By Nayef Al-Rodhan for ISN
26 February 2015
What geopolitical factors helped transform Geneva into a global economic and diplomatic center? For Nayef Al-Rodhan, two of them stand out – the city’s role as a safe haven during the two World Wars, and its ability to provide a needed ‘coordination point’ during the Cold War.
Introduction
On 19 May 2015, Geneva will celebrate the two-hundredth anniversary of its accession to the Swiss Confederation. This occasion provides an opportunity to reflect on how the past two hundred years have transformed Geneva’s relationship to Switzerland and Geneva’s role in the world. With a population of less than 200,000 inhabitants, Geneva is a global and multicultural city, a hub for humanitarian diplomacy, an epicenter for banking and trading, and it ranks behind only Zurich and Vienna in globalmeasures of the quality of life.
Alongside New York, Geneva has also become one of the most active locations for multilateral diplomacy . It hosts 30 international organizations, including the European headquarters of the United Nations, 250 international non-governmental organizations and 172 permanent missions. In total, the international sector in Geneva employs over28,000 people. Geneva is a center of humanitarian action, education, peacekeeping, security and nuclear research. This critical mass of mandates makes the city uniquely relevant in world politics.
The story of how Geneva acquired this role is tightly connected to the history of power politics in Europe, the distinct advantages of Swiss neutrality and the evolution of international diplomacy. Two hundred years ago, Geneva was treated as an object of geopolitics and bartered away at the Congresses of Paris and Vienna in order to establish a post-Napoleonic equilibrium on the European continent. This geopolitical role was retained until the Inter-War Period. Today, Geneva is often described as “the diplomatic capital of the world” and is an important node in the global economy. Two factors explain this remarkable transformation: 1) the role of the city as a “safe haven” that could offer intact infrastructure and ‘business as usual’ during the two World Wars and 2) its role as a hub of political and economic coordination between the West and the Soviet Union during the Cold War.
Paris, Vienna and Geneva
The year 1815 marked the end of a fifteen-year period of French rule over Geneva. After Napoleon’s troops were driven from the city following his defeat at Leipzig in 1813, the Swiss federal assembly voted to integrate Geneva, Neuchâtel and the Valais into the Confederation, leading to the signing of the Treaty for the Admission of Geneva on 19 May 1815.
On Geneva’s part, the move for admission was primarily a geopolitical calculation. In an era of empires and nation-states, Geneva recognized that city-states would require a larger entity to provide for their defense and survival.
At the Congresses of Paris and Vienna, Geneva won support for its desire to become a part of Switzerland. Represented by the diplomat Charles Pictet de Rochemont, Geneva received seven communes from the Pays de Gex and twenty-four communes from Savoy. Both France and the Kingdom of Sardinia ceded territories for this purpose, according to the Treaty of Paris of 1815 and the Treaty of Turin of 1816.
Geneva achieved its objectives because they were in line with the geopolitical aims of the great powers of the day. At the same time, those great powers guaranteed the city’s neutrality which helped it to become an important setting for international cooperation.
Fifteen years after Geneva became the twenty-second canton of Switzerland, Swiss philanthropist Jean-Jacques Sellon created the Society for Peace. Another 33 years later, Geneva became the seat of the International Committee of the Red Cross (ICRC) and witnessed the signing of the first international humanitarian treaty, the Geneva Convention, in 1864.
A global capital
The first attempts at formal international cooperation in Geneva were not resoundingly successful. The League of Nations, which came into existence in 1920, was headquartered in the city – first in the Palais Wilson and then in the purpose-built Palace of Nations. Though it ultimately failed to prevent the slide towards the Second World War, the League was not without its successes: for instance, the work performed by the International Labour Organization, the International Refugee Organization and the Health Organization helped to raise Geneva’s stature in the interwar period.
Geneva attained even greater significance, however, in the post-War period when many high-level negotiations and diplomatic summits began to take place in the city. These included the 1954 Conference on Indochina, the post-war meeting of the Allies in 1955, the Reagan-Gorbachev Summit in 1985, START negotiations in 2008-2009, and the ongoing high-level talks on the Iranian nuclear weapons program. For its contributions to international peace and stability, Geneva-based organizations and personalities have received no fewer than sixteen Nobel prizes, most of them for peace. The first was awarded to Henry Dunant, the founder of the ICRC; the most recent was awarded to the Intergovernmental Panel on Climate Change.
Geneva, however, is not only a global diplomatic capital but an important node in the global economy. In particular, it has become a center for the global trade in raw materials. More than 500 multi-national corporations trade in raw materials from Geneva, accounting for approximately 10% of the city’s (and the canton’s) GDP. On a given day, Geneva-based corporations process over 700 million tons of oil, which exceeds the trading volumes of the City of London (approximately 520 million tons per day) and Singapore (440 million). 80% of all Russian oil is traded through the city and approximately 20% of all cotton. Some estimate that a third of the global trade in oil, cereals, cotton and sugar, as well as half of the global trade in coffee are also directed through Geneva.
Geneva has risen to become an important geopolitical city for a variety of reasons. During the First World War, Switzerland, and hence also Geneva, was able to offer “business as usual” to international trading firms. During the 1920s, the first cereal traders, such as André, came to Geneva, primarily to be close to their main customer, Nestlé. On top of this, several Ottoman and later Turkish traders found it convenient to establish trading subsidiaries in the region of Lausanne, located on the route of the Orient Express between London and Istanbul.
Furthermore, Geneva began to benefit from the image of neutrality bestowed upon the city by the international organizations which increasingly established their headquarters there. Yet it was perhaps Geneva’s role as a “safe haven” (and its intact infrastructure) during the Second World War that attracted the most business to the city.
During the Cold War, as a result, Geneva was already well known throughout the world as a ‘neutral’ trading location. This meant that it was in Geneva that economic and political coordination between the West and the Soviet bloc came to be orchestrated. It also continued to function as an economic safe haven. Indeed, it was to Geneva that Egyptian cotton traders transferred their activities during the Nasser era, just like many Arab oil traders after the oil crisis of 1973-1974.
Swiss meta-geopolitics
Undeniably, one of the reasons why Geneva is so international is because the European headquarters of the UN and its agencies are located in the city. This reflects Switzerland’s long-standing commitment to provide federal and cantonal support to the United Nations. Most recently, this took the form of a generous loan at preferential rates for the renovation of the UN’s Palais des Nations, covering almost 50% of the costs (approximately 300 million Swiss francs). Nowhere else does the UN benefit from such facilities and this level of support.
Over decades, Geneva has established a well-defined identity as a city of peace and an ideal meeting place for diplomats – whether in the field of humanitarian action, disarmament, climate change or other concerns. In recent years, activities in other sectors, such as the crude oil trade, have increased the city’s international renown. While Geneva faces competition as a global economic and diplomatic center from cities in Asia, Africa and Latin America – some of which are becoming prominent regional centers of dialogue and diplomacy – it is unlikely that the city’s stature will diminish anytime soon.
Using the framework of meta-geopolitics, the following table discusses the geopolitical strengths and imperatives of “International Geneva.”
Excellent services, quality of life and an ideal location for diplomats and expats.
Geneva is a central location for global governance regarding social issues, public health, employment, youth, education and others areas.
Domestic Politics
Swiss neutrality, highly stable and democratic, but the initiative to curb the number of foreigners is perceived as a major setback for the city and country (although these regulations do not affect the staff of international organizations from the UN family).
Economics
Trade hub, both private companies and inter-governmental organizations in the area of trade, development, labour.
Environment
The city and canton of Geneva place strong emphasis on energy-saving and a clean environment. In line with the Swiss environmental policies, Geneva has strict standards of agricultural biodiversity, waste management or water management.
Geneva is a center for environmental diplomacy and climate change dialogue (e.g. the UN Environmental Programme is located here)
Science and Human Potential
High-profile universities, excellent research centers in medicine, chemistry, physics and other sciences.
Numerous UN research centers and institutes are located in Geneva (e.g. UNITAR).
Military and Security Issues
Geneva is a key centre for disarmament diplomacy, including the Conference on Disarmament and is host to numerous NGOs and think tanks with a unique profile in security studies, small arms, demilitarization.
International Diplomacy
Unique strength as global meeting point for international diplomats, activists and NGOs.
Imperatives and future trajectories
Social and Health Issues
High quality of life, among the top best in the world (ranked before London) will make it attractive for foreign companies.
Domestic Politics
Greater openness to foreign workforce, imperative for more facilities for expats.
Economics
Increasing importance as trading center for petrol and other commodities, growing importance in cereals trading, insurance companies, consultancies and shipping.
Low inflation – gives strength to the economy
The simple and strict tax system, with some tax discounts for companies contributes to attracting companies and investors (taxes from 3.5 to 14.1%, compared to London – 30 %)
Environment
Science and Human Potential
Continued investment in sciences and research. Excellent universities and highly skilled workforce on the local market are expected to attract even more foreign companies.
Military and Security Issues
International Diplomacy
Geneva will retain a prominent place in global diplomacy, yet the future of “International Geneva” strongly correlate with the future of the UN system.
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Nayef Al-Rodhan is a Philosopher, Neuroscientist and Geostrategist. He is an Honorary Fellow at St. Antony’s College, University of Oxford, UK, and Senior Fellow and Head of the Geopolitics and Global Futures Programme at the Geneva Centre for Security Policy, Geneva, Switzerland. Author of Neo-statecraft and Meta-Geopolitics. Reconciliation of Power, Interests and Justice in the 21st Century (LIT: Zurich, 2009)
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