Sources

The 'Bubble' Of Elite Expat Life In Switzerland

Some Swiss are questioning the parallel lifestyle of rich and highly skilled migrants, some of whom come for tax breaks. The foreign residents are often set apart, for good, in their choice of schools. Can this be remedied?

Living the high life on Lake Zurich (krusenstern)
Living the high life on Lake Zurich (krusenstern)
Anne Fournier

ZURICH - It's 7:30 a.m. when a private school bus stops in front of the entrance to a luxury apartment building constructed in Zurich's old Hürlimann brewery. Mothers buckle in their kids. They say "Bye bye!" and the children are brought to one of the region's private - and naturally, Anglophone - schools.

German-speaking Switzerland is increasingly worried about what is seen as a growing cluster of highly skilled foreign expats, increasingly living in a bubble. It manifests in large part by the snubbing of one of the essential institutions that enables social relations to flourish: public schools. In Zoug, a county famed for its fiscal advantages, city vice-president Andreas Bossard says 80% of expatriates aren't involved in local city life despite attempts to reach out with aperitifs, gifts and tax information services.

"Not long ago, we were trying to attract these migrants by all means, especially fiscal. Now, the discussion is much more cautious," says Ueli Mäder, a sociologist from Basel, who is studying the potential discrimination of highly qualified working migrants. "I doubt that a sudden move to integrate will work, since it is viewed as a correction, as though it were righting a wrong." Mäder also notes that the debate is often limited to financial considerations.

Private vs. Public

Jérôme V. is a French father of two children and a financial expert. He confirms that there are two parallel worlds in his village. He has been living in the northern Swiss city of Feusisberg for the past four years, mainly for taxation reasons. His children go to a private school on the banks of Lake Zurich. "If public schools had the same bilingual teaching opportunities, we would reconsider our decision. Our children are surrounded by 400 young people from around the world. So don't talk about an excluded society!"

So far, his family has not set out to join any of the regional organizations. "I understand how the locals might feel, like they are being invaded," says Jérôme V. He is skeptical about the potential integration processes put in place by the authorities. "These commitments must stay personal. However, I appreciate that my county can inform me on the taxation policies of the next few years, at any time."

Around Basel, 36,000 people belong to this community of highly skilled foreigners, mostly German or Anglophone and especially active in the pharmaceutical industry. A year ago, Green party president Guy Morin insisted on the will to greet these "expats' with welcoming sessions, training for media awareness and developing day-care in schools.

Today, Nicole von Jacobs, who works on integration issues for the Greens, denies that there are specific programs targeting this community. "We adapt to their needs. We try to ensure they know what opportunities they have in the region. Our prevailing integration policy of "encouraging and requiring" applies to them as well, even though many believe, for instance, that English is now sufficient, and that mastering German is no longer necessary." To encourage this, the city organizes information sessions at Novartis to present the Swiss public schools and its virtues.

A similar policy prevails in Zurich, where Julia Morais heads the integration office. "We inform and present the school system and all of its possibilities, like we do for all other foreigners," she says.

German newcomers, who are more numerous, have access to specific outings where they are introduced, "via humor," to potential culture shock. Julia Morais also expects Zurich's inhabitants to make an effort. "We must avoid the jealousies these newcomers are arousing. We need to get used to their presence."

Read more from Le Temps in French

Photo - krusenstern

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Society

Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum

-Analysis-

SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.


It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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