Publications

What does 2021 have in store for us?

Many couldn’t wait for 2020 to be over. Now that 2021 has begun, here is an attempt to put some of the persistent topics in perspective - looking back and forward.

What are we taking with us into 2021? Covid-19 still determines our everyday life, where we are allowed to eat or shop, how we work, where we can travel. Well, not the virus itself, but the governments - in the case of Switzerland, the individual cantons. This has led to a national patchwork of measures and restrictions, which almost requires active research to keep track of. Never mind, you're not supposed to travel around anyway. Hopes lie in the vaccination but numbers of new infections need to slow down significantly as well in many countries before relief can be achieved.

Due to the pandemic a great number of events last year were canceled or, as was the case with the Tokyo Olympics, postponed. The 2020 Tokyo Olympics, keeping their name, are planned to begin on the 23rd of July “with or without Covid-19”, as officials have stated, adding they will either take place in July or not at all. Since the reprisal of Olympic games in 1896 they have only ever been canceled three times in 1916, 1940 and 1944 during the two World Wars, showing how much it actually takes for the games to be canceled.

One of the symbols of the modern day Olympics is the torch relay where athletes from all over the world carry and pass on the “eternal flame”, starting in Olympia in Greece. The run culminates in the ignition of the Olympic fire at the opening ceremony, symbolizing the Olympic Spirit. This year the run is set to showcase some of the areas worst affected by the Great Eastern Japan Earthquake in 2011. The earthquake stayed in most of our memories through the Fukushima disaster that ensued when a Tsunami hit land, disabling the cooling system of the nuclear plant causing all three cores to melt. This subsequently led to a rapid change in mind of many countries regarding the use of nuclear power. Germany immediately refrained from extending nuclear plant operation lifespans, which was being discussed just before the accident. This will lead to the shutting down of the last 6 nuclear power plants in Germany in 2021 and 2022. In Switzerland an initiative to shut down all nuclear power plants by 2029 was rejected by the people in 2016, however, legislation prohibiting permits for new plants passed in 2017. The existing five plants may continue to run for as long as they can be operated safely, giving providers more time to complete the shift to alternative energy and improve efficiency of existing infrastructure.

Shutting down nuclear power plants seems like a sound strategy having witnessed the consequences of major catastrophes as in Chernobyl in 1986 and Fukushima in 2011. It also seems possible, considering Italy shut down their four plants in 1987 after a people’s referendum following the Chernobyl meltdown. Silvio Berlusconi brought the idea to the table to reverse the decision in 2009, but having just witnessed the Fukushima disaster the public said “no” quite clearly with a majority of over 94%.

The question remains, how can enough energy be produced? Alternative energy solutions are still incapable of covering the growing demand, and even if a country has no own nuclear plants, energy might still be imported from neighboring countries using nuclear energy, especially in winter months. Obviously, the initial actions taken by Germany after 2011, firing up previously shut down coal power plants, is not the greenest way out of nuclear energy. But it goes to show that a clean energy strategy needs time for implementation. When you consider developing countries’ rising energy demands, nuclear plants are almost inevitable - the only obstacle often being financing, with the initial cost for nuclear power plants being immense, often in the double digit billions. Not to mention the accessibility of the required know-how and of enriched Uranium for the power rods – something Iran has urged for, leading to sanctions by the US out of fear the radioactive material could be weaponized and used against allies, like Israel, or even the US themselves. However, in 2017 the International Energy Agency IEA, the OECD’s energy branch, recommended a doubling of nuclear energy growth to meet the 2 Degree goal (limiting global warming below 2 degrees Celsius, compared to pre-industrial levels) of the Paris Climate Agreement.

The parting President of the United States, Donald Trump, decided to withdraw the US from the Agreement, claiming the economic burden from the US pledges was unfair to American workers, taxpayers and businesses, following up on his campaign promise to put “America first”. Much of what he has said and done during his term was divisive – parting ways with long-lasting political and military allies, breaking ties with trade partners, bullying entire countries in and out of deals. Always under the pretense of putting “America first”. With the election of Joe Biden as 46th President of the United States in November, with Kamala Harris as Vice President, the people have decided to part ways with the former reality TV star and real estate mogul, preferring a more empathic, unifying and rational approach to solving the many problems at hand, some caused by the ineffective handling of the pandemic in the US with record numbers of cases, hospitalizations and deaths. The election can also be seen as a confirmation of the desire for universal healthcare – something that can be interpreted into the recent election of two democratic Senator’s in Georgia. With the senate now split 50/50 and Kamala Harris’s deciding vote, healthcare as introduced by President Obama’s administration is here to stay.

Another country suffering from rising numbers of cases is the UK. Oddly enough the BREXIT campaign had used their national health system NHS in a lie on a “Leave” campaign bus, claiming the UK send 350 million pounds to the EU every week and asking to fund the NHS instead. The person attributed with the lie was Boris Johnson, now Prime Minister of the UK and key figure of the completion of BREXIT, including the agreements reached with the EU just days before consequences went into effect on the 1st of January this year. With the full extent of economic consequences related to Covid-19 still unclear, the additional ramifications from BREXIT will further put the UK’s economic resilience to the test. The consequences for the EU are also severe: The UK were the second largest economy within the EU and the 3rd largest net contributor. A closer look at Germany’s exports can serve as an example for the significance of BREXIT within the EU. Germany’s three largest export destinations are the USA, France and the UK. When it comes to cars the UK are even the largest market for Germany, larger than the US or Asia. Import tariffs could lower demand and with the Euro gaining 20% on the Pound from 0.75 to 0.90 since January 2016, things could become dire. Comparatively the EUR/CHF rate has remained unchanged – largely due to intervention from the SNB, but since some enjoy comparing the new status of the UK with that of Switzerland, the comparison seems just as fair.

For many people, exchange rates are associated with international travel - an economic factor of its own and crucial for many cities and even countries around the globe. Travel bans dried up that sector and country-wide lockdowns, with restaurants, museums, theaters, cinemas and bars closed, brought every day private spending almost to a halt. But where did the money go? Was it saved or spent elsewhere? Certainly companies like Amazon (online shopping), Microsoft (teleworking and video conferencing) or even hiking and camping gear producers, just to name a few, profited from the circumstances. But an industry that also showed massive growth is personal electrical vehicles. New registrations in Switzerland had already grown by 143.9% for electric cars and 70.9% for hybrid cars in 2019. That growth persisted in 2020 despite registrations for gasoline cars dropping by around 35%, raising the percentage of electric and hybrid car registrations to around 26% by November. As much as this can be considered progress in the effort to reduce carbon emissions, the question remains how the growing demand for electric power can be met in the long run, pointing at the relating paragraph further above.

So what lessons can we take away from 2020 as we move forward?

The world is more connected than ever before, and more things are interrelated than meets the eye. Teachers are seen with different eyes by many parents. Low income jobs are often the ones holding together our society in tough times. We all need to pay closer attention to how we treat the most vulnerable of society. Individual rights end where they can harm others.

With the Olympic Spirit in mind, often described as the refusal to give up, we wish you a healthy 2021, full of friendship, solidarity and fair play.

January 08, 2021

Publications

Basel - The Silicon Valley of Biotech?

Three points made in favour of Basel's biotech hub - the speed of the biotech engine and how policymakers and corporations produce convincing success stories together.

January 21, 2021

Publications

Letter from the CIO - January 2021

Our CIO, Jean-Christophe Rochat, CIIA, sees a touch of optimism at the beginning of 2021, while acknowledging this is still a complicated time.

January 14, 2021

Publications

Letter from the CIO - End of Year 2020

Our CIO, Jean-Christophe Rochat, CIIA, gives another overview of the past month and an outlook into 2021.

December 22, 2020

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