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Ladies and gentlemen

I would like to thank the organisers of the St Gallen Symposium for inviting me to say a few words to you today. As I am sure you'll understand, I am always delighted to have an opportunity to come back home! I am particularly pleased to be here at the University of St Gallen, which the Federal Council acknowledges as one of Switzerland's internationally acclaimed academic institutions. One important factor in the university's worldwide reputation is the St Gallen Symposium. The fact that it is organised by the students themselves really sets it apart, and this is something the organisers can be proud of.

This year the symposium is being held for the 50th time. Wolfgang Schürer has just explained how it all began. I find it particularly interesting that the first symposium was organised as a response to the international student unrests of 1968. These student protests questioned, among other things, our liberal economic order - and ultimately the very concept of capitalism. They blamed capitalism for everything that was wrong with the world. The alternative they proposed was a Marxist-inspired economy. The world today would undoubtedly be poorer if we had gone down that path.

What I find remarkable is how the student body here at the time responded to the critics of 1968: rather than simply joining in, they created a platform to open a dialogue between young people and the object of their criticism: business leaders. By meeting in person, and opening a line of communication between students and decision-makers, they wanted to give each side an opportunity to express their opinions and argue their points of view. The aim was to create a better understanding of each other's positions - free from the constraints of preconceived notions.

Renowned Bulgarian political scientist Ivan Krastev once said: "Democracy is about people changing their views." By this he meant that, when we talk to each other and exchange our points of view, the stronger argument will ultimately prevail. Where such a dialogue exists, each side takes the other's concerns seriously. And this is what creates trust. Liberal thinking has its roots in the spirit of the Enlightenment: it is based on the conviction that, in a democracy, genuine progress is only possible through the clash of ideas in open debate. The students who founded this symposium wanted to open up such debate and create a sense of trust.

It is no coincidence, therefore, that the theme of this year's event is ‘Trust matters'. There are clearly historical reasons. But trust is also an issue today. Our world is not unlike that of 50 years ago. Trust in business and politics has eroded over the years, and particularly following the financial crisis of 2008. The criticism today is loud and fierce. And it's not only coming from the left, but also the right. The concept of globalisation has come under threat, protectionism is on the rise, closing and blocking is becoming more popular than seeking after a balance between frontier and collaboration. The increase in populist leaders around the world is fuelled by such trends. And public confidence in our liberal economic system has taken a serious blow.

Alongside the doubts about our market economy is a growing scepticism towards the ideals of a liberal democracy. As Ivan Krastev says, many people think the good thing about democracy is that you can vote governments out of power, but the bad thing is that this changes nothing. The economy - and politics - are thus facing a similar situation as back in 1968. Both are coming under serious fire and have to work hard to restore public trust.

In Switzerland, with our system of direct democracy, this is manifested more rapidly and directly than in other countries. Recently we have had two referendums, which reflect growing scepticism towards the business world. One, the Responsible Business Initiative, sought to make Swiss companies liable in Switzerland for alleged labour rights violations or environmental damage anywhere in the world, even by their subsidiaries. The initiative failed, but only by a very narrow margin. In another referendum a few months later, Swiss voters were called to decide on a free trade agreement with Indonesia. While this may seem something of a formality, in fact the referendum passed by a surprisingly small majority.

The chairman of Nestlé, Paul Bulcke, recently commented on this in an interview with the NZZ, saying: "Somewhere we stopped understanding each other and lost the connection we once had, and that's a shame. I think it is a broad social problem that decisions are often no longer made based on arguments and facts, but on emotions. We don't listen to each other enough."

The business community once again needs to make its voice heard and explain its position on urgent social or environmental issues. It must - and especially in Switzerland - seek dialogue with the people and a better understanding of their needs and concerns. Only then can the business community restore the trust it has lost. This is perhaps even more important now than 50 years ago: in today's digital, Internet-based economy, trust is a key component - especially as the people we are doing business with are often unknown or based in another country. In many business models, the personal relationship is gone. And where trust is lacking, people are likely to back out of a transaction at the first sign of any doubt. We cannot leave politics to the politicians alone. We also need flesh-and-blood businesspeople to go out and explain what they are doing, why they are doing it, and how their operations can benefit society. If the business community withdraws from this discussion, we can say goodbye to economic growth, prosperity, and at last our model of society based on freedom and responsibility.

But the importance of trust in business and politics goes beyond the world of digital transactions. Renowned political scientist Francis Fukuyama looked into the question of why some economies consistently fare better than others do. He found that the single most important difference was the level of trust among society. Doing business is easier and more efficient in countries which place value on honesty, reliability and integrity, and which trust their institutions and courts. These countries have a discernible competitive advantage.

Fukuyama includes Switzerland among such high-trust nations. This is undoubtedly linked to our system of direct democracy. On the face of it, it may seem quite burdensome for companies to have to get involved in so many referendums. However, this forces the business community to listen and respond to public opinion. They have an opportunity to communicate their point of view, but in return, they may also have to address some of the criticism they face and adapt their way of doing business.

This ongoing dialogue is essential for building trust. And it is at least partially responsible for Switzerland's economic success on the international stage. Clearly, as it says in this year's theme: ‘trust matters'. For the past 50 years, the St Gallen Symposium has provided a space for such dialogue between business and society, and between corporate leaders and the younger generation - something that the Federal Council acknowledges and greatly appreciates. Keep up the good work: for the sake of an open market economy, for the sake of our democracy, and for the sake of liberty.

Thank you!

St.Gallen Symposium