition for joining the EU?

Again, it is up to Serbia to decide what is best for it. I would like to say that I have never seen a document saying that Serbia will not be allowed to join the EU unless it first joins NATO. The other fact is that you have EU member states which are not members of NATO. So, there are lots of myths being spread around this question. The second thing I’d like to say is that stability in the region is indeed very important. You know the tragic history of the region and you know how much this region has been a battle field in the past 100 years. I do not believe that anybody who has a historical conscience would neglect the fact that stability in the Balkans is essential. The Serbian government is perfectly aware of this. We are trying to promote stability in this region through the re-creation of trade and cultural links, and by fostering political dialogue to overcome the bad legacy of the past. One school of thought suggests that the best guarantee for stability in the region is that all countries join NATO. But, obviously, there are other opinions as well, which argue differently. Honestly, this debate seems rather theoretical to me.

I come from a family of farmers. We’ve always had a garden at home and I’ve been brought up to eat only the vegetables from our own garden. The climate for that in Tel Aviv is even better than in Belgrade. There are papayas and mangoes in my future garden…

In spite of the fact that you said you were “neutral Swiss”, I must ask if you fear for the stability of Europe, which is facing many challenges – the migrant crisis, global terrorism etc.

I think that Europe has very strong institutions. It is based on very solid foundations that cannot be disrupted so easily. I believe in the strength of European countries, of what we all represent: liberal, inclusive, open and tolerant societies. This is a model of society that we want to preserve at all costs. We are confronted with challenges coming from the periphery of the Southern Rim and the South-Eastern Rim. The migrant crisis is a consequence of crises in Syria and Iraq. Europe absolutely has the capacity to cope with it. Sometimes what I miss is the self-consciousness about what Europe represents. Europe represents the way of life and values that most migrants are opting for. The soft power of Europe is actually huge. The European model is why people from Syria, usually well-educated and not at all poor, prefer to come to Europe. It is not because there is a conspiracy to take over Europe. NO, it is because they admire the model of life and because they know that there they will have a chance to develop their business, educate their kids and find a job. Here is an example: I have two favourite watches – Swiss made, obviously. One is made by a company that was formed by a Syrian. The second is made by the Swatch group, which was founded by the saviour of the Swiss watchmaking industry, the late Nicolas Hayek, an outstanding Lebanese-born entrepreneur. So, let’s be confident that not only can we integrate, but we can actually benefit from the skills many of the migrants and refugees are bringing. On the other hand, we should obviously all work more closely to try to put an end to the Syrian conflict.

Coming back to Serbia, two years ago you announced that the Swiss Government would spend up to 75 million francs on various projects in Serbia. What can you tell us about those projects?

We have 60 active projects. Basically, there are three areas of interest – energy efficiency, economic development and good governance. For example, there is a project we ran together with the EU, which aims at developing over 30 poor municipalities in the south of the country. We are going there because these regions are de-populated, have bad infrastructure and fewer investments. We are also working with the state on a number of issues related to economic development, especially public finance management. I think that we have success because, as you can see, the IMF is satisfied with the progress achieved. I would also mention, as a very important project, the creation of the Techno Park in Belgrade, which supports innovation and entrepreneurship. And, of course, our priority now is to work on education, so as to bring the education system closer to the needs of the economy.

You know the tragic history of the region and you know how much this region has been a battle field in the past 100 years. I do not believe that anybody who has a historical conscience would neglect the fact that stability in the Balkans is essential

You spent several years at The Hague Tribunal, working for the Office of the Prosecutor. What do you think about that institution and its legacy, which is often questioned by the very stars of the system – former chief prosecutor Carla Del Ponte and her deputies?

Allow me to speak in my personal capacity, as a former adviser to the prosecutor. In one sentence: if the judges had followed the prosecutors in each and every case, there would have been more justice for all the victims of the Balkans. It is a very sad fact that the victims of Operation Storm and other crimes committed in Croatia haven’t received justice. That also goes for most of the Serbian victims of crimes committed in Kosovo. But, all in all, the work of the ICTY has been useful. Try to imagine for one second what this region would look like if there had been no ICTY… There are two current developments which I would like to stress. One is the creation of the Special court for the crimes in Kosovo. That is a major challenge and expectations are high. Secondly, we follow very closely the work of domestic judicial institutions in Bosnia-Herzegovina, Serbia and Croatia. I must say that we would like to see more effective cooperation between these three countries and also more predictability. It is not sustainable for the next 20 years to have people being afraid to travel from Serbia to Croatia or from Croatia to Serbia, due to some alleged secret arrest warrants and lists – even though both countries insist there are no such secret lists.

You have spent more than six years in Serbia, on two occasions. Is there something you will miss?

The people, of course. Somehow you get to love Belgrade as a city. The people are touching, attractive, funny, provocative and creative. I did a lot to try to promote domestic artists. There is an exhibition at my residence right now and I had one last year. They are always with young, talented artists. I have created a cultural fund at the embassy, which is being supported by Swiss companies. We support local, domestic artists and it makes me very proud to help people who are creative, self-confident and future orientated. This is perhaps the part of my work I will miss the most. I find that positive energy among young people, despite the fact that I often hear how young people are lazy and don’t want to work. This is wrong.

You are off to Israel. That is your next post. Will you be able to maintain your habit of growing organic vegetables and raspberries in your backyard, as you did in Belgrade?

That’s a family tradition. I come from a family of farmers. We’ve always had a garden at home and I’ve been brought up to eat only the vegetables from our own garden. The climate for that in Tel Aviv is even better than in Belgrade. There are papayas and mangoes in my future garden…